INFORMATION 

TECHNOLOGY

Leveraging Best Practices 

and Reform Initiatives Can 

Help Agencies Better 

Manage Investments

Statement of David A. Powner, Director

Information Technology Management Issues

Testimony

Before the Subcommittee on Financial 

Services and General Government, 

Committee on Appropriations, U.S. Senate

For Release on Delivery 

Expected at 2:00 p.m. ET

Wednesday, May 7, 2014

GAO-14-568T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-568T, a testimony 

before the Subcommittee on Financial 

Services and General Government, 

Committee on Appropriations, U.S. Senate

May 7, 2014

INFORMATION TECHNOLOGY

Leveraging Best Practices and Reform Initiatives Can

Help Agencies Better Manage Investments

Why GAO Did This Study

The federal government reportedly 

plans to spend at least $82 billion on IT 

in fiscal year 2014. Given the scale of 

such planned outlays and the criticality 

of many of these systems to the health, 

economy, and security of the nation, it 

is important that OMB and federal 

agencies provide appropriate oversight 

and transparency into these programs 

and avoid duplicative investments, 

whenever possible, to ensure the most 

efficient use of resources.

GAO has previously reported and 

testified that federal IT projects too 

frequently fail and incur cost overruns 

and schedule slippages while 

contributing little to mission-related 

outcomes. Numerous best practices 

and administration initiatives are 

available for agencies that can help 

them improve the oversight and 

management of IT acquisitions.

GAO is testifying today on the results 

and recommendations from selected 

reports that focused on how best 

practices and IT reform initiatives can 

help federal agencies better manage 

major acquisitions and legacy 

investments.

What GAO Recommends

GAO has previously made numerous 

recommendations to OMB and federal 

agencies on key aspects of IT 

acquisition management, as well as 

the oversight and management of 

these investments. In particular, GAO 

has made recommendations regarding 

the IT Dashboard, efforts to 

consolidate federal data centers, and 

PortfolioStat.

What GAO Found

Information technology (IT) acquisition best practices have been developed by 

both industry and the federal government to help guide the successful acquisition 

of investments. For example, GAO recently reported on nine critical factors 

underlying successful major IT acquisitions. Factors cited included (1) program 

officials were actively engaged with stakeholders and (2) prioritized 

requirements.

One key IT reform initiative undertaken by the Office of Management and Budget 

(OMB) to improve transparency is a public website, referred to as the IT 

Dashboard, which provides information on 760 major investments at 27 federal 

agencies, totaling almost $41 billion. The Dashboard also includes ratings of 

investments’ risk on a scale from 1 (high risk) to 5 (low risk). As of April 2014, 

according to the Dashboard, 559 investments were low or moderately low risk 

(green), 159 were medium risk (yellow), and 42 were moderately high or high risk 

(red).

GAO has issued a series of reports on Dashboard accuracy and, in 2011, found

that while there were continued issues with the accuracy and reliability of cost 

and schedule data, the accuracy of these data had improved over time. Further, 

a recent GAO report found that selected agencies’ ratings were mostly or 

completely consistent with investment risk. However, this report also noted that 

agencies had removed major investments from the IT Dashboard, representing a 

troubling trend toward decreased transparency and accountability. Additionally, 

GAO reported that as of December 2013, the public version of the Dashboard 

was not updated for 15 of the previous 24 months because OMB did not revise it 

as the President’s budget request was being created. Consequently, GAO made 

recommendations to improve the Dashboard’s accuracy, ensure that it includes 

all major IT investments, and increase its availability. Agencies generally agreed 

with the report or had no comments.

In an effort to consolidate the growing number of federal data centers, OMB 

launched a consolidation initiative intended to close 40 percent of government 

data centers by 2015, and in doing so, save $3 billion. GAO reported that 

agencies planned to close 1,055 data centers by the end of fiscal year 2014, but 

also highlighted the need for continued oversight of these efforts. Among other 

things, GAO recommended that OMB improve the execution of important 

oversight responsibilities, with which OMB agreed.

