oversight

Information Technology Reform: Progress Made; More Needs to Be Done to Complete Actions and Measure Results

Published by the Government Accountability Office on 2012-05-24.

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

                             United States Government Accountability Office

GAO                          Testimony
                             Before the Subcommittee on Federal Financial
                             Management, Government Information, Federal
                             Services and International Security, Committee on
                             Homeland Security and Governmental Affairs, United
                             States Senate

                             INFORMATION
For Release on Delivery
Expected at 10:00 a.m. EDT
Thursday, May 24, 2012

                             TECHNOLOGY REFORM
                             Progress Made; More
                             Needs to Be Done to
                             Complete Actions and
                             Measure Results
                             Statement of David A. Powner, Director
                             Information Technology Management Issues




GAO-12-745T
Chairman Carper, Ranking Member Brown, and Members of the
Subcommittee:

I am pleased to be here today to discuss the progress the Office of
Management and Budget (OMB) and key federal agencies have made on
selected action items associated with information technology (IT) reform.
While investments in IT have the potential to improve lives and
organizations, some federally funded IT projects can—and have—
become risky, costly, unproductive mistakes. With at least $79 billion
spent in fiscal year 2011 by the U.S. government on IT investments, it is
important to ensure the most efficient and effective use of resources.

In December 2010, the Federal Chief Information Officer (CIO) released a
25-point plan for reforming federal IT management. This document
established an ambitious plan for achieving operational efficiencies and
effectively managing large-scale IT programs. It also clearly identified
actions to be completed in three different time frames: (1) within 6 months
(by June 2011), (2) between 6 and 12 months (by December 2011), and
(3) between 12 and 18 months (by June 2012).

You asked us to testify on our report being released today that describes
the progress OMB and key federal agencies have made on selected
action items in the IT Reform Plan and the extent to which sound
measures are in place to evaluate the success of the initiative. 1 In this
regard, my testimony specifically covers the progress made on 10
selected IT Reform Plan action items by OMB; the General Services
Administration (GSA); and the Departments of Homeland Security,
Justice, and Veterans Affairs. In preparing this testimony, we relied on our
report being released at today’s hearing. In that report, we evaluated
progress by selecting 10 action items from the IT Reform Plan, focusing
on action items that (1) were expected to be completed by December
2011, (2) covered multiple different topic areas, and (3) were considered
by internal and OMB subject matter experts to be the more important
items. We also selected three federal agencies (the Departments of
Homeland Security, Justice, and Veterans Affairs) based on several
factors, including high levels of IT spending and large numbers of
investments in fiscal year 2011. We then evaluated the steps OMB and



1
 GAO, Information Technology Reform: Progress Made; More Needs to Be Done to
Complete Actions and Measure Results, GAO-12-461 (Washington, D.C.: Apr. 26, 2012).




Page 1                                                                  GAO-12-745T
             the selected federal agencies had taken to implement the selected action
             items from the IT Reform Plan. In cases where the action was behind
             schedule, we compared plans for addressing the schedule shortfalls to
             sound project planning practices. We also determined whether and how
             agencies were tracking performance measures associated with these
             action items, and compared these measures to best practices in IT
             performance management. In addition, we interviewed OMB and selected
             agency officials regarding progress, plans, and measures.

             All work on which this testimony is based was performed from August
             2011 to April 2012 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 provides a reasonable basis for our
             findings and conclusions based on our audit objective.


             IT can enrich people’s lives and improve organizational performance.
Background   However, as we have described in numerous reports and testimonies,
             federal IT projects too frequently incur cost overruns and schedule
             slippages while contributing little to mission-related outcomes. Further,
             while IT should enable government to better serve the American people,
             the federal government has not achieved expected productivity
             improvements—despite spending more than $600 billion on IT over the
             past decade.

             Over the last two decades, Congress has enacted several laws to assist
             agencies and the federal government in managing IT investments. Key
             laws include the Paperwork Reduction Act of 1995, 2 the Clinger-Cohen
             Act of 1996, 3 and the E-Government Act of 2002. 4 Also, the GPRA
             (Government Performance and Results Act) Modernization Act of 2010
             includes IT management as a priority goal for improving the federal




             2
             44 U.S.C. § 3501 et seq.
             3
             40 U.S.C. § 11101 et seq.
             4
             The E-Government Act of 2002, Pub. L. No. 107-347 (Dec. 17, 2002).




             Page 2                                                               GAO-12-745T
                         government. 5 Each of these laws delineates roles and responsibilities for
                         OMB and agencies regarding information technology and its
                         management.

