Background

According to the President’s budget, the federal government plans to  invest more than $96 billion on IT in fiscal year 2018—the largest amount  ever. 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 desired mission-related  outcomes. For example:
The Department of Veterans Affairs’ Scheduling Replacement Project  was terminated in September 2009 after spending an estimated $127  million over 9 years.
The tri-agency National Polar-orbiting Operational Environmental  Satellite System was halted 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 Homeland Security’s Secure Border Initiative  Network program was ended in January 2011, after the department  obligated more than $1 billion for 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 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.
The Department of Defense’s Expeditionary Combat Support System  was canceled in December 2012 after spending more than a billion  dollars and failing to deploy within 5 years of initially obligating  funds.
Our past work found that 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.
Federal IT projects have also failed due to a lack of oversight and  governance. Executive-level governance and oversight across the  government has often been ineffective, specifically from chief information  officers (CIO). For example, we have reported that some CIOs’ authority  was limited because they did not have the authority to review and  approve the entire agency IT portfolio.

		FITARA Can Improve Agencies’ Management of IT

Recognizing the severity of issues related to the government-wide  management of IT, FITARA was enacted in December 2014. The law was  intended to improve agencies’ acquisitions of IT and enable Congress to  monitor agencies’ progress and hold them accountable for reducing  duplication and achieving cost savings. FITARA includes specific  requirements related to seven areas.
Federal data center consolidation initiative (FDCCI). Agencies are  required to provide OMB with a data center inventory, a strategy for  consolidating and optimizing their data centers (to include planned  cost savings), and quarterly updates on progress made. The law also  requires OMB to develop a goal for how much is to be saved through  this initiative, and provide annual reports on cost savings achieved.
Enhanced transparency and improved risk management. OMB  and covered agencies are to make detailed information on federal IT  investments publicly available, and agency CIOs are to categorize  their IT investments by level of risk. Additionally,  in the case of major  IT investments  rated as high risk for 4 consecutive quarters, the law  requires that the agency CIO and the investment’s program manager  conduct a review aimed at identifying and addressing the causes of  the risk.
Agency CIO authority enhancements. CIOs at covered agencies  are required to (1) approve the IT budget requests of their respective  agencies, (2) certify that OMB’s incremental development guidance is  being adequately implemented for IT investments, (3) review and  approve contracts for IT, and (4) approve the appointment of other  agency employees with the title of CIO. See appendix I for details on  the current status of federal CIOs.
Portfolio review. Agencies are to annually review IT investment  portfolios in order to, among other things, increase efficiency and  effectiveness and identify potential waste and duplication. In  establishing the process associated with such portfolio reviews, the  law requires OMB to develop standardized performance metrics, to  include cost savings, and to submit quarterly reports to Congress on  cost savings.
Expansion of training and use of IT acquisition cadres. Agencies  are to update their acquisition human capital plans to address  supporting the timely and effective acquisition of IT. In doing so, the  law calls for agencies to consider, among other things, establishing IT  acquisition cadres or developing agreements with other agencies that  have such cadres.
Government-wide software purchasing program. The General  Services Administration is to develop a strategic sourcing initiative to  enhance government-wide acquisition and management of software.  In doing so, the law requires that, to the maximum extent practicable,  the General Services Administration should allow for the purchase of  a software license agreement that is available for use by all executive  branch agencies as a single user.
Maximizing the benefit of the Federal Strategic Sourcing  Initiative. Federal agencies are required to compare their  purchases of services and supplies to what is offered under the  Federal Strategic Sourcing Initiative.  OMB is also required to issue  regulations related to the initiative.
In June 2015, OMB released guidance describing how agencies are to  implement FITARA. This guidance is intended to, among other things: assist agencies in aligning their IT resources with statutory establish government-wide IT management controls that will meet the  law’s requirements, while providing agencies with flexibility to adapt to  unique agency processes and requirements; clarify the CIO’s role and strengthen the relationship between agency  CIOs and bureau CIOs; and strengthen CIO accountability for IT costs, schedules, performance,  and security.
The guidance identified several actions that agencies were to take to  establish a basic set of roles and responsibilities (referred to as the  common baseline) for CIOs and other senior agency officials, which were  needed to implement the authorities described in the law. For example,  agencies were required to conduct a self-assessment and submit a plan  describing the changes they intended to make to ensure that common  baseline responsibilities were implemented. Agencies were to submit their  plans to OMB’s Office of E-Government and Information Technology by  August 15, 2015, and make portions of the plans publicly available on  agency websites no later than 30 days after OMB approval. As of  November 2016, all agencies had made their plans publicly available.
In addition, in August 2016, OMB released guidance intended to, among  other things, define a framework for achieving the data center  consolidation and optimization requirements of FITARA. The guidance  includes requirements for agencies to: maintain complete inventories of all data center facilities owned,  operated, or maintained by or on behalf of the agency; develop cost savings targets for fiscal years 2016 through 2018 and  report any actual realized cost savings; and measure progress toward meeting optimization metrics on a quarterly  basis.
The guidance also directs agencies to develop a data center  consolidation and optimization strategic plan that defines the agency’s  data center strategy for fiscal years 2016, 2017, and 2018. This strategy  is to include, among other things, a statement from the agency CIO  stating whether the agency has complied with all data center reporting  requirements in FITARA.  Further, the guidance indicates that OMB is to  maintain a public dashboard that will display consolidation-related costs  savings and optimization performance information for the agencies.

