oversight

Telecommunications Management: More Effort Needed by Interior and the Forest Service to Achieve Savings

Published by the Government Accountability Office on 1997-05-08.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to the Chairman and Ranking
                 Minority Member, Subcommittee on
                 Interior and Related Agencies,
                 Committee on Appropriations, House of
                 Representatives
May 1997
                 TELECOMMUNICATIONS
                 MANAGEMENT
                 More Effort Needed by
                 Interior and the Forest
                 Service to Achieve
                 Savings




GAO/AIMD-97-67
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Accounting and Information
                   Management Division

                   B-274808

                   May 8, 1997

                   The Honorable Ralph Regula
                   Chairman
                   The Honorable Sidney Yates
                   Ranking Minority Member
                   Subcommittee on Interior and Related Agencies
                   Committee on Appropriations
                   House of Representatives

                   As requested, we are reporting to you the results of our review of efforts
                   by the Department of the Interior and the Department of Agriculture’s
                   (USDA) Forest Service to reduce costs by consolidating their
                   telecommunications services. As agreed, our objectives were to determine
                   whether (1) Interior has consolidated and optimized telecommunications
                   services to eliminate unnecessary services and maximize savings and
                   (2) Interior and the Forest Service are sharing telecommunications
                   services where they can.


                   To its credit, Interior has undertaken a number of telecommunications
Results in Brief   cost-savings initiatives that have produced significant financial savings and
                   helped reduce the Department’s more than $62 million annual
                   telecommunications investment. However, Interior is not systematically
                   identifying and acting on other opportunities to consolidate and optimize
                   telecommunications resources within and among its bureaus or its
                   2,000-plus field locations. The cost-savings initiatives that have been
                   undertaken have generally been done on an isolated and ad hoc basis, and
                   have not been replicated throughout the Department. We did not review
                   consolidation and sharing opportunities at all of Interior’s field locations.
                   However, at the four sites we visited, we found that telecommunications
                   resources were often not consolidated or shared, and bureaus and offices
                   were paying thousands of dollars annually for unnecessary services.
                   Interior does not know to what extent similar telecommunications savings
                   may exist at its other offices because it lacks the basic information
                   necessary to make such determinations.

                   Interior and USDA may also be missing opportunities to save millions of
                   dollars by not sharing telecommunications resources. Even though the
                   Departments have a 2-year old agreement to identify and act on sharing
                   opportunities, little has been done to implement this agreement and,
                   accordingly, only limited savings have been realized. Moreover, while




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             Interior and USDA’s Forest Service currently plan to collectively spend up
             to several hundred million dollars to acquire separate radio systems over
             the next 8 years, the Departments have not jointly determined the extent
             to which they can reduce these costs by sharing radio equipment and
             services.


             As the nation’s principal conservation agency, Interior has responsibility
Background   for managing most of our nationally owned public lands and natural
             resources. This includes fostering the wisest use of our land and water
             resources, protecting our fish and wildlife, and preserving the
             environmental and cultural values of our national parks and historic
             places. Interior employs about 70,000 full-time equivalent staff1 and
             delivers a wide range of services through its bureaus, services, and offices2
              at over 2,000 field locations across the country. Three Interior
             bureaus—the Bureau of Land Management (BLM), the National Park
             Service, and the Fish and Wildlife Service (FWS)—and USDA’s Forest
             Service3 share responsibilities for managing public lands. While all have
             separate missions, they manage adjacent lands in many areas throughout
             the country and have some responsibilities that overlap. Over the last
             several years, Interior and the Forest Service have collocated some offices
             or shared space with other federal agencies, and have pursued other
             means of streamlining, sharing resources, and saving rental costs.

             To carry out its broad missions, Interior and its bureaus spend more than
             $62 million each year on telecommunications resources4 that are used to
             provide a wide array of voice, data, radio, and video services. These
             include a variety of telecommunications services acquired under the
             General Services Administration’s Federal Telecommunications System
             (FTS) 2000 contract5 as well as from local and long-distance telephone
             carriers and commercial vendors. Interior was unable to provide us with

             1
              As a result of streamlining and downsizing at the Department, Interior’s fiscal year 1998 budget
             request shows a total reduction of over 7,500 full-time equivalent staff since fiscal year 1993.
             2
              Interior’s components include the Office of the Secretary and eight major bureaus, services, and
             offices: the Bureau of Land Management, the Bureau of Reclamation, the Office of Surface Mining
             Reclamation and Enforcement, the National Park Service, the Fish and Wildlife Service, the Minerals
             Management Service, the Geological Survey, and the Bureau of Indian Affairs. Hereafter, these
             components will be referred to as “bureaus.”
             3
              The Forest Service has over 800 offices across the country.
             4
              Telecommunications can be defined as the electronic transmission of information of any type, such as
             data, sound, television picture, and facsimile.
             5
              FTS 2000 is a network of long-distance voice, data, and video telecommunications services intended
             to satisfy the federal government’s needs in the continental United States through 1998.



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its total fiscal year 1996 telecommunications costs because commercial
telecommunications costs and costs for some other services are paid
directly by Interior bureaus; these costs are not aggregated or tracked at
the Department level. However, for 1 year—fiscal year 1995—in response
to a survey we conducted, Interior estimated that it spent about
$62 million on telecommunications equipment and services.6 This included
about $29 million for FTS 2000 services and about $33 million for
commercial and other services. Estimated fiscal year 1995 costs for radio
equipment and service are not included in these totals.