                         As set out in these laws, OMB is to play a key role in helping federal
                         agencies manage their investments by working with them to better plan,
                         justify, and determine how much they need to spend on projects and how
                         to manage approved projects. Within OMB, the Office of E-government
                         and Information Technology, headed by the Federal CIO, directs the
                         policy and strategic planning of federal IT investments and is responsible
                         for oversight of federal technology spending.

                         Agency CIOs are also expected to have a key role in IT management.
                         Federal law, specifically the Clinger-Cohen Act, has defined the role of
                         the CIO as the focal point for IT management, requiring agency heads to
                         designate CIOs to lead reforms that would help control system
                         development risks; better manage technology spending; and achieve real,
                         measurable improvements in agency performance.

                         In addition, the CIO Council—comprised of CIOs and Deputy CIOs of 28
                         agencies and chaired by OMB’s Deputy Director for Management—is the
                         principal interagency forum for improving agency practices related to the
                         design, acquisition, development, modernization, use, sharing, and
                         performance of federal information resources. The CIO Council is
                         responsible for developing recommendations for overall federal IT
                         management policy; sharing best practices; including the development of
                         performance measures; and identifying opportunities and sponsoring
                         cooperation in using information resources.


Federal IT Reform Plan   After assessing the most persistent challenges in acquiring, managing,
Strives to Address       and operating IT systems, in December 2010 the Federal CIO established
Persistent Challenges    a 25-point IT Reform Plan designed to address challenges in IT
                         acquisition, improve operational efficiencies, and deliver more IT value to
                         the American taxpayer. 6 The actions were planned to be completed in


                         5
                          Pub. L. No. 111-352, 124 Stat. 3866 (2011). The GPRA (Government Performance and
                         Results Act) Modernization Act of 2010 amends the Government Performance and
                         Results Act of 1993, Pub. L. No. 103-62, 107 Stat. 285 (1993).
                         6
                          OMB, 25 Point Implementation Plan to Reform Federal Information Technology
                         Management (Washington, D.C.: Dec. 9, 2010).




                         Page 3                                                                  GAO-12-745T
                                              three different time frames: (1) within 6 months (by June 2011), (2)
                                              between 6 and 12 months (by December 2011), and (3) between 12 and
                                              18 months (by June 2012). Several different organizations were assigned
                                              ownership of the key action items, including the Federal CIO, the CIO
                                              Council, GSA, the Office of Personnel Management, the Office of Federal
                                              Procurement Policy, the Small Business Administration, and other federal
                                              agencies. Table 1 contains detailed information on selected action items
                                              in the IT Reform Plan.

Table 1: OMB’s IT Reform Plan: Selected Action Items, Required Activities, and Responsible Parties

Plan                                                                                                        Responsible
number Action item title            Required activities                                                     parties       Due date
1        Complete detailed          •   Complete consolidation plans that include a technical roadmap,      OMB and       June 2011
         implementation plans           clear consolidation targets, and measurable milestones              federal
         to consolidate 800         •   Identify dedicated agency-specific program managers                 agencies
         data centers by 2015
                                    •   Establish a cross-government task force comprised of the agency
                                        program managers
                                    •   Ensure the task force meets monthly
                                    •   Launch a public dashboard for tracking progress towards closures
                                                                                                     a
3        Shift to a “cloud first”   •   Establish a federal strategy for moving to cloud computing          OMB and       June 2011
         policy                     •   Identify three services (per agency) that are to move to cloud      federal
                                        computing                                                           agencies
                                    •   Establish migration plans for the three services that are to move
                                    •   Fully migrate the first service within 12 months
4        Stand-up contract          •   Make a common set of contract vehicles for secure cloud-based       GSA           June 2011
         vehicles for secure            infrastructure solutions available governmentwide
         Infrastructure-as-a-
                 b
         Service solutions
10       Launch a best              •   Establish a portal for program managers to exchange information  CIO Council      June 2011
         practices                      on best practices
         collaboration platform     •   Require agencies to submit their experiences to the portal
                                    •   Codify and synthesize agency submissions to provide a searchable
                                        database that facilitates real-time problem solving
13       Design a cadre of          •   Define an IT acquisition specialist position                        OMB and       June 2011
         specialized IT             •   Establish the requirements, guidance, curriculum, and process for   federal
         acquisition                    becoming one                                                        agencies
                       c
         professionals
                                    •   Create guidance to strengthen the IT acquisition skills and
                                        capabilities of IT acquisition specialists
15       Issue contracting          •   Work with IT and acquisition community to develop guidance on       Office of     December
                                                                           d
         guidance and                   contracting for modular development                                 Federal       2011
         templates to support       •   Obtain feedback from industry leaders                               Procurement
         modular                                                                                            Policy
                                    •   Develop templates and samples supporting modular development
         development




