Management Improvements Essential for Key Automated Systems at the Agricultural Stabilization and Conservation Service

Published by the Government Accountability Office on 1990-09-18.

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

                          United    States General Accounting            OffIce       / %+t%zJJb


For Release               IManagement       Improvements            Essential         for     Key
on Del ivery
                          Automated       ‘Systems     at     the    Agricultural
Expected   at
IO:00 a.m. EDT            Stabilization         and    Conservation               Service
September 18, 1990

                          Statement       of JayEtta    Z. Hecker,     Director,
                          Resources,        Community,    and Economic      Development
                          Information        Systems,
                          Information        Management    and Technology        Division

                          Before        the Subcommittee            on   Government           Information,
                          Justice,         and Agriculture,
                          C o m m ittee     on Government           Operations
                          House of Representatives

GAO/T-IMTEC-90-      13
Mr. Chairman     and Members of the Subcommittee:

I appreciate       this opportunity   to testify  on the Agricultural
Stabilization        and Conservation   Service's (ASCS) management of two
information       resources management projects    and its pending
procurement       request for upgrades to minicomputers    in ASCS county
offices     nationwide.

At your request,     we examined escalating     costs and schedule delays
for ASCS' Grain Inventory        Management System (GIMS) and Processed
Commodity Inventory      Management System (PCIMS).     In addition,   we
evaluated    how ASCS monitors and manages disk capacity       to determine
equipment upgrades necessary for its approximately         2,800 county
offices.     Our report,   delivered   to you on September 12, provides
further   details   of our work.

As the Subcommittee is aware, ASCS administers               farm commodity,
conservation,      and emergency assistance       programs, including
commodity loans and price support payments to farmers.                    To support
this mission,      ASCS has automated the acquisition,           storage,
movement, sale, and donation of grain and processed commodities
inventories     worth over $4 billion.         ASCS also has equipped its
county offices      with minicomputers      to help process commodity loans,
pay price supports,      and enroll     farmers in conservation        programs.
ASCS' program and administrative           costs associated      with these
functions     in 1989 was some $13 billion.          The GIMS, PCIMS, and
network of county office        minicomputers     are critical      to ASCS'
efforts     to provide effective     information     resources management.

ASCS' effort  at designing  and implementing    GIMS and PCIMS has been
fraught with problems contributing    to serious cost overruns and
significant  system implementation   delays.    ASCS awarded a contract
in 1983 to develop the two major automated inventory       systems at a
combined cost of about $7 million.      Current cost estimates    for
these systems amount to approximately     $62 million,  which is almost
     *                             1
9 times the initial estimate.   One system was installed 2 years
later than planned, and the other is scheduled to be installed   in
July 1991, which would be almost a 6-year delay.

ASCS has also drafted         a request for about a $57-million      increase
in procurement     authority,      primarily to purchase additional
minicomputer    disk drives and computer equipment for county offices
between July 1990 and September 1992. Our analysis,              however,
identified   flaws in the method ASCS uses to justify          these
purchases.     As a result,      we question whether ASCS' request for
this $57 million      increase is justified.

AS-                                 .
                PROJECT MANAGEMENT

Our review of GIMS and PCIMS raises concerns about ASCS' management
of information    systems development and enhancement projects.              GIMS
and PCIMS support an important        ASCS responsibility      involving   the
management of large commodity inventories          worth billions       of
dollars.     Poor planning,  insufficient     requirements     analyses,   and
faulty   contract  management have kept ASCS from finishing            the
systems on time, staying within original          cost estimates,      and
meeting important     user needs.

To illustrate,         our review found that ASCS (1) did not involve                  key
users in initially          defining     systems requirements,          (2) did not
thoroughly       review the contractor's           system design document before
accepting      it, and (3) failed         to control     user proposed system
modifications         after contractor       work began.        Moreover, the PCIMS
project     has suffered       from inconsistent        direction     from ASCSI top
management.         In the last seven years, six people have served as
the Deputy Administrator             for Management, the ASCS official
responsible        for the project.        'This lack of continuity         has
contributed       to decisions       to start,    stop, and restart        the project
which has resulted          in additional       costs.

