oversight

Information Technology: Potentially Duplicative Investments Exist at the Departments of Defense and Energy

Published by the Government Accountability Office on 2012-02-17.

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

                            United States Government Accountability Office

GAO                         Testimony
                            Before the Subcommittee on Technology,
                            Information Policy, Intergovernmental Relations
                            and Procurement Reform, Committee on Oversight
                            and Government Reform, House of Representatives

                            INFORMATION
For Release on Delivery
Expected at 9:30 a.m. EST
Friday, February 17, 2012

                            TECHNOLOGY
                            Potentially Duplicative
                            Investments Exist at the
                            Departments of Defense
                            and Energy
                            Statement of David A. Powner
                            Director, Information Technology Management Issues




GAO-12-462T
February 17, 2012

Chairman Lankford, Ranking Member Connolly, and Members of the
Subcommittee:

I am pleased to be here today to discuss the potentially duplicative
information technology (IT) investments at selected agencies and actions
these agencies are taking to address them. With at least $79 billion spent
in fiscal year 2011 by the United States government on IT investments, it
is important that federal agencies avoid investing in duplicative
investments, whenever possible, to ensure the most efficient use of
resources.
Last year, we issued a comprehensive report that identified federal
programs or functional areas where unnecessary duplication, overlap, or
fragmentation exists; the actions needed to address such conditions; and
the potential financial and other benefits of doing so. 1 More recently, we
reported on the Office of Management and Budget’s (OMB) and federal
agencies’ oversight of IT investments and the initiatives under way to
address potentially duplicative IT investments. 2 Specifically, we recently
reported that there are hundreds of IT investments providing similar
functions across the federal government. For example, agencies reported
about 1,500 investments that perform general information and technology
functions, about 775 supply chain management investments, and about
620 human resource management investments.
You asked us to testify on our report being released today that describes
the extent to which potentially duplicative IT investments exist within
these three categories, including the actions agencies are taking to
address them. 3 In this regard, my testimony specifically covers potentially
duplicative investments we identified at three of the largest agencies with
respect to number of investments–the Departments of Defense (DOD),
Energy (DOE), and Homeland Security (DHS). In preparing this
testimony, we relied on the GAO report being released at today’s hearing.




1
 GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011).
2
 GAO, Information Technology: OMB Needs to Improve Its Guidance on IT Investments,
GAO-11-826 (Washington, D.C.: Sept. 29, 2011).
3
 GAO, Information Technology: Departments of Defense and Energy Need to Address
Potentially Duplicative Investments, GAO-12-241 (Washington, D.C.: Feb. 17, 2012).




Page 1
In that report, to identify potentially duplicative IT investments within each
of the selected agencies, we analyzed a subset of investment data from
OMB’s exhibit 53 to identify investments with similar functionality. 4
Specifically, we reviewed 810, or 11 percent, of the approximately 7,200
IT investments federal agencies report to OMB through the exhibit 53.
Our review represents approximately 24 percent of DOD’s IT portfolio in
terms of the number of investments that they report to OMB, 19 percent
of DOE’s, and 16 percent of DHS’s. 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). 5 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 and reviewed and assessed agencies’ rationales for
having multiple systems that perform similar functions. Additionally, when
analyzing each investment’s description, we compared the investment’s
designated Federal Enterprise Architecture (FEA) 6 primary category and
sub-category with 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. We also interviewed officials to
discuss actions agencies have taken to address the potentially duplicative
investments and reviewed supporting documentation.
All work on which this testimony is based was performed in accordance
with generally accepted government auditing standards. Those standards
require 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


4
 The exhibit 53 identifies all IT projects—both major and non-major—and their associated
costs within a federal organization. Information included on agency exhibit 53s is
designed, in part, to help OMB better understand what agencies are spending on IT
investments.
5
 Certain investments were not placed in groups because the investment descriptions were
too broad. Additionally, IT investments identified as Funding Contributions were not
included, since they are managed by other agencies.
6
 The FEA is intended to provide federal agencies and other decision-makers with a
common frame of reference or taxonomy for informing agencies’ individual enterprise
architecture efforts and their planned and ongoing investment activities, and to do so in a
way that identifies opportunities for avoiding duplication of effort and launching initiatives
to establish and implement common, reusable, and interoperable solutions across agency
boundaries.




Page 2
                          provides a reasonable basis for our findings and conclusions based on
                          our audit objective.


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
                          realized from IT. 7 Too often, federal IT projects run over budget, behind
                          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.