To better manage the government’s existing IT systems, OMB launched the 

PortfolioStat initiative, which, among other things, requires agencies to conduct 

annual reviews of their IT investments and make decisions on eliminating 

duplication. GAO reported that agencies continued to identify duplicative 

spending as part of PortfolioStat and that this initiative has the potential to save 

at least $5.8 billion by fiscal year 2015, but that weaknesses existed in agencies’ 

implementation of the initiative’s requirements. Among other things, GAO made 

several recommendations to improve agencies’ implementation of PortfolioStat 

requirements. OMB partially agreed with these recommendations, and most of 

the other 20 agencies commenting on the report also agreed. View GAO-14-568T. For more information, 

contact David A. Powner at (202) 512-9286 or 

pownerd@gao.gov.
Page 1 GAO-14-568T 

Chairman Udall, Ranking Member Johanns, and Members of the 

Subcommittee:

I am pleased to be here today to discuss how best practices and major 

information technology (IT) reform initiatives can help the federal 

government better acquire and manage IT investments. As reported to 

the Office of Management and Budget (OMB), federal agencies plan to 

spend at least $82 billion on IT in fiscal year 2014. Given the scale of 

such planned outlays and the criticality of many of these systems to the 

health, economy, and security of the nation, it is important that OMB and 

federal agencies provide appropriate oversight and transparency into 

these programs and avoid duplicative investments, whenever possible, to 

ensure the most efficient use of resources.

However, as we have previously reported and testified, federal IT projects 

too frequently fail and incur cost overruns and schedule slippages while 

contributing little to mission-related outcomes.1 During the past several 

years, we have issued multiple reports and testimonies on best practices 

for major acquisitions and federal initiatives to acquire and improve the 

management of IT investments.2 In those reports, we made numerous 

 1

See, for example, GAO, Information Technology: OMB and Agencies Need to More 

Effectively Implement Major Initiatives to Save Billions of Dollars, GAO-13-796T

(Washington, D.C.: July 25, 2013); Secure Border Initiative: DHS Needs to Reconsider Its 

Proposed Investment in Key Technology Program, GAO-10-340 (Washington, D.C.: May 

5, 2010); and Polar-Orbiting Environmental Satellites: With Costs Increasing and Data 

Continuity at Risk, Improvements Needed in Tri-agency Decision Making, GAO-09-564

(Washington, D.C.: June 17, 2009).

2

See, for example, GAO, Information Technology: Leveraging Best Practices to Help 

Ensure Successful Major Acquisitions, GAO-14-183T (Washington, D.C.: Nov. 13, 2013); 

Information Technology: Additional Executive Review Sessions Needed to Address 

Troubled Projects, GAO-13-524 (Washington, D.C.: June 13, 2013); Data Center 

Consolidation: Strengthened Oversight Needed to Achieve Billions of Dollars in Savings, 

GAO-13-627T (Washington, D.C.: May 14, 2013); Data Center Consolidation: 

Strengthened Oversight Needed to Achieve Cost Savings Goal, GAO-13-378

(Washington, D.C.: Apr. 23, 2013); Information Technology Dashboard: Opportunities 

Exist to Improve Transparency and Oversight of Investment Risk at Select Agencies,

GAO-13-98 (Washington, D.C.: Oct. 16, 2012); Data Center Consolidation: Agencies 

Making Progress on Efforts, but Inventories and Plans Need to Be Completed,

GAO-12-742 (Washington, D.C.: July 19, 2012); Information Technology: Critical Factors 

Underlying Successful Major Acquisitions, GAO-12-7 (Washington, D.C.: Oct. 21, 2011); 

Information Technology: Continued Attention Needed to Accurately Report Federal 

Spending and Improve Management, GAO-11-831T (Washington, D.C.: July 14, 2011); 

and Information Technology: Investment Oversight and Management Have Improved but 

Continued Attention Is Needed, GAO-11-454T (Washington, D.C.: Mar. 17, 2011).
Page 2 GAO-14-568T 

recommendations to federal agencies and OMB to further enhance the 

management and oversight of IT programs.

