The impact of the federal IT project freeze

Big changes may be coming to the way the federal government handles information technology projects.

The White House's Office of Management and Budget put on hold many programs last week as part of a wide-ranging plan to overhaul the procurement process.

Here's an outline of the changes and reactions from around the industry.

Immediate: Some financial system modernization projects are stopped

Agencies with $20 million or more allotted for financial management system development or modernization projects have been directed to halt new task orders and procurements.

OMB Director Peter Orszag issued the memos, which said such projects are notoriously sluggish and costly and often fail to deliver a successful product. The memos did not identify individual projects, but the Department of Veterans Affairs confirmed that the Financial and Logistics Integrated Technology Enterprise was one affected program.

"By setting the scope of projects to achieve broad-based business transformations rather than focusing on essential business needs, Federal agencies are experiencing substantial cost overruns and lengthy delays in planned deployments," the memo states.

The frozen projects must comply with key guidelines to move forward:

-- Projects should be divided into short-term tasks that can be completed in less than four months, with the entire project lasting no longer than two years.

-- Projects should first target issues crucial to the agency's mission, rather than updating an entire system at once.

-- Senior management must more actively monitor the projects' short-term goals and make sure projects adhere to their budgets and schedules.

Agencies have been given 60 days to submit plans for adopting the guidelines, which OMB will then have an additional 60 days to review.