Information Technology: Implementing Best Practices and Reform Initiatives Can Help Improve the Management of Investments
Released: 2014-05-08T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: The federal government reportedly plans to spend at least $82 billion on IT in fiscal year 2014. Given the scale of such planned outlays and the criticality of many of these systems to the health, economy, and security of the nation, it is important that OMB and federal agencies provide appropriate oversight and transparency into these programs and avoid duplicative investments, whenever possible, to ensure the most efficient use of resources.

GAO has previously reported and testified that federal IT projects too frequently fail and incur cost overruns and schedule slippages while contributing little to mission-related outcomes. Numerous best practices and administration initiatives are available for agencies that can help them improve the oversight and management of IT acquisitions.

GAO is testifying today on the results and recommendations from selected reports that focused on how best practices and IT reform initiatives can help federal agencies better manage major acquisitions and legacy investments.

section_title: What GAO Found
paragraphs: GAO recently reported on nine critical factors underlying successful major information technology (IT) acquisitions. Factors cited included (1) program officials were actively engaged with stakeholders and (2) prioritized requirements.

One key IT reform initiative undertaken by the Office of Management and Budget (OMB) is the IT Dashboard, which provides information, including ratings of risk, on 760 major investments at 27 federal agencies. As of April 2014, according to the Dashboard, 559 investments were low or moderately low risk, 159 were medium risk, and 42 were moderately high or high risk.

GAO has issued a series of reports on Dashboard accuracy and, in 2011, found that, while there were issues with the accuracy and reliability of cost and schedule data, the accuracy of these data had improved over time. However, a recent GAO report found that agencies had removed major investments from the Dashboard, representing a troubling trend toward decreased transparency. GAO also reported that, as of December 2013, the public version of the Dashboard was not updated for 15 of the previous 24 months. GAO made recommendations to ensure that the Dashboard includes all major IT investments and increase its availability. Agencies generally agreed with the report or had no comments.

An additional key reform initiated by OMB emphasizes incremental development in order to reduce investment risk. In 2010 it called for agency investments to deliver functionality every 12 months and since 2012 has required investments to deliver functionality every 6 months. However, in its report released today, GAO found that almost three-quarters of investments reviewed did not plan to deliver capabilities every 6 months and less than half planned to deliver capabilities in 12-month cycles. GAO 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 GAO recommendations, while others disagreed or had no comment. GAO continues to believe that its recommendations are valid.

In an effort to consolidate the number of federal data centers, OMB launched a consolidation initiative intended to close 40 percent of data centers by 2015, and in doing so, save $3 billion. GAO reported that agencies planned to close 1,055 data centers by the end of fiscal year 2014, but also highlighted the need for continued oversight. Among other things, GAO recommended that OMB improve the execution of important oversight responsibilities, with which OMB agreed.

To better manage the government's existing IT systems, OMB launched the PortfolioStat initiative, which, among other things, requires agencies to conduct annual reviews of their IT investments and make decisions on eliminating duplication. GAO reported that agencies continued to identify duplicative spending as part of PortfolioStat and that this initiative has the potential to save at least $5.8 billion by fiscal year 2015, but that weaknesses existed in agencies' implementation of the initiative's requirements. Among other things, GAO made several recommendations to improve agencies' implementation of PortfolioStat requirements. OMB partially agreed with these recommendations, and most of the other 20 agencies agreed to implement them.

section_title: What GAO Recommends
paragraphs: GAO has previously made numerous recommendations to OMB and federal agencies on key aspects of IT management, including the IT Dashboard and efforts to consolidate federal data centers. Additionally, in its report being released today, GAO also recommended that agencies take actions to improve their incremental development approaches.

section_title: Letter
paragraphs: I am pleased to be here today to discuss how best practices and major  information technology (IT) reform initiatives can help the federal  government better acquire and manage IT investments. As reported to  the Office of Management and Budget (OMB), federal agencies plan to  spend at least $82 billion on IT in fiscal year 2014. Given the scale of  such planned outlays and the criticality of many of these systems to the  health, economy, and security of the nation, it is important that OMB and  federal agencies provide appropriate oversight and transparency into  these programs and avoid duplicative investments, whenever possible, to  ensure the most efficient use of resources.