The Forest Service, which employs more than 30,000 full-time staff, spent
about $33 million for telecommunications in fiscal year 1996. The Forest
Service and Interior expect to collectively spend up to several hundred
millon dollars over the next 8 years acquiring new radio equipment and
services to convert to narrowband requirements by 2005.7

As we previously reported at USDA, consolidating and optimizing
telecommunications offers organizations a way to reduce costs by
combining resources and services where sharing opportunities exist and
by eliminating unnecessary services.8 For example, the cost to access FTS
2000 services can sometimes be greatly reduced where there are multiple
FTS 2000 service delivery points that can be combined to increase the
volume of communications traffic among fewer points, thereby, obtaining
volume discounts. Additional savings can be achieved by selecting more
efficient service and equipment alternatives. Because there can be
additional equipment and transmission costs associated with
implementing consolidation and optimization alternatives, such costs will
offset some of the savings.

The 1996 Clinger-Cohen Act9 and federal guidance10 highlight the need for
federal organizations to acquire and use information technology in the
most cost-effective way and identify and act on opportunities to reduce
costs by sharing resources where possible. In so doing, federal
organizations should identify areas of duplication and work together to

6
 Telecommunications: Costs Reported by Federal Organizations for Fiscal Year 1995
(GAO/AIMD-96-105, June 17, 1996).
7
 Narrowband refers to the method of gaining more channels (and hence more capacity) by splitting FM
channels into channels that are narrower in bandwidth.
8
 USDA Telecommunications: Missed Opportunities To Save Millions (GAO/AIMD-95-97, April 24, 1995).
9
 P.L. 104-106, Section 5122, 110 Stat. 684 (1996).
10
    Executive Order 13011, “Federal Information Technology,” July 16, 1996.



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              best utilize telecommunications and other information technology that can
              reduce expenditures and redundant functions. Not taking steps that
              maximize use of telecommunications resources and achieve optimum
              service at the lowest possible cost can result in the needless waste of
              government dollars. Our 1995 report noted that USDA had hundreds of field
              office sites where multiple agencies, located within the same building or
              geographic area, obtained and used separate and often redundant
              telecommunications services. Because of this and because USDA had not
              acted on opportunities to consolidate and optimize telecommunications
              services, the Department wasted millions of dollars each year paying for
              redundant services it did not need.11

              Interior’s acting chief information officer (CIO) is responsible for advising
              and assisting the Secretary and other senior managers to ensure that the
              Department’s information technology investments are acquired and
              managed consistent with federal law and the priorities of the Secretary.
              Under the direction and leadership of the acting CIO, Interior’s Office of
              Information Resources Management (OIRM) is responsible for ensuring that
              the Department’s telecommunications resources are cost effectively
              managed and for overseeing and guiding Interior bureaus in the
              acquisition, development, management, and use of such resources. In
              addition, heads of Interior bureaus are responsible for implementing a
              program that will ensure compliance with Interior policies and for
              designating telecommunications managers who plan, implement, and
              manage telecommunications activities within their respective
              organizations. The bureaus are also responsible for determining whether
              their telecommunications requirements can be satisfied through existing
              resources and for sharing telecommunications services and equipment
              with other bureaus and agencies to the maximum extent practical. As with
              Interior, the Forest Service delegates responsibility for
              telecommunications management and the sharing of these resources to its
              regional and field components.


              To address our objectives, we reviewed documentation reporting
Scope and     telecommunications usage and costs for Interior and USDA’s Forest Service
Methodology   and we interviewed Interior and USDA officials to discuss consolidation and
              sharing activities. To review consolidation and sharing activities, we
              selected four locations where Interior officials told us offices were
              collocated and actions were underway to consolidate and optimize
              telecommunications resources and services. Specifically, we visited

              11
                GAO/AIMD-95-97, April 24, 1995.



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                           Interior bureau offices in Lakewood and Durango, Colorado; Farmington,
                           New Mexico; and Cheyenne, Wyoming. In addition, we discussed sharing
                           projects underway or planned with Interior and Forest Service officials at
                           offices in Lakewood and Durango. We also reviewed reports and billing
                           information showing FTS 2000 and commercial carrier costs to confirm our
                           results. Appendix I provides further details on our scope and
                           methodology.

                           We conducted our review from August 1996 through March 1997, in
                           accordance with generally accepted government auditing standards. We
                           provided a draft of this report to Interior and USDA for comment. Interior’s
                           and USDA’s comments are discussed in the report and are included in full in
                           appendixes II and III, respectively.


                           To its credit, Interior has undertaken a number of cost-saving initiatives to
Savings Opportunities      eliminate some unused telephone lines and unnecessary data services.
Missed Because             While significant savings have been achieved in some cases, such efforts
Telecommunications         have generally been isolated and ad hoc rather than departmentwide.
                           Savings are being missed because Interior is not systematically identifying
Resources Not              and acting on opportunities to consolidate and share telecommunications
Consolidated and           resources within and among its bureaus or its 2,000-plus field locations. At
                           just four of these field locations, we found that bureaus and offices were
Optimized                  paying thousands of dollars annually for telecommunications services that
                           were redundant and unnecessary. Interior does not know to what extent
                           similar telecommunications savings may exist at its other offices because
                           it lacks the basic information necessary to make such determinations.