                                              Page 4                                                                      GAO-12-745T
Plan                                                                                                             Responsible
number Action item title      Required activities                                                                parties            Due date
17      Work with Congress    Analyze working capital funds and transfer authorities to identify current         OMB and            June 2011
        to create IT budget   IT budget flexibilities                                                            federal
        models that align     Identify programs at agencies where additional budget flexibilities could          agencies
        with modular          improve outcomes
        development
                              Work with Congress to propose budgetary models to complement the
                              modular development approach
                              Evaluate mechanisms for increased transparency for these programs
20      Work with Congress    Work with Congress to consolidate commodity IT spending under the     OMB and                         June 2011
        to consolidate        agency CIO                                                            federal
        commodity IT          Develop a workable funding model for “commodity” IT services          agencies
        spending under
        agency CIO
                    e         Have the CIO Council and agency CIOs identify “commodity” services to
                              be included in this funding model as they are migrated towards shared
                              services
21      Reform and            Revamp IT budget submissions                                                       OMB and            June 2011
        strengthen            Have agencies conduct “TechStat” reviews
                                                                       f                                         federal
        Investment Review                                                                                        agencies
        Boards                Have OMB analysts provide training to agency CIOs in the “TechStat”
                              methodology
22      Redefine role of      Make agency CIOs responsible for managing the portfolio of large IT                Federal CIO        June 2011
        agency CIOs and       projects within their agencies                                                     and agency
        CIO Council           Have the CIO Council periodically review the highest priority “TechStat”           CIOs
                              findings assembled by the agency CIOs
                                         Source: GAO analysis of OMB’s IT Reform Plan.
                                         a
                                          Cloud computing is an emerging form of computing where users have access to scalable, on-
                                         demand capabilities that are provided through Internet-based technologies. It has the potential to
                                         provide IT services more quickly and at a lower cost.
                                         b
                                          Infrastructure-as-a-Service is one type of cloud computing in which a vendor offers various
                                         infrastructure components such as hardware, storage, and other fundamental computing resources.
                                         c
                                          While the IT Reform Plan discusses having agencies develop cadres of specialists, there is no
                                         requirement for agencies to do so.
                                         d
                                          According to the IT Reform Plan, modular development is a system development technique that
                                         delivers functionality in shorter time frames by creating requirements at a high level and then refining
                                         them through an iterative process, with extensive engagement and feedback from stakeholders.
                                         e
                                          Commodity services are systems or services used to carry out routine tasks (e.g., e-mail, data
                                         centers, and web infrastructure).
                                         f
                                          OMB defines a TechStat as a face-to-face, evidence-based accountability review of an IT investment
                                         that results in concrete actions to address weaknesses and reduces wasteful spending by turning
                                         around troubled programs and terminating failed programs.




GAO Has Previously                       Given the challenges that federal agencies have experienced in acquiring
Reported on Needed                       and managing IT investments, we have issued a series of reports aimed
Improvements in Federal                  at improving federal IT management over the last decade. Our reports
                                         cover a variety of topics, including data center consolidation, cloud
IT Management                            computing, CIO responsibilities, system acquisition challenges, and
                                         modular development. Key reports that address topics covered in the IT



                                         Page 5                                                                                    GAO-12-745T
Reform Plan include reports on data center consolidation, 7 cloud
computing, 8 best practices in IT acquisition, 9 IT spending authority, 10
investment review and oversight, 11 and agency CIO responsibilities. 12 For
example, in July 2011, we reported that only one of the agencies
submitted a complete data center inventory and no agency submitted a
complete data center consolidation plan. 13 We concluded that until these
inventories and plans are complete, agencies might not be able to
implement their consolidation activities and realize expected cost savings.
We recommended that agencies complete the missing elements in their
plans and inventories. In response to our recommendations, in October
and November 2011, the agencies updated their inventories and plans.
We have ongoing work assessing the agencies’ revised plans, and in
February 2012, we reported that our preliminary assessment of the


