Information Technology Reform: Progress Made; More Needs to Be Done to Complete Actions and Measure Results
Published: 2012-05-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This testimony discusses the progress the Office of Management and Budget (OMB) and key federal agencies have made on selected action items associated with information technology (IT) reform. While investments in IT have the potential to improve lives and organizations, some federally funded IT projects canand havebecome risky, costly, unproductive mistakes. With at least $79 billion spent in fiscal year 2011 by the U.S. government on IT investments, it is important to ensure the most efficient and effective use of resources.
In December 2010, the Federal Chief Information Officer (CIO) released a 25-point plan for reforming federal IT management. This document established an ambitious plan for achieving operational efficiencies and effectively managing large-scale IT programs. It also clearly identified actions to be completed in three different time frames: (1) within 6 months (by June 2011), (2) between 6 and 12 months (by December 2011), and (3) between 12 and 18 months (by June 2012).
Congress asked us to testify on our report being released today that describes the progress OMB and key federal agencies have made on selected action items in the IT Reform Plan and the extent to which sound measures are in place to evaluate the success of the initiative. In this regard, the testimony specifically covers the progress made on 10 selected IT Reform Plan action items by OMB; the General Services Administration (GSA); and the Departments of Homeland Security, Justice, and Veterans Affairs. In preparing this testimony, we relied on our report being released at todays hearing. In that report, we evaluated progress by selecting 10 action items from the IT Reform Plan, focusing on action items that (1) were expected to be completed by December 2011, (2) covered multiple different topic areas, and (3) were considered by internal and OMB subject matter experts to be the more important items. We also selected three federal agencies (the Departments of Homeland Security, Justice, and Veterans Affairs) based on several factors, including high levels of IT spending and large numbers of investments in fiscal year 2011.
section_title: What GAO Found
paragraphs: As discussed in our report, OMB and key federal agencies have made progress on selected action items identified in the IT Reform Plan, but there are several areas where more remains to be done. Of the 10 key action items we reviewed, 3 were completed and the other 7 were partially completed by December 2011. The action items that are behind schedule share a common reason for the delays: the complexity of the initiatives. In all seven of the cases, OMB and the federal agencies are still working on the initiatives. However, OMB and federal agencies have established time frames for completing only two of these initiatives.
In a December 2011 progress report on its IT Reform Plan, OMB reported that it made greater progress than we determined. The agency reported that of the 10 action items, 7 were completed and 3 were partially completed. OMB officials from the Office of E-government and Information Technology explained that the reason for the difference in assessments is that they believe that the IT Reform Plan has served its purpose in acting as a catalyst for a set of broader initiatives. They noted that work will continue on all of the initiatives even after OMB declares the related action items to be completed under the IT Reform Plan. We disagree with this approach. In prematurely declaring the action items to be completed, OMB risks losing momentum on the progress it has made to date.
The importance of performance measures for gauging the progress of programs and projects is well recognized. In the past, OMB has directed agencies to define and select meaningful outcome-based performance measures that track the intended results of carrying out a program or activity. Additionally, as we have previously reported, aligning performance measures with goals can help to measure progress toward those goals, emphasizing the quality of the services an agency provides or the resulting benefits to users. Furthermore, industry experts describe performance measures as necessary for managing, planning, and monitoring the performance of a project against plans and stakeholders needs.
Recognizing the importance of performance measurement, OMB and GSA have established measures for 4 of the 10 action items we reviewed: data center consolidation, shifting to cloud computing, using contract vehicles to obtain Infrastructure-as-a-Service, and reforming investment review boards. Moreover, OMB reported on three of these measures in the analytical perspectives associated with the Presidents fiscal year 2013 budget. Specifically, regarding data center consolidation, OMB reported that agencies were on track to close 525 centers by the end of 2012 and expected to save $3 billion by 2015. On the topic of cloud computing, OMB reported that agencies had migrated 40 services to cloud computing environments in 2011 and expect to migrate an additional 39 services in 2012. Regarding investment review boards, OMB reported that agency CIOs held 294 TechStat reviews and had achieved more than $900 million in cost savings, life cycle cost avoidance, or reallocation of funding. According to government and industry best practices, performance measures should be measurable, outcome-oriented, and actively tracked and managed.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the progress the Office of  Management and Budget (OMB) and key federal agencies have made on  selected action items associated with information technology (IT) reform.  While investments in IT have the potential to improve lives and  organizations, some federally funded IT projects can—and have— become risky, costly, unproductive mistakes. With at least $79 billion  spent in fiscal year 2011 by the U.S. government on IT investments, it is  important to ensure the most efficient and effective use of resources.
