U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

39–010 

" ! SENATE 113TH CONGRESS

2d Session 

REPORT

2014

113–262 

Calendar No. 577 

FEDERAL INFORMATION TECHNOLOGY 

ACQUISITION REFORM ACT 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

H.R. 1232 

TO AMEND TITLES 40, 41, AND 44, UNITED STATES 

CODE, TO ELIMINATE DUPLICATION AND WASTE 

IN INFORMATION TECHNOLOGY ACQUISITION AND 

MANAGEMENT 

SEPTEMBER 18, 2014.—Ordered to be printed 


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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware, Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

GABRIELLE A. BATKIN, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

MARY BETH SCHULTZ, Chief Counsel 

JOHATHAN M. KRADEN, Senior Counsel 

KEITH B. ASHDOWN, Minority Staff Director 

CHRISTOPHER J. BARKLEY, Minority Deputy Staff Director 

ANDREW C. DOCKHAM, Minority Chief Counsel 

KATHERN M. EDELMAN, Minority Senior Investigator 

LAURA W. KILBRIDE, Chief Clerk 


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CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for Legislation .......................................................... 1 

III. Legislative History ......................................................................................... 11 

IV. Section-by-Section Analysis of the Bill, as Reported .................................. 13 

V. Congressional Budget Office (CBO) Cost Estimate .................................... 17 

VI. Evaluation of Regulatory Impact .................................................................. 20 

VII. Changes in Existing Statute Made by the Bill, as Reported ..................... 20 


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Calendar No. 577 

113TH CONGRESS REPORT " ! SENATE 2d Session 113–262 

FEDERAL INFORMATION TECHNOLOGY ACQUISITION 

REFORM ACT 

SEPTEMBER 18, 2014.—Ordered to be printed 

Mr. CARPER, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

[To accompany H.R. 1232] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (H.R. 1232), to amend titles 40, 41, 

and 44, United States Code, to eliminate duplication and waste in 

information technology acquisition and management, having considered the same, reports favorably thereon with an amendment in 

the nature of a substitute and an amendment to the title, and recommends that the bill, as amended, do pass. 

I. PURPOSE AND SUMMARY

The Federal Information Technology Acquisition Reform Act 

(H.R. 1232) seeks to improve how the federal government acquires, 

implements, and manages its information technology (‘‘IT’’) investments. First, the bill would give agency Chief Information Officers 

more authority over the budget, governance, and personnel processes for agency IT investments. Second, the bill would make agency IT investments more transparent to the public and require agencies to review troubled investments. Third, to eliminate duplication 

and waste, the bill would require agencies to annually review all 

of their IT investments. Fourth, the bill builds on the Administration’s efforts to consolidate and streamline data centers—the facilities in which federal agencies house computer systems and related 

components. 

II. BACKGROUND AND NEED FOR LEGISLATION

Information technology has transformed how the private sector 

operates and has revolutionized the way in which businesses serve 


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1 In Fiscal Year 2014, the Federal government will spend over $80 billion in developing, modernizing and maintaining IT projects and systems. OMB, Analytical Perspectives, Budget of the 

U.S. Government, Fiscal Year 2014, at 349 (2013), available at http://www.whitehouse.gov/sites/ 

default/files/omb/budget/fy2014/assets/spec.pdf. 2See GAO–13–796T, Information Technology: OMB and Agencies Need to More Effectively Implement Major Initiatives to Save Billions of Dollars, Appendix 1, for an extensive list of IT 

projects that have failed and been cancelled as well as other IT projects that faced significant 

challenges. 3This report describes the Committee’s substitute amendment to H.R. 1232. Although the underlying bill and the substitute amendment address many of the same problems, they take substantially different approaches. The House report (H.R. Rep. No. 113–359) on H.R. 1232 explains 

the underlying bill’s provisions, while this report confines itself to describing the substitute 

amendment considered and passed by the Committee. 4These four areas are aligned with the General Accountability Office’s top recommendations 

to this Committee on how to best improve outcomes in federal IT investments. See Management 

Matters: Creating a 21st Century Government: Hearing before the Senate Homeland Security and 

Governmental Affairs Committee, 113th Congress (March 12, 2014) (Gene Dodaro, Comptroller 

General, response to questions for the record). 5Prior to the creation of the Department of Homeland Security, this Committee was known 

simply as the Governmental Affairs Committee. 

their customers. Likewise, IT has the potential to enable federal 

agencies to accomplish their missions more efficiently, effectively, 

and economically. 

Over the last twenty years, IT has become firmly interwoven into 

the mission of every federal agency, offering new ways of doing 

business and creating both opportunities and challenges for government agencies. Fully exploiting this potential, though, has presented longstanding challenges to federal agencies. Too many federal IT projects run over budget, fall behind schedule, or fail to deliver on their promises, hampering agency missions and wasting 

taxpayer dollars. Despite spending billions of dollars annually on 

IT,1 the federal government has had a decidedly mixed record in 

acquiring, developing, and managing federal IT investments.2

To improve the ability of federal agencies to manage IT investments, H.R. 1232 would strengthen and reinforce the authorities 

and responsibilities of agency Chief Information Officers (CIOs) to 

be key leaders for IT at their organizations.3 In addition to empowering agency CIOs, the bill focuses on four other areas which the 

Committee believes will help achieve better outcomes in IT investments across the federal government. Specifically, H.R. 1232 seeks 

to (1) improve the accuracy of investment performance information 

on the Office of Management and Budget’s IT Dashboard, a publically accessible online tool that presents cost and schedule information along with an evaluation from agency CIOs on major IT investments, (2) require agencies to hold investment review sessions 

on at-risk investments, (3) continue the Administration’s Federal 

Data Center Consolidation Initiative to consolidate and optimize 

data centers—the facilities in which federal agencies house computer systems and related components, and (4) use portfolio review 

processes to identify and eliminate duplicative IT investments in 

agencies.4

THE ROLE OF THE CHIEF INFORMATION OFFICER

Poor management of IT systems is a problem that has plagued 

the federal government for years. Nearly two decades ago, Senator 

William Cohen of Maine led a Governmental Affairs Committee 

subcommittee investigation into the federal government’s ability to 

manage its IT investments.5 The resulting 1995 report, entitled 

‘‘Computer Chaos,’’ could just as easily have been written today. In 

his report, Senator Cohen found many of the same problems that 


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6 Computer Chaos: Billions Wasted Buying Federal Computer Systems. Investigative Report of 

Senator William S. Cohen, Ranking Minority Member, Subcommittee on Oversight of Government Management, Senate Governmental Affairs Committee (October 12, 1994). Available at 

https://acc.dau.mil/adl/en-US/22163/file/2121/Cohen%20Computer%20Chaos%201994.pdf. 7The Clinger-Cohen Act of 1996 was originally enacted as the Information Technology Management Reform Act of 1996 (Divisions D and E of P.L. 104–106). The law was renamed the 

Clinger-Cohen Act by Pub. L. 104–208,110 Stat. 3009–393 (1996). 8 40 U.S.C. §§ 11312 and 11313. 

