Federal Software Hearing

Through the prism of the US’ inadequate response to the COVID-19 pandemic, a House committee chewed over familiar issues plaguing the US’ government’s technology use and modernization efforts.

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

On 15 July, the House Budget Committee held a virtual hearing titled “Software Update Required: COVID-19 Exposes Need for Federal Investments in Technology” to highlight the effects of underfunding of technology programs in the federal government has had in hindering efforts to combat COVID-19 and measures to mitigate its impacts. The shortcomings of federal information technology (IT) procurements, processes, and performance is one of the areas where there is bipartisan agreement on many of the issues and proposed solutions. However, Republicans and Democrats often differ on funding for civilian IT programs, a feature of the ongoing debate about another COVID-19 stimulus package. And this was the line that divided the chair and ranking member of the committee on how to address acknowledged failures in how federal and state governments distributed aid to people and businesses. Because the House Budget Committee does not have direct jurisdiction over technology programs other than setting broad parameters in the years it drafts and passes a budget resolution to guide Congressional funding, the impact of this hearing is more in the vein of shaping discussion in the House on how it should address the funding and governance of IT programs, which. Now total more than $90 billion annually of the more than $1.2 trillion in funds Congress doles out every year.

Chair John Yarmuth (D-KY) claimed “[r]ash funding cuts over the past decade have prevented the Internal Revenue Service (IRS) from modernizing its information technology (IT) systems, deteriorating the agency’s ability to not only carry out its core function of tax collection and enforcement, but also needlessly prolonging the delivery of stimulus payments to workers and families during the coronavirus pandemic and recession.” He asserted that “[t]he coronavirus pandemic has proved that the quicker the response the better the outcome – and that the steps taken by Congress to help American workers and families are only as effective as the agencies delivering that relief.” Yarmuth claimed “[u]nfortunately, the IRS is not alone in its inability to meet the needs of the American people in this perilous time.”

Yarmuth stated

  • Instead of helping to generate much-needed solutions, outdated IT systems are worsening an already difficult situation as Americans grapple with unreliable or insufficient internet access, useless automated systems, and overwhelmed and underprepared agencies. Emergency assistance programs across the board have been hampered by our antiquated IT systems – leaving families with delayed relief or no relief at all.
  • The most glaring example is unemployment assistance. We are four months into the worst economic downturn since the Great Depression, and there are still tens of thousands of workers who have filed for jobless claims but have not yet received a single payment. Many are going into debt or default, skipping meals, or losing their homes.
  • State unemployment offices, already underfunded and understaffed, were left completely unprepared for the massive influx of need. And a big reason for that is the fact that national administrative funding is essentially the same as it was in 2001 – and that’s before accounting for inflation.

Yarmuth continued

  • This lack of federal investment combined with old hardware, crashing web servers, and the need for new-hires proficient in COBOL – their systems’ 60-year old coding language – have left states scrambling. Their antiquated IT systems failed and continue to fail repeatedly – and American workers, those who lost their jobs through no fault of their own, are paying the price.
  • This aspect of our ongoing crisis is not new. The federal government has long sought to prioritize modern, secure, and shared IT solutions, but funding uncertainties – stemming from constrained discretionary funding under budget caps, shutdown threats, and continuing resolutions – have made agencies more likely to update instead of modernize. The Government Accountability Office (GAO) reports that while the total share of federal IT spending is increasing, it isn’t because we are investing in better and new technology. It’s because the price of updating our existing systems is snowballing as our ancient software becomes increasingly outdated and hardware parts nearly impossible to find.

Yarmuth said “[t]o date, Congress has passed legislation that includes $1 billion in grants to state unemployment offices to help process claims faster – and more is needed.” He argued that “[b]y refusing to bring the “HEROES Act” (H.R.6800) to the floor, [Senate Majority] Leader [Mitch] McConnell (R-KY) is holding up an additional $1 billion for the federal Technology Modernization Fund and a combined $5.5 billion to help schools, libraries, and impacted families access high speed connectivity and devices to facilitate distance learning – something we must prioritize in order to protect our children and educators.” Yarmuth remarked “earlier this month, House Democrats passed the “Moving Forward Act,” (H.R.2) a comprehensive infrastructure package that includes $100 billion in broadband funding to extend high speed internet to underserved and hard to reach communities.” He declared that “[w]e have to invest in modernization now, so that the federal government can help provide workers, families, and state and local governments with the necessary tools and resources to support our nation’s recovery efforts.”