In December 2010, the Federal Chief Information Officer (CIO) released a  25-point plan for reforming federal IT management. This document  established an ambitious plan for achieving operational efficiencies and  effectively managing large-scale IT programs. It also clearly identified  actions to be completed in three different time frames: (1) within 6 months  (by June 2011), (2) between 6 and 12 months (by December 2011), and  (3) between 12 and 18 months (by June 2012).
You asked us to testify on our report being released today that describes  the progress OMB and key federal agencies have made on selected  action items in the IT Reform Plan and the extent to which sound  measures are in place to evaluate the success of the initiative. In this  regard, my testimony specifically covers the progress made on 10  selected IT Reform Plan action items by OMB; the General Services  Administration (GSA); and the Departments of Homeland Security,  Justice, and Veterans Affairs. In preparing this testimony, we relied on our  report being released at today’s hearing. In that report, we evaluated  progress by selecting 10 action items from the IT Reform Plan, focusing  on action items that (1) were expected to be completed by December  2011, (2) covered multiple different topic areas, and (3) were considered  by internal and OMB subject matter experts to be the more important  items. We also selected three federal agencies (the Departments of  Homeland Security, Justice, and Veterans Affairs) based on several  factors, including high levels of IT spending and large numbers of  investments in fiscal year 2011. We then evaluated the steps OMB and  the selected federal agencies had taken to implement the selected action  items from the IT Reform Plan. In cases where the action was behind  schedule, we compared plans for addressing the schedule shortfalls to  sound project planning practices. We also determined whether and how  agencies were tracking performance measures associated with these  action items, and compared these measures to best practices in IT  performance management. In addition, we interviewed OMB and selected  agency officials regarding progress, plans, and measures.
All work on which this testimony is based was performed from August  2011 to April 2012 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 objective.
subsections: section_title: Background
paragraphs: IT can enrich people’s lives and improve organizational performance.  However, as we have described in numerous reports and testimonies,  federal IT projects too frequently incur cost overruns and schedule  slippages while contributing little to mission-related outcomes. Further,  while IT should enable government to better serve the American people,  the federal government has not achieved expected productivity  improvements—despite spending more than $600 billion on IT over the  past decade.
Over the last two decades, Congress has enacted several laws to assist  agencies and the federal government in managing IT investments. Key  laws include the Paperwork Reduction Act of 1995, the Clinger-Cohen  Act of 1996, and the E-Government Act of 2002. Also, the GPRA  (Government Performance and Results Act) Modernization Act of 2010  includes IT management as a priority goal for improving the federal  government.OMB and agencies regarding information technology and its  management.
Each of these laws delineates roles and responsibilities for  As set out in these laws, OMB is to play a key role in helping federal  agencies manage their investments by working with them to better plan,  justify, and determine how much they need to spend on projects and how  to manage approved projects. Within OMB, the Office of E-government  and Information Technology, headed by the Federal CIO, directs the  policy and strategic planning of federal IT investments and is responsible  for oversight of federal technology spending.
Agency CIOs are also expected to have a key role in IT management.  Federal law, specifically the Clinger-Cohen Act, has defined the role of  the CIO as the focal point for IT management, requiring agency heads to  designate CIOs to lead reforms that would help control system  development risks; better manage technology spending; and achieve real,  measurable improvements in agency performance.
In addition, the CIO Council—comprised of CIOs and Deputy CIOs of 28  agencies and chaired by OMB’s Deputy Director for Management—is the  principal interagency forum for improving agency practices related to the  design, acquisition, development, modernization, use, sharing, and  performance of federal information resources. The CIO Council is  responsible for developing recommendations for overall federal IT  management policy; sharing best practices; including the development of  performance measures; and identifying opportunities and sponsoring  cooperation in using information resources.
subsections: section_title: Federal IT Reform Plan Strives to Address Persistent Challenges
paragraphs: After assessing the most persistent challenges in acquiring, managing,  and operating IT systems, in December 2010 the Federal CIO established  a 25-point IT Reform Plan designed to address challenges in IT  acquisition, improve operational efficiencies, and deliver more IT value to  the American taxpayer. The actions were planned to be completed in  three different time frames: (1) within 6 months (by June 2011), (2)  between 6 and 12 months (by December 2011), and (3) between 12 and  18 months (by June 2012). Several different organizations were assigned  ownership of the key action items, including the Federal CIO, the CIO  Council, GSA, the Office of Personnel Management, the Office of Federal  Procurement Policy, the Small Business Administration, and other federal  agencies. Table 1 contains detailed information on selected action items  in the IT Reform Plan.