		IT Acquisitions and Operations Identified by GAO as a High-Risk Area

In February 2015, we introduced a new government-wide high-risk area,  Improving the Management of IT Acquisitions and Operations. This area  highlighted several critical IT initiatives in need of additional congressional  oversight, including (1) reviews of troubled projects; (2) efforts to increase  the use of incremental development; (3) efforts to provide transparency  relative to the cost, schedule, and risk levels for major IT investments; (4)  reviews of agencies’ operational investments; (5) data center  consolidation; and (6) efforts to streamline agencies’ portfolios of IT  investments. We noted that implementation of these initiatives was  inconsistent and more work remained to demonstrate progress in  achieving IT acquisition and operation outcomes.
Further, our February 2015 high-risk report stated that, beyond  implementing FITARA,  OMB and agencies needed to continue to  implement our prior recommendations in order to improve their ability to  effectively and efficiently invest in IT. Specifically, from fiscal years 2010  through 2015, we made 803 recommendations to OMB and federal  agencies to address shortcomings in IT acquisitions and operations.  These recommendations included many to improve the implementation of  the aforementioned six critical IT initiatives and other government-wide,  cross-cutting efforts. We stressed that OMB and agencies should  demonstrate government-wide progress in the management of IT investments by, among other things, implementing at least 80 percent of  our recommendations related to managing IT acquisitions and operations  within 4 years.
In February 2017, we issued an update to our high-risk series and  reported that, while progress had been made in improving the  management of IT acquisitions and operations, significant work still  remained to be completed. For example, as of May 2017, OMB and the  agencies had fully implemented 380 (or about 47 percent) of the 803  recommendations. This was a 24 percent increase compared to the  percentage we reported as being fully implemented in 2015. Figure 1  summarizes the progress that OMB and the agencies had made in  addressing our recommendations, as compared to the 80 percent target,  as of May 2017.
In addition, in fiscal year 2016, we made 202 new recommendations, thus  further reinforcing the need for OMB and agencies to address the  shortcomings in IT acquisitions and operations. Also, beyond addressing  our prior recommendations, our 2017 high-risk update noted the  importance of OMB and federal agencies continuing to expeditiously  implement the requirements of FITARA.
To further explore the challenges and opportunities to improve federal IT  acquisitions and operations, we convened a forum on September 14,  2016, to explore challenges and opportunities for CIOs to improve federal  IT acquisitions and operations—with the goal of better informing  policymakers and government leadership. Forum participants, which  included 13 current and former federal agency CIOs, members of  Congress, and private sector IT executives, identified key actions related  to seven topics: (1) strengthening FITARA, (2) improving CIO authorities,  (3) budget formulation, (4) governance, (5) workforce, (6) operations, and  (7) transition planning. A summary of the key actions, by topic area,  identified during the forum is provided in figure 2.
In addition, in January 2017, the Federal CIO Council concluded that  differing levels of authority over IT-related investments and spending  have led to inconsistencies in how IT is executed from agency to agency.  According to the Council, for those agencies where the CIO has broad  authority to manage all IT investments, great progress has been made to  streamline and modernize the federal agency’s footprint. For the others,  where agency CIOs are only able to control pieces of the total IT footprint,  it has been harder to achieve improvements.