As discussed with subcommittee staff, I am testifying today on the results 

and recommendations from our selected reports on how best practices 

and IT reform initiatives can help federal agencies better manage major 

acquisitions and legacy investments. All work on which this testimony is 

based was performed in accordance with generally accepted government 

auditing standards or all sections of GAO’s Quality Assurance Framework 

that were relevant to our objectives. Those standards and the framework 

require that we plan and perform our audits and engagements to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives; the framework 

also requires that we discuss any limitations in our work. We believe that 

the information, data, and evidence obtained and the analysis conducted 

provide a reasonable basis for our findings and conclusions based on our 

objectives. A more detailed discussion of the objectives, scope, and 

methodology of this work is included in each of the reports on which this 

testimony is based.3

Information technology should enable government to better serve the 

American people. However, despite spending hundreds of billions on IT 

since 2000, the federal government has experienced failed IT projects 

and has achieved little of the productivity improvements that private 

industry has realized from IT. Too often, federal IT projects run over 

 3

GAO, Information Technology: Additional OMB and Agency Actions are Needed to 

Achieve Portfolio Savings, GAO-14-65 (Washington, D.C.: Nov. 6, 2013); IT Dashboard: 

Agencies are Managing Investment Risk, but Related Ratings Need to Be More Accurate 

and Available, GAO-14-64 (Washington, D.C.: Dec. 12, 2014); GAO-13-524; GAO-13-378; 

GAO-13-98; GAO-12-742; Information Technology Reform: Progress Made; More Needs 

to Be Done to Complete Actions and Measure Results, GAO-12-461 (Washington, D.C.: 

Apr. 26, 2012); IT Dashboard: Accuracy Has Improved, and Additional Efforts Are Under 

Way to Better Inform Decision Making, GAO-12-210 (Washington, D.C.: Nov. 7, 2011); 

GAO-12-7; Data Center Consolidation: Agencies Need to Complete Inventories and Plans 

to Achieve Expected Savings, GAO-11-565 (Washington, D.C.: Jul. 19, 2011); Information 

Technology: OMB Has Made Improvements to Its Dashboard, but Further Work Is Needed 

by Agencies and OMB to Ensure Data Accuracy, GAO-11-262 (Washington, D.C.: Mar. 

15, 2011); and Information Technology: OMB’s Dashboard has Increased Transparency 

and Oversight, but Improvements Needed, GAO-10-701 (Washington, D.C.: July 16, 

2010).

Background
Page 3 GAO-14-568T 

budget, behind schedule, or fail to deliver results. In combating this 

problem, proper oversight is critical.

Both OMB and federal agencies have key roles and responsibilities for 

overseeing IT investment management and OMB is responsible for 

working with agencies to ensure investments are appropriately planned 

and justified. However, as we have described in numerous reports,4

although a variety of best practices exist to guide their successful 

acquisition, federal IT projects too frequently incur cost overruns and 

schedule slippages while contributing little to mission-related outcomes.

Agencies have reported that poor-performing projects have often used a 

“big bang” approach—that is, projects that are broadly scoped and aim to 

deliver capability several years after initiation. For example, in 2009 the 

Defense Science Board reported that the Department of Defense’s 

(Defense) acquisition process for IT systems was too long, ineffective, 

and did not accommodate the rapid evolution of IT.5 The board reported 

that the average time to deliver an initial program capability for a major IT 

system acquisition at Defense was over 7 years.

Each year, OMB and federal agencies work together to determine how 

much the government plans to spend on IT projects and how these funds 

are to be allocated. As reported to OMB, federal agencies plan to spend 

more than $82 billion on IT investments in fiscal year 2014, which is the 

total expended for not only acquiring such investments, but also the 

funding to operate and maintain them. Of the reported amount, 27 federal 

 4

See, for example, GAO, FEMA: Action Needed to Improve Administration of the National 

Flood Insurance Program, GAO-11-297 (Washington, D.C.: June 9, 2011); GAO-10-340; 

Secure Border Initiative: DHS Needs to Address Testing and Performance Limitations 

That Place Key Technology Program at Risk, GAO-10-158 (Washington, D.C.: Jan. 29, 

2010); and GAO-09-564.

5

Defense Science Board, Report of the Defense Science Board Task Force on 

Department of Defense Policies and Procedures for the Acquisition of Information 

Technology (Washington, D.C.: March 2009).
Page 4 GAO-14-568T 

agencies6 plan to spend about $75 billion, $17 billion on development and 

acquisition and $58 billion on operations and maintenance (O&M).7 Figure 

1 shows the percentages of total planned spending for 2014 for the $75 

billion spent on development and O&M.

