Information Technology: Additional Actions and Oversight Urgently Needed to Reduce Waste and Improve Performance in Acquisitions and Operations
Published: 2015-06-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The federal government invests more than $80 billion annually in IT. However, these investments frequently fail, incur cost overruns and schedule slippages, or contribute little to mission-related outcomes. This underperformance of federal IT projects can be traced to a lack of disciplined and effective management and inadequate executive-level oversight. Accordingly, in February 2015, GAO added improving the management of IT acquisitions and operations to its high-risk list—a list of agencies and program areas that are high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement, or are most in need of transformation.
GAO was asked to testify on its designation of the management of IT acquisitions and operations as a federal high-risk area and the impact of recent legislation on IT acquisition reform. In preparing this statement, GAO relied on its previously published work in these areas.
section_title: What GAO Found
paragraphs: Federal investments in information technology (IT) have often resulted in multimillion dollar cost overruns and years-long schedule delays, with questionable mission-related achievements. Further, the implementation of initiatives to improve IT acquisitions has been inconsistent. For example, the Office of Management and Budget (OMB) established a process for holding face-to-face investment performance reviews between agencies and OMB (referred to as “TechStats”). However, as of 2013 less than 20 percent of at-risk investments across the government had undergone such reviews, even though GAO has identified a number of ongoing IT investments with significant issues that require attention. OMB also requires investments to deliver capabilities every 6 months, but as GAO reported in 2014, less than half of selected investments at five major agencies planned to deliver capabilities in 12-month cycles.
To facilitate transparency across the government in acquiring and managing IT investments, OMB established a public website—the IT Dashboard—to provide detailed information on major investments at federal agencies. As of May 2015, the Dashboard showed that 178 of the government's 738 major investments—totaling $8.7 billion—were in need of management attention due to their risk. Moreover, OMB does not update the public version of the Dashboard while the President's budget request is being formulated, most recently for more than 6 months. GAO has made multiple recommendations to improve the Dashboard.
Further opportunities for savings and efficiency exist in agencies' spending on “commodity” IT (e.g., IT infrastructure, enterprise systems such as e-mail, and systems that perform administrative functions) and the consolidation of federal data centers. The table below shows savings realized or planned from the consolidation of federal data centers.
However, limitations exist in how agencies report savings in these areas: better tracking them would provide for greater transparency and oversight.
Recognizing the importance of these issues, a law was recently enacted aimed at reforming federal IT acquisition. This legislation should help address the key issue areas identified in GAO's high-risk designation. OMB has released proposed guidance for agencies to implement provisions of this law, to include implementing roles and responsibilities for senior agency officials. To improve the management of IT acquisitions and operations, it is also critical for agencies to implement GAO's prior recommendations and demonstrate measurable government-wide progress in key areas such as delivering IT systems incrementally and realizing planned data center savings.
section_title: What GAO Recommends
paragraphs: From October 2009 through December 2014, GAO made 737 recommendations to OMB and agencies to improve the management and oversight of IT. As of January 2015, only about 23 percent of these had been fully implemented.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our recent designation of  information technology (IT) acquisitions and operations as a government- wide high-risk area, as well as the impact of recently enacted federal IT  acquisition reform legislation (commonly referred to as the Federal  Information Technology Acquisition Reform Act or FITARA). As you  know, the effective and efficient acquisition and management of IT  investments has been a long-standing challenge in the federal  government.
The federal government has spent billions of dollars on failed and poorly  performing IT investments, which often suffered from ineffective  management, and spending on IT operations is inefficient. From October  2009 through December 2014, we made 737 recommendations to  address weaknesses in agencies’ IT management. In light of these  ongoing challenges, we recently added improving the management of IT  acquisitions and operations to our list of high-risk areas for the federal  government.
