In response to the tragic 1998 bombings in Kenya and Tanzania, the former Secretary of State established an independent panel, the Overseas Presence Advisory Panel (Panel), to analyze our overseas presence and develop recommendations for organizing and managing our embassies and consulates overseas. After visiting several overseas posts, the Panel concluded that the condition of U.S. posts and missions abroad was unacceptable and recommended eight major types of changes, which, according to its report, would improve the efficiency and effectiveness of our overseas presence. Specifically, the panel directed the President, the Secretary of State, and congressional leaders to form a partnership to implement the following eight recommendations: improve security and establish accountability for security at our overseas facilities; create the right size and shape for our overseas presence, ensuring that posts are not over- or under-staffed; ensure that U.S. facilities are quickly and efficiently renovated and are properly maintained and managed on an ongoing basis; adopt best practices for human resources management, such as improving recruitment and expanding training and promotion opportunities; invest in up-to-date information technology, including providing Internet access and e-mail to all staff; improve and reinforce consular services, such as same-day processing of visas; enact cost- and time-saving administrative reforms, such as consolidating some functions (e.g., accounting practices) and automating others; and reinforce the responsibilities and authorities of Ambassadors, who represent the interests of the President of the United States. Because State is the lead agency for foreign affairs, President Clinton directed the former Secretary of State, on February 10, 2000, to lead a cabinet-level committee to implement the Panel’s recommendations. As part of the former Secretary’s response, the Under Secretary for Management formed an interagency Overseas Presence Committee (the Committee) in February 2000 to address three of the eight recommendations. The Committee then established three subcommittees to implement the Panel’s recommendations: Overseas Facilities, Interagency Rightsizing, and Interagency Technology. (See fig. 1 for the Committee’s structure and table 1 for allocation of responsibilities.) In October 2000, the then Secretary of State reported on the progress made in addressing the Panel’s recommendations for seven of the eight recommendations. In response to the recommendation to invest in up-to- date information technology, State reported that it had established an acquisition and deployment strategy, preliminary system requirements, a high-level implementation plan, and an architectural concept for a common overseas knowledge management system infrastructure; established September 2000 as the goal for completing a formal program management plan, with a goal of revising the plan by April 2001 after completing evaluation of a prototype system; and established December 2001 as the goal for completing system pilot testing at two posts. On August 8, 2001, State issued its final status report on its efforts to address the Panel’s recommended changes to the Chairman of the Senate Committee on Foreign Relations. With regard to the recommendation to upgrade information technology, State reported that the interagency group has developed and is testing a prototype of the common overseas system and that a field test of the system’s infrastructure is being conducted at pilot posts in Mexico and India. In addition, State officials told us that the date for completing system prototyping has been delayed by 13 months to May 2002, and the date for completing pilot testing at two posts has been delayed by 9 months to September 2002. Also, the three vendors selected to develop system prototypes are not scheduled to deliver these systems to State for evaluation until November 2001. The modernization program is intended to put in place a common overseas knowledge management system to facilitate unclassified information/knowledge sharing among foreign affairs agencies. Key system capabilities are to include, among other things, interagency e-mail, post-specific news and information web-based links, crisis coordination support, policy formulation support, and various administrative functions (e.g., accounting, contract management, training, and travel). According to State’s draft program management plan, the department will acquire and deploy system functionality in each of these areas in three increments, or three prioritized groupings of user requirements, which State calls pilot, full-scale implementation, and deferred. (See table 2 for planned system functionality by increment.) The system is to use commercially available, Internet-based technology to enable users to access the system from any location using their respective agencies’ existing networks and operating platforms. The desktop Internet browser is intended to be the connection to the common overseas system and its knowledge management tools. A common website is to serve as the portal to the customized database applications, files, and communication tools to be shared across the foreign affairs community’s diverse, distributed environment. (See fig. 2 for a simplified diagram of the system.) In 1999, the Panel estimated the cost to acquire and deploy this unclassified system at about $200 million, assuming the use of commercially available technology. About a year later, State estimated that the investment in the system through fiscal year 2004 would be about $271 million. State