INFORMATION 

TECHNOLOGY

OMB and Agencies Need to 

More Effectively Implement 

Major Initiatives to Save 

Billions of Dollars

Statement of David A. Powner, Director 

Information Technology Management Issues

Before the Subcommittee on 

Government Operations, Committee on 

Oversight and Government Reform, 

House of Representatives

For Release on Delivery 

Expected at 9:30 a.m. EDT

Thursday, July 25, 2013

GAO-13-796T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-796T, a testimony

before the Subcommittee on Government 

Operations, Committee on Oversight and 

Government Reform, House of 

Representatives

July 2013

INFORMATION TECHNOLOGY 

OMB and Agencies Need to More Effectively 

Implement Major Initiatives to Save Billions of 

Dollars 

Why GAO Did This Study

The federal government reportedly 

plans to spend at least $82 billion on IT 

in fiscal year 2014. Given the scale of

such planned outlays and the criticality 

of many of these systems to the health, 

economy, and security of the nation, it 

is important that OMB and federal 

agencies provide appropriate oversight 

and adequate transparency into these 

programs. Nevertheless, IT projects 

too frequently incur cost overruns and 

schedule slippages, and result in 

duplicate systems while contributing 

little to mission-related outcomes. 

Additionally, projects sometimes fail or 

operate inefficiently, at the cost of 

billions of dollars. 

GAO was asked to testify on the 

results and recommendations from its 

selected reports that focused on key 

aspects of the federal government’s 

management of IT investments. To 

prepare this statement, GAO drew on 

previously published work, as well as 

ongoing follow-up on prior 

recommendations.

What GAO Recommends

GAO has issued numerous 

recommendations to OMB and 

agencies on key aspects of IT 

management, including OMB’s public 

website, known as the IT Dashboard, 

which provides detailed information on 

federal agencies’ major investments; 

reviews of underperforming projects, 

known as TechStats; and efforts to 

consolidate federal data centers.

What GAO Found

GAO has issued a number of key reports on the federal government’s efforts to 

efficiently acquire and manage information technology (IT). While the Office of 

Management and Budget (OMB) and federal agencies have taken steps to 

address underperforming IT projects and more effectively manage IT through a 

number of major initiatives, additional actions are needed. For example, OMB 

has taken significant steps to enhance the oversight accountability of federal 

investments by creating the IT Dashboard, an OMB public website which 

provides detailed information on federal agencies’ major investments. However, 

GAO previously found there were issues with the accuracy and reliability of cost 

and schedule data in the Dashboard and recommended steps that OMB and 

agencies should take to improve these data—this is important since the 

Dashboard currently reports 154 investments totaling almost $10.4 billion being 

at risk. OMB agreed with the recommendations.

GAO recently reported that OMB and selected agencies have held multiple 

reviews—known as TechStats—of selected investments that are failing or are not 

producing results. Positive outcomes have been tracked and reported from these

reviews, with most producing improved governance, as well as projects with

accelerated delivery, reduced scope, and termination. However, for the selected 

agencies, GAO found that the number of at-risk TechStats held to date was only 

about 33 percent of the current number of medium- and high-risk investments. 

GAO was also unable to validate OMB’s reported results of almost $4 billion in 

life-cycle cost savings. GAO therefore recommended that OMB validate the 

resulting cost savings and require agencies to conduct TechStats for each 

investment rated with a moderately high- or high-risk rating on the IT Dashboard. 

OMB generally agreed with the recommendations.

GAO has also issued several reports on the federal government’s progress 

towards consolidating its growing number of data centers. Most recently, in April 

2013, GAO reported that agencies closed 420 data centers by the end of 

December 2012; however, OMB had not tracked and reported on other key 

performance measures, such as progress against the initiative’s cost savings 

goal of $3 billion by the end of 2015. In addition, GAO identified weaknesses that 

existed in the oversight of the data center consolidation initiative, including not 

ensuring the completeness of agencies’ data center inventories and 

consolidation plans. GAO recommended that OMB track and report on key 

performance measures and improve the execution of important oversight 

responsibilities. OMB agreed with these recommendations.

In March 2012, OMB launched PortfolioStat, which requires agencies to conduct 

annual reviews of its IT investments and make decisions on eliminating 

duplication, among other things. OMB believes this effort has the potential to 

save $2.5 billion over the next 3 years. OMB has since made significant changes 

to PortfolioStat in March 2013, including integrating it with its data center 

consolidation initiative and establishing new reporting requirements. However, 

GAO recently reported that OMB had not yet established revised data center 

metrics and goals for the combined initiative. GAO has ongoing work looking at 

PortfolioStat, including determining whether agencies are completing key actions.

View GAO-13-796T. For more information, 

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

pownerd@gao.gov.
 

Page 1 GAO-13-796T 

Chairman Mica, Ranking Member Connolly, and Members of the 

Subcommittee:

I am pleased to be here today to discuss the highlights and 

recommendations of our selected reports that focused on key aspects of 

the federal government’s acquisition and management of information 

technology (IT) investments. As reported to the Office of Management 

and Budget (OMB), federal agencies plan to spend at least $82 billion on 

IT in fiscal year 2014. Given the scale of such planned outlays and the 

criticality of many of these systems to the health, economy, and security 

of the nation, it is important that OMB and federal agencies provide 

appropriate oversight and transparency into these programs and avoid 

duplicative investments, whenever possible, to ensure the most efficient 

use of resources.

As we have previously reported, federal IT projects too frequently incur 

cost overruns and schedule slippages while contributing little to missionrelated outcomes.1 During the past several years, we have issued 

multiple reports and testimonies on federal initiatives to acquire and 

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

numerous recommendations to federal agencies and OMB to further 

enhance the management and oversight of IT programs.

 

1

See, for example, GAO, Information Technology: Better Informed Decision Making 

Needed on Navy’s Next Generation Enterprise Network Acquisition, GAO-11-150

(Washington, D.C.: Mar. 11, 2011); and Border Security: Preliminary Observations on the 

Status of Key Southwest Border Technology Programs, GAO-11-448T (Washington, D.C.: 

Mar. 15, 2011).

2

See, for example, GAO, Information Technology: Additional Executive Review Sessions 

Needed to Address Troubled Projects, GAO-13-524 (Washington, D.C.: June 13, 2013); 

GAO, Data Center Consolidation: Strengthened Oversight Needed to Achieve Billions of 

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

Consolidation: Strengthened Oversight Needed to Achieve Cost Savings Goal, 

GAO-13-378 (Washington, D.C.: Apr. 23, 2013); Information Technology Dashboard: 

Opportunities Exist to Improve Transparency and Oversight of Investment Risk at Select 

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

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

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

Attention Needed to Accurately Report Federal Spending and Improve Management, 

GAO-11-831T (Washington, D.C.: July 14, 2011); and Information Technology: Investment 

Oversight and Management Have Improved but Continued Attention Is Needed, 

GAO-11-454T (Washington, D.C.: Mar. 17, 2011).

 
 

Page 2 GAO-13-796T 

As part of its response to our prior work, OMB deployed a public website 

in 2009, known as the IT Dashboard, which provides detailed information 

on federal agencies’ major IT investments,3 including assessments of 

actual performance against cost and schedule targets (referred to as 

ratings) for approximately 700 major federal IT investments. In addition, 

OMB has initiated other significant efforts following the creation of the 

Dashboard. For example, OMB began leading reviews—known as 

TechStat Accountability Sessions (TechStats)—of selected IT 

investments to increase accountability and improve performance; 

launched an initiative to reduce the number of federal data centers (the 

Federal Data Center Consolidation Initiative (FDCCI)); and initiated 

PortfolioStat, which requires agencies to conduct annual reviews of their 

IT investments and make decisions on eliminating duplication.

You asked us to testify on the results and recommendations from our 

selected reports that focused on key aspects of the federal government’s 

management of IT investments. Accordingly, my testimony specifically 

discusses our past work on OMB’s IT Dashboard, TechStat reviews, IT 

acquisition best practices, FDCCI, and PortfolioStat, as well as failed and 

challenged IT projects.4 My testimony also discusses ongoing follow-up 

work on our prior recommendations from these reports. All work on which 

this testimony is based was performed 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 

 

3

According to OMB guidance, a major IT Investment is a system or an acquisition 

requiring special management attention because it: has significant importance to the 

mission or function of the agency, a component of the agency, or another organization; is 

for financial management and obligates more than $500,000 annually; has significant 

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

operating, or maintenance costs; is funded through other than direct appropriations; or is 

defined as major by the agency's capital planning and investment control process.

4

See, for example, GAO-13-524; GAO-13-378; GAO-13-98; GAO-12-742; GAO, 

Information Technology: Critical Factors Underlying Successful Major Acquisitions, 

GAO-12-7 (Washington, D.C.: Oct. 21, 2011); DOD Financial Management: 

Implementation Weaknesses in Army and Air Force Business Systems Could Jeopardize 

DOD’s Auditability Goals, GAO-12-134 (Washington, D.C.: Feb. 28, 2012); Secure Border 

Initiative: DHS Needs to Strengthen Management and Oversight of Its Prime Contractor, 

GAO-11-6 (Washington, D.C.: Oct. 18, 2010); and Polar-Orbiting Environmental Satellites: 

With Costs Increasing and Data Continuity at Risk, Improvements Needed in Tri-agency 

Decision Making, GAO-09-564 (Washington, D.C.: June 17, 2009).
 

Page 3 GAO-13-796T 

reasonable basis for our findings and conclusions based on our audit 

objectives.

Information technology should enable government to better serve the 

American people. However, according to OMB, despite spending more 

than $600 billion on IT over the past decade, the federal government has 

achieved little of the productivity improvements that private industry has 

realized from IT.5 Too often, federal IT projects run over budget, behind 

schedule, or fail to deliver promised functionality. In combating this 

problem, proper oversight is critical. 

Both OMB and federal agencies have key roles and responsibilities for 

overseeing IT investment management. OMB is responsible for working 

with agencies to ensure investments are appropriately planned and 

justified. Additionally, each year, OMB and federal agencies work 

together to determine how much the government plans to spend on IT 

projects and how these funds are to be allocated. 

To assist agencies in managing their IT 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.6 Further, the act places responsibility for 

managing investments with the heads of agencies and establishes chief 

information officers (CIO) to advise and assist agency heads in carrying 

out this responsibility.

Many of these investments are critical to our nation. For example, they 

include systems to secure our nation, control aircraft, and process tax 

returns. However, the federal government has spent billions of dollars on 

failed and poorly performing IT investments, as the following examples 

illustrate:

 

5

OMB, 25 Point Implementation Plan to Reform Federal Information Technology 

Management (Washington, D.C.: December 2010). 

6

40 U.S.C. § 11302(c).

Background 

Agencies Have Spent 

Billions on Failed and 

Poorly Performing 

Investments 
 

Page 4 GAO-13-796T 

• In December 2012, the Department of Defense (DOD) canceled the 

Air Force’s Expeditionary Combat Support System after having spent 

more than a billion dollars and missing multiple milestones, including 

failure to achieve deployment within 5 years of obligating funds. The 

system was to provide the Air Force with a single, integrated logistics 

system that was to control and account for about $36 billion of 

inventory. We issued several reports on this system and found that, 

among other things, the program was not fully following best practices 

for developing reliable schedules and cost estimates.7 Among other 

things, we had recommended that DOD ensure that any future system 

deficiencies identified through independent assessments are resolved 

or mitigated prior to further deployment of the system.

• In January 2011, the Department of Homeland Security ended the 

Secure Border Initiative Network (SBInet) program after obligating 

more than $1 billion to the program because it did not meet costeffectiveness and viability standards. Since 2007, we had identified a 

range of issues and made several recommendations to improve this 

program.8 For example, in May 2010 we reported that the final 

acceptance of the first two deployments had slipped from November 

2009 to September 2010 and from March 2010 to November 2010, 

and that the cost-effectiveness of the system had not been justified.9

As a result, we recommended that the department (1) limit near-term 

investment in the first incremental block of the program, (2) 

economically justify any longer-term investment in it, and (3) improve 

key program management disciplines. This work contributed to the 

department’s decision to cancel the program.