Ranking Member Steve Womack (R-AR) said “[f]ederal information technology (IT) systems are critical to providing Americans with a wide range of government services and information…[and] [i]n the 21st century, it’s no secret that IT is fundamental to many different operations.” He contended “[t]hese systems are aimed at improving program delivery, maximizing effectiveness and efficiency, and ensuring data security…[and] [i]f we cannot maintain and optimize this critical infrastructure, the federal government will be unable to execute one of its essential functions: providing crucial resources and services to the American people.” Womack asserted “[w]e should never allow the delivery of veteran health care, social security benefits, or defense initiatives to fail because of outdated and faulty IT systems.”

Womack stated that “[u]nfortunately, current federal IT upgrade efforts are faltering due to missed deadlines, cost overruns, and inadequate outcomes, including operability failure and data breaches…[and] [w]hile COVID-19 exposed additional deficiencies of federal IT systems, these shortages existed long before the current pandemic.”

Womack stated

  • For example, in 2011, the Department of Veterans Affairs (VA) and the Department of Defense (DOD) began an electronic health record (EHR) modernization initiative to create a single, shared system between the two departments. In 2013, and after spending more than $1 billion on the program, the VA and DOD announced they were abandoning the project with nothing to show for the money spent other than a painful lesson learned. This is not only a waste of taxpayer dollars, but, more disconcerting, it hurts our nation’s service members and veterans who depend on these health care services. This is the more upsetting part for me. Program indecision and mismanagement have resulted in us failing those who’ve served this country.
  • Where is this EHR effort at the VA today? The VA and DOD are trying this again with a new government contract from Cerner. This initiative is already nearly one year behind schedule and has yet to go live in even one medical center. I truly hope this story ends better than past VA efforts in the IT space.

Womack added “I’m not just picking on the VA’s challenges. There are other examples of how we have fallen short:

  • In 2014, the Office of Personnel Management’s data was breached, which resulted in approximately 21.5 million compromised records.
  • The HITECH Act, which was part of the 2009 stimulus package, allocated billions of dollars for the Department of Health and Human Services (HHS) for IT development. To date, HHS still does not have an interoperable system and continues to struggle with siloed and fragmented data due to the different electronic health records vendors.”

Womack claimed “the question is, how do we make sure, going forward, all federal investments in IT modernization efforts result in the timely deployment of up-to-date, secure, and properly functioning systems?”

Womack asserted

  • Strong vetting and planning for proper IT implementation is key. It is imperative that these investments are met with rigorous oversight—yes, that is our job here in Congress—and agency accountability to ensure that the public is getting the best services available and taxpayer dollars are not wasted.
  • But, as I mentioned last week, there is another threat to federal investments in vital government programs such as IT modernization. That is our out-of-control deficit and debt. If we don’t confront the autopilot mandatory spending that is hurtling us towards a fiscal cliff, there won’t be any money left to fund a range of prerogatives.
  • Time is running out, and it’s essential that Congress directly address this problem. The Budget Committee must meet its duty and put together a budget to chart a new way forward. We need to get back to making the tough choices that will determine a brighter future. We have an obligation to current and future generations to ensure that critical programs don’t cease to exist.

