Information Technology: Departments of Defense and Energy Need to Address Potentially Duplicative Investments
Released: 2012-02-17T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: The federal government spends billions of dollars on information technology (IT) each year, with such investments accounting for at least $79 billion in fiscal year 2011. Given the size of these investments, it is important that federal agencies avoid duplicative investments when possible to ensure the most efficient use of resources. GAO has previously reported on initiatives under way to address potentially duplicative IT investments—i.e., investments providing similar functions across the government. GAO was asked to review the extent to which potentially duplicative IT investments exist within three categories at selected agencies (the Departments of Defense (DOD), Energy (DOE), and Homeland Security (DHS)) and actions these agencies are taking to address them. To accomplish this, GAO analyzed budget data on agency IT investments, reviewed agency information related to efforts to address duplication, and interviewed agency officials.

section_title: What GAO Found
paragraphs: Although the Departments of Defense (DOD) and Energy (DOE) use various investment review processes to identify duplicative investments, GAO found that 37 of its sample of 810 investments were potentially duplicative. These investments account for about $1.2 billion in total information technology (IT) spending for fiscal years 2007 through 2012. For example, GAO identified four DOD Navy personnel assignment investments—one system for officers, one for enlisted personnel, one for reservists, and a general assignment system—each of which is responsible for managing similar functions. While GAO did not identify any potentially duplicative investments at the Department of Homeland Security (DHS) within its sample, DHS officials have independently identified several duplicative investments and systems.

DOD and DOE officials offered a variety of reasons for the potential duplication, such as decentralized governance and a lack of control over certain facilities. Further complicating agencies’ ability to identify and eliminate duplicative investments is that investments are, in certain cases, misclassified by function. Until agencies correctly categorize their investments, they cannot be confident that their investments are not duplicative.

DHS has taken action to improve its processes for identifying and eliminating duplicative investments. For example, through reviewing portfolios of IT investments, DHS has identified much, and eliminated some, duplicative functionality in certain investments. Additionally, DOD and DOE have recently initiated plans to address potential duplication in many of the investments GAO identified, which include consolidating or eliminating systems. While these efforts may eventually yield results, they have not yet led to the elimination of duplication. For example, while DOD and DOE have specific plans to improve their IT investment review processes, officials did not provide examples of duplicative investments that had been consolidated or eliminated. Until DOD and DOE demonstrate progress on these efforts, the agencies will be unable to provide assurance that they are avoiding investment in unnecessary systems.

section_title: What GAO Recommends
paragraphs: GAO recommends that DOD and DOE report on the progress of efforts to identify and eliminate duplication, where appropriate. GAO is also recommending that DOD, DOE, and DHS correct misclassifications of investments. DOD and DHS agreed with the recommendations. DOE generally agreed with the first recommendation, but disagreed with parts of the second recommendation regarding the number of misclassified investments. However, GAO believes the number is accurate.

section_title: Letter
paragraphs: The United States government spends billions of taxpayer dollars on  information technology (IT) investments each year, with such investments  accounting for at least $79 billion in fiscal year 2011. Given the size of  these investments, it is important that federal agencies avoid investing in  duplicative investments, whenever possible, to ensure the most efficient  use of resources.

Last year, we issued a comprehensive report that identified federal  programs or functional areas where unnecessary duplication, overlap, or  fragmentation exists; the actions needed to address such conditions; and  the potential financial and other benefits of doing so.  More recently, we  reported on the Office of Management and Budget’s (OMB) and federal  agencies’ oversight of IT investments and the initiatives under way to  address potentially duplicative IT investments.reported that there are hundreds of IT investments providing similar  functions across the federal government. For example, agencies reported  about 1,500 investments that perform general information and technology  functions, about 775 supply chain management investments, and about  620 human resource management investments.

For the purposes of our analysis, we considered “duplication” to occur when two or more  agencies or programs are engaged in the same activities or provide the same services to  the same beneficiaries. agencies are taking to address them. We selected for review three of the  largest agencies with respect to number of investments–the Departments  of Defense (DOD), Energy (DOE), and Homeland Security (DHS).

To identify potentially duplicative IT investments within each of the  selected agencies, we analyzed a subset of investment data from OMB’s  exhibit 53 to identify investments with similar functionality. Specifically,  we reviewed 810, or 11 percent, of the approximately 7,200 IT  investments federal agencies report to OMB through the exhibit 53. Our  review represents approximately 24 percent of DOD’s IT portfolio in terms  of the number of investments that they report to OMB, 19 percent of  DOE’s, and 16 percent of DHS’s. We then reviewed the name and  narrative description of each investment’s purpose to identify similarities  among related investments within each agency (we did not review  investments across agencies). This formed the basis of establishing  groupings of similar investments. We discussed the groupings with each  of the selected agencies, and we obtained further information from  agency officials and reviewed and assessed agencies’ rationales for  having multiple systems that perform similar functions. Additionally, when  analyzing each investment’s description, we compared the investment’s  designated Federal Enterprise Architecture (FEA) primary category and  sub-category with OMB’s definitions for each FEA primary category and  sub-category and determined whether the investment was placed in the  correct FEA category. We obtained additional information from agency  officials about these discrepancies. We also interviewed officials to  discuss actions agencies have taken to address the potentially duplicative  investments and reviewed supporting documentation.