9 E-Gov Act of 2002, P.L. 107–347 (Dec. 17, 2002). Many of the Act’s provisions were incorporated into Title 44, U.S. Code. 10 40 U.S.C. § 11315(b)(1). 11 40 U.S.C. § 11315(b)(2). 12 40 U.S.C. § 11315(b)(3). 13 44 U.S.C. § 3502(6) defines ‘‘information resources’’ as ‘‘information and related resources, 

such as personnel, equipment, funds, and information technology.’’ 14 44 U.S.C. § 3506(b)(3)(A). 15 40 U.S.C. § 11315(c)(2). 16 44 U.S.C. §§ 3541, et seq. 

our agencies face today—poor management of IT systems, wasted 

and duplicative investments, and billions of dollars spent on older, 

outdated, and expensive ‘‘legacy’’ systems.6

To address these problems, Congress passed the Clinger-Cohen 

Act in 1996. That law, among other things, established the position 

of agency CIO to serve as a focal point for IT within an agency.7

The Clinger-Cohen Act set forth detailed requirements for IT capital planning, investment control, performance, and results-based 

management.8 Several years later, the E-Government Act of 2002 

reiterated the CIO’s responsibility for agency IT management and 

information security at their respective agencies.9

Together, these statutes require CIOs to be key leaders in managing IT and other information functions at an agency. Specifically, 

they make the CIO responsible for: • providing advice and other assistance to the head of an agency 

to ensure that IT is acquired and information resources are 

managed in accordance with the law and the priorities of the 

head of the agency; 10

• developing, maintaining, and facilitating the implementation of 

a sound, secure, and integrated IT architecture; 11

• promoting the effective and efficient design and operation of all 

major information resources management processes for an 

agency, including improvements to an agency’s work processes; 12

• ensuring that information resources,13 management operations, and decisions are integrated with an organization’s 

planning, budget, financial management, human resources 

management, and program decisions; 14

• monitoring the performance of IT programs and advising the 

agency head whether to continue, modify, or terminate such 

programs; 15 and • managing agency information security, including compliance 

with the Federal Information Security Management Act 

(‘‘FISMA’’).16

In creating the position of Chief Information Officer, Congress intended for an agency CIO to serve as a senior decision maker, providing leadership and direction for information resource development, procurement, and management. A primary goal of the 

Clinger-Cohen Act was to shift agencies’ approach on IT investments away from one focused only on technical issues towards one 

that focused on truly managing IT investments, and the CIO of an 


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17Opening statement of Senator William Cohen, Subcommittee on Oversight of Government 

Management and the District of Columbia of the Committee on Governmental Affairs, S. 946, 

the Information Technology Management Reform Act of 1995 at 3 (July 25, 1996). See also Id. 

at 12, (Testimony of Gene Dodaro, Assistant Comptroller General, Accounting and Information 

Management Division, U.S. General Accounting Office). 18Senate Committee on Homeland Security and Governmental Affairs Hearing, Identifying 

Critical Factors for Success in Information Technology Acquisitions (May 8, 2014). See also 

GAO–12–7, Information Technology: Critical Factors Underlying Successful Major Acquisitions 

(October 2011); Key Success Factors for Major Programs that Leverage IT: 7–S for Success available at https://actiac.org/sites/default/files/7-SlforlSuccessl0.pdf. 19 Id. See also GAO–14–361, Information Technology: Agencies Need to Establish and Implement Incremental Development Policies (May 2014). 20See GAO–11–634 at 29–30, Federal Chief Information Officers: Opportunities Exist to Improve Role in Information Technology Management. See also GAO–04–823, Federal Chief Information Officers: Responsibilities, Reporting Relationships, Tenure, and Challenges (July 2004). 

agency was seen as a key figure in accomplishing that objective.17

The CIO was envisioned as the person responsible and accountable 

for an agency’s IT investments, a key leader who would implement 

and enforce applicable government-wide and agency IT management policies. 

The Committee recognizes that there are many factors that must 

be in place for an agency to successfully acquire, implement, and 

manage its IT investments. In a May 2014 hearing focused on identifying the key factors that make for successful IT investments, the 

Committee heard testimony regarding the importance of senior executive support of the program, active end-user involvement in developing requirements and testing, having skilled program managers and teams, and having consistent and stable government and 

contractor staff.18 Likewise, witnesses discussed the importance of 

utilizing an ‘‘incremental’’ approach to deliver on IT investments, 

where investments are divided into smaller pieces in order to reduce investment risk and deliver capabilities in shorter time 

frames. This approach differs from the more traditional ‘‘big bang’’ 

approach often used by agencies, which relies on delivering all of 

the capabilities of a large-scale IT system at one time, often resulting in failure.19 Ultimately, the successful acquisition and implementation of IT systems requires the involvement of a variety of 

stakeholders across many disciplines including acquisition, human 

capital, and financial management. 

However, the CIO of an agency plays a very important role in 

providing technical expertise and objective, knowledge-based assessments on the wisdom of every key decision made over the lifespan of an IT investment. Thus, it is extremely important that a 

CIO, and the staff who reports to the CIO, be fully integrated into 

all the elements of the agency’s process for developing and delivering IT investments as an independent stakeholder. It is not 

enough for a CIO and his or her team to ‘‘have a seat at the 

table’’—they must also be an integral part of any decision processes 

at the agency. Unfortunately, despite statutory requirements and 

policy guidance from the Office of Management and Budget 

(‘‘OMB’’), many CIOs do not have the necessary authority and are 

frequently not recognized as the key leaders in managing IT at an 

agency. For example, in a 2011 survey of agency CIOs, the Government Accountability Office (‘‘GAO’’) found that many CIOs faced 

limitations in their ability to influence agency decisions on IT investments because a significant portion of an agency’s IT funding 

is allocated and spent at the component, or bureau level, of an 

agency.20


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21Memorandum from Jacob J. Lew, U.S. Office of Management and Budget, Chief Information 

Officer Authorities, at 1 (Aug. 8, 2011), available at http://www.whitehouse.gov/sites/default/files/ 

omb/memoranda/2011/m11-29.pdf. 22 Id. 23 Id. 24 Id. at 2. 25 Id. at 2. The IT Dashboard is ‘‘a website enabling federal agencies, industry, the general 

public, and other stakeholders to view details of federal information technology investments.’’ 

See ‘‘IT Dashboard FY2015 Edition,’’ http://www.itdashboard.gov/. 26 Id. at 2. 

In recognition of the challenges that many agency CIOs face, in 

August 2011, OMB issued a memorandum designed to move the 

role of the CIO ‘‘away from just policymaking and infrastructure 

maintenance, to encompass true portfolio management for all 

IT.’’ 21 By updating its policies, OMB sought to hold agency CIOs 

‘‘accountable for lowering operational costs, terminating and turning around troubled projects, and delivering meaningful 

functionality at a faster rate while enhancing the security of information systems.’’ 22

The memorandum laid out what OMB envisioned as the CIO’s 

responsibilities in four primary areas: • Governance—CIOs are to drive the IT investment review process by assuming ‘‘responsibility over the entire IT portfolio for 

an Agency’’ and by working to ‘‘ensure IT portfolio analysis is 

an integral part of the yearly budget process of an agency.’’ 23

• Commodity IT—CIOs are to ‘‘focus on eliminating duplication 

and rationalize . . . IT investments.’’ The services to be examined are: data centers, networks, desktop computers, mobile 

devices, e-mail, collaboration tools, web infrastructure, human 

resources systems, and finance systems. CIOs are also directed 

to ‘‘pool their agency’s purchasing power across the entire organization to drive down costs and improve service’’ and are required to ‘‘show a preference for using shared services . . . instead of standing up separate independent services.’’ 24

• Program Management—CIOs are charged with ‘‘identifying, recruiting, and hiring top IT program management talent’’ and 

are required to ‘‘train and provide annual performance reviews’’ for employees in charge of major programs as well as 

lower-level CIOs. CIOs will also be held accountable for the 

performance of IT program managers based on their governance process and the IT Dashboard, an online tool that presents the cost and schedule information of an agency’s major 

IT investments, as well as an evaluation of that investment by 

an agency CIO.25

• Information Security—CIOs, or designated agency officials who 

report to the CIO, are required ‘‘to implement an agency-wide 

information security program and to provide information security for both the information collected and maintained by the 

agency, or on behalf of the agency, and for the information systems that support the operations, assets, and mission of the 

agency.’’ 26

Building off existing statutory requirements and OMB policy, the 

Committee substitute to H.R. 1232 seeks to further empower the 

agency CIO by ensuring that the CIO has a significant role in the 

annual and multi-year planning, programming, budgeting, and execution processes as well as the management, governance, and oversight processes related to IT. The bill directs the Director of OMB 


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27See https://cio.gov/what-is-techstat/. 28 By March 2011, OMB estimated that use of the IT Dashboard and corresponding TechStat sessions had led to over $3 billion in cost reductions. See http://www.whitehouse.gov/blog/2011/ 

03/31/open-sourcing-it-dashboard-techstat-process. 29See IT Dashboard: Agencies are Managing Investment Risk, but Related Ratings Need to Be 

More Accurate and Available, GAO–14–64 (Dec. 12, 2013); Information Technology Dashboard: 

Opportunities Exist to Improve Transparency and Oversight of Investment Risk at Select Agencies, GAO–13–98 (Oct. 16, 2012); IT Dashboard: Accuracy Has Improved, and Additional Efforts 

Are Under Way to Better Inform Decision Making, GAO–12–210 (Nov. 7, 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 (Mar. 15, 2011); and Information 

Technology: OMB’s Dashboard Has Increased Transparency and Oversight, but Improvements 

Needed, GAO–10–701 (July 16, 2010). 

to require in its annual IT capital planning guidance that the CIO 

of the agency: (1) approve the agency’s information technology 

budget request; (2) certify that IT investments are implementing 

incremental development as defined by OMB; and (3) work with 

the Chief Human Capital Officer to review all IT positions requested in the budget to ensure the needs of the agency are being 

met. 