Figure 1: Percentages of Planned IT Spending for Fiscal Year 2014

Source: GAO analysis of OMB data.

However, this $75 billion does not reflect the spending of the entire 

federal government. We have previously reported that OMB’s figure 

understates the total amount spent in IT investments.8 Specifically, it does 

not include IT investments by 58 independent executive branch agencies, 

including the Central Intelligence Agency, or by the legislative or judicial 

 6

The 27 agencies are the Departments of Agriculture, Commerce, Defense, Education, 

Energy, Health and Human Services, Homeland Security, Housing and Urban 

Development, Interior, Justice, Labor, State, Transportation, the Treasury, and Veterans 

Affairs; U.S. Army Corps of Engineers, Environmental Protection Agency, General 

Services Administration, National Aeronautics and Space Administration, National 

Archives and Records Administration, National Science Foundation, Nuclear Regulatory 

Commission, Office of Personnel Management, Small Business Administration, 

Smithsonian Institution, Social Security Administration, and U.S. Agency for International 

Development.

7

According to the analytical perspectives associated with the President’s fiscal year 2014 

budget, the remainder is comprised of classified DOD IT investments.

8

GAO, Information Technology: OMB Needs to Improve Its Guidance on IT Investments, 

GAO-11-826 (Washington, D.C.: Sept. 29, 2011). 
Page 5 GAO-14-568T 

branches. Further, agencies differed on what they considered an IT 

investment; for example, some have considered research and 

development systems as IT investments, while others have not. As a 

result, not all IT investments are included in the federal government’s 

estimate of annual IT spending. OMB provided guidance to agencies on 

how to report on their IT investments, but this guidance did not ensure 

complete reporting or facilitate the identification of duplicative 

investments. Consequently, we recommended, among other things, that 

OMB improve its guidance to agencies on identifying and categorizing IT 

investments.

Further, over the past several years, we have reported that overlap and 

fragmentation among government programs or activities could be 

harbingers of unnecessary duplication.9 Thus, the reduction or elimination 

of duplication, overlap, or fragmentation could potentially save billions of 

tax dollars annually and help agencies provide more efficient and 

effective services.

OMB has implemented a series of initiatives to improve the oversight of 

underperforming investments, more effectively manage IT, and address 

duplicative investments. These efforts include the following:

• IT Dashboard. Given the importance of transparency, oversight, and 

management of the government’s IT investments, in June 2009, OMB 

established a public website, referred to as the IT Dashboard, that 

provides detailed information on 760 major IT investments at 27 

federal agencies, including ratings of their performance against cost 

and schedule targets. The public dissemination of this information is 

intended to allow OMB; other oversight bodies, including Congress; 

and the general public to hold agencies accountable for results and 

performance. Among other things, agencies are to submit Chief 

Information Officer (CIO) ratings, which, according to OMB’s 

instructions, should reflect the level of risk facing an investment on a 

 9

GAO, 2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and 

Duplication and Achieve Other Financial Benefits, GAO-13-279SP (Washington, D.C.: 

Apr. 9, 2013); 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012); and Opportunities to Reduce Potential Duplication in Government 

Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: 

Mar. 1, 2011).

OMB Has Launched

Major Initiatives for 

Overseeing Investments
Page 6 GAO-14-568T 

scale from 1 (high risk) to 5 (low risk) relative to that investment’s 

ability to accomplish its goals. Ultimately, CIO ratings are assigned 

colors for presentation on the Dashboard, according to the five-point 

rating scale, as illustrated in table 1.

Table 1: IT Dashboard CIO Rating Colors, Based on a Five-Point Scale for CIO 

Ratings

Rating (by agency CIO) Color 

1-High risk Red 

2-Moderately high risk Red 

3-Medium risk Yellow 

4-Moderately low risk Green 

5-Low risk Green 

Source: OMB’s IT Dashboard.

