MEMORANDUM FOR Chief Information Officers

FROM: Suzanne Hilding

SUBJECT: Fiscal Year 2010 Information Technology Budget Process and
Guidance

FY 2010 Information Technology (IT) budget initiatives, including those
for infrastructure, are due concurrent with the FY 2010 Secretarial
budget submission. Our goal in the IT budget review process is to ensure
that proposals include all the elements needed for IT portfolio
selection, control, and evaluation:

-   basis for investment, including project performance that
    demonstrates support to strategic goals, the annual performance
    plan, and e-government initiatives,

-   project management,

-   risk management,

-   security and privacy, and

-   enterprise architecture compliance.

    Only initiatives that are complete and highly rated in all these
    areas will be recommended by the Commerce IT Review Board (CITRB)
    for serious consideration in the FY 2010 budget assessment process.
    The FY 2010 budget process continues to emphasize linking budget,
    program planning, IT planning, performance measurement, and
    acquisition strategies. Therefore, you should include your
    respective budget, program, IT, and procurement offices in the
    preparation and review of your operating unit's IT budget proposals.

    [Secretarial Budget Submission Requirements for IT]{.underline}

    For all new IT budget investments, and modifications or enhancements
    to existing systems above base funding (including
    telecommunications), use the format in Attachment 2 to provide a
    brief, high-level summary for submission to the Commerce Office of
    the CIO concurrent with the Secretarial budget submission. As
    illustrated by the example in Attachment 3, the high level
    justification should summarize the business need, current situation,
    project vision, goal, benefits, and strategic alignment. Describe or
    quantify what would happen if the initiative is or is not funded.
    Demonstrate how the initiative contributes to Secretarial
    priorities, the President's Management Agenda, and other critical
    Department activities.

    IT investment proposals must be a product of your operating unit's
    capital planning and investment control (CPIC) process. Therefore,
    as part of your IT budget submission, provide a description of the
    CPIC portfolio management process used to evaluate and select this
    year's investments. Submit this IT Portfolio Management Summary
    along with the budget initiative summaries to Stuart Simon
    ([ssimon@doc.gov)](mailto:(ssimon@doc.gov)).

    One week after the Secretarial budget submission, for all FY 2010 IT
    budget initiatives, update an Exhibit 300 Capital Asset Plan and
    Business Case Summary in eCPIC or, for new projects, submit a
    Project Concept Document (see Attachment 4) to <ssimon@doc.gov>. As
    part of the IT budget review process, a briefing book, including the
    Exhibit 300s for IT initiatives and operating unit IT Portfolio
    Management Summaries, will be given to all CITRB members one week in
    advance of CITRB presentations. When completing the Exhibit 300, be
    sure to fill in the "DOC Supplemental" questions. During this same
    period you should also update the Exhibit 300s for all other
    investments in eCPIC, even if they have no change from the 2009
    President's budget baseline.

This year, OMB has requested that federal agencies submit only a
"current services" budget in September, along with supporting Exhibit
300s and Exhibit 53. However, the Department also plans to prepare and
review a budget that includes new initiatives for possible presentation
to the next administration. Consult your budget office to understand
what is considered current services. To have exhibits that support these
two budgets, we will maintain documentation in eCPIC for both current
services and new initiatives. Instructions will be provided under
separate cover on how to handle the two sets of documentation in eCPIC.

[OMB Budget Submission Requirements]{.underline}

To meet OMB budget submission requirements in early September, Commerce
will use eCPIC to collect, generate, and submit IT Exhibit 300s, and the
Exhibit 53 (Agency IT Investment Portfolio). To meet this requirement,
all IT investments, with or without funding increases, must be updated
in eCPIC by **August 8** to reflect their current services budget
submission. For "Non-major\" IT investments use eCPIC's more streamlined
"Non-major Business case" format. Guidance on preparing the IT budget
submission for infrastructure will be provided under separate cover.

The level of detail entered in the Exhibit 300 should be commensurate
with the magnitude of the investment. The Department will review all
Exhibit 300s and provide recommendations for strengthening them. Final
edits to the Exhibit 300s, in response to Department comments, must be
completed by **August 29**, at which time we will generate the Exhibit
53 for submission to OMB.

