Historically, the Department has invested about 10 percent of its approximately $20 billion annual budget in information technology resources. The majority of all information technology resource expenditures—over 90 percent—are made by management and operating contractors, who identify and acquire resources needed to support the Department’s programs at the site (field) level. A past GAO review found that the Department’s contractors had wide latitude in controlling their information technology resources and spent substantial resources on developing and operating duplicate systems at the site level. Key to the Department’s success in eliminating its duplicate information systems is ensuring that information technology is acquired, used, and managed effectively. This includes knowing what information resources exist or are planned and how they improve performance of agency missions. The Congress and the Office of Management and Budget have supported the need for effective management of agencywide information resources through (1) the Paperwork Reduction Act of 1995, which requires agencies to follow a number of practices aimed at improving the productivity, efficiencies, and effectiveness of government operations, (2) the Information Technology Management Reform Act (ITMRA) of 1996, which supplements the Paperwork Reduction Act, and requires agencies to design and implement a strategic process for maximizing the value and managing the risks of their technology investments, and (3) the Office of Management and Budget’s (OMB) Evaluating Information Technology Investments: A Practical Guide, published in November 1995, which guides agencies in planning for, acquiring, and implementing information systems. Developing and maintaining a complete inventory of the Department’s information resources is a key requirement of the Paperwork Reduction Act and is essential to meeting the goals of ITMRA. Further, a critical element of OMB’s investment guide is the need for agencies to create a portfolio of their information technology investments. As part of its strategy for streamlining information systems, the Department plans to eliminate or consolidate systems which have the same or similar capabilities and analyze requirements for new systems to prevent additional purchases of duplicate systems. As a key step in this process, the Department’s Office of Information Management (OIM) developed a baseline inventory to identify the functions and capabilities of software systems that are being developed, proposed, and operated by the Department and its management and operating contractors. OIM intended to use this inventory to analyze the Department’s existing information systems environment and help identify systems that could be eliminated or consolidated. This intent was expressed in the Department’s strategic alignment initiative plan to integrate information management. To most effectively carry out this effort, therefore, OIM needs an inventory that contains complete and accurate data, fully describes system capabilities, and is based on consistent reporting by the Department’s management and operating contractors. Currently, however, the baseline inventory is substantially incomplete and lacks information describing systems’ functional capabilities. Specifically, in developing the baseline inventory, OIM relied primarily on data gathered from the Department and its management and operating contractors in early 1995 for inclusion in the System Review Inventory System (SRIS). SRIS is a headquarters database used by OIM to maintain information on the Department’s software systems, including the name, primary function, specific capabilities, data content, operating platforms, and cost of the systems. The Department requires that all systems being developed, proposed, and operated by the Department and its sites that have life-cycle costs exceeding $250,000 be reported to OIM for inclusion in the SRIS database. We believe that OIM’s baseline inventory of software systems will not be adequate to support the Department’s streamlining efforts because the SRIS data is incomplete and inconsistently reported. OIM’s analyses showed that only two-thirds of the Department’s management and operating contractors responded to its request for updated SRIS information in 1995. Moreover, according to this analysis, the information which contractors did submit was incomplete in that it did not identify the functional capabilities of about two-thirds of the 2,053 systems reported in the SRIS database. Without this type of information, the Department cannot accurately assess its existing information systems environment or make informed decisions regarding the most appropriate candidates for elimination or consolidation. The data deficiencies that we noted exist largely because the Department has allowed its contractors wide latitude in developing and implementing software inventory procedures and standards, and has not required them to follow the Department’s software management guidance. Although the Department’s existing software management order requires each site to establish and operate its own software management program, the order allows sites to determine how to accomplish this. In addition, although the Department’s “Software Management Guide” (which was put in place to assist the sites in developing software management programs) states that sites should maintain inventories of the software that they acquire, develop, or operate, the Department does not require contractors to follow it. As a result, contractors (1) have inconsistent practices in developing and maintaining information on their systems and (2) use inconsistent methods for classifying systems by function and capability. For example, although the