The Committee substitute to H.R. 1232 would also require approval by the CIO of contracts for IT or IT services, the reprogramming of funds for IT programs, and the hiring of key agency IT personnel. Ultimately, the bill would do more than just create a seat 

at the ‘‘CEO-level’’ table for the Chief Information Officer—it would 

also make the CIO a key part of the agency’s decision-making processes, a position with both the authority to help make decisions 

and the responsibility to ensure that programs are well managed 

and produce good outcomes. 

INFORMATION TECHNOLOGY DASHBOARD AND TECHSTAT

ACCOUNTABILITY SESSIONS

In June 2009, the Obama Administration and OMB launched an 

Information Technology Dashboard (‘‘IT Dashboard’’ or ‘‘Dashboard’’) to quickly and easily illustrate IT investments that were 

on-track, having trouble, or calling out for cancellation. The IT 

Dashboard is a publically accessible online tool that presents cost 

and schedule information, as well as an evaluation from agency 

CIOs on the performance of major IT investments. 

Less than a year after the IT Dashboard debuted, the Administration started holding TechStat Accountability Sessions 

(‘‘TechStats’’) in January 2010. A TechStat is a ‘‘face-to-face, evidence-based review of an IT investment’’ with OMB and agency 

leadership.27 TechStat sessions seek to focus management attention on troubled IT investments and help terminate or turnaround 

IT investments that are failing or not producing results. When 

used in concert, the IT Dashboard and TechStat sessions have 

helped agencies, OMB, and Congress identify at-risk IT projects 

and implement corrective measures.28

While the IT Dashboard and TechStat sessions have been widely 

recognized as valuable oversight tools, concerns remain with the 

accuracy and usefulness of some of the information on the IT Dashboard and a decrease in the number of TechStat sessions led by 

OMB. 

The GAO has issued a series of reports highlighting deficiencies 

with the accuracy and reliability of the cost and schedule data reported on the Dashboard.29 While the accuracy of the Dashboard 

ratings appears to have improved over time, GAO has raised conVerDate Sep 11 2014 01:18 Sep 25, 2014 Jkt 039010 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\SR262.XXX SR262

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30 IT Dashboard: Agencies are Managing Investment Risk, but Related Ratings Need to Be 

More Accurate and Available, GAO–14–64 (Dec. 12, 2013). 31 Id. at 18. 32See IT Dashboard: Agencies are Managing Investment Risk, but Related Ratings Need to Be 

More Accurate and Available, GAO–14–64 at 22 (Dec. 12, 2013). 33GAO, Information Technology: Additional Executive Review Sessions Needed to Address 

Troubled Projects, GAO–13–524 (Washington, D.C.: June 13, 2013). 34GAO–13–524 at 27. The selected agencies were the Departments of Agriculture, Commerce, 

Homeland Security, and Health and Human Services. 

cerns about how some agencies have removed investments from the 

Dashboard by reclassifying their investments.30 For example, the 

Department of Energy reclassified supercomputer investments as 

facilities, rather than as IT, and removed them from public reporting on the Dashboard.31 Furthermore, the public version of the 

Dashboard is frequently not updated because OMB chooses not to 

update the Dashboard while the President’s budget request is being 

created. For example, in a December 2013 review of the IT Dashboard, GAO noted that the Department of Justice downgraded an 

investment in July 2012, but the information on the Dashboard 

was not updated to reflect this downgrade until April 2013.32

In 2013, GAO also reviewed agency implementation of TechStat 

sessions and reported that although OMB and selected agencies 

had held multiple TechStats, additional oversight was needed to 

ensure that these sessions were having the appropriate impact on 

underperforming projects.33 Additionally, GAO found that the number of TechStats held was relatively small compared to the current 

number of at-risk IT investments. Specifically, as of May 2013, of 

the 162 at-risk IT investments, only 30 (18.5 percent) had undergone an OMB-led TechStat. Further, of the 69 at-risk investments 

at four selected agencies as of May 2013, only 23 (33.3 percent) had 

undergone an OMB or agency TechStat.34

Despite the above-mentioned problems, the IT Dashboard and 

TechStat sessions have proven to be very valuable tools that have 

increased the transparency and performance of major federal IT investments. Building off the promise of these initiatives, the Committee substitute to H.R. 1232 requires a government-wide IT 

Dashboard and improves upon the quality of the data displayed on 

the Dashboard by requiring the agency CIO to certify on a quarterly basis that the cost, schedule, and performance information is 

accurate. In addition, the substitute improves upon the accuracy of 

the CIO’s evaluation by requiring that an IT investment’s overall 

risk rating align more closely to the cost and schedule risks identified for the investment, and by requiring that IT investments that 

do not employ an incremental approach be automatically rated at 

a medium-risk level to ensure they receive adequate management 

attention. The substitute also requires that agencies use the Dashboard as a foundation for a TechStat-like process to help agencies 

and OMB manage the riskiest IT projects. If an investment continues to be rated as high-risk for more than a year following completion of the required review, the Director of OMB is required to 

deny requests for future development funding until the agency CIO 

can certify that risks have been sufficiently addressed. Collectively, 

the requirements in the Committee substitute to H.R. 1232 will 

allow Congress, OMB, and the general public to use the Dashboard 

to hold agencies accountable for results and performance. 


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35See GAO–11–634 at 29–30. 36See Federal Information Technology Shared Services Strategy at 4, May 2, 2012. 37See M–12–10, Implementing PortfolioStat, Office of Management and Budget, (March 30, 

2012). 38See statement of Steven VanRoekel, Senate Committee on Homeland Security and Governmental Affairs Hearing, Reducing Duplication and Improving Outcomes in Federal Information 

Technology (June 11, 2013). 39GAO, Information Technology: Additional OMB and Agency Actions are Needed to Achieve 

Portfolio Savings, GAO–14–65 (Washington, D.C.: Nov. 6, 2013). GAO found that the potential 

savings from the first round of agency PortfolioStats are likely understated because several 

large agencies, including the Departments of Defense and Justice were not included in the estimates. 40 Id. at 15. 

PORTFOLIO REVIEW

In addition to the challenges that agencies face in acquiring and 

developing specific IT investments, the stove-piped nature of many 

Federal agencies has led to a proliferation of duplicative IT investments. Many agencies manage their IT systems in a decentralized 

manner with authorities and responsibilities spread throughout the 

agency.35 As a result, departments are unable to take an enterprise-wide view of their IT investments which frequently results in 

duplication, waste, and poor outcomes. Too often, agencies, or components of agencies, seek to develop new solutions first, before assessing existing options, or identifying ways to achieve shared 

agency-wide IT solutions. For example, in 2012, OMB reviewed 

over 7,000 Federal agency IT investments that had been reported 

to OMB and found many potential redundancies and billions of dollars in potential savings that could be achieved through either consolidation or a shared approach to IT service delivery.36

To address this problem, in March 2012, the Administration implemented the PortfolioStat process, which requires agency Chief 

Operating Officers (or their designees), on an annual basis, to lead 

an agency-wide review of the IT systems operating within an organization.37 Through the PortfolioStat process, an agency must take 

a holistic view of its IT investments to identify potential duplication within the agency, investments that do not appear to be wellaligned with agency missions, and other key considerations regarding an agency’s IT portfolio. In comparison to the TechStat reviews 

discussed above (which examine IT performance at the specific 

project or investment-level), PortfolioStat examines an agency’s IT 

portfolio as a whole to help identify and eliminate areas of duplication and waste. 