Consolidating and          Interior is not systematically identifying opportunities among collocated
Optimizing                 bureau offices to consolidate and optimize telecommunications resources.
Telecommunications         Interior’s multiple bureaus have numerous field office sites in the same
                           building or geographic area, but they obtain and use telecommunications
Resources Among Interior   equipment and services independently. This can result in the use of
Bureaus Is Rare            redundant and/or more costly telecommunications services than necessary
                           at these sites. Nevertheless, OIRM—which has responsibility for managing
                           and overseeing Interior’s telecommunications activities—has not
                           exercised effective leadership by establishing a departmentwide program
                           for systematically identifying telecommunications inefficiencies that may
                           exist and achieving savings among bureaus and offices across the
                           Department. Instead, OIRM relies on each of Interior’s separate bureaus to
                           identify and act on such opportunities. Yet, according to bureau



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telecommunications officials, this is rarely done and savings opportunities
may be lost.

Although we only visited a few of Interior’s field sites during our review,
we found that bureau offices in Lakewood, Durango, and Farmington
spent thousands of dollars over the last several years for unnecessary
commercial long-distance telephone and redundant FTS 2000 data services.
In one case, billing records show that two bureau offices in the one
building in Lakewood were spending about $4,400 annually for
unnecessary FTS 2000 services because these services had not been
consolidated and shared. In addition, we found bureau offices in
Farmington located close by one another yet still using separate data
connections to the same cities; opportunities to share these services in
order to reduce costs had not been investigated.

While many bureau telecommunications managers and staff told us they
would like to take advantage of savings by consolidating and sharing
resources at locations, given their other duties, it is not a priority.
Specifically, these officials said that they spend most of their time
maintaining current operations and providing their bureau field offices
with technical assistance. As a result, they assert that they rarely have time
to look for such consolidation opportunities among bureau offices.

Even if pursuing consolidation opportunities was a priority, the bureaus
do not have the information necessary to identify where Interior offices
are collocated and determine whether telecommunications savings
opportunities exist at these locations. Specifically, at the time of our
review, neither OIRM nor the bureaus had determined which of the
Department’s 2,000-plus field sites are located within the same building or
geographic area, and OIRM was unable to provide us with a current list of
all Interior office sites.12 Following our exit briefing with Interior at the
end of February 1997, the Department began to develop this information
by extracting and analyzing data from several of its administrative
management databases. These are positive steps that should help the
Department begin to identify savings opportunities.



12
  OIRM did give us an outdated, 2-year-old list from Interior’s Division of Space and Facilities
Management showing sites. This list was developed for emergency preparedness purposes and does
not show collocated offices. In the absence of current information on Interior sites, we attempted to
develop this information ourselves by obtaining data on collocated sites from USDA’s National
Information Technology Center in Fort Collins, Colorado. Initial lists were provided to us in November
1996, but data irregularities—caused by programming difficulties—precluded our using this
information. (See appendix I.)



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Interior bureaus also lack information needed to adequately analyze
cost-savings opportunities that may exist at collocated bureau sites.
According to Interior policy, bureaus are required to maintain inventories
of all of their telecommunications resources. However, at the time of our
review, the bureaus did not maintain up-to-date and complete inventories
of all their telecommunications resources and OIRM has not followed up to
ensure that they do so. Without information such as this that describes
types of telecommunications equipment and services at individual bureau
offices, Interior cannot easily determine where it has opportunities to
consolidate and optimize telecommunications resources among multiple
bureau offices.

In addition, neither OIRM nor the bureaus have used telecommunications
tools such as USDA’s network analysis model13 to help identify potential
savings opportunities across the Department. USDA developed and
successfully used this model to identify millions of dollars in cost-effective
options for reducing telecommunications costs at the Department and at
other agencies. USDA gave its model to Interior over a year ago, but Interior
never used it. Until OIRM and the bureaus develop the basic information
and use the tools available to systematically identify cost-reduction
opportunities at collocated bureau offices, Interior will not be able to
determine where and to what extent similar savings opportunities may
exist in Washington, D.C., and at the Department’s hundreds of offices
across the country.

Some bureau officials said that, through the normal course of their duties,
they have sometimes become aware of opportunities to consolidate and
share telecommunications resources. Even in such cases, however,
savings opportunities may not be pursued because getting the separate
Interior bureaus to agree to make changes in telecommunications
arrangements is difficult and time-consuming. In one case, for example,
three small bureau offices in Cheyenne, Wyoming, gave up trying to
consolidate and share services because no one bureau was willing to
spend the approximately $2,000 needed to purchase the required
equipment, even though services would have been upgraded and overall
bureau savings would have paid for this equipment in a few months.




13
  An automated tool used by USDA to identify millions of dollars in potential savings, the network
analysis model is designed to automate a process in which different telecommunications
configurations for given locations can be analyzed to determine where services can be combined for
volume discounts and where more cost-effective telecommunications arrangements can be selected
for an individual service, on the basis of actual traffic, tariffs, and rates.



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During our review, OIRM and the bureaus began identifying some
cost-savings opportunities using available FTS 2000 reports and other
information. For example, on October 21, 1996, OIRM and the bureaus
initiated an agreement with American Telegraph and Telephone (AT&T) to
take advantage of FTS 2000 intra-LATA (local access transport area) savings
opportunities for local toll call telephone service.14 In November 1996,
further positive steps were taken by OIRM and the bureaus to begin
identifying opportunities where Interior bureaus could aggregate some of
their FTS 2000 services to obtain volume discounts. As of the end of our
review in March 1997, these efforts were still underway and no savings had
yet been reported.