However, as we have previously reported and testified, federal IT projects  too frequently fail and incur cost overruns and schedule slippages while  contributing little to mission-related outcomes. During the past several  years, we have issued multiple reports and testimonies on best practices  for major acquisitions and federal initiatives to acquire and improve the  management of IT investments. In those reports, we made numerous  recommendations to federal agencies and OMB to further enhance the  management and oversight of IT programs.

As discussed with committee staff, I am testifying today on the results and  recommendations from our selected reports on how best practices and IT  reform initiatives can help federal agencies better manage major  acquisitions and legacy investments. This includes summarizing our  report being released today on agencies’ use of incremental development  approaches. All work on which this testimony is based was performed in  accordance with generally accepted government auditing standards or all  sections of GAO’s Quality Assurance Framework that were relevant to  our objectives. Those standards and the framework require that we plan  and perform our audits and engagements to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives; the framework also requires that we  discuss any limitations in our work. We believe that the information, data,  and evidence obtained and the analysis conducted provide a reasonable  basis for our findings and conclusions based on our 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: Information technology should enable government to better serve the  American people. However, despite spending hundreds of billions on IT  since 2000, the federal government has experienced failed IT projects  and has achieved little of the productivity improvements that private  industry has realized from IT. Too often, federal IT projects run over  budget, behind schedule, or fail to deliver results. In combating this  problem, proper oversight is critical.

Both OMB and federal agencies have key roles and responsibilities for  overseeing IT investment management, and OMB is responsible for  working with agencies to ensure investments are appropriately planned  and justified. However, as we have described in numerous reports,  although a variety of best practices exist to guide their successful  acquisition, federal IT projects too frequently incur cost overruns and  schedule slippages while contributing little to mission-related outcomes.

Agencies have reported that poor-performing projects have often used a  “big bang” approach—that is, projects that are broadly scoped and aim to  deliver capability several years after initiation. For example, in 2009 the  Defense Science Board reported that the Department of Defense’s  (Defense) acquisition process for IT systems was too long, ineffective,  and did not accommodate the rapid evolution of IT. The board reported  that the average time to deliver an initial program capability for a major IT  system acquisition at Defense was over 7 years.

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. As reported to OMB, federal agencies plan to spend  more than $82 billion on IT investments in fiscal year 2014, which is the  total expended for not only acquiring such investments, but also the  funding to operate and maintain them. Of the reported amount, 27 federal  agencies plan to spend about $75 billion: $17 billion on development and  acquisition and $58 billion on operations and maintenance (O&M). Figure  1 shows the percentages of total planned spending for 2014 for the $75  billion spent on development and O&M.

However, this $75 billion does not reflect the spending of the entire  federal government. We have previously reported that OMB’s figure  understates the total amount spent in IT investments. Specifically, it does  not include IT investments by 58 independent executive branch agencies,  including the Central Intelligence Agency or by the legislative or judicial  branches. Further, agencies differed on what they considered an IT  investment; for example, some have considered research and  development systems as IT investments, while others have not. As a  result, not all IT investments are included in the federal government’s  estimate of annual IT spending. OMB provided guidance to agencies on  how to report on their IT investments, but this guidance did not ensure  complete reporting or facilitate the identification of duplicative  investments. Consequently, we recommended, among other things, that  OMB improve its guidance to agencies on identifying and categorizing IT  investments.

Further, over the past several years, we have 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.
subsections: section_title: OMB Has Launched Major Initiatives for Overseeing Investments
paragraphs: OMB has implemented a series of initiatives to improve the oversight of  underperforming investments, more effectively manage IT, and address  duplicative investments. These efforts include the following:  IT Dashboard. Given the importance of transparency, oversight, and  management of the government’s IT investments, in June 2009, OMB  established a public website, referred to as the IT Dashboard, that  provides detailed information on 760 major IT investments at 27  federal agencies, including ratings of their performance against cost  and schedule targets. The public dissemination of this information is  intended to allow OMB; other oversight bodies, including Congress;  and the general public to hold agencies accountable for results and  performance. Among other things, agencies are to submit Chief  Information Officer (CIO) ratings, which, according to OMB’s  instructions, should reflect the level of risk facing an investment on a  scale from 1 (high risk) to 5 (low risk) relative to that investment’s  ability to accomplish its goals. Ultimately, CIO ratings are assigned  colors for presentation on the Dashboard, according to the five-point  rating scale, as illustrated in table 1.

