INFORMATION 

TECHNOLOGY

Agencies Need to 

Strengthen Oversight 

of Multibillion Dollar 

Investments in 

Operations and 

Maintenance 

Report to Congressional Requesters

November 2013

GAO-14-66

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-66, a report to 

congressional requesters

November 2013

INFORMATION TECHNOLOGY 

Agencies Need to Strengthen Oversight of 

Multibillion Dollar Investments in Operations and 

Maintenance

Why GAO Did This Study

Of the over $82 billion that federal 

agencies plan to spend on IT in fiscal 

year 2014, at least $59 billion is to be 

spent on O&M, which consists of 

legacy systems (i.e., steady state) and 

systems that are in both development 

and O&M (known as mixed life cycle). 

OMB calls for agencies to perform 

annual OAs, which are a key method 

for examining the performance of O&M 

investments.

GAO was asked to review IT O&M 

investments and agency use of OAs. 

The objectives of this report were to

among other things (1) identify the 

federal IT O&M investments with the 

largest budgets, including their 

responsible agencies and how each 

investment supports its agency’s 

mission; (2) determine the extent to 

which these investments have 

undergone OAs; and (3) assess 

whether the responsible agency’s 

major IT investments are in 

development, mixed life cycle, or 

steady state. To do so, GAO focused 

on the 10 IT investments with the 

largest budgets in O&M and their

responsible eight agencies, and 

assessed whether OAs were 

conducted on the investments. In 

addition, GAO evaluated what 

agencies spent on mixed, 

development, and O&M investments 

and whether agencies were using 

O&M funds for development activities. 

What GAO Recommends

GAO is recommending that the seven 

agencies that did not perform OAs on 

their large IT O&M investments do so, and that DHS ensure that its OA is 

complete and addresses all OMB 

factors. Of the seven agencies, three 

agreed with GAO’s recommendations; 

two partially agreed; and two had no 

comments. DHS agreed with the GAO 

recommendation to it.

What GAO Found

The 10 federal information technology (IT) operations and maintenance (O&M) 

investments with the largest budgets in fiscal year 2012—and the eight agencies that 

operate them—are identified by GAO in the table below. They support agencies by 

providing, for example, global telecommunications infrastructure and information 

transport services for the Department of Defense. 

Of the 10 investments, only the Department of Homeland Security (DHS) investment 

underwent an operational analysis (OA)—a key performance evaluation and 

oversight mechanism required by the Office of Management and Budget (OMB) to 

ensure O&M investments continue to meet agency needs. DHS’s OA addressed 

most factors that OMB calls for; it did not address three factors (e.g., comparing 

current cost and schedule against original estimates). DHS officials attributed these 

factors not being addressed to the department still being in the process of 

implementing its new OA policy. The remaining agencies did not assess their 

investments, which accounted for $7.4 billion in reported O&M spending. Agency 

officials cited several reasons for not doing so, including relying on budget 

submission and related management reviews that measure performance; however, 

OMB has noted that these are not a substitute for OAs. Until the agencies ensure 

their operational investments are assessed, there is a risk that they will not know 

whether these multibillion dollar investments fully meet intended objectives. 

Department Investment

O&M Budget 

fiscal year 

2012

(in millions)

a

OA?

Department of Defense

Defense Information System 

Network $1,813 No

Department of Defense

Next Generation Enterprise 

Network 1,394 No

Department of Energy

Consolidated Infrastructure, 

Office Automation, and 

Telecommunications Program 909 No

Department of Health and Human 

Services 

National Institutes of Health IT 

Infrastructure 358 No

Department of Homeland Security 

Customs and Border Protection 

Infrastructure 529 Yes

Department of the Treasury

Main Frames and Servers 

Services and Support 482 No 

Department of Veterans Affairs Medical IT Support 1,053 No

Department of Veterans Affairs Enterprise IT Support 665 No

National Aeronautics and Space 

Administration IT Infrastructure 458 No

Social Security Administration Infrastructure Data Center 272 No

Source: GAO analysis of OMB and agency data.

a

For the eight agencies in this review, the majority of their 401 major IT investments

were mixed life cycle (i.e., having activities and systems that are in both development 

and O&M) with regard to total spending and number of investments. Specifically, 193 

(48 percent) of the investments were mixed investments, accounting for about $18

billion (61 percent) of planned spending. As such, successful oversight of such 

investments should involve a combination of conducting OAs to address operational 

portions of an investment and establishing IT governance and program management 

disciplines to manage those portions under development. GAO’s experience at the 

agencies and this report have identified agency inconsistencies in conducting OAs 

and establishing the capabilities that are key to effectively managing IT investments; 

accordingly, GAO has made prior recommendations to strengthen agency efforts in 

these areas. 

GAO assessed whether an OA had been performed for fiscal year 2012 because it was the last full 

year for completing OAs.

View GAO-14-66. For more information, 

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

pownerd@gao.gov.
Page i GAO-14-66 Information Technology

Letter 1 

Background 2

The 10 O&M IT Investments with the Largest Budgets Support 

Agencies in a Variety of Ways and Represent a Significant Part of 

Overall Federal IT O&M Funding 10

Most of the Largest O&M IT Investments Did Not Undergo 

Operational Analyses 12

Majority of Agencies’ Investments Were Mixed Life Cycle and Use 

of O&M Funds for Development Activities Was Limited 17

Conclusions 22

Recommendations for Executive Action 23

Agency Comments and Our Evaluation 23

Appendix I Objectives, Scope, Methodology 28

Appendix II Comments from the Department of Homeland Security 30

Appendix III Comments from the National Aeronautics and Space 

Administration 32

Appendix IV Comments from the Social Security Administration 33

Appendix V Comments from the Department of Veterans Affairs 35

Appendix VI Comments from the Department of Defense 37

Appendix VII Comments from the Department of Energy 39

Contents 
Page ii GAO-14-66 Information Technology

Appendix VIII Comments from the Department of the Treasury 42

Appendix IX GAO Contact and Staff Acknowledgments 43

Tables

Table 1: Fiscal Year 2014 O&M Percentage of Total Planned IT 

Spending 4

Table 2: Fiscal Year 2014 Development Percentage of Total 

Planned IT Spending 5

Table 3: 10 Largest O&M Investments, Responsible Department and 

Agency, Amount Budgeted for O&M and Development for 

fiscal year 2012, Investment Type, and How Investment 

Supports Mission 11

Table 4: 10 Largest IT O&M Investments, Whether They Underwent 

an OA, and Their fiscal year 2012 O&M Cost (in millions) 13

Table 5: Customs and Border Protection Infrastructure: Analysis of 

Extent to Which Investment’s Fiscal Year 2012 OA 

Addressed OMB Factors 14

Table 6: Fiscal Year 2012 Selected Major IT Investments Reported 

Spending Summary (in millions) 19

Table 7: Fiscal Year 2012 Selected Major IT Investments Summary 19

Figures

Figure 1: Percentages of Total Federal IT Spending for Fiscal Year 

2014 3

Figure 2: Major IT Investments for Fiscal Year 2012 by Reported 

Spending (billions) 18

Figure 3: Major IT Investments for Fiscal Year 2012 by Total 

Number of Investments in Each Phase (Development, 

Steady State, or Mixed Life Cycle) 18
Page iii GAO-14-66 Information Technology

Abbreviations

DOD Department of Defense

DOE Department of Energy

DHS Department of Homeland Security

HHS Department of Health and Human Services

IT information technology

NASA National Aeronautics and Space Administration

OA operational analysis

O&M operations and maintenance

OMB Office of Management and Budget

SSA Social Security Administration

Treasury Department of the Treasury 

VA Department of Veterans Affairs

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Page 1 GAO-14-66 Information Technology

441 G St. N.W.

Washington, DC 20548

November 6, 2013

Congressional Requesters

Federal agencies plan to spend over $82 billion on information technology 

(IT) in fiscal year 2014. Of this amount, at least $59 billion was reported 

by the agencies to be spent on operations and maintenance (O&M). O&M 

investments consist of existing legacy systems (i.e., steady state) and 

systems that are in both development and O&M (known as mixed life 

cycle). Given the size and magnitude of these investments, it is important 

that agencies effectively manage the operations and maintenance of 

existing investments to ensure they (1) continue to meet agency needs, 

(2) deliver value, and (3) do not unnecessarily duplicate or overlap with 

other investments.