In June 2013, the Committee held a hearing on IT management 

issues focused in large part on the Administration’s PortfolioStat 

process. In the first round of PortfolioStat reviews, agencies identified more than $2.5 billion in spending reductions that could be 

achieved from FY 2013 through FY 2015.38 However, in November 

2013 GAO reported that OMB’s PortfolioStat initiative has the potential to save between $5.8 and $7.9 billion by fiscal year 2015.39

GAO also found that many agencies were not fully implementing 

the requirements of the initiative. For example, only one agency 

fully addressed the key requirements of OMB’s initiative, and 

twelve agencies were not able to ensure that their commodity IT 

baseline was complete.40

The PortfolioStat process is a promising initiative that can both 

save money and improve the management of IT systems throughout the federal government. Accordingly, the Committee substitute 


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41OMB’s definition of a ‘‘data center’’ has evolved over the years. It most recently has settled 

on defining ‘‘data center’’ as ‘‘a closet, room, floor or building for the storage, management, and 

dissemination of data and information.’’ OMB’s guidance further explains that ‘‘such a repository 

houses computer systems and associated components, such as database, application, and storage 

systems and data stores. A data center generally includes redundant or backup power supplies, 

redundant data communications connections, environmental controls (air conditioning, fire suppression, etc.) and special security devices housed in leased (including by cloud providers), 

owned, collocated, or stand-alone facilities. This definition excludes facilities exclusively devoted 

to communications and network equipment (e.g., telephone exchanges and telecommunications 

rooms).’’ Office of Management and Budget Memorandum for Chief Information Officers, Implementation Guidance for the Federal Data Center Consolidation Initiative (March 19, 2012). 42 In July 2013, the Government Accountability Office reported that the number of agencyreported federal data centers stood at 6,836. Government Accountability Office, Information 

Technology: OMB and Agencies Need to More Effectively Implement Major Initiatives to Save Billions of Dollars, GAO–13–796T (July 2013). That is more than triple the number reported in 

2010, when OMB first started counting, an increase resulting not so much from an actual 

growth in data centers, as from agencies’ growing familiarity with OMB’s requirements and 

OMB’s expansion of the definition of ‘‘data center.’’ 43 U.S. Environmental Protection Agency, ENERGY STAR Program, Report to Congress on 

Server and Data Center Energy Efficiency at 25 (pursuant to Public Law 109–431) (August 2, 

2007). 44See Time Magazine, The Surprisingly Large Energy Footprint of the Digital Economy, 

April 14, 2013 at http://science.time.com/2013/08/14/power-drain-the-digital-cloud-is-using-moreenergy-than-you-think/. 

to H.R. 1232 requires the Director of OMB and agency CIOs to annually review the IT investments of an agency to identify, among 

other things, ways to increase the efficiency and effectiveness of an 

agency’s IT investments, opportunities to increase the use of shared 

services, potential duplication, waste and cost-savings, and a multiyear strategy to reduce duplication within an agency’s IT portfolio. 

The Committee expects that agencies will review the entire portfolio of an agency’s IT investments, including hardware, software, 

and IT services. The Director of OMB would also be required to develop metrics and performance indicators for agencies to use in 

their annual portfolio review. 

DATA CENTER CONSOLIDATION

A data center is a room or building that houses computer systems and associated components that are used for the storage, 

management, and dissemination of data and information.41 Over 

the years, the federal government’s demand for IT has led to a dramatic rise in the number of federal data centers and an increase 

in operation costs. The number of data centers operated by the federal government has grown from several hundred in the 1990s to 

more than six thousand as of July 2013.42

Operating these data centers imposes significant costs on the federal government. The government has to purchase hardware, software, and the facilities in which to place them, and it has to pay 

people to run the machines in the centers. Moreover, the Environmental Protection Agency reported that in 2006 (the most recent 

year for which the information is available), federal servers and 

data centers accounted for approximately six billion kilowatts of 

electricity use, for a total annual electricity cost of about $450 million.43 These data centers typically run 24 hours a day, seven days 

a week, and require significant electricity to power the ‘‘always-on’’ 

equipment. In addition, data centers produce significant heat, requiring a substantial expenditure for energy to cool them.44 Furthermore, GAO has cited ‘‘the growth in the number of federal data 

centers, many offering similar services and resources’’ as a source 


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45Government Accountability Office, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, 26–29, GAO–11–318SP (March 2011). 46Office of Management and Budget Memorandum for Chief Information Officers, Federal 

Data Center Consolidation Initiative (February 26, 2010). 47The 24 agencies on the CIO Council are: Department of Agriculture; Department of Commerce; Department of Defense; Department of Education; Department of Energy; Department 

of Health and Human Services; Department of Homeland Security; Department of Housing and 

Urban Development; Department of the Interior; Department of Justice; Department of Labor; 

Department of State; Department of Transportation; Department of the Treasury; Department 

of Veterans Affairs; Environmental Protection Agency; General Services Administration; National Aeronautics and Space Administration; National Science Foundation; Nuclear Regulatory 

Commission; Office of Personnel Management; Small Business Administration; Social Security 

Administration; and United States Agency for International Development. 48See Fiscal Year 2012 Budget of the U.S. Government, page 29 (http://www.whitehouse.gov/ 

sites/default/files/omb/budget/fy2012/assets/budget.pdf) and Fiscal Year 2013 Budget of the U.S. 

Government, page 43 (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/ 

budget.pdf). 49See Government Accountability Office, Data Center Consolidation: Agencies Need to Complete Inventories and Plans to Achieve Expected Savings, 8–19, GAO–11–565 (July 2011); Government Accountability Office, Data Center Consolidation: Agencies Making Progress on Efforts, 

but Inventories and Plans Need to be Completed, 12, GAO–12–742 (July 2012); and Government 

Accountability Office, Data Center Consolidation: Strengthened Oversight Needed to Achieve Cost 

Savings Goal 14, GAO–13–378 (April 2013). 50See Government Accountability Office, Opportunities to Reduce Potential Duplication in 

Government Programs, Save Tax Dollars, and Enhance Revenue, 26–29, GAO–11–318SP (March 

2011). 51Government Accountability Office, Data Center Consolidation: Agencies Need to Complete 

Inventories and Plans to Achieve Expected Savings, 8–19, GAO–11–565 (July 2011). 

of overlap and duplication (and therefore unnecessary expenditures) in the federal government.45

In 2010, OMB, through the Federal CIO, launched the Federal 

Data Center Consolidation Initiative (‘‘Consolidation Initiative’’ or 

‘‘Initiative’’) to consolidate redundant federal data centers and 

achieve cost-savings. The goals of the initiative were to: promote 

the use of green IT 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.46

Under the Consolidation Initiative, OMB required the 24 departments and agencies on the CIO Council 47 to submit an inventory 

of each agency’s data centers and a plan for consolidating them. 

Agencies were then required to annually update their asset inventory and report on the progress made toward implementing the 

agency consolidation plan. OMB set a target goal of closing 40 percent of the federal data centers agencies had identified, and it estimated saving between $3 and $5 billion—both by the end of 

2015.48

At the request of this Committee, GAO conducted several reviews 

of the progress that OMB and agencies have made under the Initiative.49 GAO’s ongoing work on the Consolidation Initiative has 

confirmed two things. First, data center consolidation is an economical way to achieve more efficient IT operations, as well as 

cost-savings or cost avoidance.50 Second, significant work must still 

be done before agencies realize the full benefits of consolidation. 

