The Obama administration has ordered federal agencies to stop awarding information technology contracts for new financial system modernization projects.

The Office of Management and Budget, an arm of the White House, wants agencies to reduce the size, cost and complexity of these projects, which frequently run over budget and fail to achieve the desired results. Streamlined plans must be approved by OMB before agencies can move forward with these projects.

OMB's directive puts on hold about 30 financial system modernization projects, estimated to cost about $20 billion. Streamlining these projects will significantly reduce their cost, according to the office.

OMB Director Peter Orszag said the federal government "has almost entirely missed" the productivity boom that has "transformed private-sector performance over the past two decades."

"We are wasting billions of dollars a year, and more importantly are missing out on the huge productivity improvements other sectors have benefited from," he said. "Quite simply, we can't significantly improve the efficiency and effectiveness of the federal government without fixing IT."

The biggest problems often occur with financial system modernization projects. Instead of focusing on essential needs, agencies aim for broad business transformations.

This results in complex projects that take too long to implement and often are obsolete by the time they are completed, according to OMB. The office directed agencies to divide these projects into smaller segments that deliver the most critical functions first.

For more information, see www.whitehouse.gov/omb

Deadline for freeing wireless spectrum set

President Barack Obama ordered federal agencies to complete a plan by Oct. 1 for identifying and making available 500 megahertz of spectrum that will be licensed for wireless broadband use.

"Expanded wireless broadband access will trigger the creation of innovative new businesses, provide cost-effective connections in rural areas, increase productivity, improve public safety and allow for the development of mobile telemedicine, telework, distance learning and other new applications that will transform Americans' lives," the president said in a June 28 memorandum to agency heads.

Since government agencies rely on spectrum for emergency communications, national security, law enforcement, aviation and other functions, the plan must ensure that these capabilities aren't compromised, the memo stated. The president directed agencies to research secure spectrum-sharing technologies.

The Federal Communications Commission will auction off the freed-up spectrum.

For more information, see www.fcc.gov

Housing market dip led to self-employment drop

The decline of the housing market contributed to a drop in the number of self-employed individuals in 2008, according to a new Census Bureau report.

The number of nonemployer businesses - ones that have no paid employees and receipts of $1,000 or more - fell by 350,000 in 2008 to 21.4 million. The ranks of real estate agents and brokers fell by 11.4 percent to 700,275 establishments.

There was an 8.1 percent decline in the number of nonemployer businesses among furniture retailers, to 16,399 establishments.

Nonemployer businesses that continued to grow in 2008 included hair, nail and skin care services; educational services; and full-service restaurants.

Nearly 19 million of nonemployer businesses are sole proprietorships, but they include 1.5 million corporations and 1.1 million partnerships. In many cases, these businesses aren't an individual's primary source of income.

For more information, see www.census.gov

SBA to provide funding for regional clusters

The Small Business Administration is accepting applications for funding to support regional clusters, networks of organizations and businesses that encourage collaboration and innovation.

The SBA will award up to $600,000 to as many as 15 existing regional clusters around the nation. The money can be used to provide training and counseling to small businesses, as well as commercialization and technology transfer services.

"Clusters bring together many businesses and organizations in a region to maximize the economic strengths of that region, enhancing its ability to compete on a national and global scale," said SBA Administrator Karen Mills. "SBA is committed to providing both financial and technical assistance resources that can be a catalyst for accelerating a regional cluster's viability and lead to sustainable economic growth and job creation."

Before coming to the SBA, Mills helped organize a regional cluster in Maine focusing on the boat-building industry.

The SBA also will award contracts to regional clusters that focus on technologies critical to the Department of Defense, including advanced robotics and energy innovations.

For more information, see www.sba.gov

Kent Hoover is Washington bureau chief for American City Business Journals. E-mail: khoover@bizjournals.com