 

7

GAO-12-134 and DOD Business Transformation: Improved Management Oversight of 

Business System Modernization Efforts Needed, GAO-11-53 (Washington, D.C.: Oct. 7, 

2010). 

8

See, for example, GAO-11-6; GAO, Secure Border Initiative: DHS Needs to Reconsider 

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

May 5, 2010); Secure Border Initiative: DHS Needs to Address Testing and Performance 

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

Jan. 29, 2010); Secure Border Initiative: DHS Needs to Address Significant Risks in 

Delivering Key Technology Investment, GAO-08-1086 (Washington, D.C.: Sept. 22, 2008); 

and Secure Border Initiative: SBInet Expenditure Plan Needs to Better Support Oversight 

and Accountability, GAO-07-309 (Washington, D.C.: Feb. 15, 2007).

9

GAO-10-340. 
 

Page 5 GAO-13-796T 

• In February 2010, a task force led by the President’s Office of Science 

and Technology Policy decided to disband the National Polar-orbiting 

Operational Environmental Satellite System (NPOESS), a weather 

satellite program managed by three different agencies, after having

spent 16 years and almost $5 billion on the program. We issued a 

series of reports on the NPOESS program that highlighted the 

technical challenges, cost growth, and tri-agency management 

challenges facing the program.10 For example, in June 2009 we 

reported that the program’s approved cost and schedule baselines 

were not achievable, and that costs could grow by approximately $1 

billion over the then-current $13.95 billion estimate.11 We further noted 

that schedules for the launch of a demonstration satellite and the first 

two operational satellites were expected to be delayed, increasing the 

risk of a gap in satellite continuity. However, after the program’s 

cancellation, the agencies were directed to undertake separate 

acquisitions.

Appendix I provides further details on federal IT projects that have failed 

or faced significant challenges.

In addition to these projects, the IT Dashboard identifies other at-risk 

investments. Specifically, as of July 2013, according to the IT Dashboard, 

154 of the federal government’s approximately 700 major IT 

investments—totaling about $10.4 billion—were in need of management 

attention (rated to indicate the need for attention or to indicate significant 

concerns). (See fig. 1.)

 

10See, for example, GAO-09-564; GAO, Environmental Satellites: Polar-orbiting Satellite 

Acquisition Faces Delays; Decisions Needed on Whether and How to Ensure Climate 

Data Continuity, GAO-08-518 (Washington, D.C.: May 16, 2008); Polar-orbiting 

Operational Environmental Satellites: Restructuring Is Under Way, but Technical 

Challenges and Risks Remain, GAO-07-498 (Washington, D.C.: Apr. 27, 2007); and 

Polar-orbiting Environmental Satellites: Information on Program Cost and Schedule 

Changes, GAO-04-1054 (Washington, D.C.: Sept. 30, 2004). 

11GAO-09-564. 
 

Page 6 GAO-13-796T 

Figure 1: Overall Performance Ratings of Major Investments on the IT Dashboard, 

as of July 2013 

In addition to poorly performing investments, federal IT spending is 

hampered by inefficient operations and duplication, as the following 

examples illustrate: 

• Federal data centers. In March 2011, we reported that the increasing 

demand for IT had led to a dramatic rise in the number of federal data 

centers, with many housing similar types of equipment and providing

similar processing and storage capabilities.12 As federal agencies 

have modernized their operations, put more of their services online, 

and increased their information security profiles, they have demanded 

 

12GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save 

Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011). 

Federal IT Spending Is 

Burdened with Inefficient 

Operations and 

Duplication 
 

Page 7 GAO-13-796T 

more computing power and data storage resources. According to 

OMB, the number of federal data centers grew from 432 in 1998 to 

more than 2,000 in 2010. The growth in the number of federal data 

centers, many offering similar services and resources, has resulted in 

overlap and duplication among the centers. In addition, according to 

OMB, in August 2009 the average utilization rate for servers ranged 

from 5 percent to 15 percent. In contrast, OMB’s 2012 Data Center 

Consolidation Plan guidance states that the target for server utilization 

is 60 to 70 percent.

• Duplicative IT investments. In September 2011, we reported that 

limitations in OMB’s guidance hindered efforts to identify IT 

duplication.13 Specifically, although OMB’s guidance to federal 

agencies on how to categorize IT investments allowed for analysis of 

investments with similar functions, it did not go far enough to allow 

identification of potentially duplicative investments. Specifically, since 

the fiscal year 2004 budget cycle, OMB had required agencies to 

categorize their IT investments according to primary function and 

subfunction. In their fiscal year 2011 submissions, agencies reported 

the greatest number of IT investments in Information and Technology 

Management (1,536 investments), followed by Supply Chain 

Management (777 investments), and Human Resource Management 

(622 investments). Similarly, planned expenditures on investments 

were greatest in Information and Technology Management, at about 

$35.5 billion. Figure 2 depicts, by primary function, the total number of 

investments within the 26 federal agencies that report to the IT 

Dashboard, as of July 2011.

 

13GAO, Information Technology: OMB Needs to Improve Its Guidance on IT Investments, 

GAO-11-826 (Washington, D.C.: Sept. 29, 2011).
 

Page 8 GAO-13-796T 

Figure 2: Number of Government IT Investments by Primary Function, as of July 2011

However, we noted that categorizing IT investments according to 

primary function and subfunction limited OMB’s ability to identify 

potentially duplicative investments both within and across agencies 

because similar investments may be organized under different 

functions. Accordingly, we recommended that OMB revise guidance 

to federal agencies on categorizing IT investments to ensure that the 

categorizations are clear and that it allows agencies to choose 

secondary categories, where applicable. OMB generally agreed with 

this recommendation and has since taken action to implement it. 

Specifically, OMB updated its policy to enable agencies to select one 

primary category and up to four secondary categories for each IT

investment.

We also reported that results of OMB initiatives to identify potentially 

duplicative investments were mixed and that several federal agencies 

did not routinely assess their entire IT portfolios to identify and remove 

or consolidate duplicative systems. Specifically, we said that most of 

OMB’s recent initiatives had not yet demonstrated results, and several 

agencies did not routinely assess legacy systems to determine if they 

are duplicative. As a result, we recommended that OMB require 

federal agencies to report the steps they take to ensure that their IT 

investments are not duplicative as part of their annual budget and IT 
 

Page 9 GAO-13-796T 

investment submissions. OMB generally agreed with this 

recommendation and has since taken action to implement it. 

Specifically, in March 2012, OMB issued a memorandum to federal 

agencies regarding implementing PortfolioStat reviews. As previously 

mentioned, these reviews are intended to assist in ending the 

investment in duplicative IT investments. In addition, as part of this 

effort, OMB is requiring agencies to document their cost savings and 

cost avoidance due to consolidation beginning in their fiscal year 2014 

budget submissions. 

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

underperforming investments, more effectively manage IT, and address 

duplicative investments. These efforts include the following: 

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

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

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

provides detailed information on approximately 700 major IT 

investments at 27 federal agencies, including ratings of their 

performance against cost and schedule targets. The public 

dissemination of this information is intended to allow OMB; other 

oversight bodies, including Congress; and the general public to hold 

agencies accountable for results and performance.

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

TechStats sessions—face-to-face meetings to terminate or 

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

These meetings involve OMB and agency leadership and are 

intended to increase accountability and transparency and improve 

performance. Subsequently, OMB empowered agency CIOs to hold 

their own TechStat sessions within their respective agencies. 

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

agencies to improve management and oversight of IT investments 

have resulted in almost $4 billion in savings.

• FDCCI. Concerned about the growing number of federal data centers, 

in February 2010 the Federal CIO established FDCCI. This initiative’s 

OMB Has Launched Major 

Initiatives for Overseeing 

IT Investments
 

Page 10 GAO-13-796T 

four high-level goals are to promote the use of “green IT”14 by 

reducing the overall energy and real estate footprint of government 

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

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

and shift IT investments to more efficient computing platforms and 

technologies. OMB believes that this initiative has the potential to 

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

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

services, and improve portfolio management processes, in March 

2012 OMB launched the PortfolioStat initiative. Specifically, 

PortfolioStat requires agencies to conduct an annual agency-wide IT 

portfolio review to, among other things, reduce commodity IT15

spending and demonstrate how their IT investments align with the 

agency’s mission and business functions.16 PortfolioStat is designed 

to assist agencies in assessing the current maturity of their IT 

investment management process, making decisions on eliminating 

duplicative investments, and moving to shared solutions in order to 

maximize the return on IT investments across the portfolio. OMB 

believes that the PortfolioStat effort has the potential to save the 

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

consolidating duplicative systems.

 

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

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

meet certain environmental standards, and recycling obsolete electronics. 

15According to OMB, commodity IT includes services such as IT infrastructure (data 

centers, networks, desktop computers and mobile devices); enterprise IT systems (e-mail, 

collaboration tools, identity and access management, security, and web infrastructure); 

and business systems (finance, human resources, and other administrative functions).

16OMB, Implementing PortfolioStat, Memorandum, M-12-10 (Washington D.C.: Mar. 30, 

2012).
 

Page 11 GAO-13-796T 

Over the past several years, we have highlighted OMB and agency efforts 

to improve the transparency into and oversight of underperforming federal 

IT investments, more effectively manage IT, and address duplicative 

investments. Notably, we issued a series of reports on: the IT Dashboard; 

OMB and agency efforts to address troubled projects through TechStat 

reviews; critical factors underlying successful acquisitions; and OMB and 

agency efforts to improve the management of IT through federal data 

center consolidation efforts, as well as address duplication through 

PortfolioStat.

OMB Launched the IT Dashboard to Increase Oversight and 

Transparency, but Improvements Needed

OMB has taken significant steps to enhance the oversight, transparency, 

and accountability of federal IT investments by creating its IT Dashboard, 

and by improving the accuracy of investment ratings. However, we found 

weaknesses with the accuracy and reliability of cost and schedule data, 

and we recommended steps that OMB should take to improve these data. 

• Our July 2010 report17 found that the cost and schedule ratings on 

OMB’s Dashboard were not always accurate for the investments we 

reviewed, because these ratings did not take into consideration 

current performance. As a result, the ratings were based on outdated 

information. We recommended that OMB report on its planned 

changes to the Dashboard to improve the accuracy of performance 

information and provide guidance to agencies to standardize 

milestone reporting. OMB agreed with our recommendations and, as 

a result, updated the Dashboard’s cost and schedule calculations to 

include both ongoing and completed activities. Similarly, in March 

2011, OMB had initiated several efforts to increase the Dashboard’s 

value as an oversight tool, and had used its data to improve federal IT 

management.18 However, agency practices and the Dashboard’s 

calculations contributed to inaccuracies in the reported investment 

performance data. These included, for instance, missing data 

submissions or erroneous data at each of the five agencies we 

 

17GAO, Information Technology: OMB's Dashboard Has Increased Transparency and 

Oversight, but Improvements Needed, GAO-10-701 (Washington, D.C.: July 16, 2010).

18GAO, 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).

OMB and Agencies 

Have Taken Steps to 

Improve the 

Acquisition and 

Management of IT 

Investments, but 

Additional Actions 

Are Needed
 

Page 12 GAO-13-796T 

reviewed, along with instances of inconsistent program baselines and 

unreliable source data. As a result, we recommended that the 

agencies take steps to improve the accuracy and reliability of their 

Dashboard information, and that OMB improve how it rates 

investments relative to current performance and schedule variance. 

Most agencies generally concurred with our recommendations; OMB 

agreed with our recommendation for improving ratings for schedule 

variance. It disagreed with our recommendation to improve how it 

reflects current performance in cost and schedule ratings, but more 

recently made changes to Dashboard calculations to address this 

while also noting challenges in comprehensively evaluating cost and 

schedule data for these investments.