As of April 2014, according to the IT Dashboard, 201 of the federal  government’s 760 major IT investments—totaling $12.4 billion—were  in need of management attention (rated “yellow” to indicate the need  for attention or “red” to indicate significant concerns). (See fig. 2.)

TechStat reviews. In January 2010, the Federal CIO began leading  TechStat sessions—face-to-face meetings to terminate or turnaround  IT investments that are failing or are not producing results. These  meetings involve OMB and agency leadership and are intended to  increase accountability and transparency and improve performance.  Subsequently, OMB empowered agency CIOs to hold their own  TechStat sessions within their respective agencies. According to the  former Federal CIO, the efforts of OMB and federal agencies to  improve management and oversight of IT investments have resulted  in almost $4 billion in savings.

Federal Data Center Consolidation Initiative. Concerned about the  growing number of federal data centers, in February 2010 the Federal  CIO established the Federal Data Center Consolidation Initiative. This  initiative’s four high-level goals are to promote the use of “green IT”  by reducing the overall energy and real estate footprint of government  data centers; reduce the cost of data center hardware, software, and  operations; increase the overall IT security posture of the government;  and shift IT investments to more efficient computing platforms and  technologies. OMB believes that this initiative has the potential to  provide about $3 billion in savings by the end of 2015.

IT Reform Plan. In December 2010, OMB released its 25-point plan to  reform federal IT. This document established an ambitious plan for  achieving operational efficiencies and effectively managing large- scale IT programs. In particular, as part of an effort to reduce the risk  associated with IT acquisitions, the plan calls for federal IT programs  to deploy capabilities or functionality in release cycles no longer than  12 months, and ideally, less than 6 months. The plan also identifies  key actions that can help agencies implement this incremental  development guidance, such as working with Congress to develop IT  budget models that align with incremental development and issuing  contracting guidance and templates to support incremental  development.

PortfolioStat. In order to eliminate duplication, move to shared  services, and improve portfolio management processes, in March  2012, OMB launched the PortfolioStat initiative. Specifically,  PortfolioStat requires agencies to conduct an annual agency-wide IT  portfolio review to, among other things, reduce commodity IT  spending and demonstrate how their IT investments align with the  agency’s mission and business functions. PortfolioStat is designed  to assist agencies in assessing the current maturity of their IT  investment management process, making decisions on eliminating  duplicative investments, and moving to shared solutions in order to  maximize the return on IT investments across the portfolio. OMB  believes that the PortfolioStat effort has the potential to save the  government $2.5 billion over the next 3 years by, for example,  consolidating duplicative systems.

section_title: Opportunities Exist to Improve Acquisition and Management of IT Investments
paragraphs: Given the magnitude of the federal government’s annual IT budget, which  is expected to be more than $82 billion in fiscal year 2014, it is important  that agencies leverage all available opportunities to ensure that their IT  investments are acquired in the most effective manner possible. To do so,  agencies can rely on IT acquisition best practices, incremental  development, and initiatives such as OMB’s IT Dashboard and OMB- mandated TechStat sessions. Additionally, agencies can save billions of  dollars by continuing to consolidate federal data centers and by  eliminating duplicative investments through OMB’s PortfolioStat initiative.

Best Practices Are Intended to Help Ensure Successful Major  Acquisitions  In 2011, we identified seven successful acquisitions and nine common  factors critical to their success and noted that (1) the factors support  OMB’s objective of improving the management of large-scale IT  acquisitions across the federal government and (2) wide dissemination of  these factors could complement OMB’s efforts. Specifically, we reported  that federal agency officials identified seven successful acquisitions, in  that they best achieved their respective cost, schedule, scope, and  performance goals. Notably, all of these were smaller increments,  phases, or releases of larger projects. The common factors critical to the  success of three or more of the seven acquisitions are generally  consistent with those developed by private industry and are identified in  table 2.