My statement today will discuss this high-risk designation, as well as  plans for implementing FITARA and those plans’ impact on IT acquisition  reform. We conducted the work on which this statement is based in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. A more detailed discussion of  the objectives, scope, and methodology of this work is included in each of  the reports on which this testimony is based.
subsections: section_title: Background
paragraphs: The federal government invests more than $80 billion annually in IT, but  many of these investments fail to meet cost and schedule expectations or  make significant contributions to mission-related outcomes. We have  previously testified that the federal government has spent billions of  dollars on failed IT investments, such as  the Department of Defense’s (DOD) Expeditionary Combat Support  System, which was canceled in December 2012, after spending more  than a billion dollars and failing to deploy within 5 years of initially  obligating funds; the Department of Homeland Security’s Secure Border Initiative  Network program, which was ended in January 2011, after the  department obligated more than $1 billion to the program, because it  did not meet cost-effectiveness and viability standards; the Department of Veterans Affairs’ (VA) Financial and Logistics  Integrated Technology Enterprise program, which was intended to be  delivered by 2014 at a total estimated cost of $609 million, but was  terminated in October 2011 due to challenges in managing the  program; the Office of Personnel Management’s Retirement Systems  Modernization program, which was canceled in February 2011, after  spending approximately $231 million on the agency’s third attempt to  automate the processing of federal employee retirement claims; the National Oceanic and Atmospheric Administration, DOD, and the  National Aeronautics and Space Administration’s National Polar- orbiting Operational Environmental Satellite System, which was a tri- agency weather satellite program that the White House Office of  Science and Technology stopped in February 2010 after the program  spent 16 years and almost $5 billion; and the VA Scheduling Replacement Project, which was terminated in  September 2009 after spending an estimated $127 million over 9  years.
These and other failed IT projects often suffered from a lack of disciplined  and effective management, such as project planning, requirements  definition, and program oversight and governance. In many instances,  agencies have not consistently applied best practices that are critical to  successfully acquiring IT investments.
Federal IT projects have also failed due to a lack of oversight and  governance. Executive-level governance and oversight across the  government has often been ineffective, specifically from chief information  officers (CIO). For example, we have reported that not all CIOs have the  authority to review and approve the entire agency IT portfolio and that  CIOs’ authority was limited. This has also been highlighted by  Congress—the recently enacted law reforming federal IT acquisition is  intended to, among other things, strengthen CIO authority and provide the  oversight IT projects need.
section_title: Improving the Management of IT Acquisitions and Operations
paragraphs: Although the executive branch has undertaken numerous initiatives to  better manage the more than $80 billion that is annually invested in IT,  federal IT investments too frequently fail or incur cost overruns and  schedule slippages, while contributing little to mission-related outcomes.  In light of these challenges, we recently introduced a new government- wide high-risk area, Improving the Management of IT Acquisitions and  Operations. This area highlights several critical IT initiatives in need of  additional congressional oversight, including reviews of troubled projects,  an emphasis on incremental development, a key transparency website,  reviews of agencies’ operational investments, and efforts to streamline  agencies’ portfolios of IT investments. Implementation of these initiatives  has been inconsistent, and more work remains to demonstrate progress  in achieving IT acquisition outcomes. The recent IT reform legislation  holds promise for improving agencies’ acquisition of IT, and the Office of  Management and Budget (OMB) is developing guidance for agencies to  implement its provisions. Implementing these provisions, along with our  outstanding recommendations, is necessary for agencies to demonstrate  progress in addressing this high-risk area.
subsections: section_title: Reviews of Troubled Projects
paragraphs: In January 2010, the Federal CIO began leading TechStat sessions— face-to-face meetings to terminate or turn around 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. OMB reported that federal  agencies achieved over $3 billion in cost savings or avoidances as a  result of these sessions in 2010. Subsequently, OMB empowered agency  CIOs to hold their own TechStat sessions within their respective  agencies.
We have since reported that OMB and selected agencies 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. Specifically, OMB  reported conducting TechStats at 23 federal agencies covering 55  investments, 30 of which were considered medium or high risk at the time  of the TechStat. However, these reviews accounted for less than 20  percent of medium- or high-risk investments government-wide. As of  August 2012, there were 162 such at-risk investments across the  government. Further, we reviewed four selected agencies and found they  had held TechStats on 28 investments. While these reviews were  generally conducted in accordance with OMB guidance, areas for  improvement existed. We concluded that until OMB and agencies  develop plans to address these investments, the investments would likely  remain at risk. Among other things, we recommended that OMB require  agencies to address high-risk investments. OMB generally agreed with  this recommendation.
However, over the last 2 years, OMB has not conducted any TechStat  reviews. In particular, as of March 2015, the last TechStat was held in  March 2013 and OMB has not listed any savings from TechStats in any of  its required quarterly reporting to Congress since June 2012.