[Evaluating Exhibit 300 Business Cases]{.underline}

We would like to call your attention to key areas of the Exhibit 300
business case:

-   Security and privacy continue to be important factors in the CITRB's
    review of FY 2010 budget requests. You have a key role in helping to
    ensure that adequate resources are dedicated to IT security to
    maintain an acceptable level of risk.

-   Enterprise Architecture also requires your attention as we take
    increased interest in the management and integration of
    architectures within Commerce and across the Government, with
    particular emphasis on the elimination of duplication. Answer the
    architecture questions in the Exhibit 300 completely and carefully.
    Ensure that your baseline and target architecture documentation
    includes all current and proposed IT investments.

-   Project management, especially establishing and certifying Earned
    Value Management, is another area that has taken on increased
    importance. Your business case should verify that the Contracting
    Officer (CO), Contracting Officer's Representative (COR), and
    Project Manager (PM) have training and certification appropriate to
    the complexity of the project. In addition, take care to provide
    complete and accurate cost and schedule performance data.

-   As in past years, solid performance measures are a core element in
    your justification and must be consistent with the performance
    metrics submitted in the Performance and Accountability Report and
    in the FY 2010 Secretarial budget submission. Performance measures
    must follow the format specified in the Federal Enterprise
    Architecture (FEA) Performance Model and address each of four
    measurement areas (Mission & Business Results, Customer Results,
    Processes & Activities, and Technology).

-   All IT budget initiatives will be evaluated against the guidance and
    questions in the Exhibit 300. Accordingly, the quality of your
    responses is critical. Become familiar with the IT guidance in
    [Section
    300](http://ocio.os.doc.gov/ITPolicyandPrograms/Capital_Planning/DEV01_002689)
    of OMB Circular A-11; it will help you complete your IT investment
    plan and business case. [Detailed
    instructions](http://ocio.os.doc.gov/ITPolicyandPrograms/Capital_Planning/PROD01_002289)
    for preparing high quality Exhibit 300s are on the OCIO CPIC Web
    site as well as in the eCPIC Resource Library.

    [CITRB Reviews]{.underline}

    Sponsors of the proposals selected for evaluation before the CITRB
    should review the following guidance from the OCIO Web site:

    [Commerce IT Review Board Presentation
    Tips](http://ocio.os.doc.gov/CommerceITGroups/Commerce_IT_Review_Board/PROD01_001982  to)

    [Commerce IT Review Board Evaluation
    Criteria](http://ocio.os.doc.gov/ITPolicyandPrograms/Capital_Planning/PROD01_001983)

    [Commerce IT Review Board
    Expectations](http://ocio.os.doc.gov/CommerceITGroups/Commerce_IT_Review_Board/PROD01_001984)

    Briefings to the CITRB will take place in late June. The CITRB will
    evaluate initiatives and make recommendations to the Office of
    Budget during the budget review process. Presenters must provide an
    electronic copy of their briefing slides and resumes of their CO,
    COR, and PM to Diana Hynek (<dhynek@doc.gov>) within one week
    following the Secretarial budget submission. IT initiatives that are
    not presented directly to the CITRB may be evaluated by the Office
    of the CIO, supported by acquisition, budget, and other Department
    staff offices. Recommendations from this review process will also be
    provided to the Office of Budget. We will notify project sponsors of
    the date for their briefings before both of these review boards.

    If you have questions regarding the Exhibit 300 or other information
    in this memorandum, contact Stuart Simon at <ssimon@doc.gov>
    or (202) 482-0275.