We conducted this performance audit from June 2011 to February 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. See appendix I for a complete  description of our objective, scope, and methodology.
subsections: section_title: Background
paragraphs: 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   Too often, federal IT projects run over budget, behind  realized from IT.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.
subsections: section_title: Required Roles and Responsibilities for IT Investment Oversight
paragraphs: Congress enacted several laws to assist the federal government in better  managing IT investments. The three key laws are the Paperwork  Reduction Act of 1995, the Clinger-Cohen Act of 1996, and the   E-Government Act of 2002:

The Paperwork Reduction Act of 1995 specified OMB and agency  responsibilities for managing information resources, including the  management of IT. Among its provisions, this law established agency  responsibility for assessing and managing the risks of major  information systems initiatives.and oversee policies, principles, standards, and guidelines for federal  agency IT functions, including periodic evaluations of major  information systems.

It also required that OMB develop

The Clinger-Cohen Act of 1996 placed responsibility for managing  investments with the heads of agencies and established chief  information officers (CIO) to advise and assist agency heads in  carrying out this responsibility. Additionally, this law required 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.

The E-Government Act of 2002 established a federal e-government  initiative, which encouraged the use of web-based Internet  applications to enhance the access to and delivery of government  information and service to citizens, to business partners, to  employees, and among agencies at all levels of government. The act  also required OMB to report annually to Congress on the status of e- government initiatives. In these reports, OMB is to describe the  administration’s use of e-government principles to improve  government performance and the delivery of information and services  to the public.

section_title: OMB’s IT Oversight Mechanisms
paragraphs: OMB uses the following mechanisms to help it fulfill its required oversight  responsibilities of federal IT spending during the annual budget  formulation process.

OMB requires 27 federal departments and agencies to provide  information related to their IT investments, including agency IT  investment portfolios (called exhibit 53s) and capital asset plans and  business cases (called exhibit 300s).

In June 2009, OMB publicly deployed the IT Dashboard, which is  intended to display near real-time information on the cost, schedule,  and performance of all major IT investments. For each major  investment, the Dashboard provides performance ratings on cost and  schedule, a CIO evaluation, and an overall rating. The CIO evaluation  is based on his or her evaluation of the performance of each  investment and takes into consideration multiple variables. This  evaluation is to be updated when new information becomes available  that would affect the assessment of a given investment. The CIO also  has the ability to provide written comments regarding the status of  each investment. The Dashboard replaced OMB’s Management  Watch List and High-Risk List, which were previously used to highlight  poorly planned or poorly performing investments on a quarterly basis.  As of August 2011, the Dashboard displayed information on the cost,  schedule, and performance of 797 major federal IT investments at 27  federal agencies.

According to OMB, the public display of investment data on the IT  Dashboard is intended to allow OMB, other oversight bodies, and the  general public to hold government agencies accountable for results and  progress. In addition, the Dashboard allows users to download exhibit 53  data, which provide details on the more than 7,200 federal IT investments  (totaling $78.8 billion in planned spending for fiscal year 2011). Figure 1  shows the number of IT investments and planned spending by federal  agency.

As we have previously reported, while the IT Dashboard provides IT  investment information for 27 federal agencies, it does not include any  information about 61 other agencies’ investments. Specifically, it does  not include information from 58 independent executive branch agencies  (such as the Securities and Exchange Commission, the Central  Intelligence Agency, and the Federal Communications Commission) and  3 other agencies (such as the Legal Services Corporation). It also does  not include information from the legislative or judicial branch agencies.  Accordingly, we recommended that OMB specify which executive branch  agencies are included when discussing the annual federal IT investment  portfolio. OMB disagreed with this recommendation, stating that the  agencies included in the federal IT portfolio are already identified in OMB  guidance and on the IT Dashboard. However, we maintained that the  recommendation had not been fully addressed because OMB officials  frequently refer to the federal IT portfolio without clarifying that it does not  include all agencies.

section_title: Agencies Spend Billions on Poorly Performing IT Investments
paragraphs: Despite required roles and responsibilities and OMB’s oversight  mechanisms, the federal government spends billions of dollars on poorly  performing IT investments, as the following examples illustrate:  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 life-cycle costs.

In February 2010, the Defense Integrated Military Human Resources  System 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.

In July 2010, OMB directed the National Archives and Records  Administration (NARA) to halt development of its Electronic Records  Archive system at the end of fiscal year 2011 (1 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.

In January 2011, the Secretary of Homeland Security ended the  Secure Border Initiative Network program after spending about $1.5  billion because it did not meet cost-effectiveness and viability  standards.

In February 2011, the Office of Personnel Management canceled its  Retirement Systems Modernization program, after several years of  trying to improve the implementation of this investment.the Office of Personnel Management, it spent approximately $231  million on this investment.

