Danger Zones

Unhappy Inspectors General

Inspectors general at the General Services Administration and the Defense and Interior departments have blasted the use of technology contracts to procure unrelated items, including construction services, mental health care and even prison interrogators. The IGs long have been suspicious of flexible governmentwide contracts, particularly in the technology arena, and are on the hunt for more evidence of abuse.

A New War

Fighting in Afghanistan and Iraq has fueled military consumption of communications technology and weapons, but at the expense of other agencies' tech budgets. War on a third front, such as Iran or North Korea, would squeeze the federal budget even tighter, as tech money was diverted to the military services.

Another Terrorist Attack

Another 9/11-style event might reduce spending on technology, which has been a key component of the Bush administration's homeland security strategy. Federal funding of IT for state and local first responders may go down in 2005, unless Congress reverses course. With the federal budget already strapped, another attack could further diminish technology spending by agencies not involved in homeland security.

Legislators' Ire

For the past few years, some lawmakers have tried to restrict the Defense Department's use of outside contracting organizations, such as the General Services Administration, which charge fees for their services. Those efforts haven't let up. Considering Defense and the military are GSA's biggest technology customers, restrictions, such as limits on how much Defense agencies can pay in fees, would threaten GSA's dominance as a technology reseller.

OMB's Ax

The Office of Management and Budget's warning that it will withhold funds from technology projects that can't demonstrate success is no hollow threat. IT business cases are key components of the score cards that rate agency management performance red, yellow, or green. Red means dead, and as deficits eke away at discretionary spending, OMB could red-light more projects for failing to make a strong enough case.