These critical factors support OMB’s objective of improving the  management of large-scale IT acquisitions across the federal  government; wide dissemination of these factors could complement  OMB’s efforts.

IT Dashboard Can Improve the Transparency into and Oversight of  Major IT Investments  The IT Dashboard serves an important role in allowing OMB and other  oversight bodies to hold agencies accountable for results and  performance. However, we have issued a series of reports highlighting  deficiencies with the accuracy and reliability of the data reported on the  Dashboard. For example, we reported in October 2012 that Defense  had not rated any of its investments as either high or moderately high risk  and that, in selected cases, these ratings did not appropriately reflect  significant cost, schedule, and performance issues reported by GAO and  others. We recommended that Defense ensure that its CIO ratings reflect  available investment performance assessments and its risk management  guidance. Defense concurred and has revised its process to address  these concerns.

Further, while we reported in 2011 that the accuracy of Dashboard cost  and schedule data had improved over time, more recently, in December  2013 we found that agencies had removed investments from the  Dashboard by reclassifying their investments—representing a troubling  trend toward decreased transparency and accountability. Specifically,  the Department of Energy reclassified several of its supercomputer  investments from IT to facilities and the Department of Commerce  decided to reclassify its satellite ground system investments. Additionally,  as of December 2013, the public version of the Dashboard was not  updated for 15 of the previous 24 months because OMB does not revise it  as the President’s budget request is being created.

We also found that, while agencies experienced several issues with  reporting the risk of their investments, such as technical problems and  delayed updates to the Dashboard, the CIO ratings were mostly or  completely consistent with investment risk at seven of the eight selected  agencies. Additionally, the agencies had already addressed several of  the discrepancies that we identified. The final agency, the Department of  Veterans Affairs (VA), did not update 7 of its 10 selected investments  because it elected to build, rather than buy, the ability to automatically  update the Dashboard and has now resumed updating all investments.  To their credit, agencies’ continued attention to reporting the risk of their  major IT investments supports the Dashboard’s goal of providing  transparency and oversight of federal IT investments.

Nevertheless, the rating issues that we identified with performance  reporting and annual baselining, some of which are now corrected,  serve to highlight the need for agencies’ continued attention to the  timeliness and accuracy of submitted information in order to allow the  Dashboard to continue to fulfill its stated purpose. We recommended that  agencies appropriately categorize IT investments and that OMB make  Dashboard information available independent of the budget process.  OMB neither agreed nor disagreed with these recommendations. Six  agencies generally agreed with the report or had no comments and two  others did not agree, believing their categorizations were appropriate. We  continue to believe that our recommendations are valid.

Agencies Need to Establish and Implement Incremental  Development Policies to Better Achieve Cost, Schedule, and  Performance Goals for IT Investments  Incremental development can help agencies to effectively manage IT  acquisitions and, as such, OMB has recently placed a renewed emphasis  on it. In particular, in 2010 OMB called for IT investments to deliver  functionality every 12 months, and since 2012 has required investments  to deliver functionality every 6 months.

However, as discussed in our report being released today, most selected  agencies have not effectively established and implemented incremental  development approaches. Specifically, although all five agencies in our  review—the Departments of Defense, Health and Human Services  (HHS), Homeland Security (DHS), Transportation (Transportation), and  VA—have established policies that address incremental development, the  policies usually did not fully address three key components we identified  for implementing OMB’s guidance. Table 3 provides an assessment of  each agency’s policies against the three key components of an  incremental development policy.

Among other things, agencies cited the following reasons that contributed  to these weaknesses: (1) OMB’s guidance was not feasible because not  all types of investments should deliver functionality in 6 months and (2)  the guidance did not identify what agencies’ policies are to include or time  frames for completion. We agreed that these concerns have merit.

Additionally, the weaknesses in agency policies have enabled  inconsistent implementation of incremental development approaches.  Specifically, almost three-quarters of the selected investments we  reviewed did not plan to deliver functionality every 6 months and less than  half planned to deliver functionality in 12-month cycles. Table 4 shows  how many of the selected investments at each agency planned on  delivering functionality every 6 and 12 months during fiscal years 2013  and 2014.