In March 2011, we reported that while DOD’s Navy Next Generation  Enterprise Network investment’s first increment is estimated to cost  $50 billion, the program was not well positioned to meet its cost and  schedule estimates. As such, we recommended DOD limit further investment until it conducts an interim review to reconsider the  selected acquisition approach and addresses its investment  management issues. DOD stated that it did not concur with the  recommendation to reconsider its acquisition approach, but we  maintain that without doing so, DOD cannot be sure it is pursuing the  most cost-effective approach.

Additionally, as of August 2011, according to the IT Dashboard, 261 of  the federal government’s approximately 800 major IT investments— totaling almost $18 billion—are in need of management attention (rated  “yellow” to indicate the need for attention or “red” to indicate significant  concerns). (See fig. 2.)

In recognizing that wasteful spending continues to plague IT investment  management, OMB has recently implemented additional efforts to  address this problem. These efforts include the following:

TechStat reviews. In January 2010, the Federal CIO began leading  reviews—known as “TechStat” sessions—of selected IT investments  involving OMB and agency leadership to increase accountability and  transparency and improve performance. OMB officials stated that, as  of December 2010, 58 sessions had been held and resulted in  improvements to or termination of IT investments with performance  problems. For example, the June 2010 TechStat session for NARA’s  Electronic Records Archive investment (mentioned above) resulted in  the halting of development funding pending the completion of a  strategic plan. In addition, OMB has identified 26 additional   high-priority IT projects and plans to develop corrective action plans  with agencies at future TechStat sessions. According to the former  Federal CIO, OMB’s efforts to improve management and oversight of  IT investments have resulted in $3 billion in savings.

IT reform. In December 2010, the Federal CIO issued a 25 Point  Implementation Plan to Reform Federal Information Technology  Management. This 18-month plan specified five major goals:  strengthening program management, streamlining governance and  improving accountability, increasing engagement with industry,  aligning the acquisition and budget processes with the technology  cycle, and applying “light technology” and shared solutions. As part of  this plan, OMB outlined actions to, among other things, strengthen  agencies’ investment review boards and consolidate federal data  centers. The plan stated that OMB will work with Congress to  consolidate commodity IT spending (e.g., e-mail, data centers,  content management systems, and web infrastructure) under agency  CIOs. Further, the plan called for the role of federal agency CIOs to  focus more on IT portfolio management.

section_title: Categorization of IT Investments Is Intended to Facilitate Identification of Similar IT Investments
paragraphs: In addition to these efforts to improve government spending on IT,  avoiding unnecessary duplicative investments is critically important. In  February 2002, OMB established the FEA initiative. According to OMB,  the FEA is intended to facilitate governmentwide improvement through  cross-agency analysis and identification of duplicative investments, gaps,  and opportunities for collaboration, interoperability, and integration within  and across agency programs. The FEA is composed of five “reference  models” describing the federal government’s (1) business (or mission)  processes and functions, independent of the agencies that perform them;  (2) performance goals and outcome measures; (3) means of service  delivery; (4) information and data definitions; and (5) technology  standards. Since the fiscal year 2004 budget cycle, OMB has required  agencies to categorize their IT investments in their annual exhibit 53s  according to primary function and sub-function as identified in the FEA  reference models. For fiscal year 2012 submissions, agencies chose from  the primary functions listed in table 1.

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 3  depicts, by primary function, the total number of investments within the 27  federal agencies that report to the IT Dashboard.

Additionally, agencies were required to choose a sub-function for each  investment related to the primary function. These sub-functions are to be  selected from the business reference model. Table 2 provides examples  of primary functions and their corresponding sub-functions.

During the past several years, we have issued multiple reports and  testimonies and made numerous recommendations to OMB and federal  agencies to identify and reduce duplication within the federal  government’s portfolio of IT investments.

In March 2011, we reported an overview of federal programs and  functional areas where unnecessary duplication, overlap, or  fragmentation existed.agencies, offices, or initiatives had similar or overlapping objectives or  provided similar services to the same populations, or where government  missions were fragmented across multiple agencies or programs. These  areas spanned a range of government missions: agriculture, defense,  economic development, energy, general government, health, homeland  security, international affairs, and social services. Within and across these  missions, the report touched on hundreds of federal programs, including  IT programs, affecting virtually all major federal departments and  agencies.

Specifically, we identified 34 areas where  We reported that overlap and fragmentation among government  programs or activities could be harbingers of unnecessary duplication.  Thus, the reduction or elimination of duplication, overlap, or fragmentation  could potentially save billions of tax dollars annually and help agencies  provide more efficient and effective services. For example, we reported  that, according to OMB, the number of federal data centers (defined as  data processing and storage facilities) grew from 432 in 1998 to more  than 2,000 in 2010. These data centers often house similar types of  equipment and provide similar processing and storage capabilities. These  factors have led to concerns associated with the provision of redundant  capabilities, the underutilization of resources, and the significant  consumption of energy. Operating such a large number of centers places  costly demands on the government. In an effort to address these  inefficiencies, in February 2010, OMB launched the Federal Data Center  Consolidation Initiative to guide federal agencies in consolidating data  centers. Specifically, OMB and agencies plan to close over 950 of the  more than 2,100 federal data centers by 2015. As of November 2011,  agencies reported that a total of 149 data centers have been closed  across the federal government. For example, 16 DOD data centers, 3  DOE centers, and 7 DHS centers have been closed.