Highlighting the importance of focusing more oversight on high-risk  initiatives, in our most recent high-risk report we identified a number of  ongoing investments with significant issues requiring attention:
The Department of Health and Human Services’ HealthCare.gov  website and its supporting systems, which were to facilitate the  establishment of a health insurance marketplace by January 2014,  encountered significant cost increases, schedule slips, and delayed  functionality. In a series of reports we identified numerous planning,  oversight, security, and system development challenges faced by this  program and made recommendations to address them.
The Department of Agriculture’s Farm Program Modernization, which  is intended to modernize the IT systems supporting the Farm Service  Agency’s 37 farm programs, had not implemented a number of key  management and oversight practices to ensure its successful  completion. In July 2011, we reported on issues with the reliability of  the program’s cost estimate, weaknesses in its management  approach, and a lack of clarity in its governance structure. In our report, we recommended that the agency take action to address these  issues.
The Department of Commerce’s Census Enterprise Data Collection  and Processing investment was initiated in fiscal year 2015 and is  expected to be the backbone of the Census Bureau’s target IT  architecture. Particular attention to this area is warranted in order to  avoid repeating the mistakes of the 2010 Decennial Census, in which  the bureau had to abandon its plans for the use of handheld data  collection devices, due in part to fundamental weaknesses in its  implementation of key IT management practices.
DOD’s Defense Enterprise Accounting and Management System  (DEAMS), which is the agency’s planned accounting system designed  to provide accurate, reliable, and timely financial information, has  experienced significant delays and cost increases. 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 life- cycle cost estimate of $1.1 billion, an increase of approximately 45  percent. Further, 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. We recommended that DOD  take actions to ensure the correction of system problems prior to  further system deployment, including user training. DOD generally  concurred with our recommendations and described its efforts to  address them.
DOD’s and VA’s initiatives to modernize their electronic health records  systems are intended to address sharing data among the  departments’ health information systems, but achieving this has been  a challenge for these agencies over the last 15 years. In February  2013, the two departments’ Secretaries announced that instead of  developing a new common, integrated electronic health record  system, the departments would focus on achieving interoperability  between separate DOD and VA systems. The departments’ change and history of challenges in improving their health information  systems heighten concern about whether they will be successful.
The Department of Homeland Security’s United States Citizenship  and Immigration Services (USCIS) Transformation program is to  transition USCIS from a fragmented, paper-based filing environment  to a consolidated, paperless environment using electronic case  management tools, but it is unclear whether the department is  positioned to successfully deliver these capabilities. For example, it  has not yet demonstrated the extent to which it can meet six key  capability requirements using its new system architecture. Further,  between July 2011 and September 2014, the program’s life-cycle cost  estimate increased from approximately $2.1 billion to approximately  $2.6 billion.
The Department of Homeland Security’s Human Resources IT  investment is to consolidate, integrate, and modernize the  department’s human resources IT infrastructure, but it has  experienced a long history of issues. As of May 2015, this investment  was rated as “moderately high risk” by the department’s CIO.  According to the CIO, this investment has experienced significant  challenges that have inhibited delivered capabilities from being  accepted by users, but the department is working to address them.
The Department of Transportation’s Next Generation Air  Transportation System (NextGen) is an advanced technology air- traffic management system that the Federal Aviation Administration  (FAA) anticipates will replace the current ground-radar-based system,  at an expected cost of $15 billion to $22 billion through fiscal year  2025. However, NextGen has significantly increased the number,  cost, and complexity of FAA’s acquisition programs. The  interdependencies among these programs heighten the importance of  remaining on time and within budget. Accordingly, we recommended  that FAA, among other things, require cost and schedule risk analysis,  independent cost estimates, and integrated master schedules.
VA has invested significant resources into developing a system for  outpatient appointment scheduling, but these efforts have faced major  setbacks. After failing to implement a new solution, in October 2009,  VA began a new initiative that it refers to as HealtheVet Scheduling. In  May 2010, we recommended that, as the department proceeded with  future development, 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.
section_title: Incremental Development
paragraphs: Beyond focusing attention on individual high-risk investments, an  additional key reform initiated by OMB emphasizes incremental  development in order to reduce investment risk. In 2010, it called for  agencies’ major investments to deliver functionality every 12 months and,  since 2012, every 6 months.