7
 GAO, Data Center Consolidation: Agencies Need to Complete Inventories and Plans to
Achieve Expected Savings, GAO-11-565 (Washington, D.C.: July 19, 2011), and Follow-
up on 2011 Report: Status of Actions Taken to Reduce Duplication, Overlap, and
Fragmentation, Save Tax Dollars, and Enhance Revenue, GAO-12-453SP (Washington,
D.C.: Feb. 28, 2012).
8
 GAO, Information Security: Federal Guidance Needed to Address Control Issues with
Implementing Cloud Computing, GAO-10-513 (Washington, D.C.: May 27, 2010), and
Information Security: Additional Guidance Needed to Address Cloud Computing
Concerns, GAO-12-130T (Washington, D.C.: Oct. 5, 2011).
9
 GAO, Information Technology: Critical Factors Underlying Successful Major Acquisitions,
GAO-12-7 (Washington, D.C.: Oct. 21, 2011).
10
   GAO, Information Technology: VA Has Taken Important Steps to Centralize Control of
Its Resources, but Effectiveness Depends on Additional Planned Actions, GAO-08-449T
(Washington, D.C.: Feb. 13, 2008).
11
   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);
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: Agencies and OMB Should Strengthen
Processes for Identifying and Overseeing High Risk Projects, GAO-06-647 (Washington,
D.C.: June 15, 2006); and Information Technology: OMB Can Make More Effective Use of
Its Investment Reviews, GAO-05-276 (Washington, D.C.: Apr. 15, 2005).
12
  GAO, Federal Chief Information Officers: Opportunities Exist to Improve Role in
Information Technology Management, GAO-11-634 (Washington, D.C.: Sept. 15, 2011).
13
    GAO-11-565.




Page 6                                                                      GAO-12-745T
                       updated plans showed that not all agency plans were updated to include
                       all required information. 14 We discuss each of the topics in more detail in
                       the report being publicly released today. 15


                       As discussed in our report, OMB and key federal agencies have made
OMB and Key Federal    progress on selected action items identified in the IT Reform Plan, but
Agencies Have Made     there are several areas where more remains to be done. Of the 10 key
                       action items we reviewed, 3 were completed and the other 7 were
Progress on IT         partially completed by December 2011. The action items that are behind
Reform Action Items,   schedule share a common reason for the delays: the complexity of the
but Much Remains to    initiatives. In all seven of the cases, OMB and the federal agencies are
                       still working on the initiatives. However, OMB and federal agencies have
Be Done                established time frames for completing only two of these initiatives.

                       In a December 2011 progress report on its IT Reform Plan, OMB reported
                       that it made greater progress than we determined. The agency reported
                       that of the 10 action items, 7 were completed and 3 were partially
                       completed. OMB officials from the Office of E-government and
                       Information Technology explained that the reason for the difference in
                       assessments is that they believe that the IT Reform Plan has served its
                       purpose in acting as a catalyst for a set of broader initiatives. They noted
                       that work will continue on all of the initiatives even after OMB declares the
                       related action items to be completed under the IT Reform Plan. We
                       disagree with this approach. In prematurely declaring the action items to
                       be completed, OMB risks losing momentum on the progress it has made
                       to date.

                       Table 2 provides both OMB’s and our assessments of the status of the
                       key action items, with action items rated as “completed” if all of the
                       required activities identified in the reform plan were completed, and
                       “partially completed” if some, but not all, of the required activities were
                       completed.




                       14
                        GAO-12-453SP.
                       15
                        GAO-12-461.




                       Page 7                                                             GAO-12-745T
Table 2: GAO’s Assessment of the Status of Key Action Items

