Energy Dept. Labs Seek Exemption from IT Oversight

The federal government spends $80 billion annually on information technology investments and products. Now, the Department of Energy’s National Laboratories are seeking an exemption from the new law that is meant to increase transparency on how these funds are spent.

According to the legislative report accompanying the Federal Information Technology Acquisition Reform Act (FITARA), industry experts estimate that 25 percent, or $20 billion, of that $80 billion is misused or wasted on duplicative projects. To reduce this mismanagement of federal IT funds, Congress passed the bipartisan FITARA last year as part of the FY 2015 National Defense Authorization Act. The Act is meant to strengthen the role of each agency’s Chief Information Officer (CIO), an executive responsible for all IT systems in the agency, as well as to increase transparency on how IT funds are spent.

But the Department of Energy’s 17 National Laboratories would prefer that this oversight and accountability requirement not apply to them. The 2016 Senate Energy and Water Development Appropriations Bill includes an amendment that would exempt the Energy Department national laboratories from key requirements of FITARA and that bill’s predecessor, the Clinger Cohen Act of 1996. According to Project On Government Oversight sources, the national laboratories and the super-computing industry heavily lobbied for this blanket exemption.

The Energy Department labs claim that the agency’s work on many national security missions, such as maintaining the nuclear deterrent and developing models to simulate nuclear reactor cores, is beyond the scope of the CIO’s expertise. Much of this sensitive nuclear work is conducted at the Energy Department’s national labs.

But the Department’s programs that are classified as national security systems are already exempted from FITARA, making the claim that such projects would be beyond the scope of CIO’s expertise meaningless. The Office of Management and Budget’s guidelines for the law’s implementation further clarify that direct involvement by the CIO is not necessarily required and that “each agency should establish appropriate processes that work in its environment.”

One of the main intents of the FITARA is to ensure that the agency CIO position has the authority and prestige to attract applicants the with required subject-matter expertise (much like the Department’s current CIO, Michael Johnson, who has over 25 years of management experience, including working on national security systems as a senior scientist at Sandia National Laboratory). Exempting the national labs from the law would only serve to continue the disconnect between agency leadership and IT programs as well as to make the Energy Department’s CIO position unattractive to talented individuals.

But the CIO’s increased involvement is not the Energy Department’s only concern. The Department’s labs widely distributed talking points pushing for the exemption, stating that “there is already an extensive review and approval process” for these systems. This statement is almost laughable considering the Department’s long and well-documented history of over-paying for IT systems. In 2012, the Government Accountability Office found six potentially duplicative IT systems at the Department, totaling $8 million. Additionally, the Energy Department’s Inspector General (IG) has been concerned about the agency’s IT acquisition since 2006: an audit in that year found that the Department unnecessarily spent over $4 million “by underutilizing existing software agreements or purchasing software at higher prices, and acquiring unneeded licenses.” In 2007, the IG found additional overspending on IT and recommended a Department-wide approach to IT hardware acquisition and management. Seven years later, the Department was still wasting millions of dollars on unnecessary IT equipment; a series of Energy Department Inspector General reports from 2014 found even more examples of waste and mismanagement:

• The Department was failing to follow guidelines established by the Office of Management and Budget for major IT investments.
• A review of ten Department of Energy locations found that the Department “spent over $325,000 to support mobile devices that were not used the entire time they were activated in FY 2012.”
• Another report found that the Department paid widely different prices for software licenses, in several instances hundreds of dollars more than established government-wide acquisition prices.

At the end of 2014 the IG released a report detailing the findings of a review of the IT spending at eight Energy Department sites, several of them national laboratories. The IG determined that the Department spent almost $2 million more than necessary in FY 2012 at those eight sites alone. Several of the laboratories were responsible for this overspending:

• Lawrence Berkley National Laboratory unnecessarily paid over $261,000 for nonstandard desktops and laptops in 2012.
• Lawrence Livermore National Laboratory spent nearly $1.3 million on non-standard purchases in 2012.
• Oak Ridge National Laboratory deviated from standard IT prices 80 percent of the time.
• In addition to varying prices between different Energy Department sites, the IG found that Lawrence Livermore National Laboratory paid three different prices for the same desktop throughout 2012 and could have saved over $26,000 with proper management.

This is all too similar to a problem that has plagued the Department of Defense for years—massive overcharging for spare parts. And with this kind of rampant waste in the Energy Department’s IT acquisition process the very last thing the labs should receive is an exemption from additional oversight of this process. An exemption would be particularly troubling because the Energy Department is already failing to follow guidelines established by the Office of Management and Budget.

According to POGO sources, the Government Accountability Office, which has long been concerned with Department of Energy contract management and the agency's lack of compliance with the Clinger Cohen Act, strongly opposes the broad carve-out sought by the national labs and super-computing industry. The exemption would institutionalize Energy Department noncompliance with Clinger Cohen and FITARA, while setting a dangerous precedent for other agencies. Granting the labs an exemption from FITARA completely undermines the intent of the law—government-wide IT acquisition reform that strengthens management, oversight, and transparency into IT investment performance.