OMB’s IT Oversight Mechanisms
                          OMB uses the following mechanisms to help it fulfill oversight
                          responsibilities of federal IT spending during the annual budget
                          formulation process.
                          •   OMB requires 27 federal departments and agencies 8 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). 9



                          7
                           OMB, 25 Point Implementation Plan to Reform Federal Information Technology
                          Management (Washington, D.C.: December 2010).
                          8
                           The 27 agencies are the Agency for International Development; the Departments of
                          Agriculture, Commerce, Defense, Education, Energy, Health and Human Services,
                          Homeland Security, Housing and Urban Development, the Interior, Justice, Labor, State,
                          Transportation, the Treasury, and Veterans Affairs; the Army Corps of Engineers; the
                          Environmental Protection Agency; the General Services Administration; the National
                          Aeronautics and Space Administration; the National Archives and Records Administration;
                          the National Science Foundation; the Nuclear Regulatory Commission; the Office of
                          Personnel Management; the Small Business Administration; the Smithsonian Institution;
                          and the Social Security Administration.
                          9
                           The exhibit 300s provide a business case for each major IT investment and allow OMB to
                          monitor IT investments once they are funded. Agencies are required to provide
                          information on each major investment’s cost, schedule, and performance.




                          Page 3
•     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. 10 For each major
      investment, the Dashboard provides performance ratings on cost and
      schedule, a chief information officer (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. The CIO also has the ability to provide written comments
      regarding the status of each investment.
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).
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. 11 Specifically, it does
not include information from 58 independent executive branch agencies
and 3 other agencies. 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.




10
  According to OMB guidance, a major investment is a system or acquisition requiring
special management attention because of its importance to the mission or function of the
agency, a component of the agency, or another organization; is for financial management
and obligates more than $500,000 annually; has significant program or policy implications;
has high executive visibility; has high development, operating, or maintenance costs; is
funded through other than direct appropriations; or is defined as major by the agency’s
capital planning and investment control process.
11
    GAO-11-826.




Page 4
Agencies Spend Billions on Poorly Performing IT Investments
                            Despite OMB’s oversight mechanisms, the federal government spends
                            billions of dollars on poorly performing IT investments, as the following
                            examples illustrate:
                            •    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. 12
                            •    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. 13
                            •    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. 14 According to
                                 the Office of Personnel Management, it spent approximately $231
                                 million on this investment.
                            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). 15 (See fig. 1.)




                            12
                              Advance Policy Questions for Testimony of Elizabeth A. McGrath to be Deputy Chief
                            Management Officer of the Department of Defense, http://armed-
                            services.senate.gov/statemnt/2010/03%20March/McGrath%2003-23-10.pdf (Washington,
                            D.C.: March 2010).
                            13
                             GAO, Border Security: Preliminary Observations on the Status of Key Southwest Border
                            Technology Programs, GAO-11-448T (Washington, D.C.: Mar. 15, 2011).
                            14
                              GAO, OPM Retirement Modernization: Longstanding Information Technology
                            Management Weaknesses Need to Be Addressed, GAO-12-226T (Washington, D.C.:
                            Nov. 15, 2011).
                            15
                              The approximately 800 major IT investments total about $40.6 billion for fiscal year
                            2011.




                            Page 5
Figure 1: Overall Performance Ratings of Major IT Investments on the Dashboard,
as of August 2011




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. 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



Page 6
                                  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. 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.
                              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 2
                              depicts, by primary function, the total number of investments within the 27
                              federal agencies that report to the IT Dashboard.




                              Page 7
Figure 2: Number of Government IT Investments by Primary Function, as of July 2011




                                        Additionally, agencies were required to choose a sub-function for each
                                        investment related to the primary function.

GAO Has Previously Reported on Potential Duplication and the Challenges of
Identifying Duplicative Investments
                                        During the past several years, we have issued multiple reports and
                                        testimonies and made numerous recommendations to OMB and federal




                                        Page 8
agencies to identify and reduce duplication within the federal
government’s portfolio of IT investments. 16
In March 2011, we reported an overview of federal programs and
functional areas where unnecessary duplication, overlap, or
fragmentation existed. 17 Specifically, we identified 34 areas where
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. The
report touched on hundreds of federal programs, including IT programs,
affecting virtually all major federal departments and agencies.
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



16
  GAO, IT Dashboard: Accuracy Has Improved, and Additional Efforts Are Under Way to
Better Inform Decision Making, GAO-12-210 (Washington, D.C.: Nov. 7, 2011); GAO-11-
826; Information Technology: OMB Has Made Improvements to Its Dashboard, but
Further Work Is Needed by Agencies and OMB to Ensure Data Accuracy, GAO-11-262
(Washington, D.C.: Mar. 15, 2011); Information Technology: OMB’s Dashboard Has
Increased Transparency and Oversight, but Improvements Needed, GAO-10-701
(Washington, D.C.: July 16, 2010); Information Technology: Management and Oversight
of Projects Totaling Billions of Dollars Need Attention, GAO-09-624T (Washington, D.C.:
Apr. 28, 2009); Information Technology: OMB and Agencies Need to Improve Planning,
Management, and Oversight of Projects Totaling Billions of Dollars, GAO-08-1051T
(Washington, D.C.: July 31, 2008); Information Technology: Further Improvements
Needed to Identify and Oversee Poorly Planned and Performing Projects, GAO-07-1211T
(Washington, D.C.: Sept. 20, 2007); Information Technology: Improvements Needed to
More Accurately Identify and Better Oversee Risky Projects Totaling Billions of Dollars,
GAO-06-1099T (Washington, D.C.: Sept. 7, 2006); Information Technology: Agencies and
OMB Should Strengthen Processes for Identifying and Overseeing High Risk Projects,
GAO-06-647 (Washington, D.C.: June 15, 2006).
17
 GAO-11-318SP.