		The Federal Government Has Current Efforts to Improve IT

The administration has initiated two efforts aimed at improving federal IT.  Specifically, in March 2017, it established the Office of American  Innovation  to, among other things, improve federal government  operations and services, and modernize federal IT. The office is to  consult with both OMB and the Office of Science and Technology Policy  on policies and plans intended to improve government operations and  services, improve the quality of life for Americans, and spur job creation.
In May 2017, the administration also established the American  Technology Council to help transform and modernize federal IT and how  the government uses and delivers digital services. The President is the  chairman of this council, and the Federal CIO and the United States  Digital Service administrator are members.

	Agencies Have Taken Steps to Improve IT Management, but Full Implementation of FITARA Is Needed

Agencies have taken steps to improve the management of IT acquisitions  and operations by implementing key FITARA initiatives. However,  agencies would be better positioned to fully implement the law and, thus,  realize additional management improvements, if they addressed the  numerous recommendations we have made aimed at improving data  center consolidation, increasing transparency via OMB’s IT Dashboard,  implementing incremental development, and managing software licenses.

		Agencies Have Made Progress in Consolidating Data Centers, but Need to Take Action to Achieve Planned Cost Savings

One of the key initiatives to implement FITARA is data center  consolidation. OMB established FDCCI in February 2010 to improve the  efficiency, performance, and environmental footprint of federal data  center activities and the enactment of FITARA reinforced the initiative.  However, in a series of reports that we issued over the past 6 years, we  noted that, while data center consolidation could potentially save the  federal government billions of dollars, weaknesses existed in several  areas, including agencies’ data center consolidation plans and OMB’s  tracking and reporting on related cost savings. In these reports, we  made a total of 141 recommendations to OMB and 24 agencies to  improve the execution and oversight of the initiative. Most agencies and  OMB agreed with our recommendations or had no comments. As of May  2017, 75 of our recommendations remained open.
Also, in May 2017, we reported that the 24 agencies  participating in  FDCCI collectively had made progress on their data center closure  efforts. Specifically, as of August 2016, these agencies had identified a  total of 9,995 data centers, of which they reported having closed 4,388,  and having plans to close a total of 5,597 data centers through fiscal year  2019. Notably, the Departments of Agriculture, Defense, the Interior, and  the Treasury accounted for 84 percent of the completed closures.
In addition, 18 of the 24 agencies reported achieving about $2.3 billion  collectively in cost savings and avoidances from their data center  consolidation and optimization efforts from fiscal year 2012 through  August 2016. The Departments of Commerce, Defense, Homeland  Security, and the Treasury accounted for approximately $2.0 billion (or 87  percent) of the total.
Further, 23 agencies reported about $656 million collectively in planned  savings for fiscal years 2016 through 2018. This is about $3.3 billion less  than the estimated $4.0 billion in planned savings for fiscal years 2016  through 2018 that agencies reported to us in November 2015. Figure 3  presents a comparison of the amounts of cost savings and avoidances  reported by agencies to OMB and the amounts the agencies reported to  us.
As mentioned previously, FITARA required agencies to submit multi-year  strategies to achieve the consolidation and optimization of their data  centers no later than the end of fiscal year 2016. Among other things, this  strategy was to include such information as data center consolidation and  optimization metrics, and year-by-year calculations of investments and  cost savings through October 1, 2018.
Further, OMB’s August 2016 guidance on data center optimization  contained additional information for how agencies are to implement the  strategic plan requirements of FITARA. Specifically, the guidance stated  that agency data center consolidation and optimization strategic plans are  to include, among other things, planned and achieved performance levels  for each optimization metric; calculations of target and actual agency- wide spending and cost savings on data centers; and historical cost  savings and cost avoidances due to data center consolidation and  optimization. OMB’s guidance also stated that agencies were required to  publicly post their strategic plans to their agency-owned digital strategy  websites by September 30, 2016.
As of April 2017, only 7 of the 23 agencies that submitted their strategic  plans—the Departments of Agriculture, Education, Homeland Security,  and Housing and Urban Development; the General Services  Administration; the National Science Foundation; and the Office of  Personnel Management—had addressed all five elements required by the  OMB memorandum implementing FITARA.  The remaining 16 agencies  either partially met or did not meet the requirements. For example, most  agencies partially met or did not meet the requirements to provide  information related to data center closures and cost savings metrics. The  Department of Defense did not submit a plan and was rated as not  meeting any of the requirements.
To better ensure that federal data center consolidation and optimization  efforts improve governmental efficiency and achieve cost savings, in our  May 2017 report, we recommended that 11 of the 24 agencies take action  to ensure that the amounts of achieved data center cost savings and  avoidances are consistent across all reporting mechanisms. We also  recommended that 17 of the 24 agencies each take action to complete  missing elements in their strategic plans and submit their plans to OMB in  order to optimize their data centers and achieve cost savings. Twelve  agencies agreed with our recommendations, 2 did not agree, and 10  agencies and OMB did not state whether they agreed or disagreed.