The Office of Management and Budget (OMB) directs agencies to 

periodically examine the performance of these investments against, 

among other things, established cost, schedule, and performance goals. 

Specifically, OMB calls for agencies to perform annual operational 

analyses (OA), which are a key method for examining the performance of 

such investments in O&M.

The objectives of our current review were to:

• identify the federal IT O&M investments with the largest budgets, 

including their responsible agencies and how each investment 

supports its agency’s mission;

• determine the extent to which these investments have undergone 

OAs; and

• assess whether the responsible agency’s major IT investments are in 

development, mixed life cycle, or steady state and the extent to which 

funding for investments in O&M have been transferred and used to 

fund investments in development.

To do so, our work focused on the 10 federal IT investments with the 

largest reported budgets in O&M and the eight responsible agencies—

namely, the Departments of Defense (DOD), Energy, Homeland Security 

(DHS), Health and Human Services (HHS), the Treasury, and Veterans 

Affairs (VA), and the National Aeronautics and Space Administration and 

Social Security Administration—that operate these investments. In 

addition, we determined how these 10 investments supported their 

agencies’ mission by analyzing OMB and agency documentation and 

 
 

Page 2 GAO-14-66 Information Technology

conducting interviews with agency officials responsible for these 

investments. We also addressed whether the agencies conducted OAs to 

manage these 10 investments in accordance with OMB guidance. More 

specifically, we assessed whether an analysis had been performed on 

each of the 10 investments during fiscal year 2012 (because it was the 

last full year for completing OAs) and if so, we compared it to the OMB 

guidance criteria to identify any gaps and their causes. Further, to assess 

whether each of the eight agency’s major IT investments are in 

development, mixed life cycle, or steady state, we analyzed OMB budget 

documentation on the agencies’ planned spending on each IT investment 

by phase (i.e., development, mixed, or steady state). Moreover, to assess 

the extent to which these agencies’ had used their O&M funds on 

development activities, we compared what the agencies had planned to 

spend on development and O&M (in fiscal year 2012) with what was 

reported to have been spent in order to identify any variances that 

indicated O&M funds had been reprogrammed and used to fund 

development activities. We also conducted interviews with agency

officials and reviewed agency documentation to verify whether any such 

reprogramming of funds had occurred, their causes, and the extent to 

which such changes were subject to management oversight.

We conducted this performance audit from December 2012 to October

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. Details on our objectives, 

scope, and methodology can be found in appendix I.

The President’s fiscal year 2014 budget request included plans for the 

federal government to spend over $82 billion on IT. The stated goal of the 

President’s IT budget request is to support making federal agencies more 

efficient and effective for the American people; it also states that the 

strategic use of IT is critical to success in achieving this goal. Of the $82 

Background 
 

Page 3 GAO-14-66 Information Technology

billion budgeted for IT, the budget provides that 26 key agencies1 plan to 

spend the bulk of it, approximately $76 billion.2

Figure 1: Percentages of Total Federal IT Spending for Fiscal Year 2014

Further, of the $76 billion, 

over $59 billion is to be spent on O&M investments with the remainder 

($17 billion) being budgeted for development of new capabilities. As 

shown in figure 1, the $59 billion represents a significant majority (i.e., 77 

percent) of total budgeted spending for these agencies ($76 billion).

Although O&M spending by these agencies is about 77 percent of total IT 

spending, the amount spent by each agency varies from a high of 98 

percent to a low of 46 percent (as shown in the following table).

 

1

The 26 key 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; 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.

2

According to the budget, the remaining $6 billion includes classified DOD IT investments.
 

Page 4 GAO-14-66 Information Technology

Table 1: Fiscal Year 2014 O&M Percentage of Total Planned IT Spending 

Dollar in millions

Agencies Total IT spending O&M spending

O&M percentage of 

total IT spending

Department of Defense $34,591.3 $25,193.7 73%

Department of Health and Human Services 7,287.8 6,477.1 89%

Department of Homeland Security 6,072.4 5,074.9 84%

Department of Veterans Affairs 3,889.7 3,345.9 86%

Department of the Treasury 3,745.8 2,859.8 76%

Department of Transportation 3,128.2 1,442.0 46%

Department of Justice 2,657.4 2,151.6 81%

Department of Agriculture 2,510.3 2,204.0 88%

Department of Commerce 2,506.9 1,578.4 63%

Department of Energy 1,529.4 1,316.9 86%

Social Security Administration 1,503.9 849.1 56%

National Aeronautics and Space Administration 1,435.8 1,410.0 98%

Department of State 1,416.8 1,146.0 81%

Department of the Interior 1,012.9 958.2 95%

Department of Education 620.8 515.6 83%

Department of Labor 611.1 517.3 85%

General Services Administration 485.9 397.7 82%

Environmental Protection Agency 447.7 381.0 85%

Department of Housing and Urban Development 293.6 144.9 49%

Nuclear Regulatory Commission 152.4 130.2 85%

U.S. Agency for International Development 125.8 98.4 78%

Small Business Administration 115.2 76.7 67%

National Archives and Records Administration 103.3 94.3 91%

National Science Foundation 98.7 84.8 86%

Office of Personnel Management 86.1 65.4 76%

Smithsonian Institution 66.1 63.9 97%

Grand total $76,495.6 $58,577.9 77%

Source: GAO analysis of OMB data.

Development spending, which is intended for the inclusion of new 

capabilities, accounts for approximately 23 percent of the total amount to 

be spent on IT in fiscal year 2014 by these agencies. However, the

investments in development vary greatly, from 54 percent by the 

Department of Transportation to a low of 2 percent by the National 

Aeronautics and Space Administration.
 

Page 5 GAO-14-66 Information Technology

Table 2: Fiscal Year 2014 Development Percentage of Total Planned IT Spending 

Dollars in millions

Agencies Total IT spending 

Development 

spending

Development percentage 

of total IT spending

Department of Defense $34,591.3 $9,397.6 27%

Department of Health and Human Services 7,287.8 810.7 11%

Department of Homeland Security 6,072.4 997.5 16%

Department of Veterans Affairs 3,889.7 543.8 14%

Department of the Treasury 3,745.8 886.0 24%

Department of Transportation 3,128.2 1,686.2 54%

Department of Justice 2,657.4 505.8 19%

Department of Agriculture 2,510.3 306.4 12%

Department of Commerce 2,506.9 928.6 37%

Department of Energy 1,529.4 212.5 14%

Social Security Administration 1,503.9 654.9 44%

National Aeronautics and Space Administration 1,435.8 25.8 2%

Department of State 1,416.8 270.8 19%

Department of the Interior 1,012.9 54.7 5%

Department of Education 620.8 105.2 17%

Department of Labor 611.1 93.8 15%

General Services Administration 485.9 88.2 18%

Environmental Protection Agency 447.7 66.7 15%

Department of Housing and Urban Development 293.6 148.7 51%

Nuclear Regulatory Commission 152.4 22.2 15%

U.S. Agency for International Development 125.8 27.4 22%

Small Business Administration 115.2 38.4 33%

National Archives and Records Administration 103.3 9.0 9%

National Science Foundation 98.7 13.9 14%

Office of Personnel Management 86.1 20.7 24%

Smithsonian Institution 66.1 2.1 3%

Grand total $76,495.6 $17,917.7 23%

Source: GAO analysis of OMB data.

