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

Letter

Background

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.

Required Roles and Responsibilities for IT Investment Oversight

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.

OMB’s IT Oversight Mechanisms

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.

Agencies Spend Billions on Poorly Performing IT Investments

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.

Categorization of IT Investments Is Intended to Facilitate Identification of Similar IT Investments

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.

Selected Agencies Have Potentially Duplicative Investments; DOD and DOE Need to Do More to Address Them

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.

Potentially Duplicative IT Investments Exist at Selected Agencies

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.

Agencies Have Recently Initiated Plans to Address Potential Duplication in Many Investments, but Results Have Yet to Be Realized at DOD and DOE

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.

Conclusions

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.

Recommendations for Executive Action

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.

Agency Comments and Our Evaluation

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.

Appendix I: Objective, Scope, and Methodology

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.

Appendix II: Further Information on Potentially Duplicative Investments

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.

Appendix III: Miscategorized Investments

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.

Appendix IV: Comments from the Department of Defense

Appendix V: Comments from the Department of Energy

Appendix VI: Comments from the Department of Homeland Security

Appendix VII: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

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.