In September 2011, we reported that limitations in OMB’s guidance  hindered efforts to identify IT duplication. Specifically, OMB guidance  stated that each IT investment needs to be mapped to a single functional  category within the FEA to allow for the identification and analysis of  potentially duplicative investments across agencies. We noted that this  limits 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 allow agencies to  choose secondary categories, where applicable, which will aid in  identifying potentially duplicative investments. OMB officials generally  agreed with this recommendation and stated that they plan to update the  FEA reference models in the fall of 2011 to provide additional clarity on  how agencies should characterize investments in order to enhance the  identification of potentially duplicative investments.

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 have 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 investment  submissions. OMB generally agreed with this recommendation.

section_title: Selected Agencies Have Potentially Duplicative Investments; DOD and DOE Need to Do More to Address Them
paragraphs: Although the Departments of Defense, Energy, and Homeland Security  utilize various processes to prevent and reduce investment in duplicative  programs and systems, potentially duplicative IT investments exist.  Further complicating agencies’ ability to identify and address duplicative  investments is miscategorization of investments within agencies. Each of  the agencies has recently initiated plans to address many of these  investments. DHS’s efforts have resulted in the identification and  elimination of duplication, but DOD’s and DOE’s initiatives have not yet  led to the elimination or consolidation of duplicative investments or  functionality. Until DOD and DOE demonstrate progress on their efforts to  identify and eliminate duplicative investments, and correctly categorize  investments, it will remain unclear whether they are avoiding investment  in unnecessary systems.
subsections: section_title: Potentially Duplicative IT Investments Exist at Selected Agencies
paragraphs: Each of the agencies we reviewed has IT investment management  processes in place that are, in part, intended to prevent, identify, and  eliminate unnecessary duplicative investments. For example, DOD’s  Information Technology Portfolio Management Implementation guide  requires the evaluation of existing systems to identify duplication and  determine whether to maintain, upgrade, delete, or replace identified  systems. Similarly, DOE’s Guide to IT Capital Planning and Investment  Control specifies that investment business case summaries should be  reviewed for redundancies and opportunities for collaboration.  Additionally, according to DHS’s Capital Planning and Investment Control  Guide, proposed investments must be reviewed at the department level to  determine if the proposed need is, among other things, being fulfilled by  another DHS program, or already fulfilled by an existing capability.

Even with such investment review processes, of the 810 investments we  reviewed, we identified 37 potentially duplicative investments at DOD  and DOE within three FEA categories (Human Resource Management,  Information and Technology Management, and Supply Chain   These investments account for about $1.2 billion in total  Management).IT spending for fiscal years 2007 through 2012. Specifically, we identified

31 potentially duplicative investments totaling approximately $1.2  billion at DOD, and

6 potentially duplicative investments totaling approximately $8 million  at DOE.

The 37 investments comprise 12 groups of investments that appear to  have duplicative purposes based on our analysis of each investment’s  description, budget information, and other supporting documentation from  agency officials (see table 3). For example, we identified three  investments at DOE that were each responsible for managing the back- end infrastructure at three different locations. We also identified four DOD  Navy personnel assignment investments—one system for officers, one for  enlisted personnel, one for reservists, and a general assignment  system—each of which is responsible for managing similar assignment  functions. Additionally, the Air Force has five investments that are each  responsible for contract management, and within the Navy there are  another five contract management investments. Table 3 summarizes the  12 groups of potentially duplicative investments we identified by purpose  and agency. (See app. II for details on each of the 37 potentially  duplicative investments.)

We did not identify any potentially duplicative investments at DHS within  our sample; however, DHS has independently identified several  duplicative investments and systems. Specifically, DHS officials have  identified and, more importantly, reduced duplicative functionality in four  investments by consolidating or eliminating certain systems within each of  these investments. DHS officials have also identified 38 additional  systems that they have determined to be duplicative. For example,  officials identified multiple personnel action processing systems that could  be consolidated.

Officials from the three agencies reported that duplicative investments  exist for a number of reasons, including decentralized governance within  the departments and a lack of control over contractor facilities. For  example, DOE investments for the management of back-end  infrastructure are for facilities which DOE oversees but does not control.  In addition, DOD officials indicated that a key reason for potential  duplication at the Department of the Navy is that it had traditionally used a  decentralized IT management approach, which allowed offices to develop  systems independent of any other office’s IT needs or acquisitions.

Further complicating the agencies’ ability to prevent investment in  duplicative systems or programs is the miscategorization of investments.  Among the 810 investments we reviewed, we identified 22 investments  where the selected agencies assigned incorrect FEA primary functions or   Specifically, we identified 13 miscategorized investments  sub-functions.at DOD, 4 at DOE, and 5 at DHS. Examples are as follows:

DOD’s Computer Aided Procurement System was initially categorized  within the Information and Technology Management primary function,  but DOD agreed that this investment should be classified within the  Supply Chain Management primary function.