• Our subsequent report in 201119 noted that that the accuracy of 

investment cost and schedule ratings had improved since our July 

2010 report because OMB had refined the Dashboard’s cost and 

schedule calculations. Most of the ratings for the eight investments we 

reviewed were accurate, although more could be done to inform 

oversight and decision making by emphasizing recent performance in 

the ratings. We recommended that the General Services 

Administration comply with OMB’s guidance for updating its ratings 

when new information becomes available (including when 

investments are rebaselined) and the agency concurred. Since we 

previously recommended that OMB improve how it rates investments, 

we did not make any further recommendations.

• More recently, in October 2012 we found that opportunities existed to 

improve transparency and oversight of investment risk at our selected 

agencies.20 Specifically, CIOs at six federal agencies consistently 

rated the majority of their IT investments as low risk. These agencies 

rated no more than 12 percent of their investments as high or 

moderately high risk, and two agencies (DOD and the National 

Science Foundation) rated no investments at these risk levels. Over 

time, about 47 percent of the agencies’ Dashboard investments 

received the same rating in every rating period. For ratings that 

changed, the Department of Homeland Security and Office of 

Personnel Management reported more investments with reduced risk 

 

19GAO, 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).

20GAO-13-98. 
 

Page 13 GAO-13-796T 

when initial ratings were compared with those in March 2012; the 

other four agencies reported more investments with increased risk. In 

the past, OMB reported trends for risky IT investments needing 

management attention as part of the President’s annual budget 

submission, but discontinued this reporting in fiscal year 2010. 

Accordingly, we recommended OMB analyze agencies’ investment 

risk over time as reflected in the Dashboard’s CIO ratings and present 

its analysis with the President’s annual budget submission, with which 

OMB concurred.

Further, agencies generally followed OMB’s instructions for assigning 

CIO ratings, which included considering stakeholder input, updating 

ratings when new data become available, and applying OMB’s six 

evaluation factors. DOD’s ratings were unique in reflecting additional 

considerations, such as the likelihood of OMB review, and 

consequently DOD did not rate any of its investments as high risk. 

However, in selected cases, these ratings did not appropriately reflect 

significant cost, schedule, and performance issues reported by GAO 

and others. Although three DOD investments experienced significant 

performance problems and were part of a GAO high-risk area 

(business systems modernization), they were all rated low risk or 

moderately low risk by the DOD CIO. For example, in early 2012, we 

reported that Air Force’s Defense Enterprise Accounting and 

Management System faced a 2-year deployment delay and an 

estimated cost increase of about $500 million from an original lifecycle cost estimate of $1.1 billion (an increase of approximately 45 

percent), and that assessments by DOD users had identified 

operational problems with the system, such as data accuracy issues, 

an inability to generate auditable financial reports, and the need for 

manual workarounds.21 In July 2012, the DOD Inspector General 

reported that the system’s schedule delays were likely to diminish the 

cost savings it was to provide, and would jeopardize the department’s 

goals for attaining an auditable financial statement. DOD’s CIO rated 

the Defense Enterprise Accounting and Management System low risk 

or moderately low risk from July 2009 through March 2012. 

Moreover, DOD did not apply its own risk management guidance to 

the ratings, which reduces their value for investment management 

 

21GAO, DOD Financial Management: Reported Status of Department of Defense’s 

Enterprise Resource Planning Systems, GAO-12-565R (Washington, D.C.: Mar. 30, 2012) 

and GAO-12-134. 
 

Page 14 GAO-13-796T 

and oversight. Therefore, we recommended that DOD ensure that its 

CIO ratings reflect available investment performance assessments 

and its risk management guidance. DOD concurred with our 

recommendation.

Additional TechStat Reviews Needed to Address Troubled Projects

Regarding TechStat reviews, we reported that OMB and selected 

agencies had held multiple TechStats, but additional OMB oversight was 

needed to ensure that these meetings were having the appropriate impact 

on underperforming projects and that resulting cost savings were valid.22 

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

79 TechStats, which focused on 55 investments at 23 federal agencies. 

Further, 4 selected agencies—the Departments of Agriculture, 

Commerce, Health and Human Services, and Homeland Security—

conducted 37 TechStats covering 28 investments. About 70 percent of 

the OMB-led and 76 percent of agency-led TechStats on major 

investments were considered medium to high risk at the time of the 

TechStat. However, the number of at-risk TechStats held to date was

relatively small compared to the current number of medium- and high-risk 

IT investments. Specifically, the OMB-led TechStats represented roughly 

18.5 percent of the investments across the government that had a 

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

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

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

agencies develop plans to address these weaknesses, the investments 

would likely remain at risk.

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

reported positive results from TechStats, with most resulting in improved 

governance. Agencies also reported projects with accelerated delivery, 

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

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

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

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

that it ensured the results were valid. From our selected agencies, three 

investments had cost implications. Agencies provided supporting 

documentation for about $22.2 million in cost savings and avoidances. 

We concluded that until OMB obtains and shares information on the 

 

22GAO-13-524. 
 

Page 15 GAO-13-796T 

methods used to validate reported results, it would be difficult for the 

results to be independently validated and for OMB to provide assurance 

to Congress and the public that TechStats were achieving their intended 

impact. We therefore recommended that OMB validate the resulting cost 

savings from TechStats that it reports to Congress and require agencies 

to conduct TechStats for each IT investment rated with a moderately 

high- or high-risk CIO rating on the IT Dashboard. We also made 

recommendations to the selected agencies to strengthen their TechStat 

processes. OMB and the Department of Commerce officials generally 

agreed with our recommendations. The Department of Agriculture 

partially agreed with our assessment; neither it nor the Department of 

Health and Human Services commented on the recommendations.

Critical Factors Underlying Successful Major Acquisitions

Subsequent to the launch of the Dashboard and the TechStat reviews, 

and to help the federal agencies address the well-documented acquisition 

challenges they face, we identified seven successful investment 

acquisitions and nine common factors critical to their success in 2011.23

Specifically, we reported that department officials identified seven 

successful investment acquisitions, in that they best achieved their 

respective cost, schedule, scope, and performance goals.24 In addition, 

common factors critical to the success of three or more of the seven 

investments were: (1) program officials were actively engaged with 

stakeholders; (2) program staff had the necessary knowledge and skills; 

(3) senior department and agency executives supported the programs; (4) 

end users and stakeholders were involved in the development of 

requirements; (5) end users participated in testing of system functionality 

prior to formal end user acceptance testing; (6) government and 

contractor staff were stable and consistent; (7) program staff prioritized 

requirements; (8) program officials maintained regular communication 

with the prime contractor; and (9) programs received sufficient funding. 

Further, officials from all seven investments cited active engagement with 

 

23GAO-12-7. 

24The seven investments were (1) Commerce’s Decennial Response Integration System, 

(2) DOD’s Defense Global Combat Support System-Joint (Increment 7), (3) Department of 

Energy’s Manufacturing Operations Management Project, (4) DHS’s Western Hemisphere 

Travel Initiative, (5) Department of Transportation’s Integrated Terminal Weather System, 

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

Occupational Health Record-keeping System. 
 

Page 16 GAO-13-796T 

program stakeholders as a critical factor to the success of those 

investments. These critical factors support OMB’s objective of improving 

the management of large-scale IT acquisitions across the federal 

government, and wide dissemination of these factors could complement 

OMB’s efforts.

Strengthened Oversight Needed to Consolidate Federal Data 

Centers and Achieve Cost Savings 

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

2010, OMB launched the FDCCI. As part of this initiative, agencies

developed plans to consolidate data centers; however, these plans were 

incomplete and did not include best practices. In addition, although 

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

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

not being performed in all key areas. Finally, as part of ongoing follow-up 

work, we determined that agencies closed additional data centers, but 

that the number of federal data centers was significantly higher than 

previously estimated by OMB.

• In July 2011, we issued a report on the status of FDCCI and found 

that only 1 of the 24 agencies had submitted a complete inventory and 

no agency had submitted complete plans.25 Further, OMB had not 

required agencies to document the steps they had taken, if any, to 

verify the inventory data. We concluded that until these inventories 

and plans were complete, agencies would not be able to implement 

their consolidation activities and realize expected cost savings. 

Moreover, without an understanding of the validity of agencies’ 

consolidation data, OMB could not be assured that agencies were 

providing a sound baseline for estimating consolidation savings and 

measuring progress against those goals. Accordingly, we made 

several recommendations to OMB, including that the Federal CIO 

require that agencies, when updating their data center inventory, state 

what actions were taken to verify the information in the inventory and 

to identify any associated limitations on the data, and to complete the 

missing elements in their inventories and consolidation plans. OMB 

generally agreed with our report and has since taken actions to 

address our recommendations. For example, in July 2011, OMB 

 

25GAO, Data Center Consolidation: Agencies Need to Complete Inventories and Plans to 

Achieve Expected Savings, GAO-11-565 (Washington, D.C.: July 19, 2011). 
 

Page 17 GAO-13-796T 

required agency CIOs to submit a letter that identified steps taken to 

verify their data center inventory information and attest to the 

completeness of their consolidation plan. In addition, in March 2012, 

OMB required that all agencies, by the end of the fourth quarter of 

every fiscal year, complete all elements missing from their 

consolidation plans.

• Additionally, in July 2012, we updated our review of FDCCI’s status 

and found that, while agencies’ 2011 inventories and plans had 

improved as compared to their 2010 submissions, only 3 agencies 

had submitted a complete inventory and only 1 agency had submitted 

a complete consolidation plan.26 In addition, we noted that 3 agencies 

had submitted their inventory using an outdated format, in part, 

because OMB had not publicly posted its revised guidance. 

Notwithstanding these weaknesses, we found that 19 agencies 

reported anticipating about $2.4 billion in cost savings between 2011 

and 2015.

We also reported that none of five selected agencies had a master 

program schedule or cost-benefit analysis that was fully consistent 

with best practices. To assist agencies with their data center 

consolidation efforts, OMB had sponsored the development of a 

FDCCI total cost of ownership27 model that was intended to help 

agencies refine their estimated costs for consolidation; however, 

agencies were not required to use the cost model as part of their cost 

estimating efforts. Accordingly, we reiterated our prior 

recommendation that agencies complete missing plan and inventory 

elements and made new recommendations to OMB to publically post 

guidance updates on the FDCCI website and to require agencies to 

use its cost model. OMB generally agreed with our recommendations 

and has since taken steps to address them. More specifically, OMB 

posted its 2012 guidance for updating data center inventories and 

plans, as well as guidance for reporting consolidation progress, to the 

FDCCI public website. Further, the website has been updated to 

provide prior guidance documents and OMB memoranda. In addition, 

OMB’s 2012 consolidation plan guidance required agencies to use the 

cost model as they developed their 2014 budget request.

 

26GAO-12-742. 

27OMB refers to total cost of ownership as all associated data-center-related activities and 

costs without regard to ownership, project association, or funding line.
 

Page 18 GAO-13-796T 

• More recently, we reported28 and testified29 that the 24 FDCCI 

agencies made progress towards OMB’s goal to close 40 percent, or 

1,253 of the 3,133 total federal data centers, by the end of 2015, but 

OMB had not measured agencies’ progress against its other goal of 

$3 billion in cost savings by the end of 2015. Agencies closed 420 

data centers by the end of December 2012 and had plans to close an 

additional 548 to reach 968 by December 2015—285 closures short of 

OMB’s goal. OMB had not determined agencies’ progress against its 

cost savings goal because, according to OMB staff, the agency has 

not determined a consistent and repeatable method for tracking cost 

savings. We reported that this lack of information makes it uncertain 

whether the $3 billion in savings is achievable by the end of 2015. We 

concluded that until OMB tracks and reports on performance 

measures such as cost savings, it will be limited in its ability to 

oversee agencies’ progress against key goals. 