Given the challenges that federal agencies have experienced in acquiring  and managing IT investments, we have issued a series of reports aimed  at improving federal IT management over the last decade. Our reports  cover a variety of topics, including data center consolidation, cloud  computing, CIO responsibilities, system acquisition challenges, and  modular development. Key reports that address topics covered in the IT  Reform Plan include reports on data center consolidation, cloud  computing, best practices in IT acquisition, IT spending authority,  investment review and oversight, and agency CIO responsibilities. For  example, in July 2011, we reported that only one of the agencies  submitted a complete data center inventory and no agency submitted a  complete data center consolidation plan. We concluded that until these  inventories and plans are complete, agencies might not be able to  implement their consolidation activities and realize expected cost savings.  We recommended that agencies complete the missing elements in their  plans and inventories. In response to our recommendations, in October  and November 2011, the agencies updated their inventories and plans.  We have ongoing work assessing the agencies’ revised plans, and in  February 2012, we reported that our preliminary assessment of the  updated plans showed that not all agency plans were updated to include  all required information. We discuss each of the topics in more detail in  the report being publicly released today.
section_title: OMB and Key Federal Agencies Have Made Progress on IT Reform Action Items, but Much Remains to Be Done
paragraphs: As discussed in our report, OMB and key federal agencies have made  progress on selected action items identified in the IT Reform Plan, but  there are several areas where more remains to be done. Of the 10 key  action items we reviewed, 3 were completed and the other 7 were  partially completed by December 2011. The action items that are behind  schedule share a common reason for the delays: the complexity of the  initiatives. In all seven of the cases, OMB and the federal agencies are  still working on the initiatives. However, OMB and federal agencies have  established time frames for completing only two of these initiatives.
In a December 2011 progress report on its IT Reform Plan, OMB reported  that it made greater progress than we determined. The agency reported  that of the 10 action items, 7 were completed and 3 were partially  completed. OMB officials from the Office of E-government and  Information Technology explained that the reason for the difference in  assessments is that they believe that the IT Reform Plan has served its  purpose in acting as a catalyst for a set of broader initiatives. They noted  that work will continue on all of the initiatives even after OMB declares the  related action items to be completed under the IT Reform Plan. We  disagree with this approach. In prematurely declaring the action items to  be completed, OMB risks losing momentum on the progress it has made  to date.
Table 2 provides both OMB’s and our assessments of the status of the  key action items, with action items rated as “completed” if all of the  required activities identified in the reform plan were completed, and  “partially completed” if some, but not all, of the required activities were  completed.
Until OMB and the agencies complete the action items called for in the IT  Reform Plan, the benefits of the reform initiatives—including increased  operational efficiencies and more effective management of large-scale IT  programs—may be delayed. With the last of the action items in the IT  Reform Plan due to be completed by June 2012, it will be important for  OMB and the agencies to ensure that the action items due at earlier  milestones are completed as soon as possible.
section_title: OMB Has Not Established Measures for Evaluating Results on Most IT Reform Initiatives
paragraphs: The importance of performance measures for gauging the progress of  programs and projects is well recognized. In the past, OMB has directed  agencies to define and select meaningful outcome-based performance  measures that track the intended results of carrying out a program or  activity. Additionally, as we have previously reported, aligning  performance measures with goals can help to measure progress toward  those goals, emphasizing the quality of the services an agency provides  or the resulting benefits to users. Furthermore, industry experts describe  performance measures as necessary for managing, planning, and  monitoring the performance of a project against plans and stakeholders’  needs. According to government and industry best practices,  performance measures should be measurable, outcome-oriented, and  actively tracked and managed.
Recognizing the importance of performance measurement, OMB and  GSA have established measures for 4 of the 10 action items we  reviewed: data center consolidation, shifting to cloud computing, using  contract vehicles to obtain Infrastructure-as-a-Service, and reforming  investment review boards. Moreover, OMB reported on three of these  measures in the analytical perspectives associated with the President’s  fiscal year 2013 budget. Specifically, regarding data center consolidation,  OMB reported that agencies were on track to close 525 centers by the  end of 2012 and expected to save $3 billion by 2015. On the topic of  cloud computing, OMB reported that agencies had migrated 40 services  to cloud computing environments in 2011 and expect to migrate an  additional 39 services in 2012. Regarding investment review boards,  OMB reported that agency CIOs held 294 TechStat reviews and had  achieved more than $900 million in cost savings, life cycle cost  avoidance, or reallocation of funding.