As of April 2014, according to the IT Dashboard, 201 of the federal 

government’s 760 major IT investments—totaling $12.4 billion—were in 

need of management attention (rated “yellow” to indicate the need for 

attention or “red” to indicate significant concerns). (See fig. 2.)
Page 7 GAO-14-568T 

Figure 2: Overall Performance Ratings of Major Investments on the IT Dashboard, 

as of April 2014 

• TechStat reviews. In January 2010, the Federal CIO began leading 

TechStat sessions—face-to-face meetings to terminate or turnaround 

IT investments that are failing or are not producing results. These 

meetings involve OMB and agency leadership and are intended to 

increase accountability and transparency and improve performance. 

Subsequently, OMB empowered agency CIOs to hold their own 

TechStat sessions within their respective agencies. According to the 

former Federal CIO, the efforts of OMB and federal agencies to 

improve management and oversight of IT investments have resulted 

in almost $4 billion in savings.

• Federal Data Center Consolidation Initiative. Concerned about the 

growing number of federal data centers, in February 2010 the Federal 

CIO established the Federal Data Center Consolidation Initiative. This 
Page 8 GAO-14-568T 

initiative’s four high-level goals are to promote the use of “green IT”

10

by reducing the overall energy and real estate footprint of government 

data centers; reduce the cost of data center hardware, software, and 

operations; increase the overall IT security posture of the government; 

and shift IT investments to more efficient computing platforms and 

technologies. OMB believes that this initiative has the potential to 

provide about $3 billion in savings by the end of 2015.

• PortfolioStat. In order to eliminate duplication, move to shared 

services, and improve portfolio management processes, in March 

2012, OMB launched the PortfolioStat initiative. Specifically, 

PortfolioStat requires agencies to conduct an annual agency-wide IT 

portfolio review to, among other things, reduce commodity IT11

spending and demonstrate how their IT investments align with the 

agency’s mission and business functions.12 PortfolioStat is designed 

to assist agencies in assessing the current maturity of their IT 

investment management process, making decisions on eliminating 

duplicative investments, and moving to shared solutions in order to 

maximize the return on IT investments across the portfolio. OMB 

believes that the PortfolioStat effort has the potential to save the

government $2.5 billion over the next 3 years by, for example, 

consolidating duplicative systems.

Given the magnitude of the federal government’s annual IT budget, which 

is expected to be more than $82 billion in fiscal year 2014, it is important 

that agencies leverage all available opportunities to ensure that their IT 

investments are acquired in the most effective manner possible. To do so, 

agencies can rely on IT acquisition best practices and initiatives such as 

OMB’s IT Dashboard, and OMB-mandated TechStat sessions. 

 10“Green IT” refers to environmentally sound computing practices that can include a 

variety of efforts, such as using energy efficient data centers, purchasing computers that 

meet certain environmental standards, and recycling obsolete electronics.

11According to OMB, commodity IT includes services such as enterprise IT systems (email; identity and access management; IT security; web hosting, infrastructure, and 

content; and collaboration tools); IT infrastructure (desktop systems, mainframes and 

servers, mobile devices, and telecommunications); and business systems (financial 

management, grants-related federal financial assistance, grants-related transfer to state 

and local governments, and human resources management systems). 

12OMB, Implementing PortfolioStat, Memorandum, M-12-10 (Washington D.C.: Mar. 30, 

2012).

Opportunities Exist to 

Improve Acquisition 

and Management of 

IT Investments
Page 9 GAO-14-568T 

Additionally, agencies can save billions of dollars by continuing to 

consolidate federal data centers and by eliminating duplicative 

investments through OMB’s PortfolioStat initiative.

In 2011, we identified seven successful acquisitions and nine common 

factors critical to their success, and noted that (1) the factors support 

OMB’s objective of improving the management of large-scale IT 

acquisitions across the federal government, and (2) wide dissemination of 

these factors could complement OMB’s efforts.13 Specifically, we reported 

that federal agency officials identified seven successful acquisitions, in 

that they best achieved their respective cost, schedule, scope, and 

performance goals.14 Notably, all of these were smaller increments, 

phases, or releases of larger projects. The common factors critical to the 

success of three or more of the seven acquisitions are generally 

consistent with those developed by private industry and are identified in 

table 2.