DOE’s Environmental Management Headquarters Central Internet  Database was initially categorized within the Information and  Technology Management primary function, but DOE agreed that this  investment could be assigned the Environmental Management  primary function and the Environmental Monitoring and Forecasting  sub-function.

DHS’s Federal Emergency Management Agency—Minor  Personnel/Training Systems investment was initially categorized  within the Employee Performance Management sub-function, but  DHS agreed that this investment should be assigned to the Human  Resources Development sub-function.

Agency officials agreed that they had inadvertently miscategorized 15 of  the 22 investments we identified. However, proper categorization is  necessary in order to analyze and identify duplicative investments, both  within and across agencies. Each improper categorization represents a  possible missed opportunity to identify and eliminate an unjustified  duplicative investment. Until agencies correctly categorize their  investments, they cannot be confident that their investments are not  duplicative and are justified, and they may continue expending valuable  resources developing and maintaining unnecessarily duplicative systems.

section_title: Agencies Have Recently Initiated Plans to Address Potential Duplication in Many Investments, but Results Have Yet to Be Realized at DOD and DOE
paragraphs: DHS has taken action to improve its processes for identifying and  eliminating duplicative investments, which has produced tangible results.  Specifically, in 2010 and 2011, the DHS CIO conducted program and  portfolio reviews of hundreds of IT investments and systems. DHS  evaluated portfolios of investments within its components to avoid  investing in systems that are duplicative or overlapping, and to identify  and leverage investments across the department. Among other things,  this effort contributed to the identification and consolidation of duplicative  functionality within four investments. DHS also has plans to further  consolidate systems within these investments by 2014, which is expected  to produce approximately $41 million in cost savings. The portfolio  reviews also contributed to the identification of 38 additional systems that  are duplicative. Additionally, the DHS CIO and Chief Human Capital  Officer are coordinating to streamline and consolidate the department’s  human resources investments. A summary of the investments for which  DHS eliminated duplicative functionality and systems is provided in table  4 below.

DOD has begun taking action to address 29 of the 31 duplicative  investments we identified. For example, according to DOD officials, four  of the DOD Navy acquisition management investments—two for Naval  Sea Systems Command and two for Space and Naval Warfare Systems  Command—will be reviewed to determine whether these multiple support  systems are necessary. In addition, DOD reported that the Air Force is in  the process of developing a single contract writing system to replace the  five potentially duplicative investments we have identified. Moreover, the  Department of the Navy has implemented an executive oversight board  that is chaired by the Navy CIO, and it is now the Navy’s single senior  information management and technology policy and governance forum.  The Department of the Navy also required all IT expenditures greater  than $100,000 to be centrally reviewed and approved by the Navy CIO to  ensure that they are not duplicative. Officials reported that these  initiatives will include the review of Navy’s 22 potentially duplicative  investments that we identified.

Similarly, DOE has plans under way to address each of the 6 investments  we identified as potentially duplicative. Specifically, DOE officials  established working groups that are addressing the two groups of  duplicative investments we identified. These working groups are to  address records management and back-end infrastructure, and are  looking across the department to minimize redundancy in each of these  areas. In addition, the CIO stated that DOE has developed a  departmental strategy for electronic records management whereby a  small number of approved records management applications will be  identified for departmentwide use. Moreover, in a broader effort to reduce  duplication across the department, in September and October 2011, DOE  held technical strategic reviews, known as “TechStrat” sessions, which  are aimed at exploring opportunities to consolidate DOE’s commodity IT  services, such as e-mail and help desk support, among the various DOE  offices. The first two sessions provided opportunities for DOE bureaus to  identify and share lessons learned, and established action items to  improve DOE’s IT investment portfolio.

While these efforts could eventually yield results, DOD’s and DOE’s  initiatives have not yet led to the consolidation or elimination of  duplication. For example, while DOD provided us with documented  milestones—several of which have passed—for improving the  Department of the Navy’s IT investment review processes, officials did  not provide us with any examples of duplicative investments that they had  consolidated or eliminated. Similarly, while DOE officials have  documented time frames for consolidating DOE’s commodity IT services,  electronic records management investments, and identity management  investments, officials were unable to demonstrate that they have  consolidated or eliminated unjustified duplicative investments.

Additionally, DOD does not have plans under way to address the  remaining 2 of the 31 potentially duplicative investments. DOD officials  stated that they do not have plans to address these investments because  they do not agree that they are potentially duplicative. However, agency  officials were unable to demonstrate that investing in these systems and  programs was justified. Table 5 provides more information on the  unaddressed potentially duplicative investments at DOD.

Table 6 summarizes the number of potentially duplicative investments for  which Defense and Energy have actions under way, as well as the  number of investments that remain unaddressed.

Until DOD and DOE demonstrate, through existing transparency  mechanisms such as OMB’s IT Dashboard, that they are making  progress in identifying and eliminating duplicative investments, it will  remain unclear whether they are avoiding investment in unnecessary  systems.

section_title: Conclusions
paragraphs: While agencies have various investment review processes in place that  are partially designed to avoid investing in systems that are duplicative,  we have identified 37 potentially duplicative investments at DOD and  DOE. These investments account for about $1.2 billion in total IT  spending for fiscal years 2007 through 2012. Given that our review  covered 11 percent (810 investments) of the total number of IT  investments that agencies report to OMB, it raises questions about how  much more potential duplication exists.

