OMB released a new memo last night, directing agencies to provide past-due and new funds to support the improvement of Grants.gov. Attachment A of the memo shows that OMB expects agencies to send over $12 million to Grants.gov by April 13th, $6 million of which are intended for system improvements.

This memo and the significant level of funding demonstrate that OMB clearly expects agencies to continue using Grants.gov over the long-term.

While this is welcome news from a grants streamlining perspective, agencies are unlikely to be happy about this mandate, especially given Grants.gov’s past performance problems (which OMB highlighted in another memo on March 9th).

In many ways, Grants.gov is a victim of its own success, and also of a poorly structured approach to its funding. The “round-robin”, pass-the-hat funding approach requires agencies to argue with Congress about the importance of Grants.gov to their own core missions, so that appropriators allow them to hand money to Grants.gov. This results in an unsteady stream of funding — a situation that makes managing a project of any size difficult. The complexity of Grants.gov’s mission and approach exacerbates things further.

So this memo is encouraging for grants streamlining advocates, annoying for agencies, and doesn’t solve the fundamental problems of how Grants.gov is funded. But at least there seems to be a recognition of this now, and the system will be better positioned to serve the needs of the Recovery Act and future grants activities.