Further, in addition to including amounts to be spent on IT development 

and O&M, the budget also further specifies how the total $76 billion 

budgeted for IT is to be spent on agency IT investments by the following 

three categories:

• those solely under development ($6 billion),
 

Page 6 GAO-14-66 Information Technology

• those involving activities and systems that are in both development 

and O&M—known as mixed life cycle ($40 billion), and

• those existing operational systems—commonly referred to by OMB as 

steady state investments—that are solely in O&M ($30 billion).

To assist agencies in managing their investments, Congress enacted the 

Clinger-Cohen Act of 1996, which requires OMB to establish processes to 

analyze, track, and evaluate the risks and results of major capital 

investments in information systems made by federal agencies and report 

to Congress on the net program performance benefits achieved as a 

result of these investments.3

In carrying out its responsibilities, OMB uses several data collection 

mechanisms to oversee federal IT spending during the annual budget 

formulation process. Specifically, OMB requires federal departments and 

agencies to provide information to it related to their IT investments (called 

exhibit 53s) and capital asset plans and business cases (called exhibit 

300s).

Further, the act places responsibility for 

managing investments with the heads of agencies and establishes chief 

information officers to advise and assist agency heads in carrying out this 

responsibility.

4

• Exhibit 53. The purpose of the exhibit 53 is to identify all IT 

investments—both major and nonmajor5

 

3

40 U.S.C. § 11302(c).

—and their associated costs 

within a federal organization. Information included on agency exhibit 

53s is designed, in part, to help OMB better understand what 

agencies are spending on IT investments. The information also 

supports cost analyses prescribed by the Clinger-Cohen Act. As part 

of the annual budget, OMB publishes a report on IT spending for the 

federal government representing a compilation of exhibit 53 data 

submitted by agencies.

4

OMB Circular No. A-11, Preparation, Submission, and Execution of the Budget (August 

2012).

5

According to OMB guidance, a major IT investment requires special management 

attention because of its importance to the mission or function to the government; 

significant program or policy implications; high executive visibility; high development, 

operating, or maintenance costs; unusual funding mechanism; or definition as major by 

the agency’s capital planning and investment control process.

OMB’s Roles and 

Responsibilities for 

Overseeing IT Investments, 

Including Operations and

Maintenance
 

Page 7 GAO-14-66 Information Technology

• Exhibit 300. The purpose of the exhibit 300 is to provide a business 

case for each major IT investment and to allow OMB to monitor IT 

investments once they are funded. Agencies are required to provide 

information on each major investment’s cost, schedule, and 

performance.

In addition, in June 2009, to further improve the transparency into and 

oversight of agencies’ IT investments, OMB publicly deployed a website, 

known as the Federal IT Dashboard (Dashboard), which replaced its 

Management Watch List and High-Risk List. As part of this effort, OMB 

issued guidance directing federal agencies to report, via the Dashboard, 

the performance of their IT investments. Currently, the Dashboard 

publicly displays information on the cost, schedule, and performance of 

major federal IT investments at key federal agencies. In addition, the 

Dashboard allows users to download exhibit 53 data, which include 

information on both major and nonmajor investments. According to OMB, 

these data are intended to provide a near real-time perspective of the 

performance of these investments, as well as a historical perspective. 

Further, the public display of these data is intended to allow OMB, other 

oversight bodies, and the general public to hold the government agencies 

accountable for results and progress. Since the Dashboard has been 

implemented, we have reported and made recommendations to improve 

the data accuracy and reliability. In 2010, 2011, and 2012, we reported on 

the progress of the Dashboard and made recommendations to further 

improve how it rates investments relative to current performance.6

Further, OMB has developed guidance that calls for agencies to develop 

an OA policy for examining the ongoing performance of existing legacy IT 

investments to measure, among other things, that the investment is 

continuing to meet business and customer needs and is contributing to 

OMB 

concurred with our recommendations and has actions planned and 

underway to address them.

 

6

GAO, IT Dashboard: Opportunities Exist to Improve Transparency and Oversight of 

Investment Risk at Select Agencies, GAO-13-98 (Washington, D.C.: Oct. 16, 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); 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).
 

Page 8 GAO-14-66 Information Technology

meeting the agency’s strategic goals.

7

• assessment of current costs against life-cycle costs;

This guidance calls for the policy to 

provide for an annual OA of each investment that addresses the 

following: cost, schedule, customer satisfaction, strategic and business 

results, financial goals, and innovation. To address these areas, the 

guidance specifies the following 17 key factors that are to be addressed:

• a structured schedule assessment (i.e., measuring the

• performance of the investment against its established schedule);

• a structured assessment of performance goals (i.e., measuring the 

performance of the investment against established goals);

• identification of whether the investment supports customer processes 

as designed and is delivering goods and services it was designed to 

deliver;

• a measure of the effect the investment has on the performing 

organization itself;

• a measure of how well the investment contributes to achieving the 

organization’s business needs and strategic goals;

• a comparison of current performance with a pre-established cost 

baseline and estimates;

• areas for innovation in the areas of customer satisfaction, strategic 

and business results, and financial performance;

• indication if the agency revisited alternative methods for achieving the 

same mission needs and strategic goals; 

• consideration of issues, such as greater utilization of technology or 

consolidation of investments to better meet organizational goals;

• an ongoing review of the status of the risks identified in the 

investment’s planning and acquisition phases;

• identification of whether there is a need to redesign, modify, or 

terminate the investment;

• an analysis on the need for improved methodology (i.e., better ways 

for the investment to meet cost and performance goals);

• lessons learned;

• cost or schedule variances;

• recommendations to redesign or modify an asset in advance of 

potential problems; and

• overlap with other investments.

 

7

Capital Programming Guide, Supplement to OMB Circular A-11, Part 7 (July 2012); OMB 

Memorandum M-10-27 (June 2010), requires agencies to establish a policy for performing 

OAs on steady state investments as a part of managing and monitoring investment 

baselines.
 

Page 9 GAO-14-66 Information Technology

With regard to overseeing the agencies’ development of policies and 

annual performance, OMB officials responsible for governmentwide OA 

policy stated that they expect agencies to perform all the steps specified 

in the guidance and to be prepared to show documentation as evidence 

of compliance with the guidance.

In October 2012 we reported on five agencies’ use of OAs (during fiscal 

year 2011) and how they varied significantly.8

Consequently, we recommended, among other things, that the agencies 

conduct annual OAs and in doing, ensure they are performed for all 

investments and that all factors are fully assessed. To ensure this is done 

and to provide transparency into the results of these analyses, we also 

recommended that OMB revise its guidance to include directing agencies 

to post the results on the Dashboard. OMB and the five agencies agreed 

with our recommendations and have efforts planned and underway to 

address them. In particular, OMB issued guidance (dated August 2012) to 

the agencies directing them to report OA results along with their fiscal 

year 2014 budget submission documentation (e.g., exhibit 300) to OMB. 

According to OMB officials, they are currently establishing a process on 

how agencies are to provide the information to OMB which they plan to 

have in place over the next 6 months. As part of this, OMB is defining a 

process for what they plan to do with the information once they receive it.

Specifically, of the five 

agencies, we found that three—namely, DOD, Treasury, and VA—did not 

perform analyses on their 23 major steady state investments with annual 

budgets totaling $2.1 billion. The other two agencies—DHS and HHS—

performed analyses but did not do so for all investments. For example, 

DHS analyzed 16 of its 44 steady state investments, meaning 28 

investments with annual budgets totaling $1 billion were not analyzed; 

HHS analyzed 7 of its 8 steady state investments, thus omitting a single 

investment totaling $77 million from being assessed. We also found that 

of those OAs performed by these two agencies, none fully addressed all 

the key factors. Specifically, our analysis showed that only about half of 

the key factors were addressed in these assessments.