National Academy of Public Administration President and CEO Teresa Gerton stated

  • The government’s IT infrastructure is heavily dependent upon technologies that were invented in the mid-twentieth century. The coronavirus pandemic has made it abundantly clear that those systems pose extraordinary risk to government operations in a steady state environment, and they may fail catastrophically in a crisis. And yet, government budgeting rules and appropriation law have created IT acquisition challenges for almost as long as the term “IT” has existed.
  • Insufficient funding for capital improvements has forced agencies to repeat a cycle in which robust plans submitted with their budget requests have to be scaled back to align with the reduced funding amounts they eventually receive. Insufficient funding leads to implementation of sub-optimal solutions with limited impact on improving efficiency. Ironically, governments bear an extra cost burden for such strategies because they must allocate expensive resources to maintain obsolete and inefficient solutions, which by any reasonable business standard should have been rationalized and replaced.
  • To really change the future, we must change the rules. Today the government has challenges with cloud procurement, but the market is constantly evolving. More things will be sold as a service in the future. With enablers like quantum computing and machine learning, technology innovation will inevitably continue at an increasing rate. Given the economic, demographic, and social challenges facing this nation, the federal government must find new ways to invest in and to improve its effectiveness and efficiency to successfully meet the current and future demands of the American public. We must provide acquisition and sustainment flexibility that reflects what the commercial market is selling, and we must adapt our accounting and auditing rules to encourage, not discourage, the use of these flexibilities. We must be ready to effectively acquire and deploy modern technology solutions or risk failures in our support to our citizens, and potentially calamitous failures in our ability to govern.

Code for America Founder and U.S. Digital Response Co-Founder Jennifer Pahlka said “[t]o get government tech right, we of course need to be able to procure more modern technology platforms…[b]ut that will be insufficient if we don’t also do three things that support ​agility and human-centered design:

  • The first is to break down the silos between policy, technology and other disciplines. Technology can’t speed a process in which most cases must be handled manually, as I described above in the case of unemployment benefits under the CARES Act. A similar problem is that many states require applicants for Pandemic Unemployment Assistance (PUA) to apply for regular unemployment first, wait to receive their rejection, and only then apply for PUA. Tech, operations, policy and compliance staff must work together to solve these problems, and agile development models allow for this collaboration in ways that legacy models do not. We must even have digital professionals at the table when we craft policy; understanding how the service will be delivered is critical to getting the outcomes the policy seeks, especially now, as we face greater and greater needs and limited delivery capabilities. As the former head of the White House Domestic Policy Council Cecilia Muñoz has said, “Policy leaders must learn the skills of human-centered design, and technology must have a seat at the strategy table.”
  • The second is to encourage rapid prototyping and continuous development. Our legacy process involves a requirements gathering period that can take many years, followed by the development of a Request for Proposal that can be thousands of pages long, lengthy contracting and development periods, and then a move into what’s called sustainment. This process may work for constructing buildings, but it’s simply not how good software comes to life. It is better, faster and cheaper when interdisciplinary teams start small, build iteratively, work closely with the users of the software all the way through, and continuously update and improve the application.
  • The third is to demand that all services provide real-time data about their usage and that human beings are assigned to looking at that data to understand what’s working, what’s not working and what can be done about it. When Code for America started working to decrease the participation gap in Supplemental Nutrition Assistance (SNAP) in California, our team found that the program leadership had very little insight into the reasons people tried to apply and couldn’t, or applied but couldn’t make it through the burdensome process despite being eligible. It wasn’t that they didn’t care; the systems they’d been given to manage eligibility and enrollment simply didn’t provide that data, and what data they did get was usually months, if not years, old by the time they got it. Creating an online application that was simpler and easier to use had huge benefits for the people applying, but an equally important benefit was that the system was instrumented to allow decision-makers to see in near real-time where users got stuck and begin to fix those issues. This access to real-time data is part of what’s needed as we deal with today’s crisis.

National Employment Law Project Executive Director Rebecca Dixon urged “Congress to immediately take the following steps, which will help stabilize and ensure greater accountability and transparency over the state IT systems:

1. Fully Fund the States Linked to Strong Accountability Standards: Most importantly, the federal government must make a sizable commitment to provide dedicated funding of IT modernization and far more adequate levels of basic state unemployment insurance (UI) administration funding. With the additional funding should come strong federal oversight and enforcement, including tangible requirements that the modernization process include input from stakeholders (including workers and their advocates) from beginning to end, and comprehensive user testing that ensures participation from Black people who are faced with the most barriers, and all communities of color; those on the other side of the digital divide; people with limited English proficiency; and people with disabilities.