However, we recently reported that less than half of selected investments  at five major agencies planned to deliver capabilities in 12-month  cycles. Accordingly, we recommended that OMB develop and issue  clearer guidance on incremental development and that selected agencies  update and implement their associated policies. Most agencies agreed  with our recommendations or had no comment. Table 1 shows how many  of the total selected investments at each agency planned to deliver  functionality every 12 months during fiscal years 2013 and 2014.
section_title: Key Transparency Website
paragraphs: Given these issues, it is important for the federal government to be  transparent both when it is acquiring new investments and when it is  managing legacy investments. To help the government achieve such  transparency, in June 2009, OMB established a public website (referred  to as the IT Dashboard) that provides detailed information on major IT  investments at 27 federal agencies, including ratings of their performance  against cost and schedule targets.information is intended to allow OMB; other oversight bodies, including  Congress; and the general public to hold agencies accountable for results  and performance. Among other things, agencies are to submit ratings  from their CIOs, which, according to OMB’s instructions, should reflect the  level of risk facing an investment relative to that investment’s ability to  accomplish its goals.
The public dissemination of this  As of May 2015, according to the IT Dashboard, 178 of the federal  government’s 738 major IT investments—totaling $8.7 billion—were in  need of management attention (rated “yellow” to indicate the need for  attention or “red” to indicate significant concerns). (See fig. 1.)
Although the accuracy of Dashboard cost and schedule data has  improved over time, in December 2013, we reported that agencies had  removed major investments from the site, representing a troubling trend  toward decreased transparency. For example, several of the  Department of Energy’s supercomputer investments had been classified  as facilities, rather than IT, thus removing those investments from the  Dashboard, and OMB staff stated that they had no control over such  decisions.
Further reducing transparency, OMB does not update the public version  of the Dashboard as it and the agencies work to assist in the formulation  of the President’s annual budget request. According to an OMB Office of  E-Government and Information Technology staff member, OMB considers  information submitted during the budget process to be pre-decisional and  will only release it to the public in tandem with the President’s budget.  However, the information submitted as part of an investment’s CIO rating  does not meet OMB’s own definition of “pre-decisional,” meaning that the CIO risk ratings could be updated independent of the budget process  without disclosing information that might compromise that process.  Moreover, as of December 2013, the public version of the IT Dashboard  had not been updated for 15 of the previous 24 months. More recently,  OMB stopped updating the public version of the Dashboard on August 31,  2014, and did not update it until March 10, 2015, a span of more than 6  months. Over the past several years, we have made over 20  recommendations to help improve the accuracy and reliability of the  information on the IT Dashboard and to increase its availability.
section_title: Reviews of Operational Systems
paragraphs: In addition to spending money on new IT development, agencies also  plan to spend a significant amount of their fiscal year 2015 IT budgets on  the operations and maintenance (O&M) of legacy (i.e., steady-state)  systems. Over the past 6 fiscal years, this amount has increased, while  the amount invested in developing new systems has decreased by about  $7.8 billion since fiscal year 2010. (See figure 2.) This raises concerns  about agencies’ ability to replace systems that are no longer cost- effective or that fail to meet user needs.
section_title: Portfolio Management
paragraphs: To better manage existing IT systems, OMB launched the PortfolioStat  initiative, which requires agencies to conduct an annual, agency-wide IT  portfolio review to, among other things, reduce commodity IT spending  and demonstrate how their IT investments align with the agency’s mission  and business functions. In November 2013, we reported that agencies  continued to identify duplicative spending as part of PortfolioStat and that  this initiative had the potential to save at least $5.8 billion through fiscal  year 2015; however, weaknesses existed in agencies’ implementation of  the initiative, such as limitations in the CIOs’ authority. We made more  than 60 recommendations to improve OMB’s and agencies’  implementation of PortfolioStat. OMB partially agreed with our  recommendations, and responses from 21 of the agencies varied.
More recently, in April 2015, we reported that agencies decreased their  planned PortfolioStat savings to approximately $2 billion—a 68 percent  reduction from the amount they reported to us in 2013. Additionally,  although agencies also reported having achieved approximately $1.1  billion in PortfolioStat-related savings, inconsistencies in OMB’s and  agencies’ reporting make it difficult to reliably measure progress in  achieving savings. Among other things, we made recommendations to  OMB aimed at improving the reporting of achieved savings. OMB agreed  with the recommendations.
We have also recently reported on three key areas of agency’s IT  spending portfolio: data center consolidation, software licensing, and  mobile devices.