 

8

GAO, Information Technology: Agencies Need to Strengthen Oversight of Billions of 

Dollars in Operations and Maintenance Investments, GAO-13-87 (Washington, D.C.: Oct. 

16, 2012).

GAO Has Previously 

Reported on IT 

Investments in O&M
 

Page 10 GAO-14-66 Information Technology

Further, we recently reported9 that actions are needed within the federal 

government to reduce fragmentations, overlap, and duplication among 

federal programs and activities. These actions include improving the 

management oversight of federal IT investments in operations and 

maintenance. Specifically, to avoid wasteful or duplicative investments in 

operations and maintenance, we recommended that agencies analyze all 

information technology investments annually and report the results of 

their analyses to OMB. These actions could help agencies achieve cost 

savings by strengthening the oversight of their existing information 

technology investments in operations and maintenance, resulting in the 

potential for billions of dollars in savings.

The 10 federal IT O&M investments with the largest budgets, identified 

during our review, support agencies in a variety of ways such as

• providing worldwide telecommunications infrastructure and 

information transport for DOD operations;

• enabling HHS to conduct research, award grants, and disseminate 

biomedical research and health information to the public and National 

Institutes of Health stakeholders; and

• providing SSA the capability to maintain demographic, wage, and 

benefit information on all American citizens. Including ensuring the 

availability, changeability, stability, and security of SSA’s IT operations 

for the entire agency.

These investments are operated by eight agencies, such as the 

Department of Energy (DOE), the National Aeronautics and Space 

Administration (NASA), and Social Security Administration (SSA). In total, 

the investments accounted for about $7.9 billion in O&M spending for 

fiscal year 2012, which was approximately 14 percent of all such 

spending for federal IT O&M. The following table identifies the 10 

investments and describes the agency responsible for each investment, 

the amount budgeted for O&M and development for fiscal year 2012, 

investment type, and how each investment supports the organization’s 

mission.

 

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).

The 10 O&M IT 

Investments with the 

Largest Budgets 

Support Agencies in a 

Variety of Ways and 

Represent a 

Significant Part of 

Overall Federal IT 

O&M Funding
 

Page 11 GAO-14-66 Information Technology

Table 3: 10 Largest O&M Investments, Responsible Department and Agency, Amount Budgeted for O&M and Development for 

fiscal year 2012, Investment Type, and How Investment Supports Mission

Investment

Responsible 

department/ 

agency or office

Investment 

O&M FY12 

budget 

(millions)

Investment 

development FY12 

budget (millions)

Investment 

type 

How investment supports 

mission

Defense Information 

System Network

DOD /Defense 

Information 

Systems Agency 

$ 1,813 $ 113 Mixed Is to enable the consolidated 

worldwide telecommunications 

infrastructure and information 

transport for DOD operations.

Next Generation 

Enterprise Network

DOD/Navy $ 1,394 $ 202 Mixed Is to provide secure netcentric data and services to 

Navy and Marine Corps 

personnel, and forms the 

foundation for the Navy’s 

future Naval Network 

Environment.

Consolidated 

Infrastructure, Office 

Automation, and 

Telecommunications 

Program 

DOE/Office of the 

Chief Information 

Officer

$ 909 $ 59 Mixed Is to allow access to modern, 

reliable, and secure IT 

infrastructure to support and 

enhance the DOE’s business 

processes, strategic priorities, 

and IT vision.

National Institutes of 

Health IT 

Infrastructure

HHS/National 

Institutes of Health

$ 358 $ 13 Mixed Is to enable the department to 

conduct research, award 

grants, and disseminate 

biomedical research and 

health information to the public 

and National Institutes of 

Health stakeholders.

Customs and Border 

Protection 

Infrastructure

DHS/Customs and 

Border Protection

$ 529 $ 0 Steady state Is to provide the backbone 

support for all of Customs and 

Border Protection systems.

Internal Revenue 

Service Main Frames 

and Servers Services 

and Support

Treasury/Internal 

Revenue Service

$ 482 $ 0 Steady state Is to enable for the design, 

development, and deployment 

of server, middleware, and 

large systems and enterprise 

storage infrastructures.

Medical IT Support VA $ 1,053 $ 0 Steady state Is to provide the critical IT 

infrastructure and systems 

necessary for the delivery of 

health care and services to 

veterans.

Enterprise IT Support VA $ 665 $ 3 Mixed Is to support the mission of the 

Department by integrating, 

managing, and sustaining 

critical IT infrastructure and 

systems necessary for the 

delivery of services.
 

Page 12 GAO-14-66 Information Technology

Investment

Responsible 

department/ 

agency or office

Investment 

O&M FY12 

budget 

(millions)

Investment 

development FY12 

budget (millions)

Investment 

type 

How investment supports 

mission

National Aeronautics 

and Space 

Administration IT 

Infrastructure

NASA/Office of the 

Chief Information 

Officer

$ 458 $ 1 Mixed Is to allow institutional 

capabilities to conduct 

aeronautic and space 

activities, including ensuring 

vital assets are ready, 

available, and appropriately 

sized to conduct its missions.

Infrastructure Data 

Center

SSA/ Office of the 

Chief Information 

Officer

$ 272 $ 153 Mixed Is to maintain demographic, 

wage, and benefit information 

on all American citizens; more 

specifically, the objective of 

the investment is to ensure the 

availability, changeability, 

stability, and security of SSA’s 

IT operations for the entire 

agency.

Total $ 7.9 billion $ 544 million

Source: GAO analysis of OMB data and agency documentation.

Although required to do so, seven of the eight agencies did not conduct 

OAs on their largest O&M investments. Specifically, of the 10 O&M IT 

investments (with the largest budgets) we reviewed, only one agency—

DHS—conducted an analysis on its investment. In doing so, the 

department addressed most of the required OMB factors. However, the 

other seven agencies—DOD, DOE, HHS, Treasury, VA, NASA, and 

SSA—did not conduct OAs on their O&M investments, which have 

combined annual O&M budgets of $7.4 billion.

The following table lists the 10 investments and whether an analysis was 

completed for fiscal year 2012. Further, it provides the total O&M amount 

for the investment that had an OA and for the investments that did not 

have one—$529 million and $7.4 billion, respectively.

Most of the Largest 

O&M IT Investments 

Did Not Undergo 

Operational Analyses
 

Page 13 GAO-14-66 Information Technology

Table 4: 10 Largest IT O&M Investments, Whether They Underwent an OA, and Their fiscal year 2012 O&M Cost (in millions)

Investment

Completed OA for 

fiscal year 2012

Total O&M budget of 

investments with OA 

conducted (in millions)

Total O&M budget of 

investments with OA not 

conducted (in millions)

Defense Information System Network No $ 1,813

Next Generation Enterprise Network No $ 1,394

Consolidated Infrastructure, Office Automation, 

and Telecommunications Program

No $ 909

National Institutes of Health IT Infrastructure No $ 358

Customs and Border Protection Infrastructure Yes $ 529

Internal Revenue Service Main Frames and 

Servers Services and Support

No $ 482

Medical IT Support No $ 1,053

Enterprise IT Support No $ 665

NASA IT Infrastructure No $ 458

Infrastructure Data Center No $ 272

Total $ 529 million $7.4 billion

Source: GAO analysis of agency documentation.