2. Expand the Department of Labor’s (DOL) IT Expertise and Mandate to Ensure Full Access: There is extremely limited independent capacity and IT expertise on the part of DOL to actively monitor and enforce the state UI systems. DOL should create a specialized unit devoted to the IT, phone and other state UI agency infrastructure needs. DOL’s new regime should include strong measures of state success and failure (including adequate customer service) that can be assigned a grade that should be prominently featured on the DOL website to provide transparency to the public and compare the operation of programs across the states. For example, DOL should extend the timeliness regulations to ensure that workers are able to successfully reach a claims agent by phone within a reasonable period of time. In addition, DOL’s Center for Civil Rights should also be fully resourced to more promptly investigate and respond to complaints and make the results of their investigations public. DOL should also have the authority to review IT contractor agreements, audit contractors where necessary, and require the states to produce data documenting contractor performance.

3. Federal Commission on Modernization of Federally Funded Benefit Programs: A federal task force should be immediately created to evaluate the performance of federally funded programs, including UI, and make recommendations for reform related to funding, the creation of robust standards and metrics, contractor accountability, best practices, and the adequacy of federal agency oversight and enforcement, including compliance with civil rights laws. The task force should also explore whether certain administrative and infrastructure functions (especially in response to disasters and public health emergencies) should be federalized, and whether federal agencies should have the authority to negotiate favorable terms with IT and phone system vendors that take advantage of the federal government’s ability to leverage cost savings while also producing more compatible and high-quality state systems. Federalization in whole or part may be the simplest solution. The patchwork of state systems means that each state has to struggle with the modernization process and vendor negotiations. While some states have banded together into consortia to get a better deal, those consortia can dissolve as political leadership shifts in allied states or as states develop different modernization goals, wasting time and money. A federal process could achieve these goals on the largest possible scale.

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Appropriators Have Work To Do

Now that Congress and the White House have agreed on the FY 2020 top line numbers for defense and non-defense discretionary spending, both the House and Senate need to adjust the numbers they have put forth as their working caps.

The House did not pass a budget resolution and instead passed a deeming resolution (H.J.Res. 293) in April that functions in much the same way with respect to setting the top-line numbers for appropriations. During debate on the deeming resolution, Representative James Morelle (D-NY) explained the caps put forth by Democrats:

In fiscal year 2020, defense spending would be capped at $664 billion, with nondefense discretionary spending capped at $631 billion. The Investing for the People Act (H.R. 2021) would also provide up to $8 billion, annually, for nondefense overseas contingency operations, OCO, activities that do not count against the spending caps, while limiting OCO designation of defense spending in 2020 and 2021 to no more than the fiscal year 2019 level of $69 billion dollars.

In my this post, I detailed the new spending caps under the as the “Bipartisan Budget Act of 2019” (P.L. 116-37) raised the caps

  FY 2020 FY 2021
Defense (aka Security) $666.5 billion $671.5 billion
Non-Defense (aka non-security) $621.5 billion $626.5 billion

For FY 2020, House Democrats will need to trim roughly $10 billion from the non-defense side of appropriations and slightly boost for the defense side. The House Appropriations Committee will need to trim the non-defense funds from the bills with non-defense funding, and it is not immediately clear what their approach will be. Is an across-the-board reduction equitable? Or should the committee eliminate funds based on need and priorities? I’d say it is likely to be the latter approach, but the process for how the House does this is not clear beyond the Appropriations Committee reporting a new 302(b) allocation. Will the Appropriations Committee essentially draft new bills and hold them until the Senate has finished work on their bills all the while negotiating on final numbers for programs? This seems like the likeliest outcome although it is possible the House could bring new bills to the floor, but I suspect they wouldn’t do so unless there was some leverage to be gained against or pressure exerted on the Senate.

In the other body, appropriators are more or less working from a blank slate as Senate Majority Leader Mitch McConnell (R-KY) prevailed upon Senate Appropriations Committee Chair Richard Shelby (R-AL) to not begin the appropriations process until agreement had been reached on top-line numbers. Undoubtedly, the committee has bill language and report language that has been negotiated on; all that was missing was the top-line funding numbers. Having said that, it didn’t exactly take a crystal ball to project a reasonable range of top-line funding numbers and work from those. I’m assuming this is, in fact, what happened, and so the committee may hit the ground running next month.