DHS’s recent efforts have resulted in the identification and consolidation  of duplicative functionality in several investments and related systems.  DOD and DOE have also recently initiated plans to address many  investments that we identified, but these recent initiatives have not yet  resulted in the consolidation or elimination of duplicative investments or  functionality. Further complicating agencies’ ability to prevent, identify,  and eliminate duplicative investments is miscategorization of investments  within agencies. Without demonstrating the progress of efforts to identity  and eliminate duplicative investments, DOD and DOE will be unable to  provide assurance that they are avoiding investment in unnecessary  systems. Similarly, until DOD, DOE, and DHS, correctly categorize their  investments, they are limiting their ability to identify opportunities to  consolidate or eliminate duplicative investments.

section_title: Recommendations for Executive Action
paragraphs: To better ensure agencies avoid investing in duplicative investments, we  recommend that the Secretary of Defense direct the CIO to take the  following two actions: utilize existing transparency mechanisms, such as the IT Dashboard,  to report on the results of the department’s efforts to identify and  eliminate, where appropriate, each potentially duplicative investment  we have identified, as well as any other duplicative investments; and  correct the miscategorizations for the DOD investments we identified  and ensure that investments are correctly categorized in agency  submissions.

We recommend that the Secretary of Energy direct the CIO to take the  following two actions: utilize existing transparency mechanisms, such as the IT Dashboard,  to report on the results of the department’s efforts to identify and  eliminate, where appropriate, each potentially duplicative investment  we have identified, as well as any other duplicative investments; and correct the miscategorizations for the DOE investments we identified  and ensure that investments are correctly categorized in agency  submissions.

We recommend that the Secretary of Homeland Security direct the CIO to  take the following action:  correct the miscategorizations for the DHS investments we identified  and ensure that investments are correctly categorized in agency  submissions.

section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of our report to the three departments selected for  our review and to OMB. In commenting on the draft, DOD and DHS  generally concurred with our recommendations. DOE generally agreed  with our first recommendation and disagreed with parts of our second  recommendation. In addition, OMB provided oral technical comments that  we incorporated, where appropriate. Each department’s comments are  discussed in more detail below, and the written comments are reprinted in  appendixes IV, V, and VI.

DOD’s Deputy CIO for Information Management, Integration, and  Technology within the Office of the Assistant Secretary of Defense for  Networks and Information Integration provided written comments, which  stated that the department agreed with both of our recommendations.  DOD also provided technical comments, which we incorporated, where  appropriate.

The Director of DHS’s Departmental GAO/Office of Inspector General  Liaison Office provided written comments, which stated that the  department agreed with our recommendation to correct the  miscategorized investments and ensure that investments are correctly  categorized. Additionally, DHS provided documentation showing that the  department had recently corrected the miscategorizations in response to  our recommendation. The department also provided technical comments,  which we incorporated as appropriate.

The DOE CIO provided written comments in which the department  generally agreed with the first recommendation and disagreed with parts  of the second recommendation. Regarding our first recommendation, to  identify and eliminate potentially duplicative investments as appropriate,  DOE generally agreed with the recommendation and stated that the  Office of the CIO is committed to increasing its IT investment oversight.  The department added that for the non-major investments that GAO  identified as being potentially duplicative, it will update GAO on its  progress through means other than the IT Dashboard, since non-major  investments are not individually tracked on the Dashboard. However,  DOE also indicated that it does not believe certain investments that we  identified are potentially duplicative. Specifically, DOE did not agree that  the two card issuance and maintenance, and three logical access control  investments were potentially duplicative. Rather, it stated that the  investments in these groups were listed individually on the exhibit 53 for  reporting purposes, in order to show how the funding was being  distributed at various locations. According to DOE, these costs were for  the labor involved in deploying the technology, and could not be avoided  given the separate geographical locations. We reviewed this additional  information, and subsequently removed these five investments from our  list of potentially duplicative investments.

Regarding our second recommendation to correct miscategorizations and  ensure that investments are correctly categorized, DOE disagreed with  parts of this recommendation. Specifically, DOE agreed that two of the  four investments could be recategorized. However, it disagreed that the  two training center investments should be recategorized, and stated that  they should continue to be categorized under the Employee Performance  Management FEA sub-function because of how they are funded.  However, OMB guidance defines Employee Performance Management  as activities that enable managers to make distinctions in performance  and link individual performance to agency goals and mission  accomplishment. In other words, this sub-function involves enabling  managers to assess the performance of personnel—and does not involve  providing training to personnel. In contrast, the Human Resources  Development sub-function—which OMB guidance defines as  administering, delivering, and designing employee development  programs—is a more appropriate category.position. Additionally, DOE stated that we identified only 4 miscategorized  investments from its total population of 876 investments. However, this  implies we reviewed all 876 investments. As stated in our report, we  looked at 19 percent of DOE’s reported IT investment population, or 167  investments, and identified 4 miscategorized investments from that  subset.