With regard to the OA DHS performed on its investment (the Customs 

and Border Protection Infrastructure), the department addressed 14 of the 

17 OMB factors. For example, in addressing the factor on assessing 

performance goals, DHS made efforts to consolidate software licenses 

and maintenance in order to eliminate redundancy and reduce costs 

associated with software licenses and maintenance. Although DHS 

addressed these factors, it excluded 3 factors. Specifically, the 

department did not (1) assess current costs against life-cycle costs, (2) 

perform a structured schedule assessment, and (3) compare current 

performance against cost baseline and estimates developed when the 

investment was being planned. These factors are important because, 

among other things, they provide information to agency decision makers 

on whether an investment’s actual annual O&M costs are as they were 

planned to be and whether there is a need to examine more cost effective 

approaches to meeting agency mission objectives. Table 5 shows our 

analysis of DHS’s assessment of its Customs and Border Protection 

Infrastructure investment.
 

Page 14 GAO-14-66 Information Technology

Table 5: Customs and Border Protection Infrastructure: Analysis of Extent to Which Investment’s Fiscal Year 2012 OA 

Addressed OMB Factors

Key factor Yes or no

1. Assesses current costs against life-cycle cost N 

2. Includes a structured schedule assessment N 

3. Includes a structured assessment of performance goals Y 

4. Identifies whether the investment supports customer processes as designed and is delivering the goods and 

services it was designed to deliver

Y 

5. Measures the effect the investment has on the performing organization itself Y 

6. Includes a measure of how well the investment contributes to achieving the organization’s business needs and 

strategic goals

Y 

7. Compares current performance with a pre-established cost baseline and estimates N 

8. Identifies any areas for innovation in the areas of customer satisfaction, strategic and business results, and 

financial performance

Y 

9. Identifies if the agency revisited alternative methods for achieving the same mission needs and strategic goals Y 

10. Addresses issues such as greater utilization of technology or consolidation of investments to better meet 

organizational goals

Y 

11. Includes an ongoing review of the status of the risks identified in the investment’s planning and acquisition 

phases

Y 

12. Identifies a need to redesign, modify, or terminate the investment Y 

13. Includes an analysis on the need for improved methodology (i.e., better ways for the investment to meet cost 

and performance goals)

Y 

14. Identifies any lessons learned Y 

15. Identifies if the investment had a cost or schedule variance Y 

16. Identifies recommendations to redesign or modify an asset before it becomes a problem Y 

17. Includes information on the overlap of the investment with other systems Y 

Key: Y= fully addressed the factor

 N= did not address the factor

Source: GAO analysis of DHS data.

With regard to why DHS’s analyses did not address all OMB factors, 

officials from the DHS Office of the Chief Information Officer (who are 

responsible for overseeing the performance of OAs departmentwide) 

attributed this to the department still being in the process of updating their 

Management Directive 102-01 and its related guidance, which will provide 

additional instructions for completing OAs. As part of this update, 

department officials told us they plan to provide additional guidance on 

conducting OAs for programs once they have achieved full operational 

capability. The department expects the guidance to be completed in 

calendar year 2014. Further, according to DHS, once completed, this 

guidance will complement existing program review processes—referred 
 

Page 15 GAO-14-66 Information Technology

to by DHS as program health assessments—that requires all major IT 

investments, in support or mixed lifecycle phases, to complete an OA 

every 12 months. 

The other seven agencies attributed not performing OAs on these 

investments to several factors, including relying on other management 

and performance reviews—such as those used as part of developing their 

annual exhibit 300 submissions to OMB—although OMB has stated that 

these reviews are not to be a substitute for conducting annual analyses. 

The specific reasons cited by each agency are as follows:

• DOD: Officials from DOD’s Defense Information Systems Agency 

stated that they did not conduct an OA for the Defense Information 

Systems Network due to the fact that the investment undergoes 

constant oversight through weekly meetings to review issues such as 

the project status and accomplishments. Further, they said that the 

program manager exercises cost, schedule, and performance 

oversight using earned value management techniques. In addition,

they stated that monthly reviews of actual versus planned spending 

are collected to flag any discrepancies from expected cost and 

schedule objectives. While these reviews are important steps to 

monitoring performance management, OMB states such ongoing 

efforts to manage investment performance are not a substitute for 

conducting an annual OA. According to the OMB guidance, OAs are 

to be conducted for all existing IT investments to ensure that, among 

other things, an investment is continuing to meet business and 

customer needs and is contributing to meeting the agency’s strategic 

goals.

With regard to the Next Generation Enterprise Network, officials from 

the Navy who manage and oversee this investment stated an OA was 

not performed due to it going through a transition from a mature 

fielded system to a new service delivery model, which will become 

operational in 2014. Nonetheless, OMB guidance calls for agencies to 

also conduct annual analyses on all existing IT investments as part of 

ensuring that such investments continue to deliver value and support 

mission needs.

• DOE: Officials from the Office of the Chief Information Officer stated 

that an OA was not conducted on its Consolidated Infrastructure, 

Office Automation, and Telecommunications Program investment 

because in the summer of 2012 they began to separate it into smaller, 

more manageable pieces—referred to by these agency officials as 

deconsolidation— to better provide insight into the departmentwide 

infrastructure. In addition, to gain further insight into the infrastructure 
 

Page 16 GAO-14-66 Information Technology

spending, the DOE Chief Information Officer led an in-depth analysis 

in collaboration with senior IT executives, which included a commodity 

IT TechStat review in the fall of 2011, and a commodity IT 

PortfolioStat review in the fall of 2012. While these latter reviews are 

helpful in monitoring performance, our analysis shows that they do not 

fully address all 17 OMB factors. Specifically, the reviews do not 

address, among other things, factors in the areas of customer 

satisfaction, strategic and business results, and financial performance. 

Addressing these factors is important because it provides information 

to agency decision makers on whether the investment supports 

customer processes and is delivering the goods and services it was 

designed to deliver.

• HHS: According to officials from the department’s National Institutes 

of Health, the National Institutes of Health IT Infrastructure 

investment, which had an annual budget of $371 million for fiscal year 

2012, did not undergo an OA because this investment is an 

aggregation of all the components’ infrastructure and not a particular 

system or set of systems suited for this kind of macro analysis. In 

addition, they noted that National Institutes of Health does monitor the 

operational performance of its IT infrastructure and conducts a more 

strategic analysis of services within its IT infrastructure to evaluate the 

operational effectiveness at a strategic level. While these types of 

performance monitoring efforts are important, OMB guidance 

nonetheless calls for agencies to also conduct annual analyses on all 

existing IT investments as part of ensuring that such investments 

continue to deliver value and support mission needs.

• Treasury: Officials from the department’s IT Capital Planning and 

Investment Control branch (within the office of Treasury’s Chief 

Information Officer) noted that its Internal Revenue Service Main 

Frames and Servers Services and Support investment, which had a 

budget of $482 million for fiscal year 2012, was deconsolidated in 

fiscal year 2011 to allow for greater visibility into the infrastructure and 

that it is currently undergoing an OA but were not able to provide 

documentation at the time of our work.

• VA: Officials from VA’s Office of Information and Technology said an 

OA was not conducted on its Medical IT Support or Enterprise IT 

Support investments because performance is currently being reported 

monthly via the Federal IT Dashboard and internally through monthly 

performance reviews. The officials added that the department plans to 

develop a policy and begin conducting OAs on investments. However, 

VA has not yet determined when these analyses will be completed.