    Attachments

    cc: Neil Shapiro, Acting, OB

    Delia Davis, Acting, OAM

    Lisa Casias, OFM

    Teresa Coppolino, OFM

    Budget Officers

    Administrative Officers

    Attachment 1 **FY 2010 IT Budget Review Schedule**

  ----------------- ------------------------- --------------------------------
  **Date**          **Activity**              **Recipient**

  Secretarial       One page summaries of     [S]{.underline}<simon@doc.gov>
  budget submission budget initiatives        
  due date                                    

  Secretarial       IT Portfolio Management   <Ssimon@doc.gov>
  budget submission Summary                   
  due date                                    

  One week after    Exhibit 300s for budget   Complete in eCPIC
  Secretarial       initiatives               
  budget submission                           

  One week after    Project Concept Documents [Ssimon@doc.gov]{.underline}
  Secretarial       for proposed new projects 
  budget submission                           

  One week after    Briefing package          [D]{.underline}<hynek@doc.gov>
  Secretarial       materials (slides,        
  budget submission resumes of CO, COR and    
                    PM)                       

  One week after    Update of all current     Complete in eCPIC
  Secretarial       services Exhibit 300s     
  budget submission                           

  Late June         Departmental/OCIO         
                    briefings on selected     
                    initiatives that will not 
                    be reviewed by CITRB.     

  Late June         CITRB briefings           

  August 8          Update of all current     Complete in eCPIC
                    services Exhibit 300s for 
                    Department review         

  August 29         Finalize current services Complete in eCPIC
                    Exhibit 300s for OMB      
  ----------------- ------------------------- --------------------------------

Attachment 2

**Commerce Information Technology Review Board**

**Initiative Summary**

+-----------------------+------------------+--------------------------+
| Operating Unit:       |                  |                          |
+-----------------------+------------------+--------------------------+
| Office:               |                  |                          |
+-----------------------+------------------+--------------------------+
| Investment Name:      |                  |                          |
+-----------------------+------------------+--------------------------+
| Location in budget    |                  |                          |
| (account,             |                  |                          |
| sub-activity, line    |                  |                          |
| item).                |                  |                          |
|                       |                  |                          |
| (Specify BY amount    |                  |                          |
| from each funding     |                  |                          |
| source if more than   |                  |                          |
| one).                 |                  |                          |
+-----------------------+------------------+--------------------------+
| **IT Increase and IT  |                  |                          |
| Base Amount**         |                  |                          |
+-----------------------+------------------+--------------------------+
| Life Cycle Increase   | FY 2010 Increase | FY 2009 President's      |
|                       |                  | Budget                   |
+-----------------------+------------------+--------------------------+
|                       |                  |                          |
+-----------------------+------------------+--------------------------+
| Project Description   |                  |                          |
| and Justification:    |                  |                          |
+-----------------------+------------------+--------------------------+