                  OMB’s
                  reported
                  status
Plan number       (as of
and action        December    GAO’s
item title        2011)       assessment Description
(1) Complete   Completed      Partially    In 2011, agencies published their updated consolidation plans and identified dedicated
detailed                      completed    program managers for their data center consolidation efforts. Also, OMB established a
implementation                             cross-government task force comprised of the agency program managers that meets
plans to                                   monthly and launched a public dashboard for tracking progress in closing data centers.
consolidate at                             However, not all of the agencies’ updated data center consolidation plans include the
least 800 data                             required elements. Of the three agencies we reviewed, one (the Department of Justice)
centers by                                 lacked required milestones and targets for servers and utilization. In addition, in
2015                                       February 2012, we reported finding similar gaps in multiple agencies’ consolidation
                                                 a
                                           plans. When asked why the plans were not yet complete, agencies reported that it
                                           takes time to adequately plan for data center consolidation and many found that they
                                           need more time. We have previously recommended that agencies complete the
                                                                                                        b
                                           missing elements from their data center consolidation plans. OMB has noted that
                                           agencies are expected to provide an update on their plans in September 2012.
(3) Shift to      Completed   Partially    The Federal CIO published a strategy for moving the government to cloud computing
cloud-first                   completed    and had each agency identify three services to be moved to the cloud. In addition, each
policy                                     of the three agencies we reviewed established migration plans for these services and
                                           had migrated at least one service to the cloud by December 2011. However, each of
                                           the three agencies’ migration plans we reviewed were missing key required elements,
                                           including a discussion of needed resources, migration schedules, or plans for retiring
                                           legacy systems. We have ongoing work performing a more detailed review of seven
                                           agencies’ progress in implementing the federal cloud computing policy underway, and
                                                                                           c
                                           plan to issue that report in the summer of 2012. However, at this point there are no
                                           time frames for agencies to complete their migration plans.
(4) Stand-up      Completed   Completed    GSA has established a common set of contract vehicles for secure cloud-based
contract                                   infrastructure solutions, and made them available governmentwide. As of January
vehicles for                               2012, federal agencies could purchase cloud solutions from three GSA-approved
secure                                     vendors.
Infrastructure-
as-a-Service
solutions
(10) Launch a     Completed   Partially    The CIO Council developed a web-based collaboration portal to allow program
best practices                completed    managers to exchange best practices and case studies, and all three agencies we
collaboration                              reviewed have submitted case studies to OMB for the portal. However, the data
platform                                   accessible by the portal has not yet been effectively codified and synthesized, making it
                                           difficult for program managers to search the databases and for them to use it for
                                           problem solving. For example, a general search for cloud computing best practices
                                           identified more than 13,000 artifacts, while a date-bounded search for the last year
                                           identified 14 artifacts—of which only 8 clearly provided information on best practices in
                                           cloud computing. The vice chairman of the CIO Council explained that the portal’s
                                           shortcomings are due to how new it is, and noted that the council is still working to
                                           improve the portal’s functionality. However, the CIO Council has not established a time
                                           frame for providing this additional functionality.




                                          Page 8                                                                        GAO-12-745T
                 OMB’s
                 reported
                 status
Plan number      (as of
and action       December    GAO’s
item title       2011)       assessment Description
(13) Design a    Completed   Completed    In 2011, the Office of Federal Procurement Policy issued guidance defining an IT
cadre of                                  acquisition specialist; established the requirements, guidance, curriculum, and process
specialized IT                            for becoming one; and established guidance to strengthen the IT acquisition skills and
acquisition                               capabilities of IT acquisition specialists. Because the development of the cadre is
professionals                             voluntary, the status of the agencies we reviewed varies: the Department of Veterans
                                          Affairs has a cadre of specialized IT acquisition professionals, the Department of
                                          Homeland Security is developing one, and the Department of Justice is still considering
                                          whether they need such a cadre.
(15) Issue       Partially   Partially    An official within the Office of Federal Procurement Policy stated that the agency
contracting      completed   completed    worked with the IT and acquisition community to develop draft guidance for modular
guidance and                              development, and has obtained feedback from industry leaders. However, the office
templates to                              has not yet issued this guidance, or the required templates and samples supporting
support                                   modular development. An Office of Federal Procurement Policy official explained that
modular                                   delays were due to challenges in ensuring consistent definitions of modular
development                               development across the government and industry. The office currently plans to issue its
                                          guidance and templates in spring 2012.
(17) Work with Partially     Partially    OMB reported that it analyzed existing legal frameworks to determine what budget
Congress to     completed    completed    flexibilities are currently available and where additional budget flexibilities are needed,
create IT                                 and worked to promote these ideas (such as multiyear budgets or revolving funds) with
budget models                             selected congressional committees. Also, the three agencies we reviewed identified
that align with                           programs where additional budget flexibilities could improve outcomes. For example,
modular                                   the Department of Homeland Security proposed a working capital fund for centralized
development                               IT operations and maintenance functions. However, in response to OMB’s ideas, there
                                          has not yet been any new legislation to create budget authorities as a result of the IT
                                          Reform Plan and OMB has not identified options to increase transparency for programs
                                          that would fall under these budgetary flexibilities. OMB officials noted that they are
                                          behind schedule in working with Congress, in part because when the IT Reform Plan
                                          was issued in December 2010, the fiscal year 2012 budget process was already under
                                          way. They explained that this meant they needed to wait to incorporate changes into
                                          the fiscal year 2013 budget process. However, OMB has not yet established time
                                          frames for completing this activity.
(20) Work with   Partially   Partially    OMB issued a memo in August 2011 that, among other things, required agencies to
                                                                                                     d
Congress to      completed   completed    consolidate commodity IT services under the agency CIO. In addition, the federal CIO
consolidate                               has discussed the importance of consolidating commodity IT under the agency CIOs
commodity IT                              with selected congressional committees. However, OMB noted that this action item is
spending                                  behind schedule and that it is continuing to discuss the implementation of the memo
under agency                              and the development of models for funding commodity IT with agencies and Congress.
CIOs                                      Further, the three agencies we reviewed had not yet reported to OMB on their
                                          proposals for migrating commodity IT services to shared services, in part because they
                                          were waiting for guidance from OMB. OMB officials noted that part of the reason for the
                                          delay is that when the IT Reform plan was issued in December 2010, the fiscal year
                                          2012 budget process was already under way. Therefore, they needed to wait a year to
                                          incorporate changes into the fiscal year 2013 budget process. However, OMB has not
                                          established a time frame for completing this activity.