For example, in July 2011, GAO assessed the completeness of 

each agency’s first submission of data center consolidation documents and found that, at that time, only one agency out of 24 had 

submitted a complete data center asset inventory and no agency 

had submitted a complete consolidation plan.51 A year later, in 

July 2012, GAO reported on agencies’ second submission of data 

center consolidation documents. These submissions demonstrated 


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52Government Accountability Office, Data Center Consolidation: Agencies Making Progress on 

Efforts, but Inventories and Plans Need to be Completed, 12, GAO–12–742 (July 2012). GAO found that nineteen agencies reported anticipating a combined total of more than $2.4 billion 

in cost-savings and more than $820 million in cost avoidances between 2011 and 2015. GAO 

noted that actual savings could reach even higher, because fourteen of the agencies provided 

incomplete projections, one agency does not expect to accrue net savings until 2017, and three 

agencies did not provide any estimated cost-savings at all. 53 Id. 54Government Accountability Office, Data Center Consolidation: Strengthened Oversight Needed to Achieve Cost Savings Goal 14, GAO–13–378 (April 2013). 55 Id. at 10. 

that the Consolidation Initiative could potentially save the government billions of dollars.52 However, GAO’s review also found that 

there were still large gaps in agency inventories and plans.53

GAO’s next report on the Consolidation Initiative, issued in April 

2013, once again evaluated agency progress in consolidating data 

centers. GAO expressed frustration over the failure to track costsavings associated with the Consolidation Initiative, stating, ‘‘the 

lack of initiative-wide cost-savings data makes it unclear whether 

agencies will be able to achieve OMB’s projected savings of $3 billion by the end of 2015.’’ 54 GAO also found that OMB had not 

measured agencies’ progress toward OMB’s cost-savings goal of $3 

billion, because OMB had not determined a consistent and repeatable method for tracking cost-savings. GAO further stated that 

until OMB begins tracking and reporting on performance measures 

such as cost-savings, OMB would be limited in its ability to oversee 

agencies’ progress towards key initiative goals.55

The Committee substitute to H.R. 1232 builds on the Administration’s efforts to consolidate and streamline data centers. The bill 

does so by requiring agencies, among other things, to devise and 

implement plans to inventory and consolidate existing data centers 

and to report to OMB on the extent to which they are implementing those plans. To assist agency consolidation efforts, the 

Committee substitute to H.R. 1232 requires OMB to implement 

government-wide data center consolidation and optimization 

metrics. These metrics include cost-savings metrics that ensure accurate calculation of cost-savings and cost avoidances, as well as 

server efficiency (i.e. server utilization) metrics. 

Finally, the Committee substitute to H.R. 1232 requires OMB to 

develop a cost-savings goal for the FDCCI and regularly report to 

Congress on cost-savings realized, and the completeness of each 

agency’s data center inventories and consolidation strategies. It 

also directs the GAO to review and verify agencies’ data center consolidation efforts. 

III. LEGISLATIVE HISTORY

H.R. 1232 was introduced on March 18, 2013, by Representatives 

Darrell Issa and Gerald Connolly. On February 25, 2014, the bill 

was agreed to in the House by voice vote on a motion to suspend 

the rules and pass the bill. The bill was received in the Senate on 

February 26, 2014 and referred to the Homeland Security and Governmental Affairs Committee. 

The Committee considered the bill at a business meeting on June 

25, 2014. Senator Carper offered two amendments to the bill. The 

first was a substitute amendment that Senator Carper and Senator 

Coburn offered that would strengthen the authorities of agency 

CIOs, improve upon the public transparency and review processes 


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required of agency IT investments, require agencies to conduct annual reviews of the IT investments of the entire agency, and build 

on the Administration’s efforts to consolidate and streamline data 

centers. The second amendment was a technical amendment to the 

title of the bill. 

The Committee adopted both amendments, and ordered the underlying bill reported favorably, all by voice vote (with Senator 

Levin asking to be recorded as ‘‘present’’ for the voice vote on the 

underlying bill). Members present for the vote on the amendments 

and on the bill were Senators Carper, Levin, McCaskill, Tester, 

Heitkamp, Coburn, McCain, Johnson, and Portman. 

The Carper-Coburn substitute is based on the Committee’s extensive work on the subject. The Committee and its subcommittees 

have held six hearings over the last three years on IT management 

and related issues: • On April 12, 2011, the Subcommittee on Federal Financial 

Management, Government Information, Federal Services, and 

International Security held a hearing entitled ‘‘Examining the 

President’s Plan for Eliminating Wasteful Spending in Information Technology.’’ The hearing explored efforts by the 

Obama administration to rein in the federal government’s IT 

budget and the President’s 25-point plan to reform federal IT 

management. • On May 25, 2011, the full Committee held a hearing entitled ‘‘How to Save Taxpayer Dollars: Case Studies of Duplication in the Federal Government.’’ One of the case studies examined at the hearing was the Consolidation Initiative’s effort 

to reduce unnecessary federal data centers. • On May 24, 2012, the Subcommittee on Federal Financial 

Management, Government Information, Federal Services, and 

International Security held a hearing entitled ‘‘Innovating with 

Less: Examining Efforts to Reform Information Technology 

Spending.’’ The hearing examined the Obama administration’s 

progress in implementing its plan to transform the management of federal IT systems. 

• On June 11, 2013, the full Committee held a hearing entitled ‘‘Reducing Duplication and Improving Outcomes in Federal Information Technology.’’ During the hearing, several critical IT areas were identified as offering potential opportunities 

to reduce duplication and the cost of government operations, 

including reducing the number of underutilized federal data 

centers. 

• On May 8, 2014, the full Committee held a hearing entitled ‘‘Identifying Critical Factors for Success in Information 

Technology Acquisitions.’’ The hearing examined the critical 

factors that lead to the successful acquisition of information 

technology investments, what challenges organizations (both 

government and industry) face in implementing IT systems, 

and ongoing efforts to consolidate data centers, empower agency CIOs, and strengthen management of IT projects. 

• On June 10, 2014, the Subcommittee on the Efficiency and 

Effectiveness of Federal Programs and the Federal Workforce, 

held a hearing entitled ‘‘A More Efficient and Effective Government: Examining Federal IT Initiatives and the IT Workforce.’’ 

The hearing examined the state of major federal IT projects, as 


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56http://www.whitehouse.gov/sites/default/files/omb/assets/egov_docs/fy2015_e53_and_ 

300_guidance_final_july2013.pdf. 

well as the process through which they are solicited and coordinated government-wide. 

IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title 

Section 1 gives the bill the short title of the Federal Information 

Technology Acquisition Reform Act. 

Sec. 2. Table of contents 

Section 2 provides a table of contents for the bill. 

TITLE I—Management of Information Technology within Federal 

Government 

Sec. 101. CIO authority enhancements 

Section 101(a) adds a new section 11319 to chapter 113 of title 

40, United States Code, entitled ‘‘Resources, planning and portfolio 

management.’’ 

New section 11319(a) defines the following terms: • ‘‘Covered agency’’ means each agency listed in sections 

901(B)(1) and 901(b)(2) of title 31, which includes the following 

agencies: The Department of Agriculture, the Department of 

Commerce, the Department of Defense, the Department of 

Education, the Department of Energy, the Department of 

Health and Human Services, the Department of Homeland Security, the Department of Housing and Urban Development, 

the Department of the Interior, the Department of Justice, the 

Department of Labor, the Department of State, the Department of Transportation, the Department of the Treasury, the 

Department of Veterans Affairs, the Environmental Protection 

Agency, the National Aeronautics and Space Administration, 

The Agency for International Development, the General Services Administration, the National Science Foundation, the Nuclear Regulatory Commission, the Office of Personnel Management, the Small Business Administration, the Social Security 

Administration; and 

• The bill delegates to OMB the responsibility to provide a 

precise definition of the term ‘‘Information Technology’’ 

through OMB’s capital planning guidance. The current definition of ‘‘Information Technology’’ in OMB’s Fiscal Year 2015 

guidance is ‘‘any equipment or interconnected system or subsystem of equipment that is used in the automatic acquisition, 

storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data 

or information by an executive agency. IT is related to the 

terms capital asset, IT investment, program, project, subproject, service, and system.’’ 56

New section 11319(b) gives new authorities for CIOs. New subsection (b)(1)(A) first requires the head of each covered agency and 

each military department to ensure that the CIO of the agency has 

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ment, governance, and oversight processes related to information 

technology (IT). 

Next, new subsection (b)(1)(B) requires the OMB Director to require in OMB’s annual IT capital planning guidance that the CIO 

of the agency (1) approve the agency’s information technology budget request; (2) certify that IT investments are implementing incremental development as defined by OMB; and (3) work with the 

Chief Human Capital Officer to review all IT positions requested 

in the budget to ensure the needs of the agency are being met. 

Finally, new subsection (b)(1)(C) requires the CIO of covered 

agencies and the military departments to review and approve IT 

contracts or other agreements for information technology or information technology services. An agency CIO would also review and 

approve any request to reprogram funds for IT programs, prior to 

such funds being reprogrammed. The agency may utilize existing 

governance processes to obtain approval provided that the CIO of 

the agency is a full participant in those governance processes. This 

subsection also allows the CIO to delegate the approval of a contract or agreement to an individual who reports directly to the 

Chief Information Officer for contracts or agreements for non-major 

IT investments, as that term is defined by OMB. However, the CIO 

may not delegate the approval for major IT investments. 