Therefore, we maintain our  In addition, DOE stated that in our September 2011 report we highlighted  limitations in OMB’s guidance regarding proper categorization of  investments and further stated that, while OMB agreed to make  improvements to the guidance, agencies and OMB did not have time to  implement the changes before our new audit began. In our September  report, we noted that, under OMB’s guidance, agencies were unable to  designate a secondary category, in addition to the primary category for  each of the investments. However, in this report, our concern is with the  accuracy of agencies’ selections of the primary categories for certain  investments. These are two independent concerns with investment  categorization—both of which need to be addressed and are not  necessarily dependent on each other. In other words, regardless of  whether agencies are able to designate a secondary category, in addition  to a primary category, it is still critically important that the primary  category is accurate.

DOE made several additional comments that we address below:

The department stated that it has implemented various investment  review processes to help identify potentially duplicative investments  and to manage these investments. We acknowledge in the report that  DOE has such processes in place, and we provide examples of the  department’s existing IT investment management processes that are,  in part, intended to prevent, identify, and eliminate duplicative  investments.

DOE stated that our draft report mentions the Federal Data Center  Consolidation Initiative but that we did not specifically discuss DOE’s  accomplishment in this area. In response, we added the number of  federal data centers that DOE reportedly closed.

The department stated that prior to the GAO audit, DOE officials  realized potential duplicative investments may exist in back-end  infrastructure and that a working group has been meeting regularly to  identify duplicative investments and investigate the possibility of  consolidating. We agree with this statement, and we acknowledge the  working group’s efforts in the report. However, as we report, this  initiative has not yet resulted in the consolidation or elimination of  duplicative investments or functionality.

According to DOE, it had developed a departmental strategy for  electronic records management whereby a small number of approved  records management applications will be identified for department- wide use. It added that the three records management investments  cited in our report will remain in place while the departmental strategy  is being implemented. In response to this comment, we updated the  report to acknowledge that the CIO stated that DOE has developed a  departmental strategy, in addition to establishing an electronic records  management working group. However, similar to the back-end  infrastructure, these efforts have not yet resulted in the consolidation  or elimination of duplicative investments or functionality, and thus,  DOE may continue investing in unnecessary systems until such  actions are taken.

Lastly, DOE noted that in our report we discuss the Department’s  TechStrat sessions related to commodity IT services but did not  discuss the TechStrat sessions conducted by its Office of  Environmental Management on its major investments. We did not add  this activity to the report, because supporting documentation was not  provided to indicate that this session was conducted to specifically  reduce duplication, rather than to review major investments with  performance problems.

Finally, OMB’s Chief Architect provided comments regarding the office’s  efforts to oversee IT investments, which we incorporated, as appropriate.

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 11 days from the  report date. At that time, we will send copies of this report to the  appropriate congressional committees; the Secretaries of Defense,  Energy, and Homeland Security; the Director of the Office of  Management and Budget; and other interested parties. In addition, the  report also will be available at no charge on GAO’s website at  http://www.gao.gov.

If you or your staff members have any questions on the matters  discussed in this report, please contact me at (202) 512-9286 or  pownerd@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  GAO staff who made major contributions to this report are listed in  appendix VII.

section_title: Appendix I: Objective, Scope, and Methodology
paragraphs: Our objective was to identify potentially duplicative information technology  (IT) investments at selected agencies and actions these agencies are  taking to address them. To select agencies for review, we used the Office  of Management and Budget’s (OMB) fiscal year 2011 exhibit 53.  Specifically, we downloaded this data from OMB’s IT Dashboard and  used it to identify the agencies and their number of IT investments as  reported on the Dashboard. We used this analysis to select for review  three of the agencies with the highest number of IT investments—the  Departments of Defense (DOD), Energy (DOE), and Homeland Security  (DHS).

To identify potentially duplicative investments, we further narrowed our  analysis of the exhibit 53 data to the largest Federal Enterprise  Architecture (FEA) primary functions, by number of investments. Within  each of the selected primary functions, we selected the two sub-functions  with the most investments. Table 7 identifies the FEA primary functions  and FEA sub-functions used to select the investments for review.

This resulted in a nongeneralizable sample of 810 IT investments, which  is 11 percent of the total number of IT investments that agencies report to  OMB through the IT Dashboard (810 of 7,227).The investments we  reviewed represent approximately 24 percent of DOD’s IT portfolio in  terms of number of investments that it reports to the Dashboard, 19  percent of DOE’s, and 16 percent of DHS’s. To determine the reliability of  the data on the IT Dashboard, we reviewed recent GAO reports that  identified issues with the accuracy and reliability of agency data on the IT   We determined that the data were sufficiently reliable for the  Dashboard.purpose of this report, which was to identify selected investments to  include in our review.

We then reviewed the name and narrative description of each  investment’s purpose to identify similarities among related investments  within each agency (we did not review investments across agencies).