• NASA: Officials from NASA’s Office of the Chief Information Officer 

stated while they did not conduct a formal OA on the NASA IT 

Infrastructure investment, they did review the performance of the 
 

Page 17 GAO-14-66 Information Technology

investment using monthly performance status reviews and bimonthly 

service delivery transition status updates. The officials noted that 

these reviews address financial performance, schedule, 

transformation initiatives, risks, customer satisfaction, performance 

metrics, and business results. According to officials, the investment 

underwent a service delivery transition status update and a 

performance status review in May 2012. While these NASA reviews 

are essential IT management tools, they do not incorporate all 17 

OMB factors. For example, the reviews do not address, among other 

things, innovation and whether the investment overlapped with other 

systems. Fully addressing the OMB factors is essential to ensuring 

investments continue to deliver value and do not unnecessarily 

duplicate or overlap with other investments.

• SSA: According to officials from SSA’s Office of the Chief Information 

Officer, SSA’s Infrastructure Data Center investment did not undergo 

an analysis because it has significant development content and 

therefore an earned value analysis was conducted, which is called for 

by SSA guidance for mixed life-cycle investments. Officials stated 

they generally perform either an earned value analysis or OA, as 

applicable to the investment. While earned value management 

analyses are important to evaluating investment performance, OMB 

guidance nonetheless calls for agencies to also conduct annual OAs 

on all existing IT investments as part of ensuring that such 

investments continue to deliver value and support mission needs.

Until the agencies address these shortcomings and ensure all their O&M 

investments are fully assessed, there is increased risk that these 

agencies will not know whether these multibillion dollar investments fully 

meet intended objectives, including whether there are more efficient ways 

to deliver their intended purpose, therefore increasing the potential for 

waste and duplication.

For the eight selected agencies, the majority of their 401 major IT 

investments—totaling $29 billion— were in the mixed life-cycle phase in 

both spending and number of investments. Specifically, of the $29 billion, 

our analysis, as shown in figure 2, found that

• mixed life-cycle investments accounted for approximately $18 billion, 

or 61 percent;

• steady state investments accounted for approximately $8 billion, or 27 

percent; and

• development investments accounted for approximately $3 billion, or 

12 percent.

Majority of Agencies’ 

Investments Were 

Mixed Life Cycle and 

Use of O&M Funds 

for Development 

Activities Was Limited
 

Page 18 GAO-14-66 Information Technology

Figure 2: Major IT Investments for Fiscal Year 2012 by Reported Spending (billions)

With regard to the number of investments by phase, our analysis, as 

shown in figure 3, found that of the total 401 investments

• 193, or 48 percent, were in the mixed life-cycle phase,

• 139, or 35 percent, were in the steady state phase, and

• 69 or 17 percent, were in the development phase.

Figure 3: Major IT Investments for Fiscal Year 2012 by Total Number of Investments 

in Each Phase (Development, Steady State, or Mixed Life Cycle)
 

Page 19 GAO-14-66 Information Technology

On an individual agency basis, table 6 provides the total amount each 

agency reportedly spent on IT. It also shows of how each agency 

allocates this total by development, mixed life cycle, or steady state 

investments. Further for the mixed investments, it shows the amounts for 

O&M and development.

Table 6: Fiscal Year 2012 Selected Major IT Investments Reported Spending Summary (in millions)

Development

only Mixed life cycle Mixed breakdown Steady state

Agency Total IT spending 

Development

spending only Mixed spending Development O&M

Steady state

spending

DOD $12,712 $2,355 (19%) $9,772 (77%) $4,222 $5,550 $585 (5%)

DHS 4,391 345 (8%) 1,520 (35%) 699 821 2,526 (58%)

HHS 3,004 230 (8%) 1,552 (52%) 438 1,113 1,222 (41%)

VA 2,889 31 (1%) 1,467 (51%) 593 874 1,391 (48%)

Treasury 2,426 247 (10%) 953 (39%) 320 633 1,226 (51%)

SSA 1,127 118 (10%) 993 (88%) 349 644 16 (1%)

NASA 962 - 459 (48%) 1 458 503 (52%)

DOE 1,510 120 (8%) 1,000 (66%) 65 935 390 (26%)

Total $29,021 $3,446 (12%) $17,715 (61%) $6,687 $11,028 $7,859 (27%)

Source: GAO analysis of OMB and agency data.

Note: Due to rounding, numbers may not add up to total numbers.

Further, the following table provides for each of the eight agencies, their 

total number of investments and of that total, the number of investments 

in development, mixed life cycle, and steady state.

Table 7: Fiscal Year 2012 Selected Major IT Investments Summary

O&M phase

Development phase Mixed Steady state

Agency

Total Number of

investments 

Number of investments

in development 

Number of investments in 

mixed life cycle 

Number of investments in 

steady state 

DOD 93 21 (23%) 59 (63%) 13 (14%)

DHS 91 14 (15%) 28 (31%) 49 (54%)

HHS 92 16 (17%) 40 (43%) 36 (39%)

VA 25 5 (20%) 16 (64%) 4 (16%)

Treasury 53 6 (11%) 34 (64%) 13 (25%)

SSA 16 4 (25%) 11 (69%) 1 (6%)

NASA 11 - 1 (9%) 10 (91%)
 

Page 20 GAO-14-66 Information Technology

O&M phase

Development phase Mixed Steady state

Agency

Total Number of

investments 

Number of investments

in development 

Number of investments in 

mixed life cycle 

Number of investments in 

steady state 

DOE 20 3 (15%) 4 (20%) 13 (65%)

Total 401 69 (17%) 193 (48%) 139 (35%)

Source: GAO analysis of OMB and agency data.

Note: Due to rounding, numbers may not add up to total numbers.

The implications of the above analyses—especially the results in table 6 

that show mixed investments having significant amounts of funding for 

both development and O&M activities—are noteworthy, particularly as it 

relates to the oversight of such investments. More specifically, overseeing 

these investments will involve a set of IT management capabilities for 

those portions of the investment that are operational and a different set of 

IT management capabilities for those portions that are still under 

development. In the case of those portions that are operational, this will 

include agencies having the capability to perform thorough OAs, the 

importance of which is discussed earlier in this report.

For those portions still under development, OMB guidance10 and our best 

practices research and experience at federal agencies11

• instituting an investment review board to define and establish the 

management structure and processes for selecting, controlling, and 

evaluating IT investments;

show such 

effective oversight will involve agencies having structures and 

processes—commonly referred to as IT governance and program 

management disciplines—that include

• ensuring that a well-defined and disciplined process is used to select 

new IT proposals; and

• overseeing the progress of IT investments—using predefined criteria 

and checkpoints—in meeting cost, schedule, risk, and benefit 

 

10OMB, Evaluating Information Technology Investments, A Practical Guide (Washington, 

D.C.: November 1995).

11See, for example, GAO, Information Technology Investment Management: A Framework 

for Assessing and Improving Process Maturity, GAO-04-394G (Washington, D.C.: March 

2004) and GAO, Information Technology: DHS Needs to Further Define and Implement Its 

New Governance Process, GAO-12-818 (Washington, D.C.: July 25, 2012).
 

Page 21 GAO-14-66 Information Technology

expectations and to take corrective action when these expectations 

are not being met.

Having these disciplines are important because they help agencies, 

among other things, ensure such investments are supporting strategic 

mission needs and meeting cost, schedule, and performance 

expectations.

However, our experience at federal agencies has shown that agencies 

have not yet fully established effective governance and program 

management capabilities essential to managing IT investments. For 

example, we reported in April 2011 that many agencies did not have the 

mechanisms in place for investment review boards to effectively control 

their investments.12

In addition, our experience at federal agencies, along with the results 

from this audit, has found that agencies do not consistently conduct OAs. 

Specifically, as noted in the background, we reported in 2012 on five 

agencies’ use of them and how they varied significantly.

More specifically, we reported that while these 

agencies largely had established IT investment management boards, 

these boards did not have key policies and procedures in place for 

ensuring that projects are meeting cost, schedule, and performance 

expectations.