New subsection (b)(2) provides that the agency CIO shall approve 

the appointment of any other employee with the title of Chief Information Officer at the agency, or who functions in the capacity of 

Chief Information Offer, for any component organization within the 

agency. 

Sec. 102. Enhanced transparency and improved risk management 

in information technology investments 

Section 102(a) amends 40 U.S.C. § 11302(c) to codify OMB’s IT 

Dashboard program, requiring OMB to make publicly available the 

cost, schedule, and performance data for each major IT investment 

at an agency. This section also sets forth a review process that 

must take place for major IT investments that receive a high or 

moderately high risk for four consecutive quarters. 

Section 102(a) first adds two definitions: (1) ‘‘Covered agency’’ 

once again means each agency listed in sections 901(B)(1) and 

901(b)(2) of title 31 and (2) ‘‘Major information technology investment’’ means an agency IT investment that is designated by the executive agency as ‘‘major’’ in accordance with capital planning guidance issued by OMB. 

Section 102(a) then creates a new subsection 40 U.S.C. 

§ 11302(c)(3)(A), which requires the Director of OMB to make publicly available the cost, schedule, and performance data for each 

major IT investment for both new acquisitions and for operations 

and maintenance of existing IT. This information is required to be 

continuously available to the public, but the Director of OMB may 

waive or limit the information that is made publicly available if the 

Director determines that such a waiver or limitation is in the national security interests of the United States. 

New subsection 11302(c)(3)(B) further requires the agency CIO to 

certify each quarter that the information is current, accurate, and 

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57See Office of Management and Budget, Contracting Guidance to Support Modular Development (June 14, 2012), available at http://www.whitehouse.gov/sites/default/files/omb/procurement/guidance/modular-approaches-for-information-technology.pdf. 

tify significant data quality issues. The OMB Director must publicly identify executive agencies with an incomplete certification. 

Under new subsection 11302(c)(3)(C) the agency CIO is required 

to categorize each investment according to its risk level. The CIO 

cannot categorize the level of risk as not lower than medium risk 

for any investment that is not using incremental development. Incremental, or modular, development involves ‘‘dividing investments 

into smaller parts in order to reduce investment risk, deliver capabilities more rapidly, and permit easier adoption of newer and 

emerging technologies.’’ 57

New subsection 11302(c)(4) then sets forth a review process that 

applies to major IT investments that receive a high or moderately 

high risk rating for four consecutive quarters. First, the Administrator of the Office of E-Government and Information Technology 

at OMB (‘‘E-Gov Administrator’’), in conjunction with the CIO of 

the agency and the program manager of the investment, must review the investment to identify: (1) the root causes of the high level 

of risk of the investment; (2) the extent to which these causes can 

be addressed; and (3) the probability of future success. The E-Gov 

Administrator then sends the results of the review to the Senate 

Committee on Homeland Security and Governmental Affairs, the 

House Committee on Oversight and Government Reform, the Senate and House Appropriations Committees, and to any other Congressional committee upon request. If within one year of the date 

of completion of the above-mentioned review, the investment is still 

evaluated as high risk, the OMB Director shall deny any request 

for all future development, modernization, and enhancement funding until such time as the agency CIO certifies that the root causes 

have been addressed and there exists sufficient capability to deliver 

on the investment within the planned cost and schedule. 

Finally, new subsection 11302(c)(5) requires that the Director of 

OMB send a report to Congress, analyzing the trends of ‘‘covered 

agencies’’ reflected in the performance risk information required in 

paragraph (3). 

Sec. 103. Governmentwide software purchasing program 

Section 103(a) requires the Administrator of the General Services 

Administration (‘‘GSA’’), in collaboration with the Secretary of Defense, to identify and develop a strategic sourcing initiative to enhance Governmentwide acquisition, shared use, and dissemination 

of software. 

Section 103(b) requires the GSA Administrator, in developing the 

initiative under subsection (a), to allow for the purchase of a license agreement that is available for use by all executive agencies 

as one user to the maximum extent practicable and as appropriate. 


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TITLE II—Portfolio Review and Federal Data Center Consolidation 

Initiative 

Sec. 201. Portfolio review 

Section 201(a) adds a new subsection 11319(c) to chapter 113 of 

title 40, United States Code, that requires the Director of OMB and 

agency CIOs to annually review each agency’s IT investments. 

New subsection 11319(c)(1) requires OMB to first set forth the 

process by which agencies should identify, among other things, 

ways to increase the efficiency and effectiveness of an agency’s IT 

investments, opportunities to increase the use of shared services, 

potential duplication, waste and cost-savings, and a multi-year 

strategy to reduce duplication within an agency’s IT portfolio. 

New subsection 11319(c)(2) requires the Director of OMB to develop metrics and performance indicators that agencies shall use in 

their annual portfolio review. 

New subsection 11319(c)(3) requires the CIO of a covered agency 

to work with the agency’s Chief Operating Officer and the E-Gov 

Administrator to conduct an annual review of the IT portfolio of 

the agency. 

New subsection 11319(c)(4) requires the E-Gov Administrator to 

submit quarterly reports on the cost-savings and reductions in duplicative IT investments that were identified through the portfolio 

review process. 

Sec. 202. Federal Data Center consolidation initiative 

Subsection 202(a): Definitions 

The section defines the terms: ‘‘Administrator,’’ ‘‘Covered Agency,’’ ‘‘FDCCI,’’ and ‘‘Government-Wide Data Center Consolidation 

and Optimization Metrics.’’ 

Subsection 202(b): Federal Data Center consolidation inventories and strategies 

Subsection 202(b)(1) establishes annual data center consolidation 

reporting requirements for 24 key agencies. Each year, agencies are 

required to submit to OMB a data center inventory and a multiyear strategy to consolidate and optimize their data centers. The 

strategy shall include performance metrics, a consolidation 

timeline, and cost-saving estimates. Each agency is then required 

to implement the consolidation strategies submitted to OMB and 

provide quarterly updates to OMB on the implementation process. 

Subsection 202(b)(1) also makes clear that OMB may allow agencies to submit information through existing reporting structures 

and that each agency CIO must annually state that their agency 

has complied with the requirements of this Act. Finally, this subsection contains a Rule of Construction to make it clear that nothing in this Act limits the reporting of information by agencies to 

OMB or Congress. 

Subsection 202(b)(2) lays out the responsibilities of the E-Gov 

Administrator under this Section. These responsibilities include: 

establishing deadlines for annual reporting by agencies and requirements that agencies must meet to be considered in compliance 

with the Act, ensuring that agency progress is made available to 

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suant to this Act, monitoring the implementation of agency strategies, updating the cost-savings realized through data center consolidation, and creating government-wide data center consolidation 

and optimization metrics. 

Subsection 202(b)(3) requires the E-Gov Administrator to develop 

a cost-savings goal for data center consolidation, with a year-byyear break-down of anticipated savings. This subsection requires 

OMB to submit regular updates to Congress on cost-savings realized, and the completeness or incompleteness of each agency’s data 

center inventories and consolidation strategies. 

Subsection 202(b)(4) requires GAO to review the quality and 

completeness of each agency’s asset inventory and consolidation 

strategy. 

Subsection 202(c): Ensuring cybersecurity standards for data 

center consolidation and cloud computing 

This subsection establishes that data center consolidation must 

be done in accordance with federal guidelines on cloud computing 

security, including guidance published by the National Institute of 

Standards and Technology and the Federal Risk and Authorization 

Management Program, a government-wide program that aims to 

provide a standardized approach to security assessments and authorizations for cloud computing products and services. 

Subsection 202(d): Waiver of disclosure requirements 

This subsection provides the Director of National Intelligence 

(‘‘DNI’’) the ability to waive the requirements of the Act if the DNI 

determines that such disclosure is in the interest of national security. Within 30 days after making such a determination, the DNI 

would need to file a statement describing the waiver and the reasons for the waiver to the Senate Homeland Security and Governmental Affairs Committee, the House Committee on Oversight and 

Government Reform, and the Senate and House Intelligence Committees. 