Another effort by the Department that was designed to improve data
communications by establishing a backbone communications network
(DOInet) is also being used to help identify opportunities to reduce costs by
eliminating some redundant data services. By building on existing
networks and establishing common network node locations at high traffic
sites, Interior is establishing DOInet to provide improved interconnectivity
and interoperability among its bureaus. Under this initiative, OIRM recently
began working with the bureaus to identify and try to eliminate data
communications circuits that duplicate DOInet capabilities at high traffic
sites. Also, as part of this effort, OIRM began to review FTS 2000 billing
records to identify some opportunities for eliminating redundant and
unnecessary data circuits in the bureaus themselves.

However, OIRM has not acted to ensure that savings on all opportunities
identified as part of the DOInet initiative will be realized. Consequently,
some savings opportunities have been missed and others could not be
confirmed. For example, after determining from FTS 2000 billing data
during the months of August through November 1995 that Interior bureaus
were paying over $1.1 million annually for over 100 duplicate data circuits,
OIRM recommended that bureaus either disconnect these data lines or
explain why they are needed. But OIRM did not follow up on all its
recommendations and, near the end of our review in February 1997,
documentation showed that only about $200,000 of the $1.1 million in
potential savings identified had been achieved. In March, OIRM officials
said that further action was underway to eliminate more of these
unnecessary circuits and that 19 additional duplicate circuits with an

14
 Calls between locations within a LATA but not within the free calling area for the caller’s telephone
number are defined as intra-LATA toll calls. These calls were originally classified as local exchange
carrier business, while calls from one LATA to another (inter-LATA) belong to the interexchange
carrier selected by the caller. Changes enacted by some state legislatures offer federal government
agencies use of FTS 2000 services in lieu of local exchange carriers for intra-LATA toll calls.



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                             annual cost of over $100,000 had been eliminated. OIRM did not, however,
                             provide the billing data necessary to confirm any of these reported
                             cost-savings.


Some Savings Achieved        Some Interior bureaus have taken positive steps to reduce
Within Bureaus, but Others   telecommunications costs within their own organizations and have
Missed                       achieved significant savings by doing so. For example, according to FWS
                             telecommunications officials, they have reduced FTS 2000 usage costs
                             throughout the bureau. In one example, FWS reported saving about $66,000
                             annually by moving some commercial telephone service to FTS 2000 Virtual
                             On-Net service to achieve lower cost-per-minute charges at many of its
                             office locations.

                             However, in many cases, bureau efforts to reduce telecommunications
                             costs were done ad hoc, not systematically applied throughout the bureau
                             or replicated among other bureaus. For example, a BLM office in Cheyenne
                             reviewed telecommunications services and associated charges 2 years ago,
                             finding that it had paid an extra $90,000 because the local carrier had
                             incorrectly applied tariff rates to some of its services. The office received a
                             total reimbursement for these erroneous charges. However, according to
                             the BLM official who completed the review, this was a onetime initiative
                             undertaken after the office upgraded its telecommunications services, and
                             no additional reviews had been performed.

                             In another case, a Bureau of Reclamation telecommunications official who
                             initiated a review of telephone lines at the office in Lakewood, in
                             September 1995, found that it was paying as much as $20 per line in
                             monthly charges for lines that were no longer being used. In this case,
                             bureau officials found that the office had 2,656 telephone lines for 1,060
                             staff and that at least 1,405 of these lines were unnecessary. In July 1996,
                             bureau officials completed work reducing the number of lines to 1,251 and
                             reported annual savings totaling more than $320,000.15 Again, however,
                             despite the significant cost-savings achieved by the Bureau of
                             Reclamation, we were unable to find any cases during our review where
                             other bureaus had undertaken similar attempts to identify and eliminate
                             unused telephone lines. March 1997 records from AT&T show that, after
                             downsizing, Interior bureaus currently have almost twice as many



                             15
                               Bureau of Reclamation officials said that action is underway at other Reclamation offices to identify
                             unused lines and the Lakewood office is considering making additional system upgrades that may
                             allow even further reductions in lines.



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                            telephone lines as staff—about 137,000 lines for about 70,000 people.16
                            Until similar reviews are done throughout the Department, Interior will
                            not know to what extent other headquarters, bureau, and field offices may
                            be paying for lines they do not use.

                            Because efforts to reduce costs, such as the ones discussed above, are not
                            systematically applied and replicated throughout the Department, some
                            bureaus and offices may also be paying for other telecommunications
                            services that are not used, are uneconomical, or are otherwise not
                            cost-effective. For example, two bureau offices we visited were spending
                            several thousand dollars annually paying for redundant FTS 2000 services
                            they did not need or know they had. In one case, billing records showed
                            that one bureau office in Durango spent about $4,000 more than necessary
                            during the past year paying for redundant FTS 2000 services that should
                            have been consolidated with other services at that office. Office officials
                            told us they were not aware of the redundant services because bills are not
                            reviewed to identify this kind of problem. In another similar case, one
                            bureau office in Cheyenne paid several thousand dollars annually for
                            unnecessary local telephone services and redundant FTS 2000 services that
                            should also have been consolidated.


                            Interior and USDA may likewise be missing opportunities to save millions of
Interior and USDA           dollars by not sharing telecommunications resources among Interior
Also Missing Savings        bureaus and the Forest Service. While the two departments have a 2-year
Opportunities               old agreement to identify and act on sharing opportunities, they have
                            taken little action on this agreement and accordingly, only limited savings
                            have been realized. Moreover, while Interior and USDA’s Forest Service
                            plan to spend several hundred million dollars to acquire separate radio
                            systems over the next 8 years, the Departments have not jointly
                            determined the extent to which they can reduce these costs by sharing
                            radio equipment and services.