Further, we reported that, pursuant to OMB direction, three 

organizations—the Data Center Consolidation Task Force,30 the 

General Services Administration Program Management Office, and 

OMB—are responsible for federal data center consolidation oversight 

activities. We found that while most activities were being performed, 

there were still several weaknesses in oversight. For example, while 

the General Services Administration’s Program Management Office 

had collected agencies’ quarterly data center closure updates and 

made the information publically available on an electronic dashboard 

for tracking consolidation progress, it had not fully performed other 

oversight activities, such as conducting analyses of agencies’ 

inventories and plans. In addition, while OMB had implemented 

several initiatives to track agencies’ consolidation progress, such as 

establishing requirements for agencies to update their plans and 

inventories yearly and to report quarterly on their consolidation 

progress, the agency had not approved the plans on the basis of their 

completeness or reported on progress against its goal of $3 billion in 

 

28GAO-13-378. 

29GAO-13-627T. 

30The Data Center Consolidation Task Force is comprised of the data center consolidation 

program managers from each agency. According to its charter, the Task Force is critical to 

supporting collaboration across the FDCCI agencies, including identifying and 

disseminating key pieces of information, solutions, and processes that will help agencies 

in their consolidation efforts. 
 

Page 19 GAO-13-796T 

cost savings. The weaknesses in oversight of the data center 

consolidation initiative were due, in part, to OMB not ensuring that 

assigned responsibilities are being executed. We concluded that 

improved oversight could better position OMB to assess progress 

against its cost savings goal and minimize agencies’ risk of not 

realizing expected cost savings. 

We therefore recommended that OMB’s Federal CIO track and report 

on key performance measures, extend the time frame for achieving 

planned cost savings, and improve the execution of important 

oversight responsibilities. OMB agreed with two of our 

recommendations and stated that it plans to evaluate the remaining 

recommendation related to extending the time frame.

• Finally, as part of ongoing follow-up work, we reported that agencies 

had closed an additional 64 data centers compared to the total 

number of reported closures through the end of December 2012. 

More specifically, as of May 2013, agencies had reported closing 484 

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

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

However, we also found that the number of federal data centers had 

grown significantly since OMB had reported in December 2011 that 

there were approximately 3,133 data centers. Specifically, as of July 

2013, 22 of the 24 FDCCI agencies had collectively reported 6,836 

data centers in their inventories,31 which is approximately 3,700 data 

centers more than OMB’s previous estimate from December 2011.32 

OMB Launched PortfolioStat to Address Duplicative Investments 

To address duplicative IT investments, OMB launched PortfolioStat in 

March 2012, which is designed to assist agencies in assessing the 

current maturity of their IT portfolio management process, making 

decisions on eliminating duplication, and moving to shared services in 

order to maximize the return on IT investments across the portfolio.

 

31Two agencies had not yet provided updated inventories—the Social Security 

Administration and the Department of Veterans Affairs.

32Department of Agriculture officials stated that, in December 2012, the department added 

approximately 2,200 data centers to its inventory to account for its county office locations 

that each have one IT server. 
 

Page 20 GAO-13-796T 

We recently reported33 and testified34 on OMB’s PortfolioStat initiative, 

including that, in March 2013, OMB issued a memorandum documenting 

additional guidance to help strengthen the initiative. In its memorandum, 

OMB noted that the results from PortfolioStat so far had been 

significant—including that agencies had identified and committed to 

nearly 100 opportunities to consolidate or eliminate commodity IT 

investments and also described plans to strengthen the initiative by 

integrating PortfolioStat and FDCCI, streamlining agency reporting 

requirements, and establishing guidance for conducting PortfolioStat 

sessions in fiscal year 2013. 35 For example, to improve the outcomes of

PortfolioStat and to advance agency IT portfolio management, OMB’s

memorandum consolidated previously collected IT plans, reports, and 

data calls into three primary collection channels—an information 

resources management strategic plan,36 an enterprise road map,37 and an 

integrated data collection channel.38 Agencies’ draft versions of their 

strategic plans and enterprise road maps were due to OMB in May 2013, 

as well as their first integrated data collections. The integrated data 

collections are to be updated quarterly beginning in August 2013 and the 

strategic plans and road maps are to be updated after Congress receives 

the President’s budget for fiscal year 2015.

 

33GAO-13-378. 

34GAO, Information Technology: OMB and Agencies Need to Focus Continued Attention 

on Eliminating Duplicative Investments, GAO-13-685T (Washington, D.C.: June 11, 2013)

and GAO-13-627T. 

35OMB, Fiscal Year 2013 PortfolioStat Guidance: Strengthening Federal IT Portfolio 

Management, Memorandum M-13-09 (Washington, D.C.: Mar. 27, 2013). 

36OMB, Management of Federal Information Resources, Circular A-130 (Washington, 

D.C.: Nov. 30, 2000). According to OMB Circular A-130, an agency’s information 

resources management strategic plan should describe how information resources 

management activities help accomplish agency missions, and ensure that information 

resource management decisions are integrated with organizational planning, budget, 

procurement, financial management, human resources management, and program 

decisions.

37OMB, Increasing Shared Approaches to Information Technology Services (Washington, 

D.C.: May 2, 2012). The enterprise road map is to include a business and technology 

architecture, an IT asset inventory, a commodity IT consolidation plan, a line of business 

service plan, and an IT shared service plan. 

38The integrated data collection channel will be used by agencies to report structured 

information, such as progress in meeting IT strategic goals, objectives, and metrics, as 

well as cost savings and avoidances resulting from IT management actions. 
 

Page 21 GAO-13-796T 

However, our April 2013 report noted that key data-center-related

performance metrics of the combined initiative were not yet fully defined. 

For example, OMB’s March 2013 memorandum39 stated that, to more 

effectively measure the efficiency of an agency’s data center assets,

agencies would also be measured by the extent to which their data 

centers are optimized for total cost of ownership by incorporating metrics 

for data center energy, facility, labor, and storage, among other things. 

Although OMB had indicated which performance measures it planned to 

use going forward, it had not documented the specific metrics for 

agencies to report against. OMB’s March 2013 memorandum indicates 

that these would be developed by the Data Center Consolidation Task 

Force, but did not provide a time frame for when this will be completed. 

Further, our report noted that OMB’s integration of FDCCI with 

PortfolioStat also included a modification to the previous data center 

consolidation goal of closing approximately 40 percent of the total number 

of agency data centers. Specifically, OMB stated an agency’s data center 

population will now be placed into one of two categories—core and noncore data centers—but for which the memorandum did not provide 

specific definitions. OMB further stated that its new goal is to close 40 

percent of non-core data centers but, as noted, the definitions of core and 

non-core data centers were not provided. Therefore, the total number of 

data centers to be closed under OMB’s revised goal could not be 

determined.

We also reported that, although OMB had previously stated that 

PortfolioStat was expected to result in savings of approximately $2.5 

billion through 2015, its March 2013 memorandum did not establish a 

new cost savings goal that reflected the integration of FDCCI. Instead, 

OMB stated that all cost savings goals previously associated with FDCCI 

would be integrated into broader agency efforts to reshape their IT 

portfolios, but did not provide a revised savings estimate. We concluded 

that the lack of a new cost savings goal would limit OMB’s ability to 

determine whether or not the new combined initiative is on course toward 

achieving its planned objectives. As a result, we recommended that OMB 

track and annually report on key data center consolidation performance 

measures, such as the size of data centers being closed and cost savings 

to date. OMB agreed with our recommendation.

 

39OMB, Memorandum M-13-09. 
 

Page 22 GAO-13-796T 

We have ongoing work looking at OMB’s PortfolioStat initiative, including 

determining whether agencies completed key required PortfolioStat 

actions, evaluating selected agencies' plans for making portfolio 

improvements and achieving associated cost savings, and describing

OMB's plans to improve the PortfolioStat process.

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

transparency and oversight of federal spending, but continued leadership 

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

For example, federal agencies need to continue to improve the accuracy 

of information on the Dashboard to provide greater transparency and 

even more attention to the billions of dollars invested in troubled projects. 

Further, additional TechStat reviews are needed to focus management 

attention on additional troubled projects and establish clear action items 

to turn the projects around or terminate them. In addition, the expanded 

use of the common factors critical to the successful management of largescale IT acquisitions should result in the more effective delivery of 

mission-critical systems. 

The federal government can also build on the momentum of progress on 

agencies’ data center closures as the federal data center consolidation 

effort is integrated with PortfolioStat. OMB recently released additional 

guidance that expanded this important initiative’s scope and reported that 

significant progress had been made to date, including more than 100 

opportunities to consolidate or eliminate commodity IT investments. 

Moving forward, it will be important for OMB to be transparent on 

agencies’ progress against key performance metrics, such as data center 

consolidation cost savings, in order to ensure that the PortfolioStat 

initiative is meeting its established objectives. Overall, the implementation 

of GAO recommendations can help further reduce wasteful spending on 

poorly managed, unnecessary, and duplicative investments.

Chairman Mica, Ranking Member Connolly, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

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

Page 23 GAO-13-796T 

If you or your staffs have any questions about this testimony, please 

contact me at (202) 512-9286 or at pownerd@gao.gov. Individuals who 

made key contributions to this testimony are Dave Hinchman (Assistant 

Director), Justin Booth, Rebecca Eyler, Lee A. McCracken, Jonathan 

Ticehurst, and Kevin Walsh.

GAO Contact and 

Staff 

Acknowledgments 
Appendix I: Examples of IT Project Failures 

and Challenges

Page 24 GAO-13-796T 

The federal government continues to spend billions of dollars on troubled 

IT investments. This appendix identifies examples of major IT 

investments that have failed or faced significant challenges. In this 

regard, we focused on IT projects that were considered major 

development or acquisition efforts, based on their size or mission 

criticality. We considered a project to have failed if it was terminated by 

the agency after substantial investment and without delivering significant 

planned capabilities. A project was considered to be challenged if we had 

identified significant issues in its performance or management and made 

recommendations for improvement. To identify these projects, we 

reviewed our work published since January 1, 2003, that addressed the 

performance or management of federal agency IT projects. We did not 

include a project on our lists if it was not the subject of a GAO report.

Since 2003, a number of major IT projects at federal agencies have 

failed. Specifically, agencies canceled the following investments after 

spending millions of dollars:

• Department of Defense’s (DOD) Expeditionary Combat Support 

System (ECSS)

• DOD’s Defense Integrated Military Human Resources System 

(DIMHRS)

• Department of Homeland Security’s (DHS) Computer-Assisted 

Passenger Prescreening System (CAPPS II)

• DHS’s Electronically Managing Enterprise Resources for Government 

Effectiveness and Efficiency (eMerge2)

• DHS’s Next Generation Homeland Security Information Network 

(HSIN Next Gen)

• DHS’s Secure Border Initiative Network (SBInet) 

• Federal Bureau of Investigation’s (FBI) Virtual Case File (VCF)

• General Services Administration’s (GSA) e-Authentication Program

• National Archives and Records Administration’s (NARA) Electronic 

Records Archive (ERA)

• National Polar-orbiting Operational Environmental Satellite System 

(NPOESS)

• Office of Personnel Management’s (OPM) Retirement Systems 

Modernization

• Veterans Affairs’ (VA) Scheduling Replacement Project

• VA’s Core Financial and Logistics System (CoreFLS)

• VA’s Financial and Logistics Integrated Technology Enterprise 

(FLITE) Program

Appendix I: Examples of IT Project Failures 

and Challenges

Failed Investments
Appendix I: Examples of IT Project Failures 

and Challenges

Page 25 GAO-13-796T 

• VA’s Health Information Systems and Technology Architecture—

Foundations Modernization (VistA-FM)

These projects were canceled after going over budget, missing schedule 

milestones, or failing to deliver intended capabilities. In many of these 

cases, we had identified issues in the management of these programs 

and made recommendations for improvement. These issues were often 

related to a lack of disciplined and effective management, such as project 

planning, requirements definition, and program oversight and 

governance. The following provides additional information on these failed 

IT investments.