Subsection 202(e): Sunset 

This subsection repeals the Federal Data Center Consolidation 

Initiative on October 1, 2018. 

V. CONGRESSIONAL BUDGET OFFICE (CBO) COST ESTIMATE

JULY 25, 2014. 

Hon. TOM CARPER, Chairman, Committee on Homeland Security and Governmental Affairs, U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1232, the Federal Information Technology Acquisition Reform Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 


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H.R. 1232—Federal Information Technology Acquisition Reform Act 

Summary: H.R. 1232 would amend the laws governing the procurement and management of information technology (IT) systems 

throughout the federal government. Specifically, the legislation 

would expand the existing Federal Data Center Consolidation Initiative to require agencies to inventory their data centers (facilities 

used to house computer systems and associated components) and to 

submit plans for optimizing their use. In addition, the bill would 

increase the authority of federal Chief Information Officers (CIOs), 

and require reports and analysis by government agencies concerning their IT investments. 

CBO estimates that implementing H.R. 1232 would cost $30 million over the 2015–2019 period, assuming appropriation of the necessary amounts. Although improving the procurement and management of IT systems, including optimizing the use of federal data 

centers, ultimately could reduce spending, CBO does not expect 

that there would be any significant savings from implementing this 

legislation for the next few years. 

Enacting the bill could affect direct spending by agencies not 

funded through annual appropriations; therefore, pay-as-you-go 

procedures apply. CBO estimates, however, that any net change in 

spending by those agencies would not be significant. Enacting the 

bill would not affect revenues. 

H.R. 1232 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 1232 is shown in the following table. The costs 

of this legislation fall within all budget functions that include funding to purchase information technology. 

By fiscal year, in millions of dollars— 

2015 2016 2017 2018 2019 2015– 

2019 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level ...................................................... 2 7 7 7 7 30 

Estimated Outlays ........................................................................ 2 7 7 7 7 30 

Basis of estimate: For this estimate, CBO assumes that H.R. 

1232 will be enacted in late 2014 and that the necessary amounts 

for implementing the bill will be appropriated for each year. 

Administration of Information Management and Procurement 

The federal government spends about $80 billion annually on IT 

investments. Many provisions of H.R. 1232 would codify and expand upon the government’s current practices concerning IT management and procurement. Office of Management and Budget 

(OMB) memoranda, Presidential directives, Administration initiatives, and other plans have directed federal agencies to improve the 

oversight of underperforming IT systems, more effectively manage 

IT costs, address duplicative investments through the IT Dashboard (a system with detailed information on major IT investments 

by the federal government), hold TechStat reviews (meetings to terminate or turnaround poorly performing federal IT investments), 

and implement plans to consolidate federal data centers. 


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H.R. 1232 would require 24 major agencies to submit comprehensive inventories of their IT facilities to OMB as well as plans for 

phasing out some data centers and optimizing performance at the 

remaining facilities. Under the bill, agencies also would be required 

to submit estimates of cost savings from consolidating those facilities. The Government Accountability Office (GAO) would be required to annually review and verify agency efforts in this area and 

report to the Congress on its findings. In addition, the legislation 

would expand the role and responsibilities of agency CIOs and expand the analysis needed to justify and report on government-wide 

IT procurements. 

Based on information from selected agencies, OMB, and GAO 

studies and reports on similar efforts to improve the cost effectiveness of IT spending, CBO expects that the administrative workload 

of most agencies would increase under H.R. 1232, mostly to prepare additional reports and to conduct more thorough reviews of IT 

spending. CBO estimates that implementing H.R. 1232 would cost 

$7 million a year, assuming appropriation of the necessary 

amounts. 

Savings 

The President’s Budget for Fiscal Year 2015 reported that agen- cies have saved about $1.6 billion through IT reform initiatives in 

recent years. Some of those savings come from the current Federal 

Data Center Consolidation Initiative to close up to 40 percent of 

the 1,200 consolidated data centers by the end of 2015 and from 

using tools like PortfolioStat reviews to reduce inefficiency, duplication, and unnecessary spending. Because most of the requirements 

of H.R. 1232 would make incremental changes to the current policies and practices, CBO expects that any additional savings from 

implementing this bill over the next five years would be small. 

Previous CBO estimates: On December 6, 2013, CBO transmitted 

a cost estimate for S. 1611, the Federal Data Center Consolidation 

Act of 2013, as ordered reported by the Senate Committee on 

Homeland Security and Governmental Affairs on November 6, 

2013. On November 12, 2013, CBO transmitted a cost estimate for 

H.R. 1232, as ordered reported by the House Committee on Oversight and Government Reform on March 20, 2013. Both S. 1611 

and the Senate version of H.R. 1232 contain identical provisions on 

data center consolidation. Although the House and Senate versions 

of H.R. 1232 both address the management and procurement of 

federal IT systems, CBO estimates that the House bill would have 

a greater cost because it has a larger scope. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. Enacting the bill could 

affect direct spending by agencies not funded through annual appropriations; therefore, pay-as-you-go procedures apply. CBO estimates, however, that any net increase in spending by those agencies would not be significant. Enacting the bill would not affect revenues. 

Intergovernmental and private-sector impact: H.R. 1232 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. 


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Estimate prepared by: Federal costs: Matthew Pickford; Impact 

on state, local, and tribal governments: Michael Hirsch and Leo 

Lex; Impact on the private sector: Tristan Hanon. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

VI. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill. The Committee agrees with the 

Congressional Budget Office that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded 

Mandates Reform Act and would impose no costs on state, local, or 

tribal governments, or private entities. 

VII. CHANGES IN EXISTING STATUTE MADE BY THE BILL, AS

REPORTED

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, the following changes in existing law made by 

the bill, as reported, are shown as follows: (existing law proposed 

to be omitted is enclosed in black brackets, new matter is printed 

in italic, existing law in which no change is proposed is shown in 

roman): 

UNITED STATES CODE 

* * * * * * * 

TITLE 40—PUBLIC BUILDINGS, PROPERTY, AND WORKS 

* * * * * * * 

CHAPTER 113—RESPONSIBILITY FOR ACQUISITIONS OF 

INFORMATION TECHNOLOGY 

Sec. 

11301. Responsibility of Director. 

* * * * * * * 

11319. Resources, planning, and portfolio management. 

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§ 11302. Capital planning and investment control 

(a) * * * 

(b) * * * 

(c) USE OF BUDGET PROCESS.— 

(1) DEFINITIONS.—In this subsection— 

(A) the term ‘‘covered agency’’ means an agency listed in 

section 901(b)(1) or 901(b)(2) of title 31; and 

(B) the term ‘‘major information technology investment’’ 

means an investment within a covered agency information 

technology investment portfolio that is designated by the 

covered agency as major, in accordance with capital planning guidance issued by the Director. 

(ø1¿2) Analyzing, tracking, and evaluating capital investments. As part of the budget process, the Director shall develop a process for analyzing, tracking, and evaluating the 


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risks, including information security risks, and results of all 

major capital investments made by an executive agency for information systems. The process shall cover the life of each system and shall include explicit criteria for analyzing the projected and actual costs, benefits, and risks, including information security risks, associated with the investments. 

(3) PUBLIC AVAILABILITY.— (A) IN GENERAL.—The Director shall make available to 

the public the cost, schedule, and performance data for 

each major information technology investment, without regard to whether the investments are for new information 

technology acquisitions or for operations and maintenance 

of existing information technology. 

(B) QUARTERLY REVIEW AND CERTIFICATION.— 

(i) IN GENERAL.—For each major information technology investment listed under subparagraph (A), the 

Chief Information Officer of the covered agency and the 

program manager of the investment within the covered 

agency shall, at least once every quarter— 

(I) certify that the information is current, accurate, and reflects the risks associated with each 

listed investment; and 

(II) identify significant data quality issues that 

affect the quality of data made available under 

subparagraph (A). 

(ii) INCOMPLETE CERTIFICATIONS.—The Director shall 

publicly identify covered agencies with an incomplete 

certification under clause (i)(I). 