While the Senate did not pass a budget resolution as McConnell undoubtedly wanted to protect those Senate Republicans up for reelection from uncomfortable votes, the Senate Budget Committee did mark up a budget resolution. In S.Con.Res. 12, the Senate Budget Committee set the following caps in FY 2020: $576 billion for defense (plus the majority of $67 billion in OCO funds) and $542 billion for non-defense. Consequently, the Senate has just gained a huge amount of breathing room on both sides of the discretionary divide, and yet, because the Senate Appropriations Committee has not marked up any bills, the process of effecting the new caps will be somewhat easier. In any event, the nominal, not-real numbers the Senate started with will be adjusted upwards by $90 billion on the defense side of the ledger and $79 billion for non-defense.

Opening the aperture on appropriations reveals an uncertain view. Sure, we have top-line numbers, but will Fox News rile up the President after Republicans and Democrats have reached agreement on full-year appropriations for FY 2020. However, more immediately, it seems unlikely we will have all 12 bills enacted before the end of FY 2019 on September 30 and has been common practice there will almost certainly be a continuing resolution (CR) for some portion of the federal government through December. It’s just a question of which agencies will have FY 2020 appropriations in place and which will be operating under a CR, which does cause some problems. In any event, it will quite the ride as always.

FY 2020 Appropriations Starting

It’s a been a while.

In any event, it’s a big week. The House Appropriations Committee begins work on FY 2020 appropriations bills even though top-line numbers haven’t entirely been decided in the Democratic Caucus, and the Congressional Budget Office (CBO) releases its revised baseline on this coming Thursday, May 2.

This week’s House Appropriations Committee markup schedule is

Over in the Senate, the Appropriations Committee will hold these hearings:

Subcommittee Hearing: Review of the FY2020 Budget Request for the Department of Homeland Security   05/02/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for Department of Labor   05/02/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for the U.S. Nuclear Regulatory Commission   05/01/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for NASA   05/01/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for the Navy and Marine Corps   05/01/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for the Indian Health Service   05/01/19 09:30AM
Subcommittee Hearing: Review of the FY2020 and FY2021 Budget Request for the VA   04/30/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for USAID   04/30/19 02:30PM

Also, Senate Appropriations Committee Chair Richard Shelby (R-AL) said yesterday that his committee will not work on their appropriations bills until there is a deal in place on the caps. He remarked that “[t]hat’s what we’d like to do because we’d have more certainty.”

Of course, where the caps are ultimately set is a major stumbling block in enacting FY 2020 appropriations. At present, the caps for defense funding would be $576 billion (without uncapped Overseas Contingency Operations (OCO) funding) and non-defense $542 billion (without OCO, Disaster relief, and other adjustments). House Democrats are split on how much to raise the caps, but House Appropriations Committee Chair Nita Lowey (D-NY) seems to be willing to work with the cap adjustments in the “Investing for the People Act of 2019” (H.R. 2021) of $664 billion for defense (plus $69 billion for defense OCO for a total of $733 billion) and $631 billion for non-defense (plus add ons pushing the cap up to $662 billion.) Consequently, House appropriations bills will likely meet those top lines as reported out of committee.

The Senate Budget Committee, however, opted to remain with the current cap levels for FY 2020 with the hopes that a deal will soon be reached for both FY 2020 and FY 2021. Their budget resolution, S.Con.Res.12, would keep the FY 2020 caps of $576 billion for defense and $542 for non-defense.

There’s still a supplemental appropriations bill floating that Congress hasn’t passed, which seems to be held up on whether Puerto Rico would receive more funding to recover from Hurricane Maria. However, the White House opposes more funds, and Democrats are insisting on it. Hence, an impasse even though a number of the states waiting on relief via supplemental appropriations for FY 2019 include states Trump will need to carry in 2020, including Florida, Georgia, and Iowa.