Considering agencies’ concerns about delivering functionality every 6  months and given that so few are planning to deliver functionality in that  time frame, our report noted that delivering functionality every 12 months,  consistent with OMB’s IT Reform Plan, would be an appropriate starting  point and a substantial improvement. Until OMB issues realistic and clear  guidance and agencies update their policies to reflect this guidance,  agencies may not consistently adopt incremental development  approaches, and IT expenditures will continue to produce disappointing  results—including sizable cost overruns and schedule slippages and  questionable progress in meeting mission goals and outcomes. In the  report being released today, we recommend that OMB develop and issue  realistic and clear guidance on incremental development, and that  Defense, HHS, DHS, and Transportation update and implement their  incremental development policies, once OMB’s guidance is made  available. OMB stated that it agreed with our recommendation to update  and issue incremental development guidance, but did not agree that its  current guidance is not realistic. However, slightly more than one-fourth of  selected investments planned to deliver functionality every 6 months— and less than one-half planned to do so every 12 months. Additionally,  there are three types of investments for which it may not always be  practical or necessary to expect functionality to be delivered in 6-month  cycles. Thus, we continue to believe that delivering functionality every 6  months is not an appropriate requirement for all agencies and that  requiring the delivery of functionality every 12 months, consistent with  OMB’s IT Reform Plan, is a more appropriate starting point. We therefore  maintain that OMB should require projects associated with major IT  investments to deliver functionality at least every 12 months.

Four agencies—Defense, HHS, DHS, VA—generally agreed with the  report or had no comments and one agency—Transportation—did not  agree that its recommendation should be dependent on OMB first taking  action. Specifically, the department explained that relying on another  agency to concur with one of our recommendations before Transportation  can take action leaves the department with the potential challenge of a  recommendation that cannot be implemented. However, as previously  stated, OMB agrees with our recommendation to update and issue  incremental guidance, meaning that OMB has committed to taking the  actions necessary to enable Transportation to begin addressing our  recommendation. Accordingly, we continue to believe that our  recommendations are warranted and can be implemented.

TechStat Reviews Can Help Highlight and Evaluate Poorly  Performing Investments  TechStat reviews were initiated by OMB to enable the federal government  to turnaround, halt, or terminate IT projects that are failing or are not  producing results. In 2013, we reported that OMB and selected agencies  had held multiple TechStats, but that 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, we determined that, as of April 2013, OMB reported  conducting 79 TechStats, which focused on 55 investments at 23 federal  agencies. Further, 4 selected agencies—the Departments of Agriculture,  Commerce, HHS, and DHS—conducted 37 TechStats covering 28  investments. About 70 percent of the OMB-led and 76 percent of agency- led TechStats on major investments were considered medium to high risk  at the time of the TechStat.

However, the number of at-risk TechStats held was relatively small  compared to the current number of medium- and high-risk major IT  investments. Specifically, the OMB-led TechStats represented roughly  18.5 percent of the investments across the government that had a  medium- or high-risk CIO rating. For the 4 selected agencies, the number  of TechStats represented about 33 percent of the investments that have a  medium- or high-risk CIO rating. We concluded that, until OMB and  agencies develop plans to address these weaknesses, the investments  would likely remain at risk.

In addition, we reported that OMB and selected agencies had tracked and  reported positive results from TechStats, with most resulting in improved  governance. Agencies also reported projects with accelerated delivery,  reduced scope, or termination. We also found that OMB reported in 2011  that federal agencies achieved almost $4 billion in life-cycle cost savings  as a result of TechStat sessions. However, we were unable to validate  OMB’s reported results because OMB did not provide artifacts showing  that it ensured the results were valid. Among other things, we  recommended that OMB require agencies to report on how they validated  the outcomes. OMB generally agreed with this recommendation.