Page 9
Consolidation Initiative to guide federal agencies in consolidating data
centers. Specifically, OMB and agencies plan to close more than 950 of
the over 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. 18 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. OMB officials generally
agreed with this recommendation and stated that they plan to update the
FEA reference models 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.




18
 GAO-11-826.




Page 10
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, 19 we identified 37 potentially duplicative investments at DOD
                             and DOE within three FEA categories (Human Resource Management,


                             19
                               We reviewed 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 the number of investments
                             reported to the Dashboard, 19 percent of DOE’s, and 16 percent of DHS’s.




                             Page 11
Information and Technology Management, and Supply Chain
Management). 20 These investments account for about $1.2 billion in total
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 1). 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 1 summarizes the
12 groups of potentially duplicative investments we identified by purpose
and agency.




20
  Within the three selected functions, we narrowed our review to the following seven sub-
functions: Benefits Management, Organization and Position Management, Employee
Performance Management, Information Management, Information Security, Inventory
Control, and Goods Acquisition.




Page 12
Table 1: Potentially Duplicative Investments

Dollars in millions
                                                                                                            Planned and
                                                                                                         actual spending
                                                                                            Number of        fiscal years
Department Branch or bureau                         Purpose                               investments          2007-2012
DOD            Air Force                            Contract Management                              5               $41
               Army                                 Personnel Assignment Management                  2               $12
               Navy                                 Acquisition Management                           4              $407
                                                    Aviation Maintenance and Logistics               2               $85
                                                    Contract Management                              5               $17
                                                    Housing Management                               2                $5
                                                    Personnel Assignment Management                  4               $28
                                                    Promotion Rating                                 2                $3
                                                    Workforce Management                             3              $109
               DOD Enterprisewide                   Civilian Personnel Management                    2              $504
DOE            Energy Programs                      Back-end Infrastructure                          3                $1
               Energy Programs & Environmental      Electronic Records and Document                  3                $7
               and Other Defense Activities         Management
                                                    Total                                           37            $1,219
                                          Source: GAO analysis of agencies’ data.



                                          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, including a personnel security investment, time and
                                          attendance investment, human resources investment, and an information
                                          network investment. 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



                                          Page 13
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
sub-functions. Specifically, we identified 13 miscategorized investments
at DOD, 4 at DOE, and 5 at DHS. For example, 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.
Therefore, we recommended in our report that the agencies correct the
miscategorizations for the investments we identified and ensure that
investments are correctly categorized in agency submissions. In
response, DOD stated that it agreed, and will attempt to make the
categorization changes for certain investments in its fiscal year 2013
submission. DHS also agreed with the recommendation, and provided
documentation showing that the department had recently corrected the
miscategorizations for each of the investments we identified. DOE agreed
that two of the four investments we identified could be recategorized, and
reported that the department has made those changes. However, DOE
disagreed that the other two investments we identified were
miscategorized, explaining that its categorizations reflect funding
considerations. However, OMB guidance indicates that investments
should be classified according to their intended purpose. Consequently,
we believe the recommendation is warranted.




Page 14
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. For example, officials identified multiple personnel action
                            processing systems that could be consolidated.
                            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



                            Page 15
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, which are two
civilian personnel management investments. Specifically, DOD officials
stated that they do not have plans to address these two 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.
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. Therefore, we recommended that these two agencies utilize
existing transparency mechanisms, such as the IT Dashboard, to report
on the results of their departments’ efforts to identify and eliminate, where
appropriate, each potentially duplicative investment we identified, as well
as any other duplicative investments. In response to our report, DOD and
DOE stated that they agreed with the recommendation. Additionally, DOE
added that for the non-major investments that we 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.




Page 16
                    In summary, 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 that 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. Implementation of our recommendations should provide
                    better assurance that agencies are avoiding investment in unnecessary
                    systems.
                    Chairman Lankford, Ranking Member Connolly, and Members of the
                    Subcommittee, this concludes my statement. I would be happy to answer
                    any questions at this time.




GAO Contact and Staff Acknowledgments
                    If you should have any questions about this testimony, please contact me
                    at (202) 512-9286 or by e-mail at pownerd@gao.gov. Individuals who
                    made key contributions to this testimony are Shannin O’Neill, Assistant
                    Director; Javier Irizarry; Lee McCracken; and Kevin Walsh.




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