DOD’s Expeditionary Combat Support System (ECSS) 

In December 2012, DOD canceled ECSS after having spent more than a 

billion dollars and missing multiple milestones, including failure to achieve 

deployment within 5 years of obligating funds. The system was to provide 

the Air Force with a single, integrated logistics system that was to control 

and account for about $36 billion of inventory. We issued several reports 

on this system and found that, among other things, the program was not 

fully following best practices for developing reliable schedules and cost 

estimates.1 Among other things, we had recommended that DOD ensure 

that any future system deficiencies identified through independent 

assessments be resolved or mitigated prior to further deployment of 

ECSS.

DOD’s Defense Integrated Military Human Resources System 

(DIMHRS)

In February 2010, DIMHRS was canceled after 10 years of development 

and approximately $850 million spent, due, in part, to a lack of strategic 

alignment, governance, and requirements management, as well as the 

overall size and scope of the effort.2 The system was intended to provide 

 

1

GAO, DOD Business Transformation: Improved Management Oversight of Business 

System Modernization Efforts Needed, GAO-11-53 (Washington, D.C.: Oct. 7, 2010) and 

DOD Financial Management: Implementation Weaknesses in Army and Air Force 

Business Systems Could Jeopardize DOD’s Auditability Goals, GAO-12-134 (Washington, 

D.C.: Feb. 28, 2012).

2

GAO, Information Technology: Departments of Defense and Energy Need to Address 

Potentially Duplicative Investments, GAO-12-241 (Washington, D.C.: Feb. 17, 2012). 
Appendix I: Examples of IT Project Failures 

and Challenges

Page 26 GAO-13-796T 

a joint, integrated, standardized personnel and pay system for all military 

personnel. In 2008, we had reported that Army officials had concerns 

about the extent to which Army requirements were being incorporated 

into DIMHRS and that DOD had not established a clear, well-defined 

process for maintaining effective communications to better prepare the 

Army to deploy DIMHRS.3 We had recommended that DOD develop a 

clearly defined process for effectively communicating the differences 

between DIMHRS’s capabilities and the Army’s requirements. However, 

subsequent to the cancellation decision, each military service is now 

responsible for developing its own integrated personnel and pay system. 

DHS’s Computer-Assisted Passenger Prescreening System (CAPPS 

II) 

In August 2004, DHS canceled its CAPPS II program—a Transportation 

Security Administration (TSA) initiative to develop a system to identify 

passengers requiring additional security attention—due to a variety of 

delays and challenges. In February 2004, we reported that, according to 

program officials, approximately $41.5 million had been allocated for the 

system’s acquisition to date and that the program faced a number of 

implementation challenges.4 Specifically, key activities in the development 

of CAPPS II had been delayed, and TSA had not completed important 

system planning activities. In addition, TSA had not completely addressed 

seven of the eight issues identified by Congress as key areas of interest 

related to the development, operation, and public acceptance of CAPPS 

II. We also identified other challenges, including developing the 

international cooperation needed to obtain passenger data, managing the 

possible expansion of the program’s mission beyond its original purpose, 

and ensuring that identity theft could not be used to negate the security 

benefits of the system. We recommended, among other things, that DHS 

develop project plans, including schedules and estimated costs, to guide 

development; establish a plan for completing critical security activities; 

and develop a process by which passengers can get erroneous 

information corrected. CAPPS II was eventually replaced by the Secure 

 

3

GAO, DOD Systems Modernization: Maintaining Effective Communication Is Needed to 

Help Ensure the Army’s Successful Deployment of the Defense Integrated Military Human 

Resources System, GAO-08-927R (Washington, D.C.: Sept. 8, 2008).

4

GAO, Aviation Security: Computer-Assisted Passenger Prescreening System Faces 

Significant Implementation Challenges, GAO-04-385 (Washington, D.C.: Feb. 12, 2004).
Appendix I: Examples of IT Project Failures 

and Challenges

Page 27 GAO-13-796T 

Flight system, which in turn was completely revamped and replaced by a 

new version of Secure Flight that finally became operational.

DHS’s Electronically Managing Enterprise Resources for 

Government Effectiveness and Efficiency (eMerge2

) 

DHS canceled its eMerge2 project in December 2005 after an 

unsuccessful pilot program that began in January 2004 and lasted about 

2 years. The project was expected to integrate financial management 

systems across the entire department and address financial management 

weaknesses. According to DHS, it had spent a total of about $52 million 

for the eMerge2 project, including approximately $18 million in contractor 

costs. As we reported in June 2007, DHS officials stated that several of 

the work products developed for eMerge2 would be useful as they move 

forward with their financial management modernization efforts, regardless 

of the strategic financial management direction ultimately selected by the 

department.

5 However, we found that key work products were of limited 

value. Specifically, the concept of operations did not contain an adequate 

description of the legacy systems and a clear articulation of the vision that 

should guide the department’s improvement efforts, and key requirements 

developed for the project were unclear and incomplete. We 

recommended, among other things, that, going forward, DHS employ best 

practices in defining its financial management system strategy, such as 

developing a comprehensive concept of operations document, 

standardizing business processes, and using disciplined processes to 

minimize project risk.

DHS’s Next Generation Homeland Security Information Network 

(HSIN Next Gen)

In October 2010, DHS terminated the acquisition of its HSIN Next Gen 

system, which was to be the follow-on to its original HSIN system, the 

department’s primary IT system for sharing terrorism-related information. 

The department cited, among other things, continuing cost, schedule, and 

performance shortfalls and the lack of key IT management controls and 

capabilities that are essential to mitigating such shortfalls and ensuring 

successful system delivery. In 2008 we reported that DHS had yet to 

 

5

GAO, Homeland Security: Departmentwide Integrated Financial Management Systems 

Remain a Challenge, GAO-07-536 (Washington, D.C.: June 21, 2007).
Appendix I: Examples of IT Project Failures 

and Challenges

Page 28 GAO-13-796T 

implement the full set of controls essential to effectively manage the 

acquisition of HSIN Next Gen.6

 We recommended that DHS strengthen its 

acquisition management controls before it started to implement the 

system. The termination of HSIN Next Gen resulted in a cost reduction of 

$128,969,000. 

DHS’s Secure Border Initiative Network (SBInet)

In January 2011, the Secretary of Homeland Security ended the SBInet

program after obligating more than $1 billion to the program because it 

did not meet cost-effectiveness and viability standards. Since 2007, we 

had identified a range of issues and made several recommendations to 

improve this program.7 For example, in May 2010 we reported that the 

final acceptance of the first two deployments had slipped from November 

2009 to September 2010 and from March 2010 to November 2010, and 

that the cost-effectiveness of the system had not been justified.8 We 

concluded that DHS had not demonstrated that the considerable time and 

money being invested to acquire and deploy the program was a wise and 

prudent use of limited resources. As a result, we recommended that the 

department (1) limit near-term investment in the first incremental block of 

the program, (2) economically justify any longer-term investment in it, and 

(3) improve key program management disciplines. This work contributed 

to the department’s decision to cancel the program. 

 

6

GAO, Information Technology: Management Improvements Needed on the Department 

of Homeland Security’s Next Generation Information Sharing System, GAO-09-40

(Washington, D.C.: Oct. 8, 2008). 

7

See, for example, GAO, Secure Border Initiative: DHS Needs to Strengthen Management 

and Oversight of Its Prime Contractor, GAO-11-6 (Washington, D.C.: Oct. 18, 2010); 

Secure Border Initiative: DHS Needs to Reconsider Its Proposed Investment in Key 

Technology Program, GAO-10-340 (Washington, D.C.: May 5, 2010); Secure Border 

Initiative: DHS Needs to Address Testing and Performance Limitations That Place Key 

Technology Program at Risk, GAO-10-158 (Washington, D.C.: Jan. 29, 2010); Secure 

Border Initiative: DHS Needs to Address Significant Risks in Delivering Key Technology 

Investment, GAO-08-1086 (Washington, D.C.: Sept. 22, 2008); and Secure Border 

Initiative: SBInet Expenditure Plan Needs to Better Support Oversight and Accountability, 

GAO-07-309 (Washington, D.C.: Feb. 15, 2007).

8

GAO-10-340. 
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Page 29 GAO-13-796T 

FBI’s Virtual Case File (VCF)

In March 2005, the FBI discontinued the VCF component of its Trilogy 

project after investing 3 years and $170 million. The FBI terminated the 

project after Trilogy’s overall projected costs grew from $380 million to 

$537 million, the program fell behind schedule, and pilot testing showed 

that completion of VCF was infeasible and cost prohibitive. Among 

reasons we and others cited for VCF’s failure were poorly defined system 

requirements, ineffective requirements change control, limited contractor 

oversight, and human capital shortfalls due to, for example, a lack of

continuity in certain management positions and a lack of trained staff for 

key program positions.9

GSA’s e-Authentication Program 

In October 2003, it was reported that GSA had terminated plans to 

develop an “e-Authentication gateway,” which was to provide a 

consolidated electronic authentication service to support the egovernment initiatives sponsored by OMB. We had reported 1 month 

earlier in September 2003 that, according to agency officials, 13 agencies 

had provided a total of $13.5 million to GSA for the gateway as of August 

18, 2003, with another $3 million expected from another agency by the 

end of fiscal year 2003.

10 However, GSA had achieved few of its project 

objectives and extended the milestone for completing a fully operational 

system. We noted that the modest progress that had been achieved to 

date called into question the likelihood that the project could successfully 

field an operational gateway, even within the revised schedule. Further, 

the project faced a number of challenges, including developing 

procedures and guidance defining the specific technologies to support 

different authentication requirements, agreeing upon technical standards 

to provide a basis for ensuring interoperability, and taking full measures to 

 

9

GAO, Information Technology: FBI Following a Number of Key Acquisition Practices on 

New Case Management System, but Improvements Still Needed, GAO-07-912

(Washington, D.C.: July 30, 2007); Information Technology: FBI Has Largely Staffed Key 

Modernization Program, but Strategic Approach to Managing Program’s Human Capital Is 

Needed, GAO-07-19 (Washington, D.C.: Oct. 16, 2006); and Information Technology: FBI 

Is Building Management Capabilities Essential to Successful System Deployments, but 

Challenges Remain, GAO-05-1014T (Washington, D.C.: Sept. 14, 2005). 

10GAO, Electronic Government: Planned e-Authentication Gateway Faces Formidable 

Development Challenges, GAO-03-952 (Washington, D.C.: Sept. 12, 2003).
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ensure that the gateway system was adequately secured and that privacy 

information adequately protected. 

NARA’s Electronic Records Archive (ERA) 

In July 2010, OMB directed NARA to halt development of its ERA system 

at the end of fiscal year 2011 (a year earlier than planned). OMB cited 

concerns about the system’s cost, schedule, and performance and 

directed NARA to better define system functionality and improve strategic 

planning. Through fiscal year 2010, NARA had spent about $375 million 

on the system. We issued several reports and made recommendations to 

improve this system, noting, among other things, that NARA’s plans for 

ERA lacked sufficient detail to clearly show what functions had been 

delivered or were to be included in future increments and at what cost; 

the agency had been inconsistent in its use of earned value management 

to monitor the project’s progress; and NARA lacked a contingency plan 

for ERA to ensure system continuity in the event that normal operations 

were disrupted.

11 These findings and recommendations contributed to the 

decision to halt the system. 

National Polar-orbiting Operational Environmental Satellite System 

(NPOESS)

In February 2010, a presidential task force decided to disband NPOESS 

after having spent 16 years and almost $5 billion on the program. 