However, OMB has not established performance measures for 6 of the 10  action items we reviewed. For example, OMB has not established  measures related to the best practices collaboration platform, such as  number of users, number of hits per query, and customer satisfaction.  Further, while OMB has designed the guidance and curriculum for  developing a cadre of IT acquisition professionals, it has not established  measures for tracking agencies’ development of such a cadre. Table 3  details what performance measures and goals, if any, are associated with  the action item.
Until OMB establishes and tracks measureable, outcome-oriented  performance measures for each of the action items in the IT Reform Plan,  the agency will be limited in its ability to evaluate progress that has been  made and whether or not the initiative is achieving its goals.
section_title: Implementation of Recommendations Could Help Ensure Key Efforts are Completed and Results are Identified
paragraphs: In our report being released today, we are making several  recommendations to help ensure the completion of key IT reform  initiatives and that the results of these initiatives are measured.  Specifically, we are recommending that the Departments of Homeland  Security, Justice, and Veterans Affairs complete elements missing from  the agencies’ plans for migrating services to a cloud computing  environment, and identify and report on the commodity services proposed  for migration to shared services. All three agencies agreed with our  recommendations and identified steps that they are undertaking to  address them.
In addition, we are recommending that the Federal CIO ensure that the  action items called for in the IT Reform Plan are completed by the  responsible parties prior to the completion of the IT Reform Plan’s 18  month deadline of June 2012 and that the agency provide clear time  frames for addressing the shortfalls associated with the IT Reform Plan  action items. The Federal CIO agreed with both of these  recommendations and stated that OMB intends to complete the action  items by the deadline. We are also recommending that the Federal CIO  accurately characterize the status of the IT Reform Plan action items in  an upcoming progress report in order to keep momentum going on action  items that are not yet completed. The Federal CIO disagreed with this  recommendation and stated that OMB has accurately characterized the  completeness of the action items, and therefore, the recommendation  does not apply. We do not agree with OMB’s characterization of four  action items. Specifically, OMB considers the action items associated with  data center consolidation, cloud-first policy, best practices collaboration  portal, and redefining roles of agency CIOs and the CIO Council to be  completed. While we agree that OMB has made progress in each of  these areas, we found activities specified in the IT Reform Plan that have  not yet been completed. For example, in the area of data center  consolidation, we found that selected agency plans are still incomplete. In  addition, in the move to cloud computing, selected agency migration  plans lack key elements. Thus, we believe that the recommendation is  warranted.
To address our concerns regarding performance measures, we are  recommending that the Federal CIO establish outcome-oriented  measures for each applicable action item in the IT Reform Plan. The  Federal CIO disagreed with our recommendation and noted that OMB  measured the completeness of the IT Reform Plan action items and not  the performance measures associated with broader initiatives. We  continue to believe that our recommendation is appropriate because there  are multiple action items in the IT Reform Plan that are not aligned with  broader initiatives and for which there are no measures. Examples  include the best practices portal, developing a cadre of specialized IT  acquisition professionals, and establishing budget models that align with  modular development. Given that the purpose of the IT Reform Plan is to  achieve operational efficiencies and improve the management of large- scale IT programs, we maintain that it is appropriate to establish  performance measures to monitor the IT Reform Plan’s results.
In summary, OMB and selected agencies have made strides in  implementing the IT Reform Plan, including pushing agencies to  consolidate data centers, migrating federal services to cloud computing,  improving the skills of IT acquisition professionals, and strengthening the  roles and accountability of CIOs. However, several key reform items  remain behind schedule despite OMB stating that these items have been  completed.
In addition, OMB has not established performance measures for gauging  the success of most of its reform initiatives. For example, while OMB is  tracking the number of services that agencies move to a cloud computing  environment and the number of data center closures, it is not tracking the  usefulness of its efforts to develop a best practices collaboration portal or  a cadre of IT acquisition professionals.
Overstating progress and not implementing appropriate performance  measures do not position the federal IT community to leverage and build  on the progress made to date. Moving forward, it will be important for  OMB to continue to provide guidance, goals, and oversight to ensure that  critical IT reform efforts extend well beyond the original 18-month time  frame. It will also be important for agencies to aggressively pursue the  completion of IT reform initiatives.
Chairman Carper, Ranking Member Brown, and Members of the  Subcommittee, this concludes my statement. I would be happy to answer  any questions at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: 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 Colleen Phillips (Assistant  Director), Cortland Bradford, Rebecca Eyler, Kathleen S. Lovett, and  Jessica Waselkow.
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