Data Center Consolidation: Concerned about the size of the federal  data center inventory and recognizing the potential to improve the  efficiency, performance, and environmental footprint of federal data  center activities, OMB, under the leadership of the Federal CIO,  established the federal data center consolidation initiative in February  2010. In a series of reports, we found that, while data center consolidation  could potentially save the federal government billions of dollars,  weaknesses existed in the execution and oversight of the initiative.
Most recently, we reported that, as of May 2014, agencies collectively  reported that they had a total of 9,658 data centers;2015, they had closed 1,236 data centers and were planning to close an  additional 2,607—for a total of 3,843—by the end of September 2015. We  also noted that between fiscal years 2011 and 2017, agencies reported  planning a total of about $5.3 billion in cost savings and avoidances due  to the consolidation of federal data centers. In correspondence  subsequent to the publication of our report, DOD’s Office of the CIO  identified an additional $2.1 billion in savings to be realized beyond fiscal  year 2017, which increased the total savings across the federal  government to about $7.4 billion.   as of February  Table 2 below provides a summary of agencies’ total data center cost  savings and cost avoidances between fiscal years 2011 and 2017, as well  as DOD cost savings and cost avoidances to be realized beyond 2017.
However, we noted that planned savings may be understated because of  difficulties agencies encountered when calculating savings and  communicating their estimates to OMB. We concluded that it was  important for OMB to continue to provide leadership and guidance on this  initiative, and we made recommendations to ensure the initiative  improves governmental efficiency and achieves cost savings. Most  agencies agreed with our recommendations or had no comment.
Software Licensing: An additional area of concern is agencies’  management of their software licenses. We recently reported on federal  agencies’ management of software licenses and determined that better  management was needed to achieve significant savings government- wide. In particular, 22 of the 24 major agencies identified in the Chief  Financial Officers Act of 1990 did not have comprehensive license  policies, and only 2 had comprehensive license inventories. As a result,  agencies’ oversight of software license spending was limited or lacking,  and thus they may miss out on savings. The potential savings could be  significant considering that, in fiscal year 2012, one major federal agency  reported saving approximately $181 million by consolidating its enterprise  license agreements, even though its oversight process was ad hoc.
We recommended that OMB issue needed guidance to agencies and  made more than 130 recommendations to the agencies to improve their  policies and practices for managing software licenses. OMB disagreed  with the need for guidance. However, without such guidance, agencies  will likely continue to lack the visibility into what needs to be managed.  Most agencies generally agreed with the recommendations or had no  comments.
Mobile Devices: We have also identified weaknesses in agencies’  management of their mobile devices. Both a 2011 executive order and  OMB’s 2012 Digital Government Strategy call for agencies to, among  other things, take steps to ensure they are not paying for unused or  underused mobile devices and services and to move toward an  enterprise-wide model for purchasing these devices and services in order  to reduce costs. However, in May of this year we reported that agencies  need to implement more effective controls on their mobile devices and  services in order to realize potential cost savings. Specifically, most of  the 15 agencies we reviewed did not have an inventory of mobile devices  and associated services that can be used to assess device usage, and  only 1 of the 15 agencies had documented procedures for monitoring  spending by reviewing devices and associated service plans for overuse,  underuse, or zero use. A key reason for these weaknesses was that  agencies took a decentralized approach to managing mobile device  spending. We also noted that OMB had not measured progress toward its  stated goal of achieving financial savings related to mobile devices and  services.
Highlighting the potential for savings in this area, agencies reported  paying a range of rates per line for various service combinations, from  $21 for 200 voice minutes, unlimited data, and 200 text messages, to  $122 for unlimited voice, data, and text messages. Agencies also paid  different rates for the same bundle of services. For example, for the  unlimited voice, text, and data bundles, agencies paid between $69 and  $122 per month.
Accordingly, we recommended that the agencies in our review take  actions to improve their inventories and control processes and that OMB  measure and report progress in achieving mobile cost savings. OMB and  14 of the agencies generally agreed with the recommendations or had no  comment. One agency, the Department of Defense, partially agreed, but  we maintained that actions are still needed.
section_title: Recent Legislation Can Help Improve Agencies’ Management of IT
paragraphs: Recognizing the severity of issues related to government-wide  management of IT, in December 2014, Congress led the enactment of  FITARA. Among other things, the law includes the following  requirements:
Agencies, except for DOD, shall ensure that CIOs have a significant  role in, among other things, programming and budgeting decisions, as  well as management, governance, and oversight processes related to  IT. For example, agencies (other than DOD) may only enter into  contracts for IT and IT services that are reviewed and approved by the  agency CIO.