NPOESS was a tri-agency weather satellite program managed by the 

National Oceanic and Atmospheric Administration (NOAA), DOD, and the 

National Aeronautics and Space Administration (NASA). We issued a 

series of reports on the NPOESS program that highlighted the technical 

challenges, cost growth, and tri-agency management challenges facing 

 

11See, for example, GAO, Electronic Records Archive: Status Update on the National 

Archives and Records Administration’s Fiscal Year 2010 Expenditure Plan, GAO-10-657

(Washington, D.C.: June 11, 2010); Electronic Records Archive: The National Archives 

and Records Administration’s Fiscal Year 2009 Expenditure Plan, GAO-09-733

(Washington, D.C.: July 24, 2009); and National Archives: Progress and Risks in 

Implementing its Electronic Records Archive Initiative, GAO-10-222T (Washington, D.C.: 

Nov. 5, 2009).
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the program.12 For example, in June 2009 we reported that the program’s 

approved cost and schedule baselines were not achievable, and that

costs could grow by approximately $1 billion over the then-current $13.95 

billion estimate.13 We further noted that schedules for the launch of a 

demonstration satellite and the first two operational satellites were 

expected to be delayed, increasing the risk of a gap in satellite continuity.

We had also found that the NPOESS program’s tri-agency executive 

council was ineffective, and we made recommendations aimed at 

improving this executive-level oversight. However, after the program’s 

cancellation, the agencies were directed to undertake separate 

acquisitions.

OPM’s Retirement Systems Modernization

In February 2011, OPM canceled its Retirement Systems Modernization 

program after several years of trying to improve the implementation of this 

investment.14 This was the agency’s third major effort over a more than 

20-year period to automate the processing of federal employee retirement 

claims. According to OPM, it spent approximately $231 million on this 

investment. We issued a series of reports on the agency’s efforts to 

modernize its retirement system and found that the agency was hindered 

by weaknesses in several important management disciplines that are 

 

12See, for example, GAO, Polar-Orbiting Environmental Satellites: With Costs Increasing 

and Data Continuity at Risk, Improvements Needed in Tri-agency Decision Making,

GAO-09-564 (Washington, D.C.: June 17, 2009); Environmental Satellites: Polar-orbiting 

Satellite Acquisition Faces Delays; Decisions Needed on Whether and How to Ensure 

Climate Data Continuity, GAO-08-518 (Washington, D.C.: May 16, 2008); Polar-orbiting 

Operational Environmental Satellites: Restructuring Is Under Way, but Technical 

Challenges and Risks Remain, GAO-07-498 (Washington, D.C.: Apr. 27, 2007); and 

Polar-orbiting Environmental Satellites: Information on Program Cost and Schedule 

Changes, GAO-04-1054 (Washington, D.C.: Sept. 30, 2004). 

13GAO, Polar-Orbiting Environmental Satellites: With Costs Increasing and Data 

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

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

14GAO, OPM Retirement Modernization: Longstanding Information Technology 

Management Weaknesses Need to Be Addressed, GAO-12-226T (Washington, D.C.: 

Nov. 15, 2011).
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essential to successful IT modernization efforts.15 Accordingly, we made 

recommendations in areas such as project management, organizational 

change management, testing, cost estimating, and earned value 

management. In May 2008, an OPM official cited the issues that we 

identified as justification for issuing a stop work order to the system 

contractor, and the agency subsequently terminated the contract, which 

resulted in a cost reduction of $136.5 million between fiscal years 2009 

and 2013. 

VA’s Scheduling Replacement Project

In September 2009, VA terminated its Scheduling Replacement Project, 

after spending an estimated $127 million over 9 years. The investment 

was to modernize its more than 25-year-old outpatient scheduling system, 

but the department had not yet implemented any of the planned system’s 

capabilities. VA began a new initiative that it refers to as HealtheVet 

Scheduling on October 1, 2009. In May 2010, we reported that VA’s 

efforts to successfully complete the Scheduling Replacement Project 

were hindered by weaknesses in several key project management 

disciplines and a lack of effective oversight that, if not addressed, could 

undermine the department’s second effort to replace its scheduling 

system. As the department proceeded with future development, we 

recommended that it take actions to improve key processes, including 

acquisition management, system testing, and progress reporting, which 

are essential to the department’s second outpatient scheduling system 

effort. 

VA’s Core Financial and Logistics System (CoreFLS)

VA’s first attempt to develop an integrated financial and asset 

management system, CoreFLS, began in 1998 but was discontinued by 

the department in 2004 because the pilot system failed to support VA’s 

 

15GAO, Office of Personnel Management: Retirement Modernization Planning and 

Management Shortcomings Need to Be Addressed, GAO-09-529 (Washington, D.C.: Apr. 

21, 2009); Office of Personnel Management: Improvements Needed to Ensure Successful 

Retirement Systems Modernization, GAO-08-345 (Washington, D.C.: Jan. 31, 2008); 

Comments on the Office of Personnel Management’s February 20, 2008 Report to 

Congress Regarding the Retirement Systems Modernization, GAO-08-576R (Washington, 

D.C.: Mar. 28, 2008); and Office of Personnel Management: Retirement Systems 

Modernization Program Faces Numerous Challenges, GAO-05-237 (Washington, D.C.: 

Feb. 28, 2005).
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operations after the department reportedly spent more than $249 million 

on development. The department conducted three independent 

assessments of the initiative that collectively identified 141 findings, which 

the department categorized into functional areas of responsibility such as 

acquisition management, organizational change management, program 

management, and systems engineering. VA aggregated these findings 

into a repository of lessons learned to inform future efforts. However, we 

reported in September 2008 that the department had not taken corrective 

actions to address all the findings, and recommended that it do so.16

Subsequently, VA officials provided documentation showing that all items 

in the repository had been addressed.

VA’s Financial and Logistics Integrated Technology Enterprise 

(FLITE) Program

In October 2011, VA terminated its FLITE program, an effort to deliver an 

integrated financial and asset management system for the department. 

Begun in 2005, the system was intended to be delivered by 2014 at a 

total estimated cost of $608.7 million but was canceled due to challenges 

in managing the program, including an unsuccessful pilot of the Strategic 

Asset Management system. The FLITE program was VA’s second effort

to develop such a system. We had reported in October 2009 that the 

department had not yet fully established capabilities needed to ensure 

that the program will be successfully implemented and recommended that 

it take steps to improve program management.17

VA’s Health Information Systems and Technology Architecture—

Foundations Modernization (VistA-FM)

In October 2010, VA terminated its VistA-FM program, which was to 

address the need to transition the VA electronic medical record system to 

a new architecture. As we reported in October 2009, the program, which 

had been estimated to cost $1.9 billion, had significant weaknesses in its 

earned value management processes, and we estimated that the 

 

16GAO, Veterans Affairs: Additional Details Are Needed in Key Planning Documents to 

Guide the New Financial and Logistics Initiative, GAO-08-1097 (Washington, D.C.: Sept. 

22, 2008).

17GAO, Information Technology: Actions Needed to Fully Establish Program Management 

Capability for VA's Financial and Logistics Initiative, GAO-10-40 (Washington, D.C.: Oct. 

26, 2009).
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program would likely overrun its budget at completion by about $350.2 

million.18 As a result of our recommendations and an internal department 

evaluation of the program, multiple components of the program were 

suspended, before the program was finally terminated in 2010.

In addition to canceling many failed projects, the government has 

continued to invest in challenged IT projects. The following are selected 

examples of such investments that have faced significant challenges:

• Department of Commerce/Census Bureau’s 2010 Decennial Census

• Department of Commerce/NOAA’s Geostationary Operational 

Environmental Satellite-R (GOES-R) Series

• DHS’s Rescue 21 Program

• DHS’s United States Visitor and Immigrant Status Indicator 

Technology (US-VISIT) Program

• DOD’s Armed Forces Health Longitudinal Technology Application 

(AHLTA)

• DOD’s Defense Enterprise Accounting and Management System 

(DEAMS)

• DOD’s Global Combat Support System-Army (GCSS-Army)

• DOD’s Global Combat Support System–Marine Corps (GCSS-MC)

• DOD’s Navy Enterprise Resource Planning System (Navy ERP) 

• DOD’s Navy Next Generation Enterprise Network (NGEN)

• DOD/Department of the Treasury’s Navy Cash Program

• DOD/VA’s Integrated Electronic Health Record (iEHR)

• DOD/VA’s Federal Health Care Center (FHCC)

• Food and Drug Administration’s (FDA) Mission Accomplishments and 

Regulatory Compliance Services (MARCS)

• Internal Revenue Service’s (IRS) Customer Account Data Engine 

(CADE)

• NASA’s James Webb Space Telescope (JWST)

• U.S. Department of Agriculture’s (USDA) Modernize and Innovate the 

Delivery of Agricultural Systems (MIDAS) Program

We have identified challenges facing these projects, many due to 

ineffective or undisciplined management, and have made 

 

18GAO, Information Technology: Agencies Need to Improve the Implementation and Use 

of Earned Value Techniques to Help Manage Major System Acquisitions, GAO-10-2

(Washington, D.C.: Oct. 8, 2009).

Challenged IT

Investments 
Appendix I: Examples of IT Project Failures 

and Challenges

Page 35 GAO-13-796T 

recommendations for improvement. The following provides additional 

information on these challenged IT investments.

Department of Commerce/Census Bureau’s Decennial Census

At a cost of about $13 billion, the 2010 Decennial Census was the 

costliest in history. This was due, in part, to cost overruns and major 

performance problems with key IT systems. For example, the Census 

Bureau’s Field Data Collection Automation (FDCA) program, originally 

estimated to cost $596 million, was intended to use handheld mobile 

devices to support field data collection for the census, including in-person 

follow-up with those who did not return their census questionnaires 

(nonresponse follow-up). However, we testified in March 2008 that the 

program was experiencing significant problems, including schedule 

delays and cost increases from changes in requirements.19 We had 

previously reported that the FDCA project office had not implemented the 

full set of acquisition management capabilities that were needed to 

effectively manage the program and that the changes to requirements 

had been a contributing factor to both schedule delays and cost increases 

experienced by the FDCA program. 

In April 2008, due to problems identified during testing and cost overruns 

and schedule slippages, the Secretary of Commerce announced a 

redesign of the 2010 Census, resulting in a $205 million increase in lifecycle costs. Also in April 2008, the Census Bureau decided not to use the 

handheld devices for nonresponse follow-up, but did continue to use the 

devices for other decennial census operations. Dropping the use of 

handhelds for nonresponse follow-up and replacing them with a paperbased system increased the cost of the Census by up to $3 billion. 

Although the bureau worked aggressively to improve the paper-based 

system that replaced the handheld computers, we reported in December 

2010 that the paper-based system also experienced significant issues 

when it was put in operation.20 For example, performance problems with 

the IT system used to manage the nonresponse follow-up process led to 

 

19GAO, Information Technology: Significant Problems of Critical Automation Program 

Contribute to Risks Facing 2010 Census, GAO-08-550T (Washington, D.C.: Mar. 5, 2008).

20GAO, 2010 Census: Data Collection Operations Were Generally Completed As 

Planned, but Long-Standing Challenges Suggest Need for Fundamental Reforms, 

GAO-11-193 (Washington, D.C.: Dec. 14, 2010).
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processing backlogs, which hindered the bureau’s ability to fully 

implement quality assurance procedures as planned. We recommended, 

accordingly, that the bureau incorporate best practices in its IT acquisition

management policy. In September 2012, we reported that the Census 

Bureau still needed to implement key IT management practices to select, 

control, and evaluate its IT investments and effectively manage system 

development, as well as key practices for effective workforce planning, 

and recommended it take eight actions to do so.21 Until such steps are 

taken, the bureau faces the risk that the same kind of IT management 

and implementation challenges that faced the 2010 Decennial Census will 

impact the 2020 Census.

Department of Commerce/NOAA’s Geostationary Operational 

Environmental Satellite-R (GOES-R) Series

The Department of Commerce’s NOAA, with the aid of NASA, is to 

procure the next generation of geostationary operational environmental 

satellites—a series of four satellites intended to replace existing weather 

satellites that will likely reach the end of their useful lives in about 2015. 