                                         Page 9                                                                         GAO-12-745T
                 OMB’s
                 reported
                 status
Plan number      (as of
and action       December    GAO’s
item title       2011)       assessment Description
(21) Reform    Completed     Completed        In 2011, OMB revamped its requirements for agency IT budget submissions. OMB also
and strengthen                                developed, published, and provided training for agency CIOs on how to conduct
Investment                                    TechStat reviews that includes accountability guidelines, engagement cadence,
Review Boards                                 evaluation processes, and reporting processes. By December 2011, all 24 agencies
                                              conducted at least one TechStat review.
(22) Redefine    Completed   Partially        In August 2011, OMB issued a memo directing agencies to strengthen the role of the
role of agency               completed        CIO away from solely being responsible for policymaking and infrastructure
CIOs and the                                  maintenance to a role that encompasses true portfolio management for all IT. However,
CIO Council                                   OMB acknowledged that there is disparity among agency CIOs’ authorities and that it
                                              will take time for agencies to implement the required changes. Of the three agencies
                                              we reviewed, two CIOs reported having true portfolio management for all IT projects,
                                              and one did not. The Department of Homeland Security’s CIO does not yet have
                                              responsibility for the portfolio of all IT projects. We have ongoing work assessing the
                                              department’s governance of IT investments.
                                              Regarding changes in the role of the CIO Council, the council formed a committee to
                                              focus on management best practices. This committee analyzed the outcomes of
                                              agency TechStat reviews over the past year and published a report discussing
                                              governmentwide trends in December 2011.
                                         Source: GAO analysis of OMB and agency data.
                                         a
                                             GAO-12-453SP.
                                         b
                                             GAO-11-565.
                                         c
                                         The seven agencies are the Departments of Agriculture, Health and Human Services, Homeland
                                         Security, State, and Treasury, as well as GSA and the Small Business Administration.
                                         d
                                          OMB, Memorandum for Heads of Executive Departments and Agencies: Chief Information Officer
                                         Authorities, M-11-29 (Washington, D.C.: Aug. 8, 2011).


                                         Until OMB and the agencies complete the action items called for in the IT
                                         Reform Plan, the benefits of the reform initiatives—including increased
                                         operational efficiencies and more effective management of large-scale IT
                                         programs—may be delayed. With the last of the action items in the IT
                                         Reform Plan due to be completed by June 2012, it will be important for
                                         OMB and the agencies to ensure that the action items due at earlier
                                         milestones are completed as soon as possible.




                                         Page 10                                                                          GAO-12-745T
                         The importance of performance measures for gauging the progress of
OMB Has Not              programs and projects is well recognized. In the past, OMB has directed
Established Measures     agencies to define and select meaningful outcome-based performance
                         measures that track the intended results of carrying out a program or
for Evaluating Results   activity. 16 Additionally, as we have previously reported, aligning
on Most IT Reform        performance measures with goals can help to measure progress toward
Initiatives              those goals, emphasizing the quality of the services an agency provides
                         or the resulting benefits to users. 17 Furthermore, industry experts describe
                         performance measures as necessary for managing, planning, and
                         monitoring the performance of a project against plans and stakeholders’
                         needs. 18 According to government and industry best practices,
                         performance measures should be measurable, outcome-oriented, and
                         actively tracked and managed.