Inaction on Interior/USDA   Interior’s bureaus (e.g., BLM, FWS, and the Park Service) and USDA’s Forest
Sharing Agreement Limits    Service recognize that opportunities to share telecommunications
Savings Opportunities       resources among their offices exist. While these organizations acquire and
                            use separate telecommunications resources and services to fulfill their
                            individual missions, they work in many of the same geographic areas,
                            overseeing adjacent public lands and natural resources. Because of this,


                            16
                              Telephone line information for Interior and its bureaus was extracted from AT&T’s inventory of
                            telephone lines. We did not verify the accuracy of this information.



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                            savings may be achieved by sharing resources and services where
                            opportunities exist among these agencies to do so.

                            In recognition of such sharing opportunities, Interior and USDA established
                            a memorandum of agreement in January 1995 to support
                            interdepartmental cooperative efforts “to seek aggressively, opportunities
                            for sharing telecommunications resources” and institute steps necessary
                            to act on these opportunities. While Interior and USDA were to work
                            together to identify potential candidate sites for aggregating and sharing
                            telecommunications resources, they never did. In fact, they have not yet
                            identified Interior bureaus and the Forest Service sites that are in common
                            areas where it may be possible to share telecommunications resources to
                            reduce costs. Senior Interior and USDA managers could not provide a valid
                            basis for not implementing this sharing agreement.

                            Despite inaction on the agreement, we found isolated cases in which
                            Interior and Forest Service offices are reducing their telecommunications
                            costs by sharing some resources. For example, as part of a National
                            Performance Review (NPR) pilot called Trading Post, BLM and the Forest
                            Service said they are achieving thousands of dollars in annual savings by
                            sharing voice communications and local telephone services in Durango.17
                            In another case, Interior bureaus and the Forest Service have begun
                            sharing common network and telecommunications resources at several
                            Alaska sites under an NPR initiative known as ARTnet.18 According to initial
                            results, three Interior bureaus and the Forest Service have said they
                            reduced their annual telecommunications costs over 44 percent (from
                            about $197,000 to $110,000). While such initiatives are positive, they so far
                            involve only a few sites and are not being replicated across the country in
                            other areas where Interior and USDA likely have similar kinds of sharing
                            opportunities.


Savings Opportunities Not   Interior bureaus and USDA’s Forest Service plan to collectively spend up to
Considered in Upcoming      several hundred million dollars over the next 8 years to purchase new
Radio Systems               radio systems required under new federal narrowband standards. Under a
                            directive from the National Telecommunications and Information
Procurements
                            17
                              The Trading Post is a partnership formed between BLM and the Forest Service to demonstrate and
                            experiment with new and more effective ways of doing business at several office sites in Colorado,
                            Montana, and Oregon. Like the trading posts of the American frontier, this initiative focuses on trying
                            to offer customers a common-sense, one-stop-shopping approach by sharing resources to promote
                            more cost-effective delivery of services.
                            18
                              Interior won the Vice President’s Hammer Award and a 1996 Federal Technology Leadership Award
                            for its efforts in leading this National Performance Review initiative.



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              Administration, all federal radio users are required to begin implementing
              new narrowband technologies to make additional radio channels available
              to federal agencies. These new narrowband capabilities are expected to be
              fully implemented governmentwide by January 1, 2005. Interior bureaus
              plan to spend about $270 million making this transition. While the Forest
              Service has not determined how much its actual transition to narrowband
              systems will cost, budget estimates show that it expects to spend tens of
              millions of dollars replacing radio equipment over the next several years.

              According to Interior documentation, its bureaus and the Forest Service
              run parallel radio systems in some areas, with opportunities to share
              portions of these systems. Further, Interior and Forest Service officials at
              headquarters and some field locations said they are interested in sharing
              radio communications; in some cases, Interior and Forest Service field
              locations have begun to share mountaintop maintenance, radio
              frequencies, and dispatch operations. Both agencies have also studied, to
              some degree, implications of sharing radio communications resources. In
              fact, Interior determined that sharing radio resources as part of the effort
              to transition to narrowband standards could reportedly bring about a
              25 percent overall cost reduction (including equipment and personnel).19
              However, at the time of our review, no decisions about this had been
              reached and Interior and the Forest Service are each proceeding with
              plans to acquire separate radio equipment and services that address their
              individual needs.


              While Interior has taken some positive steps to reduce
Conclusions   telecommunications costs, it has not done what is necessary to take
              advantage of departmentwide opportunities to eliminate unnecessary
              services and maximize savings, and has no systematic approach for doing
              so. Until OIRM and the bureaus develop basic information and use the tools
              available to them to systematically identify cost-savings opportunities,
              Interior will not be able to determine where and to what extent sharing
              opportunities may exist throughout the Department and its hundreds of
              offices across the country. Similarly, until Interior and USDA follow their
              1995 agreement to actively pursue opportunities for sharing
              telecommunications resources among bureaus and the Forest Service,
              millions of dollars in potential savings will not have a chance of being
              realized.



              19
               We could not validate or assess these cost-savings because Interior documentation supporting them
              was unavailable, and the Forest Service told us that it has prepared no similar estimates.