OMB shall provide guidance that requires CIOs to certify that IT  acquisitions are adequately implementing incremental development.
OMB shall issue guidance that requires the CIO to adequately reflect  each major IT investment’s cost, schedule, and performance in the  investment evaluation.
OMB shall make available to the public a list of all major IT  investments, including data on cost, schedule, and performance, and  report to Congress on any investment that is evaluated as high risk for  4 consecutive quarters.
The General Services Administration shall identify and develop a  government-wide program for the acquisition, dissemination, and  shared use of software licenses.
OMB, in consultation with agency CIOs, shall implement a process to  assist agencies in managing their IT portfolios.
Agencies shall annually report to OMB’s Administrator of the Office of  Electronic Government specific information, to include progress in  consolidating federal data centers and the associated savings.
The new IT acquisition reform requirements codified in the law, when fully  implemented, should help address key issue areas identified in our high- risk report related to the management of IT investments.
In April 2015, OMB released proposed guidance for public comment on  how agencies are to implement the law.states that it is intended to, among other things, assist agencies in  aligning their IT resources to statutory requirements; establish  government-wide IT management controls that will meet the law’s  requirements, while providing agencies with flexibility to adapt to unique  agency processes and requirements; clarify the CIO’s role and strengthen  the relationship with agency CIOs and bureau CIOs; and strengthen CIO  accountability for IT cost, schedule, and performance.
OMB’s proposed guidance  The proposed guidance includes several actions agencies are to take  within specified time frames to implement a basic set of roles and  responsibilities for CIOs and other senior agency officials (referred to as  the “common baseline”) needed for the management of IT and to  implement the specific authorities described in the law. Such roles and  responsibilities described include those related to budget formulation and  planning, acquisition and execution, and organization and workforce. To  implement the common baseline, the proposed guidance includes the  following more specific requirements:
By August 15, 2015, each agency is to conduct a self-assessment  and articulate a plan describing the changes it will make to ensure  that all common baseline responsibilities are implemented by  December 31, 2015. Agencies are to submit their plans to OMB’s  Office of E-Government for review and acceptance and make the  plans publicly available on agency websites no later than 30 days  after OMB acceptance.
By December 31, 2015, agencies are to implement specific  responsibilities and processes for the management of IT from the  common baseline.
By April 30, 2016, agencies are to update their self-assessment to  identify any obstacles or incomplete implementation of common  baseline responsibilities over the preceding 12 months. The self- assessment is to be updated on an annual basis thereafter.
Additionally, the proposed guidance reiterates OMB’s existing guidance  on PortfolioStat, the IT Dashboard, and the federal data center  consolidation initiative, and expands its existing guidance on TechStat  sessions. In particular, with respect to TechStat sessions, the proposed  guidance calls for agencies to hold these sessions for investments that for  3 consecutive months have a “red” risk rating, which indicates that the  CIO has significant concerns with the investment. If the CIO continues to  give a “red” rating for 1 year following the TechStat session, the guidance  states that OMB may intervene with appropriate performance and  budgetary actions until the agency has addressed the root cause of the  problems and ensured that the investment will complete remaining  activities within its planned cost and schedule.
Finally, OMB’s proposed guidance also includes requirements to help  support agency implementation of the roles and responsibilities for CIOs  and other senior agency officials (i.e., the common baseline). For  example, through the end of fiscal year 2016, the Federal CIO Council  is to meet quarterly to discuss topics related to the implementation of the  common baseline and to assist agencies by, for example, sharing  examples of agency governance processes and IT policies. Additionally,  by June 30, 2015, the President’s Management Council is to select  three members from the council to provide an update on government- wide implementation of FITARA on a quarterly basis through September  2016. The updates are to improve the agencies’ awareness of policies  and procedures that have worked well in other agencies.