plans to update this cost estimate. According to State’s draft program management plan, the estimated cost to perform system prototyping and pilot testing is $18.2 million. The conference report accompanying the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 2001, stated the conference committee’s expectation that State would spend $17 million to carry the program through pilot testing. State has met with subcommittee staff to keep them informed of its plans and progress, and State has agreed to submit a spending plan for the pilot project, as directed by the conference report. Prototyping activities are currently scheduled for completion in May 2002. In June 2000, we testified that State was in the early stages of planning for the overseas-presence system modernization—establishing preliminary milestones, developing rough cost estimates, and formulating a program management plan. At that time, we expressed concern regarding (1) State’s ability to obtain agreement internally as well as from the foreign affairs partner agencies in devising and deploying a common technology solution and (2) State’s lack of an approved architecture to guide and constrain its own IT investments. In our testimony, we stated, among other things, that it was important for State to (1) carefully plan the initiative establishing realistic goals and milestones, (2) install the needed management and oversight accountability to properly guide the acquisition of the system, and (3) anticipate the steps needed to gain the full cooperation of its agency partners. Office of Management and Budget (OMB) guidance outlines risk reduction principles that are consistent with best commercial practices and, if effectively implemented, can increase the probability that system modernization programs will succeed. Among other things, this guidance supports (1) prototyping system components before acquiring or developing the operational system, (2) using commercially available technology, and (3) securing system stakeholders’ involvement and agreement on products such as management plans and system requirements. State’s near-term plans generally provide for each of these areas of guidance. In particular, State is currently focused on acquiring and evaluating system prototypes that are to employ either commercially available and/or government-used hardware and software products. On July 5, 2001, State selected three vendors, each of which was to develop a prototype system by October 2001. However, according to a State official, because of security and infrastructure concerns identified during testing that the vendors must address, the systems are now scheduled for delivery in November 2001. In addition, State planned to evaluate the delivered prototype systems using evaluation criteria that were to be developed by a private firm by September 28, 2001. While an initial draft of the criteria was provided on that date, according to a State official, revisions were needed, and the deadline for finalizing the evaluation criteria was changed to mid-November 2001. Although these events will delay the deadline for completing the prototype evaluation one month to May 2002, piloting activities will not be affected and will begin as scheduled. Once the prototype system solutions have been evaluated, State and its agency partners plan to use the best capabilities from each prototype to refine user requirements and develop a specification for the foundational system capabilities that will be pilot tested. State plans to pilot test these foundational capabilities in India and Mexico between April and September 2002. According to State, no commitments have been made to proceed beyond this pilot test, and any decisions about how best to proceed will have to involve agency partners, OMB, and relevant congressional committees. In addition to prototyping the system and using commercially available products, State has also taken steps to engage other foreign affairs agencies in its prototyping activities, including securing stakeholder involvement and buy-in. Specifically, responses from the seven modernization program partner agencies that responded to our survey showed that they were generally satisfied with State’s efforts to engage them in near-term program activities. Additionally, four of these agencies stated that State had informally obtained their concurrence on such items as program plans and system requirements. As for the other three agencies, one stated that while it had reviewed some of the program documentation, it had not participated in an approval process; another stated that it had reviewed program documentation for informational purposes only and was unaware of any approval process; and the third stated that it had not reviewed any of the program documentation. Nevertheless, we found that these and other interagency meetings, such as program working group meetings, have occurred and provided forums for informally engaging agency partners. In general, agency partners attended these meetings and participated in the program. For example, two agency partners have assigned staff to the FASI Program Office. Available documentation and State CIO officials’ statements confirm that agency partners’ buy-in to program decisions, such as agreement on the requirements for the prototype and approval of plans, is being accomplished informally. According to State, representatives for the partner agencies agreed that their lack of opposition or comments equated to concurrence on actions, plans, and/or documents, thereby eliminating the need to obtain actual signatures to indicate approval.