		Risks Need to Be Fully Considered When Agencies Rate Their Major Investments on OMB’s IT Dashboard

To facilitate transparency across the government in acquiring and  managing IT investments, OMB established a public website—the IT  Dashboard—to provide detailed information on major investments at 26  agencies, including ratings of their performance against cost and  schedule targets. Among other things, agencies are to submit ratings  from their CIOs, which, according to OMB’s instructions, should reflect the  level of risk facing an investment relative to that investment’s ability to  accomplish its goals. In this regard, FITARA  includes a requirement for  CIOs to categorize their major IT investment risks in accordance with  OMB guidance.
Over the past 6 years, we have issued a series of reports about the  Dashboard that noted both significant steps OMB has taken to enhance  the oversight, transparency, and accountability of federal IT investments  by creating its Dashboard, as well as concerns about the accuracy and  reliability of the data. In total, we have made 47 recommendations to  OMB and federal agencies to help improve the accuracy and reliability of  the information on the Dashboard and to increase its availability.  Most  agencies agreed with our recommendations or had no comments. As of  May 2017, 17 of these recommendations have been implemented.
In June 2016, we determined that 13 of the 15 agencies selected for in- depth review had not fully considered risks when rating their major  investments on the Dashboard. Specifically, our assessments of risk for  95 investments at the 15 selected agencies  matched the CIO ratings  posted on the Dashboard 22 times, showed more risk 60 times, and showed less risk 13 times. Figure 4 summarizes how our assessments  compared to the selected investments’ CIO ratings.
Aside from the inherently judgmental nature of risk ratings, we identified  three factors which contributed to differences between our assessments  and the CIO ratings:
Forty of the 95 CIO ratings were not updated during April 2015 (the  month we conducted our review), which led to differences between  our assessments and the CIOs’ ratings. This underscores the  importance of frequent rating updates, which help to ensure that the  information on the Dashboard is timely and accurately reflects recent  changes to investment status.
Three agencies’ rating processes spanned longer than 1 month.
Longer processes mean that CIO ratings are based on older data, and  may not reflect the current level of investment risk.
Seven agencies’ rating processes did not focus on active risks.
According to OMB’s guidance, CIO ratings should reflect the CIO’s  assessment of the risk and the investment’s ability to accomplish its  goals. CIO ratings that do no incorporate active risks increase the  chance that ratings overstate the likelihood of investment success.
As a result, we concluded that the associated risk rating processes used  by the 15 agencies were generally understating the level of an  investment’s risk, raising the likelihood  that critical federal investments in  IT are not receiving the appropriate levels of oversight.
To better ensure that the Dashboard ratings more accurately reflect risk,  we recommended that the 15 agencies take actions to improve the quality  and frequency of their CIO ratings. Twelve agencies generally agreed  with or did not comment on the recommendations and three agencies  disagreed, stating that their CIO ratings were adequate. However, we  noted that weaknesses in these three agencies’ processes still existed  and that we continued to believe our recommendations were appropriate.  As of May 2017, these recommendations have not yet been fully  implemented.