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                      In order to help bring about significant potential savings from
Recommendations       consolidated and shared telecommunications resources, we recommend
                      that the Secretary of the Interior direct—and hold accountable—the
                      Department’s acting CIO to immediately establish and fully implement
                      among Interior’s bureaus, a departmentwide program for systematically
                      identifying and acting on all opportunities to consolidate and optimize
                      telecommunications resources, including voice, data, video, and radio
                      equipment and services, where it is cost-effective to do so. At a minimum,
                      the acting CIO should:

                  •   Determine and maintain a current list of Department field locations that
                      are collocated and the extent to which telecommunications resources and
                      services are shared.
                  •   Direct and ensure that all Interior bureaus and offices establish and
                      maintain up-to-date and complete inventories of their telecommunications
                      resources and services at collocated sites.
                  •   Direct and ensure that all Interior bureaus and offices review and analyze
                      telecommunications bills at regular intervals, using a cost-effective
                      approach to ensure that all charges are appropriate and services needed.
                  •   Identify potential savings opportunities at these sites using inventories and
                      telecommunications tools, such as USDA’s network analysis model.
                  •   Monitor these activities and follow up as needed to ensure that all
                      identified savings opportunities are acted upon.

                      In addition, we recommend that the Secretary of the Interior direct—and
                      hold accountable—each of the Department’s assistant secretaries to
                      cooperate with the acting CIO and immediately establish and fully
                      implement bureauwide programs for similarly identifying and acting on all
                      opportunities to consolidate and optimize telecommunications resources
                      within each bureau, using the steps discussed.

                      We also recommend that the acting CIO report to the Secretary every
                      6 months on the progress of these efforts and savings achieved.

                      We further recommend that the Secretary of the Interior and the Secretary
                      of Agriculture ensure that their respective acting CIO’s are responsible and
                      accountable for implementing the 1995 joint sharing agreement. At a
                      minimum, the acting CIOs should:

                  •   Determine where Interior and USDA field sites are collocated and the extent
                      to which services are shared.




                      Page 13                           GAO/AIMD-97-67 Telecommunications Management
                         B-274808




                     •   Identify potential savings opportunities for all telecommunications
                         equipment and services at these sites using the information specified
                         above and telecommunications tools such as USDA’s network analysis
                         model.
                     •   Stop further radio system purchases, except those necessary for meeting
                         immediate technology needs that are critical to ongoing operations, until
                         both departments jointly determine and document where radio equipment
                         and services can be cost-effectively shared and savings achieved.
                     •   Monitor these activities and follow up where needed to ensure that all
                         identified savings opportunities are acted upon.


                         The Department of the Interior’s Assistant Secretary for Policy,
Agency Comments          Management and Budget provided written comments on April 7, 1997, on a
and Our Evaluation       draft of this report. Written comments were also provided by USDA’s acting
                         CIO on April 8, 1997. These comments are summarized below, and are
                         reproduced in appendixes II and III, respectively.

                         Interior’s Assistant Secretary for Policy, Management and Budget stated
                         that the Department will use our report to focus additional efforts on
                         eliminating unnecessary telecommunications services and to implement
                         sharing opportunities. Specifically, the Assistant Secretary stated that
                         Interior will use the results of our review to develop guidance and
                         direction needed by bureau telecommunications managers to better
                         manage their acquisition and sharing of telecommunications services and
                         develop a telecommunications management improvement strategy for the
                         Department. The Assistant Secretary also stated that Interior’s strategy
                         will be implemented by identifying projects, staffing them with
                         Departmental and bureau managers, prioritizing actions, and monitoring
                         results. She also said that actions have already begun on several of these
                         improvement projects.

                         We are encouraged by Interior’s statements to better manage its
                         acquisition and sharing of telecommunications services. It will now be
                         important for the Department to develop specific actions it plans to take
                         on each of our recommendations as it moves ahead on efforts to better
                         manage and share telecommunications resources. Given Interior’s
                         decentralized telecommunications management structure and its reliance
                         on bureaus to identify and act on savings opportunities, it is especially
                         important for the Secretary to implement our recommendations to
                         direct—and hold accountable—the Department’s acting CIO and assistant
                         secretaries for establishing and fully implementing, both among and within



                         Page 14                          GAO/AIMD-97-67 Telecommunications Management
B-274808




Interior’s bureaus, programs for systematically identifying and acting on
all opportunities to consolidate and optimize telecommunications
resources—including voice, data, video, and radio equipment and
services—where it is cost-effective to do so.

Interior’s Assistant Secretary and USDA’s acting CIO stated that their
departments plan to work together to share telecommunications resources
and achieve savings. While these statements are encouraging, neither
department responded to our specific recommendations relating to
implementing the 1995 joint sharing agreement. Given the little action
taken on this agreement, we believe it is especially important that the
Secretary of the Interior and the Secretary of Agriculture ensure that their
respective acting CIOs are both held responsible and accountable for fully
implementing the 1995 agreement as well as our other recommendations
for increasing levels of telecommunications resources sharing between the
departments.

Interior’s Assistant Secretary stated that Interior did not agree with our
recommendation to stop further radio purchases, except those necessary
for meeting immediate technology needs that are critical to ongoing
operation, until both departments jointly determine and document where
radio equipment and services can be cost effectively shared and savings
achieved. The Assistant Secretary did state, though, that Interior supports
the goal of implementing shared radio systems, and will implement
procedures within Interior and with the Forest Service to ensure that all
land mobile radio systems designs are reviewed for sharing and other
savings potential prior to radio purchase. USDA’s acting CIO stated that
additional work on sharing radio systems is needed by the Forest Service
and Interior, but did not comment on our specific recommendation.