Continued Oversight Needed to Consolidate Federal Data Centers  and Achieve Cost Savings  In an effort to consolidate the growing number of federal data centers, in  2010, OMB launched a consolidation initiative intended to close 40  percent of government data centers by 2015, and, in doing so, save $3  billion. Since 2011, we have issued a series of reports on the efforts of  agencies to consolidate their data centers. For example, in July 2011  and July 2012, we reported that agencies had developed plans to  consolidate data centers; however, these plans were incomplete and did  not include best practices. In addition, although we reported that  agencies had made progress on their data center closures, OMB had not  determined initiative-wide cost savings, and oversight of the initiative was  not being performed in all key areas. Among other things, we  recommended that OMB track and report on key performance measures,  such as cost savings to date, and improve the execution of important  oversight responsibilities. We also recommended that agencies complete  inventories and plans. OMB agreed with these two recommendations,  and most agencies agreed with our recommendations to them.

Additionally, as part of ongoing follow-up work, we have determined that  while agencies had closed data centers, the number of federal data  centers was significantly higher than previously estimated by OMB.

Specifically, as of May 2013, agencies had reported closing 484 data  centers by the end of April 2013 and were planning to close an additional  571 data centers—for a total of 1,055—by September 2014. However, as  of July 2013, 22 of the 24 agencies participating in the initiative had  collectively reported 6,836 data centers in their inventories— approximately 3,700 data centers more than OMB’s previous estimate  from December 2011. This dramatic increase in the count of data centers  highlights the need for continued oversight of agencies’ consolidation  efforts.

We have ongoing work looking at OMB’s data center consolidation  initiative, including evaluating the extent to which agencies have achieved  planned cost savings through their consolidation efforts, identifying  agencies’ notable consolidation successes and challenges in achieving  cost savings, and evaluating the extent to which data center optimization  metrics have been established.

Agencies’ PortfolioStat Efforts Have the Potential to Save Billions of  Dollars  OMB launched the PortfolioStat initiative in March 2012, which required  26 executive agencies to, among other things, reduce commodity IT  spending and demonstrate how their IT investments align with the  agencies’ mission and business functions. In November 2013, we  reported on agencies’ efforts to complete key required PortfolioStat  actions and make portfolio improvements. We noted that all 26 agencies  that were required to implement the PortfolioStat initiative took actions to  address OMB’s requirements. However, there were shortcomings in their  implementation of selected requirements, such as addressing all required  elements of an action plan to consolidate commodity IT and migrating two  commodity areas to a shared service by the end of 2012. In addition,  several agencies had weaknesses in selected areas such as the CIO’s  authority to review and approve the entire portfolio and ensuring a  complete baseline of information relative to commodity IT. Further, we  observed that OMB’s estimate of about 100 consolidation opportunities  and a potential $2.5 billion in savings from the PortfolioStat initiative was  understated because, among other things, it did not include estimates  from Defense and the Department of Justice. Our analysis, which  included these estimates, showed that, collectively, the 26 agencies  reported about 200 opportunities and at least $5.8 billion in potential  savings through fiscal year 2015—at least $3.3 billion more than the  number initially reported by OMB.

In March 2013, OMB issued a memorandum commencing the second  iteration of its PortfolioStat initiative. This memorandum identified a  number of improvements that should help strengthen IT portfolio  management and address key issues we have identified. However, we  concluded that selected OMB efforts could be strengthened to improve  the PortfolioStat initiative and ensure agencies achieve identified cost  savings, including addressing issues related to existing CIO authority at  federal agencies and publicly reporting on agency-provided data. We  recommended, among other things, that OMB require agencies to fully  disclose limitations with respect to CIO authority. In addition, we made  several recommendations to improve agencies’ implementation of  PortfolioStat requirements. OMB partially agreed with these  recommendations, and responses from 20 of the agencies commenting  on the report varied.

We have ongoing work looking at the second iteration of OMB’s  PortfolioStat initiative, including identifying action items and associated  time frames from joint OMB-agency PortfolioStat meetings, determining  agencies’ progress in addressing these action items, and evaluating the  extent to which agencies have realized planned savings.

In summary, OMB’s and agencies’ recent efforts have resulted in greater  transparency and oversight of federal spending, but continued leadership  and attention are necessary to build on the progress that has been made.