This formed the basis of establishing groupings of similar investments.  We discussed the groupings with each of the selected agencies, and we  obtained further information from agency officials. We also reviewed and  assessed agencies’ rationales for having multiple systems that perform  similar functions. Additionally, when analyzing each investment’s  description, we compared each investment’s designated FEA primary  category and sub-category to OMB’s definitions for each FEA primary  category and sub-category and determined whether the investment was  placed in the correct FEA category. We obtained additional information  from agency officials about these discrepancies.

To identify the actions agencies have taken to address the potentially  duplicative investments we identified, we reviewed agency  documentation, such as agency memos and working group charters, and  interviewed officials. We also reviewed documentation and interviewed  agency officials to identify what investments were consolidated,  eliminated, or modified to decrease duplication and the estimated cost  savings (if available) associated with these actions.

We conducted this performance audit from June 2011 to February 2012  in accordance with generally accepted government auditing standards.  Those standards required 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.

section_title: Appendix II: Further Information on Potentially Duplicative Investments
paragraphs: The tables in this appendix provide information on the 37 investments that  we identified as potentially duplicative within the three selected FEA  functions (Human Resource Management, Information and Technology  Management, and Supply Chain Management). Specifically, we  identified 31 potentially duplicative IT investments at DOD and 6 at DOE.  Highlighted investments indicate the instances in which the agency does  not currently have plans under way to address the potential duplication.

section_title: Appendix III: Miscategorized Investments
paragraphs: The tables in this appendix provide information on the 22 investments that  we identified as incorrectly categorized by the selected agencies  according to OMB’s FEA. Specifically, we identified 13 miscategorized  investments at DOD (2 within Air Force, 2 within Army, 3 within Navy, and  6 enterprisewide), 4 at DOE, and 5 at DHS. Highlighted investments  indicate the seven instances in which the agency did not agree that the  investments were miscategorized.

section_title: Appendix IV: Comments from the Department of Defense

section_title: Appendix V: Comments from the Department of Energy

section_title: Appendix VI: Comments from the Department of Homeland Security

section_title: Appendix VII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, the following staff made key  contributions to this report: Shannin O’Neill, Assistant Director; Cortland  Bradford; Javier Irizarry; Lee McCracken; and Kevin Walsh.


Question-summary annotations: questions: question: How effective are DOD and DOE investment review processes?
answer: Although the Departments of Defense (DOD) and Energy (DOE) use various investment review processes to identify duplicative investments, GAO found that 37 of its sample of 810 investments were potentially duplicative.
child_questions: question: How do these duplicates affect IT spending?
answer: These investments account for about $1.2 billion in total information technology (IT) spending for fiscal years 2007 through 2012.

question: What is an example of duplication?
answer: For example, GAO identified four DOD Navy personnel assignment investments—one system for officers, one for enlisted personnel, one for reservists, and a general assignment system—each of which is responsible for managing similar functions.

question: How prevalent is duplication at DHS?
answer: While GAO did not identify any potentially duplicative investments at the Department of Homeland Security (DHS) within its sample, DHS officials have independently identified several duplicative investments and systems.

questions: question: How has DHS improved its processes for identifying duplicative investments?
answer: For example, through reviewing portfolios of IT investments, DHS has identified much, and eliminated some, duplicative functionality in certain investments.
child_questions: question: How have DOD and DOE done the same?
answer: Additionally, DOD and DOE have recently initiated plans to address potential duplication in many of the investments GAO identified, which include consolidating or eliminating systems.

question: To what extent have these efforts been successful?
answer: While these efforts may eventually yield results, they have not yet led to the elimination of duplication. For example, while DOD and DOE have specific plans to improve their IT investment review processes, officials did not provide examples of duplicative investments that had been consolidated or eliminated.
child_questions: question: How does this limit the effectiveness of these efforts?
answer: Until DOD and DOE demonstrate progress on these efforts, the agencies will be unable to provide assurance that they are avoiding investment in unnecessary systems.

questions: question: How large is federal IT spending on information technology?
answer: The federal government spends billions of dollars on information technology (IT) each year, with such investments accounting for at least $79 billion in fiscal year 2011.
child_questions: question: How has GAO previously reviewed IT issues?
answer: GAO has previously reported on initiatives under way to address potentially duplicative IT investments—i.e., investments providing similar functions across the government.

question: What was GAO asked to review?
answer: GAO was asked to review the extent to which potentially duplicative IT investments exist within three categories at selected agencies (the Departments of Defense (DOD), Energy (DOE), and Homeland Security (DHS)) and actions these agencies are taking to address them.
child_questions: question: How did GAO collect data for this report?
answer: To accomplish this, GAO analyzed budget data on agency IT investments, reviewed agency information related to efforts to address duplication, and interviewed agency officials.

questions: question: What did GAO recommend?
answer: GAO recommends that DOD and DOE report on the progress of efforts to identify and eliminate duplication, where appropriate. GAO is also recommending that DOD, DOE, and DHS correct misclassifications of investments.
child_questions: question: How did DOD and DHS respond?
answer: DOD and DHS agreed with the recommendations.

question: How did DOE respond?
answer: DOE generally agreed with the first recommendation, but disagreed with parts of the second recommendation regarding the number of misclassified investments.
child_questions: question: To what extent did this change GAO's stance?
answer: However, GAO believes the number is accurate.