Key to effectively implementing CIOs’ and other officials’ responsibilities  in this area is ensuring consistent reporting on their IT reform efforts. In  April 2015 we reported that, although OMB uses the information reported  by CIOs to help it oversee the federal government’s use of IT, the majority  of CIOs at the 24 agencies covered by the Chief Financial Officers Act do  not, for the most part, use this information for their own IT management  efforts. We recommended, among other things, that OMB, in  collaboration with CIOs, ensure a common understanding of priority IT  reform initiatives and their reporting requirements. OMB neither agreed  nor disagreed with our recommendations.
section_title: Actions Needed to Address This High-Risk Area
paragraphs: In our February 2015 high-risk report, we identified actions that OMB and  the agencies need to take to make progress in this area. These include  implementing the recently enacted statutory requirements promoting IT  acquisition reform, as well as implementing GAO’s previous  recommendations, such as updating the public version of the IT  Dashboard throughout the year. As noted in that report, from October  2009 through December 2014, we made 737 recommendations to  improve agencies’ management of their IT acquisitions; however, as of  January 2015, only about 23 percent of these had been fully  implemented.
Also in our high-risk report, we stated that OMB and agencies should  demonstrate measurable government-wide progress in the following key  areas:
OMB and agencies should, within 4 years, implement at least 80  percent of GAO’s recommendations related to the management of IT  acquisitions and operations.
Agencies should ensure that a minimum of 80 percent of the  government’s major acquisitions deliver functionality every 12 months.
Agencies should achieve no less than 80 percent of the planned  PortfolioStat savings and 80 percent of the savings planned for data  center consolidation.
In summary, with the recent passage of IT reform legislation, the federal  government has an opportunity to improve the transparency and  management of IT acquisition and operations, and strengthen the  authority of CIOs to provide needed direction and oversight. OMB and  federal agencies should expeditiously implement the requirements of the  legislation and continue to implement our previous recommendations. To  help ensure that these improvements are achieved, continued  congressional oversight of OMB’s and agencies’ implementation efforts is  essential.
Chairmen Hurd and Meadows, Ranking Members Kelly and Connolly,  and Members of the Subcommittees, this completes my prepared  statement. I would be pleased to respond to any questions that you may  have at this time.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: For additional information about this high-risk area, contact David A.  Powner at (202) 512-9286 or pownerd@gao.gov, Carol Cha at (202) 512- 4456 or chac@gao.gov, or Valerie Melvin at (202) 512-6304 or  melvinv@gao.gov. Individuals who made key contributions to this  testimony are Dave Hinchman (Assistant Director), Scott Borre, Chris  Businsky, Kaelin Kuhn, Lee McCracken, Kevin Walsh (Assistant Director),  and Jessica Waselkow.
section_title: Related GAO Products
paragraphs: Telecommunications: Agencies Need Better Controls to Achieve  Significant Savings on Mobile Devices and Services. GAO-15-431. May  21, 2015.
Information Technology: Additional OMB and Agency Actions Needed to  Ensure Portfolio Savings Are Realized and Effectively Tracked.  GAO-15-296. April 16, 2015.
Federal Chief Information Officers: Reporting to OMB Can Be Improved  by Further Streamlining and Better Focusing on Priorities. GAO-15-106.  April 2, 2015.
High-Risk Series: An Update. GAO-15-290. February 11, 2015.
Data Center Consolidation: Reporting Can be Improved to Reflect  Substantial Planned Savings. GAO-14-713. September 25, 2014.
Federal Software Licenses: Better Management Needed to Achieve  Significant Savings Government-Wide. GAO-14-413. May 22, 2014.
Information Technology: Agencies Need to Establish and Implement  Incremental Development Policies. GAO-14-361. May 1, 2014.
IT Dashboard: Agencies Are Managing Investment Risk, but Related  Ratings Need to Be More Accurate and Available. GAO-14-64. December  12, 2013.
Information Technology: Agencies Need to Strengthen Oversight of  Multibillion Dollar Investments in Operations and Maintenance.  GAO-14-66. November 6, 2013.
Information Technology: Additional OMB and Agency Actions Are Needed  to Achieve Portfolio Savings. GAO-14-65. November 6, 2013.
Information Technology: Additional Executive Review Sessions Needed  to Address Troubled Projects. GAO-13-524. June 13, 2013.
Information Technology: Agencies Need to Strengthen Oversight of  Billions of Dollars in Operations and Maintenance Investments.  GAO-13-87. October 16, 2012.
IT Dashboard: Accuracy Has Improved, and Additional Efforts Are Under  Way to Better Inform Decision Making. GAO-12-210. November 7, 2011.
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