1 Savings goals not planned
Risk: missed cost savings targets and weaker optimization progress
Consolidating data centers. In an effort to reduce the growing number of data centers, OMB launched a consolidation initiative in 2010. GAO recently reported that agencies had closed 3, 125 of the 10, 584 total data centers and achieved $ 2.8 billion in cost savings and avoidances through fiscal year 2015. Agencies are planning a total of about $ 8.2 billion in savings and avoidances through fiscal year 2019. However, these planned savings may be higher because 10 agencies had not fully developed their planned savings goals. In addition, agencies made limited progress against OMB’s fiscal year 2015 data center optimization performance targets, such as the utilization of data center facilities. GAO recommended that the agencies take action to complete their cost savings targets and improve optimization progress. Most agencies agreed with the recommendations or had no comment.
2 Insufficient quality and frequency of risk analysis
Lower transparency
Enhancing transparency. OMB’s IT Dashboard provides detailed information on major investments at federal agencies, including ratings from Chief Information Officers (CIO) that should reflect the level of risk facing an investment. In a draft report, GAO’s assessments of the risk ratings showed more risk than the associated CIO ratings. In particular, of the 95 investments reviewed, GAO’s assessments matched the CIO ratings 22 times, showed more risk 60 times, and showed less risk 13 times. Several issues contributed to these differences, such as ratings not being updated frequently. In its draft report, GAO is recommending that agencies improve the quality and frequency of their CIO ratings.
3 Different interpretations of guidance
Significant differences in reporting approach
Implementing incremental development. An additional key reform initiated by OMB has emphasized the need to deliver investments in smaller parts, or increments, in order to reduce risk and deliver capabilities more quickly. Since 2012, OMB has required investments to deliver functionality every 6 months. In a draft report, GAO determined that 22 agencies reported that 64 percent of 469 active software development projects had plans to deliver usable functionality every 6 months for fiscal year 2016. Further, for seven selected agencies, GAO identified significant differences in the percentage of software projects delivering every 6 months reported to GAO compared to what was reported on the IT Dashboard. For example, the percentage of software projects reported to GAO by the Department of Commerce decreased by about 42 percentage points from what was reported on the IT Dashboard. These differences were due, in part, to agencies having different interpretations of OMB’s guidance on reporting software development projects. In its draft report, GAO is recommending that OMB and agencies improve the use of incremental development.
Background
The federal government plans to invest more than $ 89 billion on IT in fiscal year 2017. However, as we have previously reported, investments in federal IT too often result in failed projects that incur cost overruns and schedule slippages while contributing little to the mission -related outcome. For example:
· The Department of Homeland Security’s Secure Border Initiative Network program was ended in January 2011, after the department obligated more than $ 1 billion to the program, because it did not meet cost- effectiveness and viability standards.
· The Department of Veterans Affairs’ Financial and Logistics Integrated Technology Enterprise program was intended to be delivered by 2014 at a total estimated cost of $ 609 million, but was terminated in October 2011 due to challenges in managing the program.
· The Office of Personnel Management’s Retirement Systems Modernization program was canceled in February 2011, after spending approximately $ 231 million on the agency’s third attempt to automate the processing of federal employee retirement claims.
The tri-agency National Polar-orbiting Operational Environmental Satellite System was stopped in February 2010 by the White House’s Office of Science and Technology Policy after the program spent 16 years and almost $ 5 billion.
The Department of Veterans Affairs’ Scheduling Replacement Project was terminated in September 2009 after spending an estimated $ 127 million over 9 years.
These and other failed IT projects often suffered from a lack of disciplined and effective management, such as project planning, requirements definition, and program oversight and governance. In many instances, agencies had not consistently applied best practices that are critical to successfully acquiring IT investments.
· Implementing incremental development. An additional key reform initiated by OMB has emphasized the need to deliver investments in smaller parts, or increments, in order to reduce risk and deliver capabilities more quickly. Since 2012, OMB has required investments to deliver functionality every 6 months. In a draft report, GAO determined that 22 agencies reported that 64 percent of 469 active software development projects had plans to deliver usable functionality every 6 months for fiscal year 2016. Further, for seven selected agencies, GAO identified significant differences in the percentage of software projects delivering every 6 months reported to GAO compared to what was reported on the IT Dashboard. For example, the percentage of software projects reported to GAO by the Department of Commerce decreased by about 42 percentage points from what was reported on the IT Dashboard. These differences were due, in part, to agencies having different interpretations of OMB’s guidance on reporting software development projects. In its draft report, GAO is recommending that OMB and agencies improve the use of incremental development.
Objectives
[The GAO report] will primarily discuss our recently published work on data center consolidation and our draft reports with recommendations, which are currently with applicable agencies for comment, on the (1) risk of major investments as reported on the Office of Management and Budget’s (OMB) IT Dashboard and (2) implementation of incremental development practices. A more detailed discussion of the objectives, scope, and methodology of this work is included in each of the reports that are cited throughout this statement.
· Implementing incremental development. An additional key reform initiated by OMB has emphasized the need to deliver investments in smaller parts, or increments, in order to reduce risk and deliver capabilities more quickly. Since 2012, OMB has required investments to deliver functionality every 6 months. In a draft report, GAO determined that 22 agencies reported that 64 percent of 469 active software development projects had plans to deliver usable functionality every 6 months for fiscal year 2016. Further, for seven selected agencies, GAO identified significant differences in the percentage of software projects delivering every 6 months reported to GAO compared to what was reported on the IT Dashboard. For example, the percentage of software projects reported to GAO by the Department of Commerce decreased by about 42 percentage points from what was reported on the IT Dashboard. These differences were due, in part, to agencies having different interpretations of OMB’s guidance on reporting software development projects. In its draft report, GAO is recommending that OMB and agencies improve the use of incremental development.