                         Recognizing the importance of performance measurement, OMB and
                         GSA have established measures for 4 of the 10 action items we
                         reviewed: data center consolidation, shifting to cloud computing, using
                         contract vehicles to obtain Infrastructure-as-a-Service, and reforming
                         investment review boards. Moreover, OMB reported on three of these
                         measures in the analytical perspectives associated with the President’s
                         fiscal year 2013 budget. Specifically, regarding data center consolidation,
                         OMB reported that agencies were on track to close 525 centers by the
                         end of 2012 and expected to save $3 billion by 2015. On the topic of
                         cloud computing, OMB reported that agencies had migrated 40 services
                         to cloud computing environments in 2011 and expect to migrate an
                         additional 39 services in 2012. Regarding investment review boards,
                         OMB reported that agency CIOs held 294 TechStat reviews and had
                         achieved more than $900 million in cost savings, life cycle cost
                         avoidance, or reallocation of funding.

                         However, OMB has not established performance measures for 6 of the 10
                         action items we reviewed. For example, OMB has not established



                         16
                          OMB, Guide to the Program Assessment Rating Tool.
                         17
                           GAO, NextGen Air Transportation System: FAA’s Metrics Can Be Used to Report on
                         Status of Individual Programs, but Not of Overall NextGen Implementation or Outcomes,
                         GAO-10-629 (Washington, D.C.: July 27, 2010).
                         18
                          Thomas Wettstein and Peter Kueng, “A Maturity Model for Performance Measurement
                         Systems,” and Karen J. Richter, Ph.D., Institute for Defense Analyses, CMMI® for
                         Acquisition (CMMI-ACQ) Primer, Version 1.2.




                         Page 11                                                                   GAO-12-745T
                                             measures related to the best practices collaboration platform, such as
                                             number of users, number of hits per query, and customer satisfaction.
                                             Further, while OMB has designed the guidance and curriculum for
                                             developing a cadre of IT acquisition professionals, it has not established
                                             measures for tracking agencies’ development of such a cadre. Table 3
                                             details what performance measures and goals, if any, are associated with
                                             the action item.

Table 3: Assessment of Performance Measures Associated with Selected IT Reform Action Items

Action item                         Performance measures                 Performance goals
(1) Complete detailed               •   Number of data center closures   •   The IT Reform Plan identifies a goal to consolidate 800
implementation plans to             •   Expected cost savings                data centers by 2015.
consolidate 800 data centers by                                          •   In December 2011, in conjunction with a decision to
                                    •
2015                                                                         include smaller data centers in the consolidation effort,
                                                                             the Federal CIO increased this goal to more than 1,000
                                                                             data centers by 2015.
                                                                         •   In February 2012, OMB announced a goal of saving $3
                                                                             billion by 2015.
(3) Shift to a cloud-first policy   •   Number of services               •   The IT Reform Plan states that each agency will identify
                                        transitioned to a cloud              three services to move to the cloud and that one of those
                                        computing environment                services must move within 12 months.
                                    •   Number of legacy systems         •   OMB has not yet announced goals for eliminated legacy
                                        eliminated                           systems or anticipated cost savings.
                                    •   Anticipated cost savings
(4) Stand-up contract vehicles      •   Number of task orders issued     •   GSA established a goal of having at least one task order
for secure Infrastructure-as-a-         under the contract vehicle           issued under the Infrastructure-as-a-Service blanket
Service solutions                   •   Dollar amounts awarded               purchase agreement in the first year.
                                        through the contract vehicle     •   GSA has not yet announced goals for its second year.
                                    •   Period of performance for the
                                        contract
                                                       a                                               a
(10) Launch a best practices                        —                                                 —
collaboration platform
                                                       a                                               a
(13) Design a cadre of                              —                                                 —
specialized IT acquisition
professionals
                                                       a                                               a
(15) Issue contracting guidance                     —                                                 —
and templates to support
modular development
                                                       a                                               a
(17) Work with Congress to                          —                                                 —
create IT budget models that
align with modular development
                                                       a                                               a
(20) Work with Congress to                          —                                                 —
consolidate commodity IT
spending under agency CIOs




                                             Page 12                                                                       GAO-12-745T
Action item                    Performance measures                          Performance goals
(21) Reform and strengthen     •   Number of TechStat reviews                •     OMB established a goal of having agency CIOs terminate
investment review boards       •   Number of terminated                            or turn around one third of all underperforming IT
                                   programs                                        investments by June 2012.
                               •   Cost savings associated with
                                   TechStat reviews
                                                  a                                                         a
(22) Redefine role of agency                    —                                                         —
CIOs and the CIO Council

                                        Source: GAO analysis of OMB and agency data.
                                        a
                                         Performance measures or goals have not been established for this action item.


                                        Until OMB establishes and tracks measureable, outcome-oriented
                                        performance measures for each of the action items in the IT Reform Plan,
                                        the agency will be limited in its ability to evaluate progress that has been
                                        made and whether or not the initiative is achieving its goals.


