4. Establish a governmentwide innovation fund for innovative information technology projects. (3) By September 1994, OMB should develop a proposal to establish a government- wide innovation fund - including draft legislation, if needed. This fund would support projects with significant benefits to more than one program or agency. Enabling legislation for the fund should parallel the legislation for existing agency WCFs; with concurrence from appropriations committees, appropriated monies should be transferred to the fund and retained without fiscal year spending restrictions until expended on fund-sponsored initiatives. The legislation would also contain provisions establishing funding procedures and operating mechanisms that distinguish this fund from a traditional WCF. Consideration should be given to the options of creating an independent fund or expanding the scope of the existing Information Technology Fund administered by the General Services Administration.[14] Considerations in the fund's operational framework must ensure that the fund is established and operated with the conditions necessary to promote partnership with the IT industry; leverage the fund with other resources of federal, state, and local agencies, and the private sector; and manage the risk of IT innovation. The criteria by which initiatives are evaluated and selected for fund sponsorship are critical to the value of the fund. The criteria should be established, reviewed, refined, and published in a process open to public comment. The objective of the criteria should be to identify those initiatives that present the best value to the government, considering both return on investment and risk. The criteria would need to address potential improvement of agency, interagency, and intergovernmental operations. Implementation costs, demonstrated savings, agency competency, technological feasibility, interagency and intergovernmental commitments, and the participation of the IT industry would all be carefully weighed. Capital equivalent to 1 percent of the federal government's annual expenditures for IT would provide sufficient capital to operate the fund. Based on fiscal year 1993 estimates, the 1 percent formula would result in a funding level of approximately $250 million.[15] However, it would be self-defeating to IT innovation to obtain this funding from agency IT funds which are already constrained. Therefore, funding should be identified from within existing agency program appropriations and, with concurrence from the appropriations committees, transferred to the fund to avoid new appropriations. The method of capitalization, together with procedures for periodically reviewing and setting the funding level in succeeding fiscal years, would be key ingredients of the enabling legislation to establish the fund. The relationship of the fund and fund-sponsored initiatives to agency information system plans, budgets, and appropriations points to OMB for fund oversight and development of its operational framework. Recommendation of projects to be sponsored by the fund would be an appropriate role for the Government Information Technology Services (GITS) Working Group proposed earlier in this report. In addition, the views of state and local government and the private sector should be considered through an advisory role for industry groups and government associations and/or a consultant role for distinguished innovators. Endnotes 14. The Information Technology Fund was authorized by the Paperwork Reduction Reauthorization Act of 1986. The fund enables the General Services Administration to efficiently provide common information technology resources to federal agencies on a coordinated basis. 15. OMB, Current Information Technology Resource Requirements of the Federal Government: Fiscal Year 1993, p. 3.
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