A new report released Thursday claims the federal government wastes at least half of the $70 billion to $80 billion it spends each year on IT and cybersecurity. However, critics say the metric used to compare agencies with private industry is flawed.
The International Association of Information Technology Asset Managers (IAITAM), which compiled the report, looked at IT spending compared to headcount and found that federal agencies spend on average seven times more than private companies on IT per employee. Agencies spend an average of $36,162, while industry spends $4,867 per employee.
The largest disconnect was discovered in the Department of Education, which spends 30 times the private sector average, at $168,000 per DoE employee.
"If this level of federal spending on IT was to be reduced to just three times the average for private industry, the savings would add up to well over $30 billion," the report states.
Using a cost-per-employee metric is rarely ideal, particularly when comparing the public and private sectors, said Rex Facer, associate professor of public finance and management at BYU's Romney Institute for Public Management.
"When comparing the cost we need to be comparing similar jobs," Facer said. When comparing public and private, "The major difference is in the experience and specialization required" of government employees, which tends to be higher than in industry.
Not only that, but "specialization is going to vary across government dramatically," he added. The use of contracts and higher level of specialization means government agencies tend to do more with fewer salaried employees.
J. David Cox, national president of the American Federation of Government Employees, agreed overspending on IT is a problem but cited outside contractors as the issue.
"The problem is that federal agencies' spending on information technology and products is out of control — in large part because contracting out has left the government bereft of the in-house expertise necessary to plan IT spending, thoughtfully award contracts and oversee contractors," he said. "The frequent scandals caused by contractor blunders — from the healthcare.gov meltdown to the hacking of the Armed Forces Network — are compelling reminders of the consequences of the federal government's dangerous and ruinous overreliance on information technology contractors."
While using the cost-per-employee metric to add perspective, the IAITAM report also goes into specifics on IT overspends and missed opportunities.
"Right now, we have the high-tech equivalent of the $436 Pentagon hammer and it's just getting worse," said IAITAM CEO Barbara Rembiesa. "Federal IT chiefs often cite inadequate funding as the biggest inhibitor to progress, but a thorough investigation of the overall federal government IT sector reveals that cost savings and IT security would be increased by a comprehensive ITAM program at the national government level in the U.S."
"Just as importantly, more tightly controlled spending would actually reduce the IT failures now plaguing federal agencies," Rembiesa added.
The report cites examples of wasteful IT spending, such as two instances where the Department of Energy overspent on equipment and software licenses by a combined $2.6 million. Similar issues with unused software licenses cost the IRS some $11.6 million.
"At the root of much of what ails the federal government bloat in IT spending and related woes is a lack of meaningful IT asset management," the report states, calling on Congress to make asset management a priority. "Legislation should address the areas of procurement, disposal, inventory management to the component level of IT assets (such as hard drives), data security and other mandated policies which would mitigate the risk to the United States and the critical infrastructure that is not owned by the government but is enabled and regulated by legislation."
Aaron Boyd is an awarding-winning journalist currently serving as editor of Federal Times — a Washington, D.C. institution covering federal workforce and contracting for more than 50 years — and Fifth Domain — a news and information hub focused on cybersecurity and cyberwar from a civilian, military and international perspective.