13

Regarding the use of O&M funds for development efforts, the eight 

agencies we reviewed did not, in large part, reprogram or reallocate O&M 

funds for use on development activities during the period reviewed (fiscal 

year 2012). Specifically, six of the agencies reported they did not 

Of the five 

agencies, we found that three—namely, DOD, Treasury, and VA—did not 

perform analyses on 23 major steady state investments with annual 

budgets totaling $2.1 billion. The other two agencies—DHS and HHS—

performed them but did not do so for all investments. Accordingly, we 

have made recommendations to these agencies to improve their use of 

OAs and fully implement effective governance and program management 

capabilities. They have in large part agreed to our recommendations and 

have efforts underway and planned to implement them.

 

12GAO, Information Technology: Continued Improvements in Investment Oversight and 

Management Can Yield Billions in Savings, GAO-11-511T (Washington, D.C.: Apr. 12, 

2011). 

13GAO-13-87. 
 

Page 22 GAO-14-66 Information Technology

reprogram IT O&M funds to be used on development activities and we

identified no evidence to the contrary; two agencies—Treasury and VA—

reported they did so in two instances. With regard to Treasury, the 

department—on its CADE 2 investment which has a total O&M budget of 

$40 million—reallocated a total of $10,000 to fund development activities 

planned for the investment. According to Treasury documentation, the 

cost of the investment’s operations and maintenance came in under 

budget by $10,000 so the department reallocated the funds to be used on 

new CADE 2 development efforts. Treasury reported this reallocation was 

discussed and approved by the Internal Revenue Service’s investment 

review board (the Internal Revenue Service is responsible for overseeing 

CADE 2) during its monthly executive steering meetings held during fiscal 

year 2012.

With regard to VA, it reprogrammed a total of $13.3 million from O&M to 

development on investments within an investment category which VA 

referred to as a portfolio. Specifically, during fiscal year 2012, the 

department reprogrammed $13.3 million from an O&M investment within 

its Medical Portfolio to investments under development within the portfolio 

requiring additional funding. This reprogramming of funds was approved 

by the Secretary of Veterans Affairs in June 2012.

The 10 largest federal O&M IT investments represent a significant part of 

the federal government’s multibillion dollar commitment to operating and 

maintaining its IT investments. Although OMB has established that 

agencies are to use OAs to evaluate the performance of such 

investments, their use by the agencies on these investments was very 

limited. DHS was the only agency to perform such an assessment and in 

doing so largely addressed the required OMB factors. While Treasury and 

VA had planned to perform analyses, they had not done so. Further, 

DOD, DOE, HHS, NASA, and SSA had not intended to perform these 

analyses on their large O&M investments. This limited use of OAs is due 

in part to a number of factors, including agencies relying on other types of 

performance oversight reviews that can be helpful but are not intended to 

be a substitute for these assessments. Until these agencies address 

these shortcomings and ensure all their large O&M investments are fully 

assessed, there is increased risk that these agencies will not know 

whether these multibillion dollar investments fully meet intended 

objectives, including whether there are more efficient ways to deliver their 

intended purpose.

Conclusions 
 

Page 23 GAO-14-66 Information Technology

To ensure that the largest IT O&M investments are being adequately 

analyzed, we recommend that the

• Secretary of Defense direct appropriate officials to perform OAs on 

the two investments identified in this report, including ensuring the 

analyses include all OMB factors;

• Secretary of Energy direct appropriate officials to perform an OA on 

the investment identified in this report, including ensuring the analysis

includes all OMB factors;

• Secretary of Health and Human Services direct appropriate officials to 

perform an OA on the investment identified in this report, including 

ensuring the analysis includes all OMB factors;

• Secretary of Treasury direct appropriate officials to perform an OA on 

the investment identified in this report, including ensuring the analysis

include all OMB factors;

• Secretary of Veterans Affairs direct appropriate officials to perform 

OAs on the two investments identified in this report, including 

ensuring the analyses include all OMB factors;

• NASA Administrator direct appropriate officials to perform an OA on 

the investment identified in this report, including ensuring the analysis

includes all OMB factors; and

• Commissioner of Social Security direct appropriate officials to perform 

an OA on the investment identified in this report, including ensuring 

the analysis includes all OMB factors.

In addition, we recommend that the Secretary of Homeland Security 

direct appropriate officials to ensure the department’s OA for the Customs 

and Border Protection Infrastructure is complete and assesses missing 

OMB factors identified in this report.

In commenting on a draft of this report, four agencies—DHS, NASA, SSA, 

and VA—agreed with our recommendations; two agencies—DOD and 

DOE—partially agreed; and two agencies—HHS and Treasury—had no 

comments. The specific comments from the four agencies that agreed are 

as follows:

• DHS in its written comments, which are reprinted in appendix II, 

stated that it concurred with our findings and recommendation. It 

also commented that DHS’s Office of the Chief Information Officer 

and the Office of Information Technology within Customs and 

Border Protection (the DHS component agency responsible for the 

Customs and Border Protection Infrastructure investment) are to 

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 24 GAO-14-66 Information Technology

work closely to ensure future OAs conducted on the investment 

fully address the OMB assessment factors.

• NASA, in its written comments—which are reprinted in appendix 

III—stated it concurred with our recommendation. NASA also 

stated that it planned to conduct an OA on its NASA IT 

Infrastructure investment in April 2014 that is to include all OMB 

factors. 

• In its written comments, SSA stated it agreed with our 

recommendation. It also stated that since 2008, SSA has had a 

process to perform OAs on investments that were solely in O&M 

and that it recently expanded the process to include mixed life 

cycle IT investments that have significant systems in O&M. SSA 

further commented that it was in the process of performing OAs 

on the SSA mixed life cycle investment identified in our report and 

other similar agency investments, with the goal of completing 

these analyses by September 30, 2013. SSA’s comments are 

reprinted in appendix IV.

• VA, in its written comments, stated it agreed with our conclusions 

and concurred with our recommendation. It also said that it had 

scheduled OAs for the two investments identified in our report to 

begin in the second half of fiscal year 2014. VA’s comments are 

reprinted in appendix V.

The specific comments of the two agencies that partially agreed are as 

follows: 

• DOD, in its written comments, stated that it partially concurred 

with our recommendation. Specifically, DOD said it agreed with 

our recommendation that its OAs should address all OMB 

assessment factors and said it is establishing an OA policy in 

coordination with OMB. The department further agreed with our 

recommendation that it perform an OA on its Defense Information 

System Network investment. 

The department disagreed with our recommendation to perform 

an OA on its Next Generation Enterprise Network investment 

stating the investment is no longer in O&M and such investments, 

per OMB policy, do not require an OA. More specifically, as noted 

earlier in this report, DOD is transitioning the investment from a 

mature fielded system to a new service delivery model, which will 
 

Page 25 GAO-14-66 Information Technology

become operational in 2014, and has moved the entire investment 

back into planning and acquisition. Nonetheless, consistent with 

our recommendation and as required by OMB policy, DOD plans

to conduct an OA on this investment once the department begins 

to make it operational in 2014. DOD’s comments are reprinted in 

appendix VI.

• In its written comments—which are reprinted in appendix VII—

DOE commented that it partially concurred with our 

recommendation. DOE stated it was not required to perform an 

OA on the Consolidated Infrastructure, Office Automation, and 

Telecommunications Program because the investment no longer 

exists. Specifically, DOE said it decided in 2012 to separate this 

large investment into smaller, more manageable pieces—referred 

to by DOE as deconsolidation—to better provide insight into its 

departmentwide infrastructure, and that since the investment no 

longer exists, there is no reason to perform an OA on it. 