		Agencies Need to Increase Their Use of Incremental Development Practices

OMB has emphasized the need to deliver investments in smaller parts, or  increments, in order to reduce risk, deliver capabilities more quickly, and  facilitate the adoption of emerging technologies. In 2010, it called for  agencies’ major investments to deliver functionality every 12 months and,  since 2012, every 6 months. Subsequently, FITARA codified a  requirement that agency CIOs certify that IT investments are adequately  implementing OMB’s incremental development guidance.
However, in May 2014, we reported that 66 of 89 selected investments  at five major agencies  did not plan to deliver capabilities in 6-month  cycles, and less than half of these investments planned to deliver  functionality in 12-month cycles. We also reported that only one of the five  agencies had complete incremental development policies. Accordingly,  we recommended that OMB clarify its guidance on incremental  development and that the selected agencies update their associated  policies to comply with OMB’s revised guidance (once made available),  and consider the factors identified in our report when doing so.
Four of the six agencies agreed with our recommendations or had no  comments, one agency partially agreed, and the remaining agency  disagreed with the recommendations. The agency that disagreed did not  believe that its recommendations should be dependent upon OMB taking  action to update guidance. In response, we noted that only one of the  recommendations to that agency depended upon OMB action, and we  maintained that the action was warranted and could be implemented.
Subsequently, in August 2016, we reported that agencies had not fully  implemented incremental development practices for their software  development projects. Specifically, we noted that, as of August 31, 2015,  22 federal agencies  had reported on the Dashboard that 300 of 469  active software development projects (approximately 64 percent) were  planning to deliver usable functionality every 6 months for fiscal year  2016, as required by OMB guidance. Table 1 lists the total number and  percent of federal software development projects for which agencies  reported plans to deliver functionality every 6 months for fiscal year 2016.
Regarding the remaining 169 projects (or 36 percent) that were reported  as not planning to deliver functionality every 6 months, agencies provided  a variety of explanations for not achieving that goal. These included  project complexity, the lack of an established project release schedule, or  that the project was not a software development project.
Further, in conducting an in-depth review of seven selected agencies’  software development projects, we determined that 45 percent of the  projects delivered functionality every 6 months for fiscal year 2015 and 55  percent planned to do so in fiscal year 2016. However, significant  differences existed between the delivery rates that the agencies reported  to us and what they reported on the Dashboard. For example, for four  agencies (the Departments of Commerce, Education, Health and Human  Services, and Treasury), the percentage of delivery reported to us was at  least 10 percentage points lower than what was reported on the Dashboard. These differences were due to (1) our identification of fewer  software development projects than agencies reported on the Dashboard  and (2) the fact that information reported to us was generally more current  than the information reported on the Dashboard.
We concluded that, by not having up-to-date information on the  Dashboard about whether the project is a software development project  and about the extent to which projects are delivering functionality, these  seven agencies were at risk that OMB and key stakeholders may make  decisions regarding the agencies’ investments without the most current  and accurate information. As such, we recommended that the seven  selected agencies review major IT investment project data reported on  the Dashboard and update the information as appropriate, ensuring that  these data are consistent across all reporting channels.
Finally, while OMB has issued guidance requiring agency CIOs to certify  that each major IT investment’s plan for the current year adequately  implements incremental development, only three agencies (the  Departments of Commerce, Homeland Security, and Transportation) had  defined processes and policies intended to ensure that the CIOs certify  that major IT investments are adequately implementing incremental  development. Accordingly, we recommended that the remaining four  agencies—the Departments of Defense, Education, Health and Human  Services, and the Treasury—establish policies and processes for  certifying that major IT investments adequately use incremental  development.
The Departments of Education and Health and Human Services agreed  with our recommendation, while the Department of Defense disagreed  and stated that its existing policies address the use of incremental  development. However, we noted that the department’s policies did not  comply with OMB’s guidance and that we continued to believe our  recommendation was appropriate. The Department of the Treasury did  not comment on its recommendation.
In total, we have made 23 recommendations to OMB and agencies to  improve their implementation of incremental development. As of May  2017, 17 of our recommendations remained open.