This new series is considered critical to the United States’ ability to 

maintain the continuity of data required for weather forecasting. NOAA 

estimates that the GOES-R series will cost $10.9 billion through 2036; the 

launch of the first satellite is planned for October 2015. In September 

2010, we reported that, since 2006, the launch dates of the first two 

satellites in the series have been delayed by about 3 years, which could 

lead to a gap in coverage if the existing weather satellites fail 

prematurely.22 We also found that NOAA had not established adequate 

continuity plans in the event of a satellite failure with no backup available 

and that the agency had not adequately involved users at federal 

agencies that rely on GOES data in developing and prioritizing 

requirements. We recommended that NOAA address weaknesses in its 

continuity plans and improve its processes for involving other federal 

agencies. Subsequently, NOAA established a continuity plan for GOES-R 

 

21GAO, Information Technology: Census Bureau Needs to Implement Key Management 

Practices, GAO-12-915 (Washington, D.C.: Sept. 18, 2012).

22GAO, Geostationary Operational Environmental Satellites: Improvements Needed in 

Continuity Planning and Involvement of Key Users, GAO-10-799 (Washington, D.C.: Sept. 

1, 2010).
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and developed a communications plan for involving agencies that depend 

on GOES data.

In June 2012 we reported that technical problems with instruments and 

spacecraft, among others, had delayed key reviews and led to increased 

complexity for the development of GOES-R.23 While the program reported 

having $1.2 billion in reserve to manage future delays and cost growth, 

significant development remained, and we concluded that the program 

may not be able to ensure that it has adequate resources to cover 

ongoing challenges and unexpected problems. In addition, we found that 

the program’s schedule contained deficiencies, and it had not fully 

implemented risk management best practices. We recommended that 

NOAA assess and report reserves needed over the life of the program 

and address the issues with its schedules and risk management. NOAA 

reported that it would take steps to implement these recommendations.

DHS’s Rescue 21 Program

DHS’s Rescue 21 program is intended to modernize the U.S. Coast 

Guard’s maritime search and rescue communications capability. Since 

2003, we have reported on significant weaknesses in the oversight and 

management of the program, including continued cost growth and 

schedule delays.24 For example, in May 2006, we found that the 

estimated total acquisition cost for Rescue 21 had increased from $250 

million in 1999 to $710.5 million in 2005, and the time line for achieving 

full operating capability had been delayed from 2006 until 2011.25 We 

recommended that executive-level management oversee Rescue 21’s 

progress toward cost and schedule milestones and manage risks; 

establish milestones to complete an integrated baseline review; and 

 

23GAO, Geostationary Weather Satellites: Design Progress Made, but Schedule 

Uncertainty Needs to be Addressed, GAO-12-576 (Washington, D.C.: June 26, 2012).

24GAO, Information Technology Cost Estimation: Agencies Need to Address Significant 

Weaknesses in Policies and Practices, GAO-12-629 (Washington, D.C.: July 11, 2012); 

Information Technology: Agencies Need to Establish Comprehensive Policies to Address 

Changes to Projects’ Cost, Schedule, and Performance Goals, GAO-08-925 (Washington, 

D.C.: July 31, 2008); United States Coast Guard: Improvements Needed in Management

and Oversight of Rescue System Acquisition, GAO-06-623 (Washington, D.C.: May 31, 

2006); and Coast Guard: New Communications System to Support Search and Rescue 

Faces Challenges, GAO-03-1111 (Washington, D.C.: Sept. 30, 2003).

25GAO-06-623. 
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develop revised cost and schedule estimates. More recently, in July 2012, 

we reported26 that the Rescue 21 program’s life-cycle cost estimate had 

grown to approximately $2.7 billion—an increase of approximately $2.4 

billion since 199927—and that completion was delayed to 2017. Program 

officials stated that increases in the cost estimate were due, in part, to 

additional schedule delays and more realistic estimates of future costs for 

ongoing system technology refreshment. However, we noted that the 

program’s cost estimate did not exhibit all qualities of a reliable cost 

estimate and recommended that DHS direct responsible officials to 

update future life-cycle cost estimates using cost-estimating practices that 

address the weaknesses we identified.

DHS’s United States Visitor and Immigrant Status Indicator 

Technology (US-VISIT) Program

DHS’s US-VISIT program is charged with developing a biometric 

verification capability for non-U.S. citizens entering and leaving the 

country. From fiscal year 2002 to fiscal year 2012, DHS’s US-VISIT 

program was appropriated over $3.5 billion, and the program has 

successfully developed a massive biometric database and deployed an 

entry capability. However, the program had not developed an exit 

capability and last conducted an exit pilot in 2009. We have reported on 

issues associated with key aspects of US-VISIT program management, 

such as risk management and the reliability of cost estimates and 

program schedules, as well as the lack of a completed strategic plan and 

the results of the 2009 exit pilot.28 We recommended that DHS review the 

 

26GAO-12-629. 

27The Rescue 21 program’s original cost estimate, developed in 1999, only included 

system acquisition costs and did not include costs for operating and maintaining the 

system. These costs were subsequently included in the program’s 2005 revisions to the 

cost estimate.

28GAO, Homeland Security: US-VISIT Pilot Evaluations Offer Limited Understanding of Air 

Exit Options, GAO-10-860 (Washington, D.C.: Aug. 10, 2010); Homeland Security: Key 

US-VISIT Components at Varying Stages of Completion, but Integrated and Reliable 

Schedule Needed, GAO-10-13 (Washington, D.C.: Nov. 19, 2009); Homeland Security: 

U.S. Visitor and Immigrant Status Indicator Technology Program Planning and Execution 

Improvements Needed, GAO-09-96 (Washington, D.C.: Dec. 12, 2008); Homeland 

Security: Strategic Solution for US-VISIT Program Needs to Be Better Defined, Justified, 

and Coordinated, GAO-08-361 (Washington, D.C.: Feb. 29, 2008); and Homeland 

Security: U.S. Visitor and Immigrant Status Program’s Long-standing Lack of Strategic 

Direction and Management Controls Needs to Be Addressed, GAO-07-1065 (Washington, 

D.C.: Aug. 31, 2007).
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program’s approach to risk management and earned value management, 

and that DHS develop a plan and integrated schedule for a 

comprehensive exit capability. We also recommended that the program 

incorporate additional sources of information when making future 

decisions about an exit capability. However, there are no known current 

plans to develop an exit process, and the President’s fiscal year 2013 

budget request called for eliminating a standalone US-VISIT program 

office and incorporating the program’s mission into Customs and Border 

Protection and Immigration and Customs Enforcement. We have ongoing 

recommendation follow-up work regarding this issue.

DOD’s Armed Forces Health Longitudinal Technology Application 

(AHLTA)

DOD has obligated approximately $2 billion over 13 years to acquire an 

electronic health record system—referred to as its AHLTA initiative. In 

October 2010, we reported that DOD had delivered various capabilities 

for outpatient care and dental care documentation, but it scaled back 

other capabilities it had originally planned to deliver, such as replacement 

of legacy systems and inpatient care management.29 In addition, users 

continued to experience significant problems with the performance 

(speed, usability, and availability) of the portions of the system that have 

been deployed. These problems were due in part to weaknesses in key 

acquisition management and planning processes. DOD initiated efforts to 

improve system performance and enhance functionality and plans to 

continue its efforts to stabilize the AHLTA system through 2015, as a 

"bridge" to the new electronic health record system it intends to acquire. 

According to DOD, the planned new electronic health record system—

known as the EHR Way Ahead—is to be a comprehensive, real-time 

health record for service members and their families and beneficiaries. To 

help better manage these efforts, we recommended that DOD take six 

actions to help ensure that it has disciplined and effective processes in 

place to manage the acquisition of further electronic health record system 

capabilities.

 

29GAO, Opportunities Exist to Improve Management of DOD’s Electronic Health Record 

Initiative, GAO-11-50 (Washington, D.C.: Oct. 6, 2010). 
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DOD’s Defense Enterprise Accounting and Management System 

(DEAMS)

The Air Force’s DEAMS is the agency’s target accounting system 

designed to provide accurate, reliable, and timely financial information. In 

March 2012, we reported that DEAMS faced a 2-year deployment delay 

and an estimated cost increase of about $500 million from its original lifecycle cost estimate of $1.1 billion, an increase of approximately 45 

percent.30 Further, in February 2012, we reported that assessments by 

DOD users had identified operational problems with the system, such as 

data accuracy issues, an inability to generate auditable financial reports, 

and the need for manual workarounds.31 We recommended that DOD 

take actions to ensure the correction of system problems prior to further 

system deployment, including user training. In July 2012, the DOD 

Inspector General reported that the DEAMS schedule delays were likely 

to diminish its intended cost savings and would jeopardize the 

department’s goals for attaining an auditable financial statement.

DOD’s Global Combat Support System-Army (GCSS-Army)

GCSS-Army is intended to improve the Army’s supply chain management 

capabilities and provide accurate equipment readiness status reports, 

among other things. In March 2012, we reported that GCSS-Army was 

experiencing a cost overrun of approximately $300 million on an original 

life-cycle cost estimate of $3.9 billion (an increase of approximately 8 

percent) and a deployment delay of approximately 2 years.32 Among other 

things, we recommended that DOD ensure any future system deficiencies 

identified through independent assessments are resolved or mitigated 

prior to further deployment of the system. In addition, because the DOD

CIO rated GCSS-Army as low or moderately low risk from July 2009 

through March 2012 on OMB’s federal IT Dashboard, we recommended 

that the department’s CIO reassess the department’s considerations for 

assigning risk levels to investments on the Dashboard, to include external 

assessments of performance and risk.

 

30GAO, DOD Financial Management: Reported Status of Department of Defense's 

Enterprise Resource Planning Systems, GAO-12-565R (Washington, D.C.: Mar. 30, 

2012). 

31GAO-12-134. 

32GAO-12-565R. 
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DOD’s Global Combat Support System–Marine Corps (GCSS-MC)

GCSS-MC is intended to provide the deployed warfighter enhanced 

capabilities in the areas of warehousing, distribution, logistical planning, 

depot maintenance, and improved asset visibility. In July 2008, we 

reported that not effectively implementing key IT management controls, 

such as economically justifying investment in the system, had in part 

contributed to a 3-year schedule slippage and a cost overrun of about 

$193 million on the first phase of the program and would likely contribute 

to future delays and overruns if not corrected.33 Accordingly, we made 

recommendations to address the identified deficiencies, such as cost and 

schedule estimating, risk management, and system quality measurement 

weaknesses. In October 2010,34 we reported that GCSS-MC faced a 3-

year deployment delay on phase 1. We also reported in March 2012 that 

GCSS-MC faced an estimated cost increase of about $970 million from its 

original life-cycle cost estimate of $126 million.35 As of December 2011, 

the life-cycle cost estimate was estimated to be $1.1 billion, and a revised 

full deployment date was being considered.

DOD’s Navy Enterprise Resource Planning System (Navy ERP) 

Navy ERP is intended to standardize the acquisition, financial, program 

management, maintenance, procurement, plant and wholesale supply, 

and workforce management capabilities of the Navy. In March 2012, we 

reported that Navy ERP faced a 2-year deployment delay and an 

estimated cost increase of about $1 billion from its original life-cycle cost 

estimate of $1.87 billion.36 This estimate was later revised in August 2004, 

December 2006, and again in September 2007 to $2.4 billion. In October 

2010,37 we reported that these slippages occurred, in part, because of 

problems experienced in data conversion and adopting new business 

 

33GAO, DOD Business Systems Modernization: Key Marine Corps System Acquisition 

Needs to Be Better Justified, Defined, and Managed, GAO-08-822 (Washington, D.C.: 

July 28, 2008).

34GAO-11-53. 

35GAO-12-565R, DOD’s GCSS-MC Program Management Office and historical data as 

reported in GAO-11-53. 