Nonetheless, consistent with our recommendation, DOE added 

that it will ensure that OAs are conducted on the O&M 

components of all current major IT investments in DOE’s IT 

portfolio. DOE stated that it had already performed OAs on 

applicable operational components that used to comprise the 

Consolidated Infrastructure, Office Automation, and 

Telecommunications Program. For example, DOE commented 

that one of the investments created during deconsolidation—

called Consolidated Infrastructure—had already undergone an OA 

most recently in August 2013. 

While DOE reported this progress in its comments to us, it did not 

provide us with documentation to support that this OA had been 

performed and whether it addressed all the OMB assessment 

factors. Consequently, we are revising our recommendation to 

DOE that it ensure OAs are performed on the applicable 

operational components that used to comprise the Consolidated 

Infrastructure, Office Automation, and Telecommunications 

Program, including the newly created Consolidated Infrastructure 

investment. 

With regard to HHS and Treasury, 

• HHS, in comments provided via e-mail from its GAO Intake 

Coordinator within the Office of the Assistant Secretary for 
 

Page 26 GAO-14-66 Information Technology

Legislation, stated that it did not have any general comments on 

this report, and 

• Treasury in its written response said it had no comments on our 

report; the department’s comments are reprinted in appendix VIII.

DHS and HHS also provided technical comments, which we incorporated 

as appropriate.

We are sending copies of this report to interested congressional 

committees; the Secretaries of the Departments of Defense, Energy, 

Health and Human Services, Homeland Security, Treasury, and Veterans 

Affairs; the Administrator of the National Aeronautics and Space 

Administration; and the Commissioner of the Social Security 

Administration. This report will also be available at no charge on our 

website at http://www.gao.gov.

If you or your staffs have any questions on matters discussed in this 

report, please contact me at (202) 512-9286 or pownerd@gao.gov. 

Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this report. GAO staff who made 

major contributions to this report are listed in appendix IX. 

David A. Powner

Director

Information Technology Management Issues
 

Page 27 GAO-14-66 Information Technology

List of Requesters

The Honorable Thomas R. Carper

Chairman

The Honorable Tom Coburn, M.D.

Committee on Homeland Security 

 and Governmental Affairs

United States Senate

The Honorable Claire McCaskill

Chairman

Subcommittee on Financial and Contracting Oversight

Committee on Homeland Security 

 and Governmental Affairs

United States Senate

The Honorable Susan M. Collins

United States Senate
Appendix I: Objectives, Scope, Methodology

Page 28 GAO-14-66 Information Technology

Our objectives were to (1) identify the federal IT O&M investments with 

the largest budgets, including their responsible agencies and how each 

investment supports its agency’s mission; (2) determine the extent to 

which these investments have undergone OAs; and (3) assess whether 

the responsible agency’s major IT investments are in development, mixed 

life cycle, or steady state, and the extent to which funding for investments 

in O&M have been used to finance investments in development.

To identify those federal IT O&M investments with the largest budgets, we 

used data reported to the Office of Management and Budget (OMB) as 

part of the budget process, and focused on the 10 largest reported 

budgets in O&M and the responsible eight agencies (the Departments of 

Defense, Energy, Homeland Security, Health and Human Services, the 

Treasury, and Veteran Affairs; and the National Aeronautics and Space 

Administration and Social Security Administration) that operate these 

investments. In addition, to determine how these 10 investments support 

their agencies’ missions, we reviewed OMB and agency documentation 

(e.g., exhibit 300s, exhibit 53s) and interviewed agency officials.

To determine the extent to which OAs were conducted to manage these 

investments in accordance with OMB guidance, we analyzed agency 

documentation and interviewed responsible agency officials to determine 

whether any operational analyses had been performed on these 10 

investments during fiscal year 2012 because it was the last full year for 

completing OAs. In those cases where an OA had been performed, we 

compared it against OMB guidance on conducting them, including the 17 

factors that are to be addressed as part of such assessments, to identify 

any variances.1

To assess whether each of the eight agency’s major IT investments are in 

development, mixed life cycle, or steady state, we analyzed agencies’ 

reported spending data provided to OMB as part of the budget process to 

determine what phase the majority of the investments were in and where 

Where there were variances, we reviewed agency 

documentation and interviewed agency officials responsible for the OA to 

identify the cause of their occurrence. In those instances where an 

analysis was not performed, we reviewed documentation and interviewed 

agency officials to identify why it was not done.

 

1

Capital Programming Guide, Supplement to OMB Circular A-11, Part 7 (July 2012); OMB 

Memorandum M-10-27 (June 2010).

Appendix I: Objectives, Scope, Methodology
Appendix I: Objectives, Scope, Methodology

Page 29 GAO-14-66 Information Technology

the majority of funds were invested (i.e., development, mixed, or steady 

state). To assess the reliability of the data we analyzed, we corroborated 

them by interviewing investment and other agency officials to determine 

whether the OMB information we used was consistent with that reported 

by the agencies; based on this assessment, we determined the data were 

reliable for the purposes of this report. Further, to assess the extent to 

which these and other agency IT O&M investments involve development 

activities, we analyzed agency data and evaluated whether the eight 

agencies were using their O&M funds for development activities (i.e., 

through the reprogramming or reallocation of funds). Specifically, we 

compared what agencies planned to spend on development and O&M 

with what was reported to have been spent to identify any variances that 

indicated O&M funds were reprogrammed and used for development 

activities. In addition, we reviewed agencies’ documentation to determine 

if agencies had any processes in place to manage investments 

transitioning from development to O&M. Lastly, we reviewed agency 

documentation and interviewed agency IT budget and investment officials 

to verify whether any reprogramming occurred, its causes, and the extent 

of which any reprogramming was subject to management oversight.

We conducted this performance audit from December 2012 to October

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: Comments from the Department 

of Homeland Security

Page 30 GAO-14-66 Information Technology

Appendix II: Comments from the Department 

of Homeland Security
Appendix II: Comments from the Department 

of Homeland Security

Page 31 GAO-14-66 Information Technology
Appendix III: Comments from the National 

Aeronautics and Space Administration

Page 32 GAO-14-66 Information Technology

Appendix III: Comments from the National 

Aeronautics and Space Administration 
Appendix IV: Comments from the Social 

Security Administration

Page 33 GAO-14-66 Information Technology

Appendix IV: Comments from the Social 

Security Administration
Appendix IV: Comments from the Social 

Security Administration

Page 34 GAO-14-66 Information Technology
Appendix V: Comments from the Department 

of Veterans Affairs

Page 35 GAO-14-66 Information Technology

Appendix V: Comments from the Department 

of Veterans Affairs
Appendix V: Comments from the Department 

of Veterans Affairs

Page 36 GAO-14-66 Information Technology
Appendix VI: Comments from the Department 

of Defense

Page 37 GAO-14-66 Information Technology

Appendix VI: Comments from the 

Department of Defense
Appendix VI: Comments from the Department 

of Defense

Page 38 GAO-14-66 Information Technology
Appendix VII: Comments from the Department 

of Energy

Page 39 GAO-14-66 Information Technology

Appendix VII: Comments from the 

Department of Energy
Appendix VII: Comments from the Department 

of Energy

Page 40 GAO-14-66 Information Technology
Appendix VII: Comments from the Department 

of Energy

Page 41 GAO-14-66 Information Technology
Appendix VIII: Comments from the Department 

of the Treasury

Page 42 GAO-14-66 Information Technology

Appendix VIII: Comments from the 

Department of the Treasury 
Appendix IX: GAO Contact and Staff 

Acknowledgments

Page 43 GAO-14-66 Information Technology

David A. Powner, (202) 512-9286 or pownerd@gao.gov

In addition to the contact name above, individuals making contributions to 

this report included Gary Mountjoy (Assistant Director), Gerard Aflague, 

Camille Chaires, Rebecca Eyler, and Lori Martinez.

Appendix IX: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(311283)
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