Table 2: Common Critical Success Factors

Program officials were actively engaged with stakeholders

Program staff had the necessary knowledge and skills

Senior department and agency executives supported the programs

End users and stakeholders were involved in the development of requirements

End users participated in testing of system functionality prior to formal end user 

acceptance testing

Government and contractor staff were consistent and stable

Program staff prioritized requirements

Program officials maintained regular communication with the prime contractor

Programs received sufficient funding

Source: GAO analysis of agency data.

 13GAO-12-7.

14The seven investments were (1) Department of Commerce’s Decennial Response 

Integration System, (2) Defense’s Defense Global Combat Support System-Joint 

(Increment 7), (3) Department of Energy’s Manufacturing Operations Management 

Project, (4) Department of Homeland Security’s Western Hemisphere Travel Initiative, (5) 

Department of Transportation’s Integrated Terminal Weather System, (6) Internal 

Revenue Service’s Customer Account Data Engine 2, and (7) Veterans Affairs 

Occupational Health Record-keeping System.

Best Practices Are 

Intended to Help

Ensure Successful

Major Acquisitions
Page 10 GAO-14-568T 

These critical factors support OMB’s objective of improving the 

management of large-scale IT acquisitions across the federal 

government; wide dissemination of these factors could complement 

OMB’s efforts.

The IT Dashboard serves an important role in allowing OMB and other 

oversight bodies to hold agencies accountable for results and 

performance. However, we have issued a series of reports highlighting 

deficiencies with the accuracy and reliability of the data reported on the 

Dashboard.15 For example, we reported in October 2012 that Defense 

had not rated any of its investments as either high or moderately high risk 

and that in selected cases, these ratings did not appropriately reflect 

significant cost, schedule, and performance issues reported by GAO and 

others. We recommended that Defense ensure that its CIO ratings reflect 

available investment performance assessments and its risk management 

guidance. Defense concurred and has revised its process to address 

these concerns.

Further, while we reported in 2011 that the accuracy of Dashboard cost 

and schedule data had improved over time,16 more recently, in December 

2013 we found that agencies had removed investments from the 

Dashboard by reclassifying their investments—representing a troubling 

trend toward decreased transparency and accountability.17 Specifically, 

the Department of Energy reclassified several of its supercomputer 

investments from IT to facilities and the Department of Commerce 

decided to reclassify its satellite ground system investments. Additionally, 

as of December 2013, the public version of the Dashboard was not 

updated for 15 of the previous 24 months because OMB does not revise it 

as the President’s budget request is being created.

We also found that, while agencies experienced several issues with 

reporting the risk of their investments, such as technical problems and 

delayed updates to the Dashboard, the CIO ratings were mostly or 

completely consistent with investment risk at seven of the eight selected 

 15GAO-14-64; GAO-13-98; GAO-12-210; GAO-11-262; and GAO-10-701.

16GAO-12-210.

17GAO-14-64.

IT Dashboard Can 

Improve the Transparency 

into and Oversight of 

Major IT Investments
Page 11 GAO-14-568T 

agencies.18 Additionally, the agencies had already addressed several of 

the discrepancies that we identified. The final agency, the Department of 

Veterans Affairs, did not update 7 of its 10 selected investments because 

it elected to build, rather than buy, the ability to automatically update the 

Dashboard, and has now resumed updating all investments. To their 

credit, agencies’ continued attention to reporting the risk of their major IT 

investments supports the Dashboard’s goal of providing transparency and 

oversight of federal IT investments.

Nevertheless, the rating issues that we identified with performance 

reporting and annual baselining,19 some of which are now corrected, 

serve to highlight the need for agencies’ continued attention to the 

timeliness and accuracy of submitted information, in order to allow the 

Dashboard to continue to fulfill its stated purpose. We recommended that 

agencies appropriately categorize IT investments and that OMB make 

Dashboard information available independent of the budget process. 

OMB neither agreed nor disagreed with these recommendations. Six 

agencies generally agreed with the report or had no comments and two 

others did not agree, believing their categorizations were appropriate. We 

continue to believe that our recommendations are valid.