E-mail the completed form to **ssimon@doc.gov**

Attachment 3

**EXAMPLE**

**Commerce Information Technology Review Board**

**Initiative Summary**

+-----------------------+-----------------------+-----------------------+
| Operating Unit: NOAA  |                       |                       |
+-----------------------+-----------------------+-----------------------+
| Office: NWS           |                       |                       |
+-----------------------+-----------------------+-----------------------+
| Investment Name:      |                       |                       |
| Telecommunications    |                       |                       |
| Gateway               |                       |                       |
+-----------------------+-----------------------+-----------------------+
| Location in budget:   |                       |                       |
| Salaries and expenses |                       |                       |
| account \$1.0M;       |                       |                       |
| Capital account       |                       |                       |
| \$1.4M                |                       |                       |
+-----------------------+-----------------------+-----------------------+
| **IT Increase and IT  |                       |                       |
| Base Amount:**        |                       |                       |
+-----------------------+-----------------------+-----------------------+
| Life Cycle Increase   | FY 2010 Increase      | FY 2009 President's   |
|                       |                       | Budget                |
+-----------------------+-----------------------+-----------------------+
| \+ \$20,000,000       | \+ \$2,400,000        | \$2,000,000           |
+-----------------------+-----------------------+-----------------------+
| Project Description   |                       |                       |
| and Justification:    |                       |                       |
|                       |                       |                       |
| NOAA requests an      |                       |                       |
| increase to modernize |                       |                       |
| the NWS               |                       |                       |
| Telecommunication     |                       |                       |
| Gateway (NWSTG)       |                       |                       |
| legacy systems with   |                       |                       |
| current operating     |                       |                       |
| system, data          |                       |                       |
| processing, and       |                       |                       |
| communications        |                       |                       |
| switching technology. |                       |                       |
| This modernization    |                       |                       |
| (first in 5 years) is |                       |                       |
| necessary to prevent  |                       |                       |
| obsolescence and      |                       |                       |
| manage the exploding  |                       |                       |
| volumes of            |                       |                       |
| observational and     |                       |                       |
| weather forecast and  |                       |                       |
| warning information   |                       |                       |
| created by the NWS    |                       |                       |
| modernization.        |                       |                       |
|                       |                       |                       |
| NWSTG is no longer    |                       |                       |
| adequate: 1) Basic    |                       |                       |
| message switching     |                       |                       |
| process is outdated   |                       |                       |
| leading to delays in  |                       |                       |
| dissemination of      |                       |                       |
| weather watches and   |                       |                       |
| warnings. 2) Volume   |                       |                       |
| of numerical weather  |                       |                       |
| prediction models     |                       |                       |
| from NCEP is          |                       |                       |
| projected to grow     |                       |                       |
| from 10 gigabytes/day |                       |                       |
| to 400 gigabytes/day  |                       |                       |
| during FY 2010 due to |                       |                       |
| improvements in model |                       |                       |
| resolutions. Central  |                       |                       |
| collection and        |                       |                       |
| dissemination of      |                       |                       |
| national radar        |                       |                       |
| products will grow    |                       |                       |
| from 35 GB/day to 300 |                       |                       |
| in FY 2010. 3) NWSTG  |                       |                       |
| facility is twelve    |                       |                       |
| years old, and cannot |                       |                       |
| be adequately         |                       |                       |
| maintained or         |                       |                       |
| upgraded. 4) Current  |                       |                       |
| NWSTG technology      |                       |                       |
| cannot maintain       |                       |                       |
| compatibility with US |                       |                       |
| and foreign partners. |                       |                       |
|                       |                       |                       |
| During FY 2010, the   |                       |                       |
| NWS will acquire      |                       |                       |
| servers and           |                       |                       |
| processors (+\$0.4    |                       |                       |
| million); LANs and    |                       |                       |
| hubs (+\$0.4          |                       |                       |
| million); routers and |                       |                       |
| interfaces (+\$0.2    |                       |                       |
| million); gateway     |                       |                       |
| switch replacement    |                       |                       |
| (+\$1.0 million); and |                       |                       |
| operating system      |                       |                       |
| software (+0.4        |                       |                       |
| million).             |                       |                       |
+-----------------------+-----------------------+-----------------------+

Attachment 4

Project Concept Document\*

The Project Concept Document defines the project's reason for being. It
defines a high-level approach, providing critical success factors, a
Product Description Statement, and other top-level planning information.
The Project Concept Document should define what is to be done, why it is
to be done, and what business value it will provide when the project is
completed. Where a project concept document is used instead of the
Exhibit 300, include the project's life cycle funding profile in the
Exhibit 300 Summary of Spending table format.

-   The business justification should focus attention on the purpose and
    impact of the project within both the particular Commerce operating
    unit and the Department as a whole. The justification should provide
    the business need, current situation, project vision and goal,
    benefits, and strategic alignment.

-   The proposed solution description should include high-level
    requirements, assumptions, proposed alternatives, project approach,
    high-level deliverables, and dependencies on other projects.

-   The Product Description Statement is a high-level statement
    contained within the Project Concept Document, which describes the
    characteristics of the products or processes to be created by the
    project. Typically, a Product Description Statement does not have a
    great deal of detail and will be used as a basis for building
    progressively more detailed descriptions as the project plan
    matures.

In addition to the business justification, proposed solution, and
product description statement, the Project Concept Document for large,
complex projects should identify external interfaces; establish
strategic alignment across the portfolio of systems; and describe the
impact of the project within the particular Commerce operating unit, the
Department as a whole, and outside the Department of Commerce.

\* The terms and definitions are derived from project management best
practices identified in the Project Management Book of Knowledge