official responsible for maintaining the software inventory at the Department’s largest (in terms of funding) EM site told us that the site recently reviewed in detail the systems reported in its software inventory in order to ensure that all the requested data were identified, some other sites reported having starkly different practices, including the following: Contractor officials at another major EM site stated that they had not verified any of the inventory data reported by their site and that hundreds of additional systems were probably unaccounted for in their inventory. A field office official responsible for reviewing software management at two national laboratories stated that these laboratories have not inventoried the vast majority of the systems acquired by the sites to support their program and project requirements. Our analyses of two major EM sites’ inventories, which together identified 1,348 systems, showed that these inventories lacked data on (1) the functions of 59 percent of the systems and (2) the development cost of 84 percent of the systems. Management and operating contractors also use a variety of methods for classifying site software systems by the specific capabilities they provide. Because of this lack of consistency in classifying systems, some sites do not report the requested data to the Department or they report incomplete data. For example, EM’s two largest sites use different classification methods, and neither of these methods is the same as that used for SRIS, which classifies the functional capabilities of systems according to 12 primary and 48 secondary categories. One of the sites does not classify any of its systems according to functional capabilities, with the exception of engineering systems. The other site classifies its systems according to 16 primary categories of functional capabilities, including the 12 primary categories identified for SRIS but does not classify systems according to the secondary categories identified for SRIS. An official at this site stated that because its classification method differs from that used for SRIS, the site did not provide OIM any information on the functional capabilities of its systems in 1995. Contractor officials at both sites stated that before they can provide the required updates to SRIS, they must perform time-consuming word searches and other research, and modify their systems classifications to agree with SRIS’s classifications. The Department currently is developing a consolidated order for information resources management that will replace the existing software management order (DOE 1330.1D). The new order, which is still in draft, establishes Department policies, responsibilities, and authorities for the planning, funding, development, acquisition, security, and integration of information technology resources. The draft order states that a local software inventory management system shall be developed to maintain an awareness of the software available at each site. However, as written, the order does not specify (1) standards for classifying systems according to their functional capabilities or (2) procedures for ensuring the integrity of software systems data included in the inventories. As a result, contractors will continue to have wide latitude in how they choose to develop and maintain software system inventories, and thus, the Department will not likely progress toward having an inventory that it can effectively use to identify duplicate systems. Streamlining information systems is essential to helping the Department realize savings. In addition, it is essential that the Department and its contractors be able to assess the capabilities of existing systems prior to acquiring new systems to avoid further duplication and waste. However, without mechanisms for ensuring more reliable reporting by the Department’s management and operating contractors, these efforts will not succeed. Because approximately 90 percent of all information technology resource expenditures are made by management and operating contractors at the site level, the success of the Department’s improvement efforts hinges on their effective participation. We recommend that you direct the Deputy Assistant Secretary for Information Management to develop, and include in the draft consolidated information resources management order, (1) specific standards for classifying software systems according to their functional capabilities and (2) procedures for ensuring that the data included in software system inventories are complete and reliable; and require all management and operating contractors to immediately evaluate their software system inventories for completeness and accuracy, address any weaknesses identified, and create and provide OIM a database which is consistent with the Department’s standards. Department of Energy officials, including the Deputy Assistant Secretary for Information Management, provided written comments on a draft of this report. We have incorporated their comments where appropriate and reprinted them in appendix I. These officials disagreed with our recommendations. Specifically, the officials said that they had not meant to imply that a complete inventory of departmental and contractor systems would be available or needed to support the Department’s streamlining effort. Moreover, they stated that they did not believe that it was appropriate for the Department to require its management and operating contractors to either maintain information system inventories or to adhere to specific systems classifications for identifying their information systems. They stated that such inventories are not required by either the Paperwork Reduction Act of 1995 or the Information Technology Management Reform Act of 1996.