TechStat reviews were initiated by OMB to enable the federal government 

to turnaround, halt, or terminate IT projects that are failing or are not 

producing results. In 2013, we reported that OMB and selected agencies 

had held multiple TechStats, but that additional OMB oversight was 

needed to ensure that these meetings were having the appropriate impact 

on underperforming projects and that resulting cost savings were valid.20

Specifically, we determined that as of April 2013, OMB reported 

conducting 79 TechStats, which focused on 55 investments at 23 federal 

agencies. Further, 4 selected agencies—the Departments of Agriculture, 

 18The eight agencies selected for the review were the Departments of Agriculture, 

Commerce, Energy, Justice, Transportation, the Treasury, and Veterans Affairs; and the 

Social Security Administration.

19At times, a project’s cost, schedule, and performance goals—known as its baseline—are 

modified to reflect changed development circumstances. These changes—called a 

rebaseline—can be done for valid reasons, but can also be used to mask cost overruns 

and schedule delays. 

20GAO-13-524.

TechStat Reviews

Can Help Highlight

and Evaluate Poorly 

Performing Investments
Page 12 GAO-14-568T 

Commerce, HHS, and DHS—conducted 37 TechStats covering 28 

investments. About 70 percent of the OMB-led and 76 percent of agencyled TechStats on major investments were considered medium to high risk 

at the time of the TechStat.

However, the number of at-risk TechStats held was relatively small 

compared to the current number of medium- and high-risk major IT 

investments. Specifically, the OMB-led TechStats represented roughly 

18.5 percent of the investments across the government that had a 

medium- or high-risk CIO rating. For the 4 selected agencies, the number 

of TechStats represented about 33 percent of the investments that have a 

medium- or high-risk CIO rating. We concluded that until OMB and 

agencies develop plans to address these weaknesses, the investments 

would likely remain at risk.

In addition, we reported that OMB and selected agencies had tracked and 

reported positive results from TechStats, with most resulting in improved 

governance. Agencies also reported projects with accelerated delivery, 

reduced scope, or termination. We also found that OMB reported in 2011 

that federal agencies achieved almost $4 billion in life-cycle cost savings 

as a result of TechStat sessions. However, we were unable to validate 

OMB’s reported results because OMB did not provide artifacts showing 

that it ensured the results were valid. Among other things, we 

recommended that OMB require agencies to report on how they validated 

the outcomes. OMB generally agreed with this recommendation.

In an effort to consolidate the growing number of federal data centers, in 

2010, OMB launched a consolidation initiative intended to close 40 

percent of government data centers by 2015, and, in doing so, save $3 

billion. Since 2011, we have issued a series of reports on the efforts of 

agencies to consolidate their data centers.21 For example, in July 2011 

and July 2012, we found that agencies had developed plans to 

consolidate data centers; however, these plans were incomplete and did 

not include best practices.22 In addition, although we reported that 

agencies had made progress on their data center closures, OMB had not 

determined initiative-wide cost savings, and oversight of the initiative was 

 21GAO-13-378; GAO-12-742; and GAO-11-565.

22GAO-12-742 and GAO-11-565.

Continued Oversight 

Needed to Consolidate 

Federal Data Centers and 

Achieve Cost Savings
Page 13 GAO-14-568T 

not being performed in all key areas. Among other things, we 

recommended that OMB track and report on key performance measures, 

such as cost savings to date, and improve the execution of important 

oversight responsibilities, and that agencies complete inventories and 

plans. OMB agreed with these two recommendations, and most agencies 

agreed with our recommendations to them.

Additionally, as part of ongoing follow-up work, we have determined that 

while agencies had closed data centers, the number of federal data 

centers was significantly higher than previously estimated by OMB. 

Specifically, as of May 2013, agencies had reported closing 484 data 

centers by the end of April 2013, and were planning to close an additional 

571 data centers—for a total of 1,055—by September 2014. However, as 

of July 2013, 22 of the 24 agencies participating in the initiative had 

collectively reported 6,836 data centers in their inventories—

approximately 3,700 data centers more than OMB’s previous estimate 

from December 2011. This dramatic increase in the count of data centers 

highlights the need for continued oversight of agencies’ consolidation 

efforts.