                                        In our report being released today, we are making several
Implementation of                       recommendations to help ensure the completion of key IT reform
Recommendations                         initiatives and that the results of these initiatives are measured.
                                        Specifically, we are recommending that the Departments of Homeland
Could Help Ensure                       Security, Justice, and Veterans Affairs complete elements missing from
Key Efforts are                         the agencies’ plans for migrating services to a cloud computing
Completed and                           environment, and identify and report on the commodity services proposed
                                        for migration to shared services. All three agencies agreed with our
Results are Identified                  recommendations and identified steps that they are undertaking to
                                        address them.

                                        In addition, we are recommending that the Federal CIO ensure that the
                                        action items called for in the IT Reform Plan are completed by the
                                        responsible parties prior to the completion of the IT Reform Plan’s 18
                                        month deadline of June 2012 and that the agency provide clear time
                                        frames for addressing the shortfalls associated with the IT Reform Plan
                                        action items. The Federal CIO agreed with both of these
                                        recommendations and stated that OMB intends to complete the action
                                        items by the deadline. We are also recommending that the Federal CIO
                                        accurately characterize the status of the IT Reform Plan action items in
                                        an upcoming progress report in order to keep momentum going on action
                                        items that are not yet completed. The Federal CIO disagreed with this
                                        recommendation and stated that OMB has accurately characterized the
                                        completeness of the action items, and therefore, the recommendation
                                        does not apply. We do not agree with OMB’s characterization of four
                                        action items. Specifically, OMB considers the action items associated with


                                        Page 13                                                                               GAO-12-745T
data center consolidation, cloud-first policy, best practices collaboration
portal, and redefining roles of agency CIOs and the CIO Council to be
completed. While we agree that OMB has made progress in each of
these areas, we found activities specified in the IT Reform Plan that have
not yet been completed. For example, in the area of data center
consolidation, we found that selected agency plans are still incomplete. In
addition, in the move to cloud computing, selected agency migration
plans lack key elements. Thus, we believe that the recommendation is
warranted.

To address our concerns regarding performance measures, we are
recommending that the Federal CIO establish outcome-oriented
measures for each applicable action item in the IT Reform Plan. The
Federal CIO disagreed with our recommendation and noted that OMB
measured the completeness of the IT Reform Plan action items and not
the performance measures associated with broader initiatives. We
continue to believe that our recommendation is appropriate because there
are multiple action items in the IT Reform Plan that are not aligned with
broader initiatives and for which there are no measures. Examples
include the best practices portal, developing a cadre of specialized IT
acquisition professionals, and establishing budget models that align with
modular development. Given that the purpose of the IT Reform Plan is to
achieve operational efficiencies and improve the management of large-
scale IT programs, we maintain that it is appropriate to establish
performance measures to monitor the IT Reform Plan’s results.


In summary, OMB and selected agencies have made strides in
implementing the IT Reform Plan, including pushing agencies to
consolidate data centers, migrating federal services to cloud computing,
improving the skills of IT acquisition professionals, and strengthening the
roles and accountability of CIOs. However, several key reform items
remain behind schedule despite OMB stating that these items have been
completed.

In addition, OMB has not established performance measures for gauging
the success of most of its reform initiatives. For example, while OMB is
tracking the number of services that agencies move to a cloud computing
environment and the number of data center closures, it is not tracking the
usefulness of its efforts to develop a best practices collaboration portal or
a cadre of IT acquisition professionals.




Page 14                                                           GAO-12-745T
                  Overstating progress and not implementing appropriate performance
                  measures do not position the federal IT community to leverage and build
                  on the progress made to date. Moving forward, it will be important for
                  OMB to continue to provide guidance, goals, and oversight to ensure that
                  critical IT reform efforts extend well beyond the original 18-month time
                  frame. It will also be important for agencies to aggressively pursue the
                  completion of IT reform initiatives.

                  Chairman Carper, Ranking Member Brown, and Members of the
                  Subcommittee, this concludes my statement. I would be happy to answer
                  any questions at this time.


                  If you or your staffs have any questions about this testimony, please
GAO Contact       contact me at (202) 512-9286 or at pownerd@gao.gov. Individuals who
and Staff         made key contributions to this testimony are Colleen Phillips (Assistant
                  Director), Cortland Bradford, Rebecca Eyler, Kathleen S. Lovett, and
Acknowledgments   Jessica Waselkow.




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                  Page 15                                                         GAO-12-745T
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