First Look: OMB's New Exhibit 300 - P2C2 Group (Federal Sector Report)

FEDERAL SECTOR REPORT May 2006 IN THIS ISSUE OMB's New Exhibit 300 Consulting Services Home Page (c) 2006 by the P2C2 Group, Inc.
FIRST LOOK: OMB'S NEW EXHIBIT 300 The P2C2 Group has taken OMB's new Exhibit 300 format on a "test drive" to evaluate the impact on Federal agencies with information technology capital investments. Overall, we are pleased with the results, and commend the Office of Management and Budget (OMB) for its changes. The P2C2 Group converted a business case in last year's format to the preliminary version of the new Exhibit 300. We did so to evaluate the impact of the changes for our Federal clients, who will need to adopt the new approach rapidly. The New Exhibit 300 The new Exhibit 300 focuses on management and results over the information technology (IT) investment's lifecycle. In many ways, the new format is less of a classic "business case" and more of an IT performance-tracking system. The new approach is a significant departure from the previous version, which was a text-heavy proposal of future promises and discussions of planned compliance with Clinger-Cohen Act and other laws. Compliance with regulatory requirements continues. However, under the new approach, accountability for performance is paramount, and an IT investment's progress is traced over the years from planning to acquisition and through steady-state management. The Exhibit 300 is a part of OMB Circular A-11, Preparation, Submission and Execution of the Budget, and it is published annually at http://www.whitehouse.gov/omb/circulars/index-budget.html. As a caveat, we conducted our "test drive" of the new format using a version available in late April, and it could change. The final OMB guidance usually is not available until June or July, after the Exhibit 300 preparation process is well underway. The Test Drive In converting a business case to the new Exhibit 300 format, we selected a project that followed the basic advice that the P2C2 Group has endorsed over the past several years: Capital Planning and Investment Control (CPIC) is a year-round planning, management and control process; The Exhibit 300 should be viewed as a summary of sound, ongoing IT management processes. Documentation should be maintained of all investment management functions: performance goals and metrics, requirements, risk management, acquisition, cost and schedule control, security, enterprise architecture, and results. Our trial conversion was further constrained by the fact that we did not yet have OMB's updated Circular A-11 guidance that will accompany the Exhibit 300. This challenge proved to be useful, because we were able to identify sticky points where we do need more information before the document can be finalized and polished for submission as a budget request. With the above caveats, however, we are pleased to report that it was possible to draft the Exhibit 300 in its new format, subject to a number of issues and clarifications that will require additional checking.	Are you ready for the coming fiscal year? Click for the P2C2 Group's Contract Vehicles
Highlights The new format is generally a joy to prepare. An Exhibit 300 that had previously occupied 75 pages was reduced to 40 pages. Brevity has its price, however: It isn't possible to BS your way through the form; the resulting Exhibit 300 is strong only if you've got a well planned, well managed, and well documented project or program. Fortunately, our client agency for the converted business case has done its homework (with our support, of course), and the results of our trial Exhibit 300 were very positive. Following are highlights of the new format for the Exhibit 300, based on our trial experience in converting a project: After introductory information, the format is segmented by lifecycle phases. For example, only investments in the "Operations and Maintenance" phase must complete Part III. Part IV is specifically for E-Gov and Lines of Business initiatives. Text must be brief and to the point: "Long text" is limited to 2500 characters, and "medium text" must be no longer than 500 characters. More responses are based on check marks rather than text responses There are some new questions, such as "Are the records produced by this investment appropriately scheduled with the National Archives and Records Administration's approval?" Performance goals are upfront, and thorough metrics will be important throughout the investment lifecycle. Acquisition is focused on project performance and risk management, and it looks like there will be a spotlight on the performance of the principal contractor(s). The Enterprise Architecture section is more tightly integrated, and components of the Federal Enterprise Architecture (FEA) Service Reference Model (SRM) now must have identifiable funding percentages. Responses to information security are to be tied to the specific system and components, rather than the agency as a whole; and it reflects the transition to more rigorous NIST requirements. Operational Analysis Reviews-and ongoing performance management responding to such reviews-will need much greater attention. Strong and decisive project/program management for IT will be the franca lingua of the new investment management process. Recommendations Last year's Exhibit 300 will not have all the answers you need for the new format. Identify the impact on your projects as soon as possible so you have time to prepare thorough and accurate responses. Major investments must be headed by experienced Project Management Professionals-not only as a funding requirement but also to achieve the performance results that will be demanded over the IT investment's entire lifecycle. The new Exhibit 300 requirements need to be integrated into your ongoing project management, portfolio management, and CPIC processes. The emphasis on IT management and performance will require results based on year-round work. (The 300 is not a once-a-year paper drill.) Agencies using contract support for preparing and reviewing Exhibit 300s will need to review and possibly update these scopes of work. Bottom Line The new Exhibit 300 reduces government paperwork, and it is deceptively simple. However, great care will need to be put into each response, because you will be accountable for achieving results-year by year, and quarter by quarter, throughout the entire lifecycle.
CONSULTING SERVICES The P2C2 Group is a team of expert consultants with many years of experience in the Federal Sector. We have the know-how to support you during changing times. We serve high-achieving federal agencies, and we are proud to be their partners. Please contact us for more information. Lifecycle Management Support IT Investment Management Budget Justification Independent Verification and Validation (IV&V) Acquisition Performance Evaluation Documentation Conceptual Planning for New Initiatives The P2C2 Group, Inc. is accessible through world-class prime contractors, GSA MOBIS and other multiple-award contracts, and 8(a) firms. Call Jim Kendrick at 301-942-7985 to discuss vehicles appropriate to your agency.
HOME PAGE Elena and I just returned from a spring break in Barcelona and Amsterdam. It was wonderful, and we would like to give you our vacation postcard, which is just a click away. Best wishes, Jim Kendrick Certified Management Consultant P2C2 Group, Inc. 4101 Denfeld Avenue Kensington, MD 20895 kendrick@p2c2group.com 301-942-7985 NEWSLETTER ARCHIVE

The P2C2 Group, Inc.
4101 Denfeld Avenue | Kensington, MD 20895
Point of Contact: Jim Kendrick, President
e-mail: kendrick@p2c2group.com
phone: 301-942-7985 | fax: 301-942-7986