		Agencies Need to Better Manage Software Licenses to Achieve Savings

Federal agencies engage in thousands of software licensing agreements  annually. The objective of software license management is to manage,  control, and protect an organization’s software assets. Effective  management of these licenses can help avoid purchasing too many  licenses, which can result in unused software, as well as too few licenses,  which can result in noncompliance with license terms and cause the  imposition of additional fees.
As part of its PortfolioStat initiative, OMB has developed policy that  addresses software licenses. This policy requires agencies to conduct an  annual, agency-wide IT portfolio review to, among other things, reduce  commodity IT spending. Such areas of spending could include software  licenses.
In May 2014, we reported on federal agencies’ management of software  licenses and determined that better management was needed to achieve  significant savings government-wide. In particular, 22 of the 24 major  agencies did not have comprehensive license policies and only 2 had  comprehensive license inventories. In addition, we identified five leading  software license management practices, and the agencies’  implementation of these practices varied.
As a result of agencies’ mixed management of software licensing,  agencies’ oversight of software license spending was limited or lacking,  thus, potentially leading to missed savings. However, the potential  savings could be significant considering that, in fiscal year 2012, 1 major  federal agency reported saving approximately $181 million by  consolidating its enterprise license agreements, even when its oversight  process was ad hoc. Accordingly, we recommended that OMB issue  needed guidance to agencies; we also made 135 recommendations to  the 24 agencies to improve their policies and practices for managing  licenses. Among other things, we recommended that the agencies  regularly track and maintain a comprehensive inventory of software  licenses and analyze the inventory to identify opportunities to reduce  costs and better inform investment decision making.
Most agencies generally agreed with the recommendations or had no  comments. As of May 2017, 123 of the recommendations had not been  implemented, but 4 agencies had made progress. For example, three  agencies—the Department of Education, General Services  Administration, and U.S. Agency for International Development—regularly  track and maintain a comprehensive inventory of software licenses. In  addition, two of these agencies also analyze agency-wide software  licensing data to identify opportunities to reduce costs and better inform  investment decision making. The National Aeronautics and Space  Administration uses its inventory to make decisions and reduce costs, but  does not regularly track and maintain a comprehensive inventory. While  the other agencies had not completed the actions associated with these  recommendations, they had plans in place to do so. Table 2 reflects the  extent to which agencies implemented recommendations in these areas.
In conclusion, with the enactment of FITARA,  the federal government has  an opportunity to improve the transparency and management of IT  acquisitions and operations, and to strengthen the authority of CIOs to  provide needed direction and oversight. The forum we held also  recommended that CIOs be given more authority, and noted the  important role played by the Federal CIO.
Most agencies have taken steps to improve the management of IT  acquisitions and operations by implementing key FITARA initiatives,  including data center consolidation, efforts to increase transparency via  OMB’s IT Dashboard, incremental development, and management of  software licenses; and they have continued to address recommendations  we have made over the past several years. However, additional  improvements are needed, and further efforts by OMB and federal  agencies to implement our previous recommendations would better  position them to fully implement FITARA.
To help ensure that these efforts succeed, OMB’s and agencies’  continued implementation of FITARA is essential. In addition, we will  continue to monitor agencies’ implementation of our previous  recommendations.
Chairmen Meadows and Hurd, Ranking Members Connolly and Kelly,  and Members of the Subcommittees, this completes my prepared  statement. I would be pleased to respond to any questions that you may  have at this time.

	GAO Contacts and Staff Acknowledgments

If you or your staffs have any questions about this testimony, please  contact me at (202) 512-9286 or at pownerd@gao.gov. Individuals who  made key contributions to this testimony are Kevin Walsh (Assistant  Director), Chris Businsky, Rebecca Eyler, and Jessica Waselkow (Analyst  in Charge).