OMB launched the PortfolioStat initiative in March 2012, which required 

26 executive agencies23 to, among other things, reduce commodity IT 

spending and demonstrate how their IT investments align with the 

agency’s mission and business functions.24 In November 2013, we 

reported on agencies efforts to complete key required PortfolioStat 

actions and make portfolio improvements.25 We noted that all 26 agencies 

that were required to implement the PortfolioStat initiative took actions to 

address OMB’s requirements. However, there were shortcomings in their 

implementation of selected requirements, such as addressing all required 

elements of an action plan to consolidate commodity IT, and migrating 

two commodity areas to a shared service by the end of 2012. In addition, 

several agencies had weaknesses in selected areas such as the CIO’s 

authority to review and approve the entire portfolio, and ensuring a 

 23Of the 27 previously mentioned agencies, 1 agency—the Smithsonian Institute—is not 

required to participate in the PortfolioStat initiative.

24OMB, Implementing PortfolioStat, Memorandum M-12-10 (Washington, D.C.: Mar. 30, 

2012). 

25GAO-14-65.

Agencies’ PortfolioStat 

Efforts Have the Potential 

to Save Billions of Dollars
Page 14 GAO-14-568T 

complete baseline of information relative to commodity IT. Further, we 

observed that OMB’s estimate of about 100 consolidation opportunities 

and a potential $2.5 billion in savings from the PortfolioStat initiative was 

understated because, among other things, it did not include estimates 

from Defense and the Department of Justice. Our analysis, which 

included these estimates, showed that, collectively, the 26 agencies 

reported about 200 opportunities and at least $5.8 billion in potential 

savings through fiscal year 2015, at least $3.3 billion more than the 

number initially reported by OMB.

In March 2013, OMB issued a memorandum commencing the second 

iteration of its PortfolioStat initiative.26 This memorandum identified a 

number of improvements that should help strengthen IT portfolio 

management and address key issues we have identified. However, we 

concluded that selected OMB efforts could be strengthened to improve

the PortfolioStat initiative and ensure agencies achieve identified cost 

savings, including addressing issues related to existing CIO authority at 

federal agencies, and publicly reporting on agency-provided data. We 

recommended, among other things, that OMB require agencies to fully 

disclose limitations with respect to CIO authority. In addition, we made 

several recommendations to improve agencies’ implementation of 

PortfolioStat requirements. OMB partially agreed with these 

recommendations, and responses from 20 of the agencies commenting 

on the report varied.27

In summary, OMB’s and agencies’ recent efforts have resulted in greater 

transparency and oversight of federal spending, but continued leadership 

and attention are necessary to build on the progress that has been made. 

The expanded use of the common factors critical to the successful 

management of large-scale IT acquisitions should result in more effective 

delivery of mission-critical systems. Additionally, federal agencies need to 

continue to improve the accuracy and availability of information on the 

Dashboard to provide greater transparency and even more attention to 

 26OMB, Memorandum for the Heads of Executive Departments and Agencies: Fiscal Year 

2013 PortfolioStat Guidance: Strengthening Federal IT Portfolio Management, M-13-09 

(Washington, D.C.: Mar. 27, 2013).

27Of the 20 agencies commenting on the report, 12 agreed with our recommendations 

directed to them, 4 disagreed or partially disagreed with our recommendations directed to 

them, and 4 provided additional clarifying information. 
Page 15 GAO-14-568T 

the billions of dollars invested in troubled projects. Further, agencies 

should conduct additional TechStat reviews to focus management 

attention on troubled projects and establish clear action items to turn the 

projects around or terminate them.

The federal government can also build on the progress of agencies’ data 

center closures and reduction in commodity IT. With the possibility of over 

$5.8 billion in savings from the data center consolidation and PortfolioStat 

initiatives, agencies should continue to identify consolidation opportunities 

in both data centers and commodity IT. In addition, better support for the 

estimates of cost savings associated with the opportunities identified 

would increase the likelihood that these savings will be achieved.

Chairman Udall, Ranking Member Johanns, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions that you may have at this time.

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 Dave Hinchman (Assistant 

Director), Rebecca Eyler, Kaelin Kuhn, Bradley Roach, Andrew Stavisky, 

and Kevin Walsh.

GAO Contact and 

Staff 

Acknowledgments

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