36GAO-12-565R. 

37GAO-11-53. 
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procedures associated with implementing the Navy ERP. Moreover, in 

September 2008,38 we reported that not effectively implementing key IT 

management controls, such as earned value management, had

contributed to the more than 2-year schedule delay and almost $600 

million cost overrun on the program since it began, and would likely 

contribute to future delays and overruns if not corrected. Accordingly, we 

made recommendations to address the identified deficiencies, such as 

improving cost and schedule estimating, earned value management, and 

risk management weaknesses. 

DOD’s Navy Next Generation Enterprise Network (NGEN)

DOD’s NGEN is to replace the Navy Marine Corps Intranet program and 

include capabilities such as secure transport of voice and data, data 

storage, and e-mail, to be incrementally acquired through multiple 

providers. The program, which is expected to cost about $38 billion 

through fiscal year 2024, had weaknesses in its acquisition approach. 

Specifically, in March 2011, we reported that the program was not well 

positioned to meet its cost and schedule estimates.39 For example, the 

department had not sufficiently analyzed alternative acquisition 

approaches and did not have a reliable schedule for executing NGEN.

We recommended DOD limit further investment until it conducted an 

interim review to reconsider the selected acquisition approach and 

addresses its investment management issues. In September 2012, we 

reported that while DOD had revised its acquisition approach, it was still 

suffering from management issues related to measuring cost 

effectiveness, completing milestones on schedule, and mitigating risk.40

 

38GAO, DOD Business Systems Modernization: Important Management Controls Being 

Implemented on Major Navy Program, but Improvements Needed in Key Areas, 

GAO-08-896 (Washington, D.C.: Sept. 8, 2008).

39GAO, Information Technology: Better Informed Decision Making Needed on Navy's Next 

Generation Enterprise Network Acquisition, GAO-11-150 (Washington, D.C.: Mar. 11, 

2011). 

40GAO, Next Generation Enterprise Network: Navy Implementing Revised Approach, but 

Improvement Needed in Mitigating Risks, GAO-12-956 (Washington, D.C.: Sept. 19, 

2012). 
Appendix I: Examples of IT Project Failures 

and Challenges

Page 43 GAO-13-796T 

DOD/Department of the Treasury’s Navy Cash Program

Initiated in 2001, Navy Cash is a joint Department of the Navy and 

Department of the Treasury Financial Management Service program to 

create a cashless environment on ships using smart card technology. It 

was estimated to cost about $320 million to fully deploy. In 2008, we 

reported that the system had not been assessed and defined in a way to 

ensure that it was not duplicative of programs in the Air Force and the 

Army that use smart card technology, nor economically justified on the 

basis of reliable analyses of estimated costs and expected benefits over 

the program’s life. 41 In addition, we reported that system requirements 

and system security had not been effectively managed. Program 

oversight and management officials acknowledged the weaknesses and 

cited turnover of staff in key positions and their primary focus on 

deploying Navy Cash as reasons for the state of some of the IT 

management controls. We concluded that after investing about 6 years 

and $132 million on Navy Cash and planning to invest an additional $60 

million to further develop the program, the department had yet to 

demonstrate through verifiable analysis and evidence that the program, 

as currently defined, was justified. Accordingly, we recommended that 

investment of modernization funding in the program be limited until a 

basis for informed decision making was established, and that other 

program management weaknesses were corrected.

DOD/VA’s Integrated Electronic Health Record (iEHR)

DOD and VA have been challenged over the last 15 years on a variety of 

initiatives to share data among the departments’ health information 

systems. In March 2011, the Secretaries of DOD and VA committed their 

two departments to developing a new common iEHR, and in May 2012 

announced their goal of implementing it across the departments by 2017. 

According to the departments, the decision to pursue iEHR would enable 

DOD and VA to align resources and investments with common business 

needs and programs, resulting in a platform that would replace the two 

departments’ electronic health record systems with a common system. 

The departments estimated the life-cycle cost of this effort at about $25 

billion. However, as we noted in a recent testimony, the Secretaries 

 

41GAO, DOD Business Systems Modernization: Planned Investment in Navy Program to 

Create Cashless Shipboard Environment Needs to Be Justified and Better Managed, 

GAO-08-922 (Washington, D.C.: Sept. 8, 2008).
Appendix I: Examples of IT Project Failures 

and Challenges

Page 44 GAO-13-796T 

announced in February 2013 that instead of developing a new common 

integrated electronic health record system, the departments would focus 

on integrating health records from separate DOD and VA systems.42 VA 

has stated that it will continue to modernize its existing system, called 

VistA, while pursuing the integration of health data, while in May 2013, 

DOD announced that it planned to purchase a commercial off-the-shelf 

product. The Secretaries offered several reasons for this new direction, 

including cutting costs, simplifying the problem of integrating DOD and VA 

health data, and meeting the needs of veterans and service members 

sooner rather than later. Nevertheless, the departments’ recent change in 

the program’s direction and history of challenges to improving their health 

information systems heighten concern about whether this latest initiative 

will be successful.

DOD/VA’s Federal Health Care Center (FHCC)

DOD and VA jointly undertook an IT project to support the FHCC in North 

Chicago, Illinois, which is the first medical facility to serve both 

departments’ patient populations while operating under a single line of 

authority. As we reported in February 2011, despite an investment of 

more than $122 million, none of the FHCC’s required IT capabilities had 

been implemented as planned when the center opened in October 

2010.43 While system components to support single sign-on and singlepatient registration became operational in December 2010, a component 

to support medical consults was not expected to be completed until 

March 2013, and the departments did not have a schedule for completion 

of the component to support pharmacy. We recommended that the 

departments strengthen their joint IT system planning efforts for the 

FHCC by developing plans that include scope definition, cost and 

schedule estimation, and project plan documentation and approval. We 

also noted that the two departments face barriers in three key IT 

management areas—strategic planning, enterprise architecture, and 

investment management—and recommended steps for improvement.

 

42GAO, Electronic Health Records: Long History of Management Challenges Raises 

Concerns about VA's and DOD's New Approach to Sharing Health Information, 

GAO-13-413T (Washington, D.C.: Feb. 27, 2013).

43GAO, Electronic Health Records: DOD and VA Should Remove Barriers and Improve 

Efforts to Meet Their Common System Needs, GAO-11-265 (Washington, D.C.: Feb. 2, 

2011).
Appendix I: Examples of IT Project Failures 

and Challenges

Page 45 GAO-13-796T 

FDA’s Mission Accomplishments and Regulatory Compliance 

Services (MARCS)

FDA’s MARCS program is intended to automate workflow, help track and 

manage information about firm compliance with FDA’s regulations, and 

eliminate FDA’s existing stove-piped databases. However, the program

has been rebaselined five times since 2002, the total estimated cost has 

grown from $221.4 million to $282.7 million, and the estimated completion 

date for initial development has slipped from September 2008 to October 

2016. According to OMB exhibit 53s from 2004 to 2013, FDA has spent 

approximately $160 million from fiscal year 2002 to fiscal year 2011 on 

MARCS. In March 2012, we reported FDA had not developed a 

comprehensive integrated master schedule for MARCS that would allow 

the agency to effectively gauge progress.44 We further reported that the 

agency was reevaluating the scope of the initiative and concluded that, 

until this assessment was complete, it was uncertain how or when much 

of the intended functionality and improvements associated with MARCS 

would be delivered. We recommended that FDA, in completing the 

assessment of MARCS, develop an integrated master schedule that 

identifies which legacy systems will be replaced and when; identifies all 

current and future tasks to be completed; and defines and incorporates 

information reflecting needed resources and critical dependencies. We 

further recommended that the agency use this schedule to monitor the 

progress of MARCS. 

IRS’s Customer Account Data Engine (CADE)

In December 2011, IRS ended further development of CADE, its effort to 

replace legacy systems for storing, managing, and accessing individual 

taxpayer accounts. IRS started developing this system in 2002 to replace 

the legacy Individual Master File processing system and house tax 

information for more than 40 million taxpayers while providing faster 

return processing and refunds. In December 2009, we reported that after 

over 5 years and $400 million, CADE was only processing about 15 

 

44GAO, Information Technology: FDA Needs to Fully Implement Key Management 

Practices to Lesson Modernization Risks, GAO-12-346 (Washington, D.C.: Mar. 15, 

2012). 
Appendix I: Examples of IT Project Failures 

and Challenges

Page 46 GAO-13-796T 

percent of the functionality originally planned for completion by 2012.45 In 

addition, each successive release of the system was expected to process 

more complex returns, but several technical challenges had not been 

addressed. Given this, IRS estimated that full implementation of CADE 

would not be achieved until at least 2018 or possibly as late as 2028. As 

a consequence, in 2011 IRS decided to stop development of new CADE 

functionality and rethink its strategy for modernizing individual taxpayer 

accounts to determine whether an alternative approach could deliver 

improvements sooner. This led to the development of CADE 2, a new 

program for replacing the Individual Master File. Beginning in January 

2012, IRS started using CADE 2 to process returns daily and issue 

refunds faster for about 84 million taxpayers. As of January 2013, IRS 

reported that there have been no significant problems with the system.

NASA’s James Webb Space Telescope (JWST) 

NASA’s JWST project is designed to advance understanding of the origin 

of the universe. Since 2006, we have identified a range of issues with the 

project. For example, in July 2006, we reported46 that the JWST project 

had experienced cost growth exceeding $1 billion—which increased its 

life-cycle cost estimate from $3.5 billion to $4.5 billion—and its launch 

date had slipped nearly 2 years to 2013. We also found that the program 

was not fully adhering to a knowledge-based acquisition approach, which 

ensures that resources match requirements in terms of knowledge, time, 

and money before program start. Accordingly, we recommended that the 

program apply such an approach. In October 2009, we reported that as of 

May 2009, the JWST contractor exceeded its planned cost target by 

$224.7 million and had not completed $9.4 million in planned work.47 A 

key driver in this cost overrun was greater-than-expected complexity in 

the work, which required additional resources. We concurred with the 

contractor’s estimate that it would overrun its budget—worth 

approximately $1.3 billion—by $448.5 million. We also found that the 

program had not fully implemented practices for earned value 

management and recommended steps for improvement. In 2011, the

 

45GAO, 2009 Tax Filing Season: IRS Met Many 2009 Goals, but Telephone Access 

Remained Low, and Taxpayer Service and Enforcement Could Be Improved, GAO-10-225

(Washington, D.C.: Dec. 10, 2009).

46GAO-06-634. 

47GAO-10-2. 
Appendix I: Examples of IT Project Failures 

and Challenges

Page 47 GAO-13-796T 

project finalized a major replanning that resulted in further growth to the 

project’s expected costs, as well as additional delays to its expected 

launch date. On the basis of the replanning, NASA announced that the 

project would be rebaselined at approximately $8.8 billion—a 78 percent 

increase to the project’s life-cycle cost compared to the previous 

baseline—and would launch in October 2018—a delay of 52 months.

USDA’s Modernize and Innovate the Delivery of Agricultural 

Systems (MIDAS) Program

USDA’s MIDAS program is intended to modernize the IT systems 

supporting the Farm Service Agency’s 37 farm programs. As we reported 

in July 2011, the implementation cost estimate is approximately $305 

million, with a life-cycle cost of approximately $473 million.48 However, we 

found that the implementation cost estimate was uncertain because it had 

not been updated since 2007, and the program schedule had not been 

updated to account for delays. In addition, we reported that the program’s 

management approach, while including many leading practices, could be 

strengthened. Finally, we found there was a lack of clarity and definition 

regarding the roles of executive-level governance bodies responsible for 

overseeing the program. We recommended that USDA update cost and 

schedule estimates, address management issues, and clarify the roles 

and coordination among governance bodies.

 

48GAO, USDA Systems Modernization: Management and Oversight Improvements Are 

Needed, GAO-11-586 (Washington, D.C.: July 20, 2011).

(311292)
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