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Big chill for federal IT spending

The Office of Management and Budget puts a halt on projects budgeted above $500,000 at agencies slated to join the proposed Department of Homeland Security.

The Office of Management and Budget has put a halt on major IT spending at agencies expected to join the proposed Department of Homeland Security.

The OMB sent a memo to agency heads Friday, freezing "all IT infrastructure system development and planned modernization efforts" budgeted at more than $500,000, pending a review of investments by the new security department.

"An integrated and universal IT system would provide the best support for homeland security--including earlier detection and faster response to potential threats," the memo states. "For this reason, existing investments should be assessed for appropriate use prior to procuring new IT infrastructure-related products and services."

The proposed Department of Homeland Security would combine 22 agencies, including the Secret Service, the Coast Guard and the Federal Emergency Management Agency. Those agencies have already budgeted $364 million in IT spending projects in 2002 and $782 million in 2003. The OMB included a list of some of the projects that would be put on hold, which range from the Secret Service's telephone and pager program to FEMA's infrastructure systems.

The OMB, which oversees spending by the executive branch of government, estimates that standardizing systems and eliminating duplication could save between $100 million and $200 million over the next two years.

The OMB has also ordered agencies to review their budgets for any plans listed in its memo and to participate in an IT investment review being conducted by the OMB and the current Office of Homeland Security.

Tech companies have been anxiously watching the government to see how and when the money budgeted for homeland defense will be spent.