The expanded use of the common factors critical to the successful  management of large-scale IT acquisitions should result in more effective  delivery of mission-critical systems. Additionally, federal agencies need to  continue to improve the accuracy and availability of information on the  Dashboard to provide greater transparency and even more attention to  the billions of dollars invested in troubled projects. Further, agencies need  to implement incremental development approaches in order to increase  the likelihood that major IT investments meet their cost, schedule, and  performance goals. Additionally, agencies should conduct additional  TechStat reviews to focus management attention on troubled projects and  establish clear action items to turn the projects around or terminate them.

The federal government can also build on the progress of agencies’ data  center closures and reduction of commodity IT. With the possibility of over  $5.8 billion in savings from the data center consolidation and PortfolioStat  initiatives, agencies should continue to identify consolidation opportunities  in both data centers and commodity IT. In addition, better support for the  estimates of cost savings associated with the opportunities identified  would increase the likelihood that these savings will be achieved.

Chairman Carper, Ranking Member Coburn, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to any questions that you may have 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 Dave Hinchman (Assistant  Director), Deborah A. Davis (Assistant Director), Rebecca Eyler, Kaelin  Kuhn, Meredith Raymond, Jamelyn Payan, Bradley Roach, Andrew  Stavisky, and Kevin Walsh.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.


Question-summary annotations: questions: question: What did GAO find in 2011?
answer: GAO has issued a series of reports on Dashboard accuracy and, in 2011, found that, while there were issues with the accuracy and reliability of cost and schedule data, the accuracy of these data had improved over time.

question: What did GAO find in a recent report?
answer: However, a recent GAO report found that agencies had removed major investments from the Dashboard, representing a troubling trend toward decreased transparency. GAO also reported that, as of December 2013, the public version of the Dashboard was not updated for 15 of the previous 24 months.

question: What did GAO make recommendations for?
answer: GAO made recommendations to ensure that the Dashboard includes all major IT investments and increase its availability.
child_questions: question: How did agencies respond to these recommendations?
answer: Agencies generally agreed with the report or had no comments.

questions: question: What does OMB's key reform emphasize?
answer: An additional key reform initiated by OMB emphasizes incremental development in order to reduce investment risk.
child_questions: question: How has this reform impacted requirements for agency investments?
answer: In 2010 it called for agency investments to deliver functionality every 12 months and since 2012 has required investments to deliver functionality every 6 months.

question: What did GAO find in today's report?
answer: However, in its report released today, GAO found that almost three-quarters of investments reviewed did not plan to deliver capabilities every 6 months and less than half planned to deliver capabilities in 12-month cycles.

question: What did GAO recommend to OMB?
answer: GAO recommended that OMB develop and issue clearer guidance on incremental development and that selected agencies update and implement their associated policies.
child_questions: question: How did agencies respond to these recommendations?
answer: Most agencies agreed with GAO recommendations, while others disagreed or had no comment.

questions: question: What did OMB do to consolidate the number of federal data centers?
answer: In an effort to consolidate the number of federal data centers, OMB launched a consolidation initiative intended to close 40 percent of data centers by 2015, and in doing so, save $3 billion.
child_questions: question: By 2014, what were the results of this initiative?
answer: GAO reported that agencies planned to close 1,055 data centers by the end of fiscal year 2014, but also highlighted the need for continued oversight.

question: What did GAO recommend to OMB?
answer: Among other things, GAO recommended that OMB improve the execution of important oversight responsibilities, with which OMB agreed.

questions: question: What did OMB do to better manage the government's IT systems?
answer: To better manage the government's existing IT systems, OMB launched the PortfolioStat initiative, which, among other things, requires agencies to conduct annual reviews of their IT investments and make decisions on eliminating duplication.
child_questions: question: What did GAO find in regard to this initiative?
answer: GAO reported that agencies continued to identify duplicative spending as part of PortfolioStat and that this initiative has the potential to save at least $5.8 billion by fiscal year 2015, but that weaknesses existed in agencies' implementation of the initiative's requirements.

question: What did GAO recommend in regard to this initiative?
answer: Among other things, GAO made several recommendations to improve agencies' implementation of PortfolioStat requirements.
child_questions: question: How did OMB and other agencies respond to these recommendations?
answer: OMB partially agreed with these recommendations, and most of the other 20 agencies agreed to implement them.