Appendix I: Status of Federal Chief Information Officers

As of May 2017, 9 of the 25 federal CIO positions were filled by acting  CIOs that do not permanently hold the position. Of the 9, 2 were career  positions and the remaining positions require some form of appointment.  Table 3 summarizes the status of the CIO position at the federal level.

Summary:
Why GAO Did This Study

The federal government plans to invest almost $96 billion on IT in fiscal year 2018. Historically, these investments have too often failed, incurred cost overruns and schedule slippages, or contributed little to mission-related outcomes. Accordingly, in December 2014, Congress enacted FITARA, aimed at improving agencies' acquisitions of IT. Further, in February 2015, GAO added improving the management of IT acquisitions and operations to its high-risk list.
This statement summarizes agencies' progress in improving the management of IT acquisitions and operations. This statement is based on GAO prior and recently published reports on (1) data center consolidation, (2) risk levels of major investments as reported on OMB's IT Dashboard, (3) implementation of incremental development practices, and (4) management of software licenses.

What GAO Found

The Office of Management and Budget (OMB) and federal agencies have taken steps to improve information technology (IT) through a series of initiatives, and as of May 2017, had fully implemented about 47 percent of the approximately 800 related GAO recommendations. However, additional actions are needed.
Consolidating data centers . OMB launched an initiative in 2010 to reduce data centers, which was reinforced by the Federal Information Technology Acquisition Reform Act (FITARA) in 2014. GAO reported in May 2017 that agencies had closed 4,388 of the 9,995 total data centers, and had plans to close a total of 5,597 through fiscal year 2019. As a result, agencies reportedly saved or avoided about $2.3 billion through August 2016. However, out of the 23 agencies that submitted required strategic plans, only 7 had addressed all required elements. GAO recommended that agencies complete their plans to optimize their data centers and achieve cost savings and ensure reported cost savings are consistent across reporting mechanisms. Most agencies agreed with the recommendations.
Enhancing transparency . OMB's IT Dashboard provides information on major investments at federal agencies, including ratings from Chief Information Officers that should reflect the level of risk facing an investment. GAO reported in June 2016 that agencies had not fully considered risks when rating their investments on the Dashboard. In particular, of the 95 investments reviewed, GAO's assessments of risks matched the ratings 22 times, showed more risk 60 times, and showed less risk 13 times. GAO recommended that agencies improve the quality and frequency of their ratings. Most agencies generally agreed with or did not comment on the recommendations.
Implementing incremental development . OMB has emphasized the need for agencies 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 August 2016, GAO reported that while 22 agencies had reported that about 64 percent of 469 active software development projects planned to deliver usable functionality every 6 months for fiscal year 2016, the other 36 percent of the projects did not. Further, for 7 selected agencies, GAO identified differences in the percentages of software projects reported to GAO as delivering functionality every 6 months, compared to what was reported on the Dashboard. GAO made recommendations to agencies and OMB to improve the reporting of incremental data on the Dashboard. Most agencies agreed or did not comment on the recommendations.
Managing software licenses . Effective management of software licenses can help avoid purchasing too many licenses that result in unused software. In May 2014, GAO reported that better management of licenses was needed to achieve savings. Specifically, only two agencies had comprehensive license inventories. GAO recommended that agencies regularly track and maintain a comprehensive inventory and analyze that data to identify opportunities to reduce costs and better inform decision making. Most agencies generally agreed with the recommendations or had no comments; as of May 2017, 4 agencies had made progress in implementing them.

What GAO Recommends

From fiscal years 2010 through 2015, GAO made about 800 recommendations to OMB and federal agencies to address shortcomings in IT acquisitions and operations, and included recommendations to improve the oversight and execution of the data center consolidation initiative, the accuracy and reliability of the Dashboard, incremental development policies, and software license management. Most agencies agreed with GAO's recommendations or had no comments. In addition, in fiscal year 2016, GAO made about 200 new recommendations in this area. GAO will continue to monitor agencies' implementation of these recommendations.