We are also encouraged by Interior’s and USDA’s statements indicating their
willingness to work toward increased levels of radio sharing. Nevertheless,
we stand by our recommendation that Interior and USDA should stop
further radio system purchases, except those necessary for meeting
immediate technology needs that are critical to ongoing operations, until
both Departments jointly determine and document where radio equipment
and services can be cost effectively shared and savings achieved.
Regarding the costs of Interior’s transition to narrowband radio systems,
Interior’s Assistant Secretary also stated that the Department now plans to
spend $270 million for the narrowband radio system transition; not the
$200 million we were told during our review. We have amended the report
to reflect Interior’s revised estimate of $270 million.



Page 15                          GAO/AIMD-97-67 Telecommunications Management
B-274808




Interior’s Assistant Secretary also provided several specific comments.
Regarding use of USDA’s network analysis model tool to identify cost
savings opportunities, the Assistant Secretary stated that the Department
had used USDA’s model to eliminate $100,000 in addition to what is stated in
the report and that the tool had also been used to identify $750,000 in
redundant data circuits at the Bureau of Indian Affairs.

Our information, however, continues to indicate otherwise. Specifically, in
February 1997, and again on April 8, 1997, the official responsible for the
network analysis model at USDA stated that while he had given Interior a
copy of the model in September 1995, Interior had never used it.20 Even so,
our report does recognize the more than $1.1 million in duplicate circuits
that Interior said it identified by reviewing FTS 2000 billing records and this
amount includes circuits at the Bureau of Indian Affairs. However, as the
report also states, OIRM did not provide us with the billing records
necessary to confirm that the Department had actually achieved any of
these savings, despite several requests during our review for these records.

The Assistant Secretary also commented that Interior believes AT&T’s
records include some telephone lines that are not active or being billed to
the Department. However, the Assistant Secretary agreed with the report’s
premise that Interior may have unused telephone lines and, as a result, the
Department will conduct a thorough review of AT&T’s records to verify the
number of telephone lines it has and take corrective action where
necessary. We agree that AT&T’s records may include inactive lines in some
cases. However, as we discuss in our report, hundreds of thousands of
dollars in savings have been achieved at one Bureau of Reclamation office
where AT&T’s records were used to identify and eliminate unnecessary
telephone lines. Given this and the fact that Interior does not know to
what extent it may be paying for unnecessary or inactive telephone lines,
we believe that this action by Interior, if fully carried out across the
Department, could achieve additional savings by helping to identify and
eliminate further unnecessary telephone lines and services.

Finally, Interior’s Assistant Secretary named numerous examples that
were not cited in our report in which radio service is being shared
between Interior bureaus and USDA agencies. Our report recognizes that
Interior and USDA have taken some steps to share radio services, but have
done little to ensure that radio and other telecommunications resources


20
  According to this official, the model was not used by Interior because Interior officials had never
requested and obtained the input data necessary to operate it. The USDA official further stated that on
April 3, 1997, Interior requested input data for the model and asked to be trained in its use.



Page 16                                       GAO/AIMD-97-67 Telecommunications Management
B-274808




are shared in all cases throughout the country where there are
opportunities to do so.


As agreed with your offices, unless you publicly announce the contents of
this report earlier, we will not distribute it until 30 days from the date of
this letter. At that time we will send copies to the Secretary of the Interior;
the Secretary of Agriculture; the Chairmen and Ranking Minority Members
of the Senate Committee on Governmental Affairs, the Senate and House
Committees on Appropriations, and the House Committee on Government
Reform and Oversight; the Director of the Office of Management and
Budget; and other interested parties. Copies will also be made available to
others upon request.

Please contact me at (202) 512-6408 if you or your staff have any questions
concerning this report. I can also be reached by e-mail at
willemssenj.aimd@gao.gov. Major contributors to this report are listed in
appendix IV.




Joel C. Willemssen
Director, Information Resources Management




Page 17                            GAO/AIMD-97-67 Telecommunications Management
Contents



Letter                                                                                          1


Appendix I                                                                                     20

Scope and
Methodology
Appendix II                                                                                    23

Comments From the
Department of the
Interior
Appendix III                                                                                   26

Comments From the
Department of
Agriculture
Appendix IV                                                                                    28

Major Contributors to
This Report


                        Abbreviations

                        AIMD      Accounting and Information Management Division
                        AT&T      American Telephone and Telegraph
                        BLM       Bureau of Land Management
                        BOR       Bureau of Reclamation
                        CIO       chief information officer
                        DOInet    DOI communications network
                        FTS       Federal Telecommunications System
                        FWS       Fish and Wildlife Service
                        GAO       General Accounting Office
                        LATA      local access transport area
                        NPR       National Performance Review
                        OIRM      Office of Information Resources Management
                        USDA      United States Department of Agriculture


                        Page 18                       GAO/AIMD-97-67 Telecommunications Management
Page 19   GAO/AIMD-97-67 Telecommunications Management
Appendix I

Scope and Methodology


             To address our objectives, we reviewed Interior policies on
             telecommunications management, various memoranda and reports
             discussing telecommunications management activities at the Department,
             vendor billing data showing Interior telecommunications usage and costs,
             and other materials outlining plans and efforts by OIRM and the bureaus to
             identify opportunities to consolidate and optimize telecommunications
             resources and services and implement cost-savings solutions. To identify
             Interior’s overall telecommunications costs, we obtained the Department’s
             estimated costs for fiscal year 1995, as it does not track costs for voice,
             data, video, and other services. We also reviewed documentation relating
             to interagency efforts by Interior and USDA’s Forest Service to combine and
             share resources and obtained current estimated radio replacement costs
             for Interior bureaus and the Forest Service.