(C) INVESTMENT EVALUATION BY AGENCY CIO.—For each 

major information technology investment listed under subparagraph (A), the Chief Information Officer of the covered 

agency shall— 

(i) categorize the investment according to level of 

risk; 

(ii) categorize the level of risk of the investment at a 

risk rating that is not lower than the higher of the cost 

rating and schedule risk rating of the investment, as 

determined in accordance with guidance issued by the 

Director; and 

(iii) categorize the level of risk as not lower than medium risk for any investment determined by the Chief 

Information Officer and program manager to not employ incremental development, as determined in accordance with capital planning guidance issued by the 

Director. 

(D) CONTINUOUS AVAILABILITY.—The information required under subparagraph (A), in its most updated form, 

shall be publicly available at all times. 

(E) WAIVER OR LIMITATION AUTHORITY.—The applicability of subparagraph (A) may be waived or the extent of 

the information may be limited by the Director, if the Director determines that such a waiver or limitation is in the 

national security interests of the United States. 

(4) RISK MANAGEMENT.—For each major information technology investment listed under paragraph (3)(A) that receives a 


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high risk rating, as described in paragraph (3)(C), for 4 consecutive quarters— 

(A) the Administrator of the Office of Electronic Government, in conjunction with the Chief Information Officer of 

the covered agency and the program manager of the investment within the covered agency, shall conduct a review of 

the investment that shall identify— 

(i) the root causes of the high level of risk of the investment; 

(ii) the extent to which these causes can be addressed; and 

(iii) the probability of future success; 

(B) the Administrator of the Office of Electronic Government shall communicate the results of the review under 

subparagraph (A) to— 

(i) the Committee on Homeland Security and Governmental Affairs and the Committee on Appropriations of 

the Senate; 

(ii) the Committee on Oversight and Government Reform and the Committee on Appropriations of the 

House of Representatives; and 

(iii) upon a request by any committee of Congress, to 

that committee; and 

(C) if, on the date that is 1 year after the date of completion of the review required under subparagraph (A), the investment is rated as high risk under paragraph (3)(C), the 

Director shall deny any request for additional development, 

modernization, or enhancement funding for the investment 

until the date on which the Chief Information Officer of the 

covered agency certifies that— 

(i) the root causes of the high level of risk of the investment have been addressed; and 

(ii) there is sufficient capability to deliver the remaining planned increments within the planned cost 

and schedule.’’. 

(ø2¿5) REPORT TO CONGRESS.—At the same time that the President submits the budget for a fiscal year to Congress under section 

1105(a) of title 31, the Director shall submit to Congress a report 

on the net program performance benefits achieved as a result of 

major capital investments made by executive agencies for information systems and how the benefits relate to the accomplishment of 

the goals of the executive agencies. The report shall include an 

analysis of covered agency trends reflected in the performance risk 

information required in paragraph (3). 

* * * * * * * 

§ 11319. Resources, planning, and portfolio management 

(a) DEFINITIONS.—In this section— 

(1) the term ‘‘covered agency’’ means each agency listed in section 901(b)(1) or 901(b)(2) of title 31; and 

(2) the term ‘‘information technology’’ has the meaning given 

that term under capital planning guidance issued by the Office 

of Management and Budget. 

(b) ADDITIONAL AUTHORITIES FOR CIOS.— 


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(1) PLANNING, PROGRAMMING, BUDGETING, AND EXECUTION

AUTHORITIES FOR CIOS.— 

(A) IN GENERAL.—The head of each covered agency and 

each agency listed in section 102 of title 5 shall ensure that 

the Chief Information Officer of the agency has a significant role in— 

(i) the decision processes for all annual and multiyear planning, programming, budgeting, and execution 

decisions, related reporting requirements, and reports 

related to information technology; and 

(ii) the management, governance, and oversight processes related to information technology. 

(B) BUDGET FORMULATION.— 

(i) IN GENERAL.—The Director of the Office of Management and Budget shall require in the annual information technology capital planning guidance of the Office of Management and Budget that the Chief Information Officer of each covered agency— 

(I) approve the information technology budget request of the covered agency; 

(II) as part of an approval under subclause (I), 

certify that information technology investments are 

adequately implementing incremental development, as defined in capital planning guidance 

issued by the Office of Management and Budget; 

and 

(III) acting in conjunction with the Chief Human 

Capital Officer of the covered agency, review all 

positions with information technology responsibilities requested in the budget request of the covered 

agency to ensure the positions meet the ongoing requirements of the covered agency. 

(C) REVIEW.— 

(i) IN GENERAL.—A covered agency and an agency 

listed in section 102 of title 5— 

(I) may not enter into a contract or other agreement for information technology or information 

technology services, unless the contract or other 

agreement has been reviewed and approved by the 

Chief Information Officer of the agency; 

(II) may not request the reprogramming of any 

funds made available for information technology 

programs, unless the request has been reviewed 

and approved by the Chief Information Officer of 

the agency; and 

(III) may use the governance processes of the 

agency to approve such a contract or other agreement if the Chief Information Officer of the agency 

is included as a full participant in the governance 

processes. 

(ii) DELEGATION.— 

(I) IN GENERAL.—Except as provided in subclause (II), the duties of a Chief Information Officer under clause (i) are not delegable. 


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(II) NON-MAJOR INFORMATION TECHNOLOGY IN- VESTMENTS.—For a contract or agreement for a 

non-major information technology investment, as 

defined in the annual information technology capital planning guidance of the Office of Management and Budget, the Chief Information Officer of 

a covered agency or an agency listed in section 102 

of title 5 may delegate the approval of the contract 

or agreement under clause (i) to an individual who 

reports directly to the Chief Information Officer. 

(2) PERSONNEL-RELATED AUTHORITY.—Notwithstanding any 

other provision of law, for each covered agency, the Chief Information Officer of the covered agency shall approve the appointment of any other employee with the title of Chief Information 

Officer, or who functions in the capacity of a Chief Information 

Officer, for any component organization within the covered 

agency. 

(c) INFORMATION TECHNOLOGY PORTFOLIO, PROGRAM, AND RESOURCE REVIEWS.— 

(1) PROCESS.—The Director of the Office of Management and 

Budget shall implement a process to assist covered agencies in 

reviewing their portfolio of information technology investments 

to identify or develop— 

(A) ways to increase the efficiency and effectiveness of the 

information technology investments of the covered agency; 

(B) opportunities to consolidate the acquisition and management of information technology services, and increase 

the use of shared-service delivery models; 

(C) potential duplication and waste, including unnecessary or duplicative software licenses; 

(D) potential cost-savings, including cost-savings and 

cost avoidance opportunities related to software licenses of 

the covered agency; 

(E) plans for actions to optimize the information technology portfolio, programs, and resources of the covered 

agency; 

(F) ways to better align the information technology portfolio, programs, and financial resources of the covered 

agency to the multi-year funding profiles and strategic 

plans, when such plans are required by Congress; 

(G) a multi-year strategy to identify and reduce duplication and waste within the information technology portfolio 

of the covered agency, including component-level investments, and projected cost-savings and avoidances resulting 

therefrom; and 

(H) any other goals that the Director may establish. 

(2) METRICS AND PERFORMANCE INDICATORS.—The Director of 

the Office of Management and Budget shall develop standardized cost-savings and cost avoidance metrics and performance 

indicators, which shall be used by agencies for the purposes of 

paragraph (1). 

(3) ANNUAL REVIEW.—In accordance with the process implemented under paragraph (1), the Chief Information Officer of 

each covered agency, in conjunction with the Chief Operating 

Officer or Deputy Secretary (or equivalent) of the covered agency 


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and Administrator of the Office of Electronic Government, shall 

conduct an annual review of the information technology portfolio of the covered agency. 

(4) QUARTERLY REPORTS.— (A) IN GENERAL.—The Administrator of the Office of 

Electronic Government shall submit a quarterly report on 

the cost-savings and reductions in duplicative information 

technology investments identified through the review required by paragraph (3) to— 

(i) the Committee on Homeland Security and Governmental Affairs and the Committee on Appropriations of 

the Senate; 

(ii) the Committee on Oversight and Government Reform and the Committee on Appropriations of the 

House of Representatives; and 

(iii) upon a request by any committee of Congress, to 

that committee. 

(B) INCLUSION IN OTHER REPORTS.—The reports required 

under subparagraph (A) may be included as part of another report submitted to the committees of Congress described in clauses (i), (ii), and (iii) of subparagraph (A). 

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