             To determine whether Interior had consolidated and optimized
             telecommunications resources to eliminate unnecessary services and
             maximize savings, we interviewed OIRM officials responsible for
             Departmentwide telecommunications management activities as well as
             telecommunications managers and/or staff in Interior’s major bureaus. In
             addition, we reviewed internal correspondence and other documents
             describing actions taken to identify Departmentwide opportunities to
             consolidate and optimize telecommunications services.

             Because Interior did not have a current list of sites where its bureau
             offices are collocated with one another and with Forest Service offices, we
             attempted to develop this information by contacting USDA’s National
             Information Technology Center in Fort Collins, Colorado, which assists
             the General Services Administration in managing the government’s FTS
             2000 billing database. Because all Interior bureaus and the Forest Service
             obtain services under the government’s FTS 2000 contract, in
             September 1996, we asked the National Information Technology Center to
             develop information from the FTS 2000 billing database showing addresses
             for Interior and Forest Service offices, from which collocated sites could
             be identified. Initial lists were provided to us in November 1996, but
             programming problems that caused some data irregularities precluded us
             from using this information.

             To review consolidation and sharing activities, we selected four locations
             where OIRM and bureau officials told us bureau offices were collocated and
             where some actions had been taken to consolidate and optimize
             telecommunications resources and services. Specifically, we visited
             Interior bureau offices in Lakewood and Durango, Colorado; Farmington,



             Page 20                          GAO/AIMD-97-67 Telecommunications Management
Appendix I
Scope and Methodology




New Mexico; and Cheyenne, Wyoming. To determine the extent to which
telecommunications resources and services had been consolidated at
these locations, we interviewed bureau officials and observed ongoing
operations.

At our site visits, we found cases in which Interior and the bureaus had
additional opportunities to consolidate and optimize telecommunications
services and had lost savings because no one had identified and acted on
these opportunities. However, we were unable to identify precise dollar
amounts for these lost savings because up-to-date, comprehensive
information describing telecommunications services and costs were
generally not available at these offices. Therefore, in the absence of this
information, we attempted to estimate the lost savings by analyzing
Interior telecommunications usage and cost data that we had also
obtained from USDA’s National Information Technology Center and
commercial telephone company vendors.1

To determine whether Interior and the Forest Service were sharing
telecommunications services where possible, we interviewed
telecommunications managers involved in these activities and reviewed
the status of plans intended to expand sharing. In addition, we discussed
sharing projects underway or planned with Interior and Forest Service
officials at offices in Lakewood and Durango and opportunities for sharing
voice, data, and radio equipment and services. We also reviewed
telecommunications usage and cost data obtained from USDA’s National
Information Technology Center and commercial telephone company
vendors to determine the extent to which telecommunications resources
had been consolidated and optimized.

We performed our audit work from August 1996 through March 1997, in
accordance with generally accepted government auditing standards. Our
work was primarily done at Interior and USDA headquarters offices in
Washington, D.C. We also worked at Interior offices for the National Park
Service, the Bureau of Reclamation, and the Office of Surface Mining
Reclamation and Enforcement in Washington, D.C.; the Bureau of Land
Management, the Bureau of Reclamation, and the U.S. Fish and Wildlife
Service in Lakewood; the Minerals Management Service in Herndon,
Virginia; and the U.S. Geological Survey in Reston, Virginia. Our work also
included visits to selected Interior bureau offices in Farmington and

1
 The National Information Technology Center’s Telecommunications Services Division had developed
significant expertise in the cost-based analysis of telecommunications services; its personnel have
been recognized for their technical excellence by the General Services Administration and by the
Interagency Committee on Information Resources Management.



Page 21                                     GAO/AIMD-97-67 Telecommunications Management
Appendix I
Scope and Methodology




Cheyenne; Interior and USDA Forest Service offices in Durango; and Forest
Service offices in Lakewood.




Page 22                         GAO/AIMD-97-67 Telecommunications Management
Appendix II

Comments From the Department of the
Interior




              Page 23     GAO/AIMD-97-67 Telecommunications Management
Appendix II
Comments From the Department of the
Interior




Page 24                               GAO/AIMD-97-67 Telecommunications Management
Appendix II
Comments From the Department of the
Interior




Page 25                               GAO/AIMD-97-67 Telecommunications Management
Appendix III

Comments From the Department of
Agriculture




               Page 26   GAO/AIMD-97-67 Telecommunications Management
Appendix III
Comments From the Department of
Agriculture




Page 27                           GAO/AIMD-97-67 Telecommunications Management
Appendix IV

Major Contributors to This Report


                       Stephen A. Schwartz, Senior Assistant Director
Accounting and         William D. Hadesty, Technical Director
Information            Mark D. Shaw, Assistant Director
Management Division,   Mirko J. Dolak, Technical Assistant Director
                       Patricia Macauley, Senior Information Systems Analyst
Washington D.C.        Michael P. Fruitman, Communications Analyst




(511414)               Page 28                         GAO/AIMD-97-67 Telecommunications Management
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