SOme factors       outside ASCSI control      also contributed       to the
difficulty      in developing    the two systems.        Legislation      such as the
Food Security       Act of 1985 changed GIMS' requirements             after ASCS
accepted     the system design.      Similarly,      legislative     requirements
such as those coming from the Prompt Payment Act and other
agricultural      policy   changes, including       commodity packaging and
shipping     period initiatives,     affected     PCIMS requirements         after
design acceptance.         However, ‘ASCS records and our discussions               with
project     management officials     indicate     that these legislative           and
policy     changes were not the principal         causes in the two systems'
cost growth and schedule delays.            According to ASCS records,             at
most about $7 million         of the nearly $55 million          in contract     cost
growth for both systems was due to these new requirements.

Problems Rer&.in With GIMS and
    MS Desoite     Sianificant     Investment

Although installed,      GIMS does not meet some important        inventory
managers' needs that were deleted in 1985 to conserve contract
funds.    In order to generate needed management information             reports,
users key in some of the same data residing          in GIMS into personal
computer-based    systems.    ASCS is also using in-house resources           and
another contractor     to enhance GIMS to satisfy      user needs that were
not met when the system was implemented in 1987.             Through June
1990, the agency incurred       about $5 million   in direct     costs for in-
house programmer staff and had obligated         about $1 million      in funds
for the other contractor      to continue developing     and modifying       GIMS.

PCIMS, expected to be fully         operational    in July 1991, will be used
not only by ASCS, but also by USDA's Food and Nutrition                    Service and
Agricultural    Marketing    Service.      However, the three agencies have
not established     an effective     means to resolve disagreements             that
may arise during PCIMS acceptance testing,              installation,       and
maintenance.     In addition,     an agreement among the agencies
establishing    a structured     software maintenance policy has not been
finalized.     The absence of an effective         interagency        management

         structure   to guide project  direction,     control,    and oversight       poses
         substantial   risk to the successful     implementation,     operation,       and
         maintenance of PCIMS.

                           . INEFFIW

         In May 1990, ASCS planned to, request the General Services
         Administration's        approval of about $258 million       in additional
         procurement      authority     through December 1996. ASCS has not formally
         submitted     the request for approval and is presently          revising     it.
         This procurement        authority     is mainly for more minicomputer      disk
         drives and equipment upgrades at its county offices.                The   May   1990
         draft procurement         request indicated     that the agency needed an
         additional      $57 million      in procurement    authority for minicomputer
         equipment upgrades, maintenance,             and software between July 1990 and
         September 1992.

         To determine whether these additional            purchases are justified,   we
         examined ASCS' procedures         used to manage disk capacity      for its
         county office     minicomputers.      According to ASCS, most county
         offices   do not have staff with highly technical          computer'skills.
         Thus, ASCS uses its Kansas City Management Office             (KCMO) to
         centrally   manage ADP support for its approximately           2,800 county
         offices,   including    procuring,    writing,    testing, and installing
         computer software      and related    equipment.

         KCMO manages disk capacity       at the county offices          by periodically
         monitoring  directories   listing     all computer programs and data files
         stored on the offices'   disks.       KCMO identifies       files     for deletion,
         and recommends that the counties         purge certain      files     and off-load
         others to floppy diskettes       or computer tape to help ensure
         efficient  disk usage.    If a county's       disk utilization          exceeds 70
         percent of its available     disk space after files           identified      for
deletion  or alternative storage have been removed, the Management
Office will purchase an additional   disk storage upgrade.

We examined file directories             for the minicomputer     disks in each
ASCS county office          (as of June 1990) to determine how efficiently
disk space was being used.             On average, we found that about 12
percent of county office I disk capacity              is wasted to maintain
unnecessary      files --files     that should be deleted or offloaded         to
other storage devices (such as floppy diskettes                or computer tape).
On a county-by-county          basis, we found that as little         as 2 percent
and as much as 36 percent of the disk space used was occupied by
files   identified      for deletion       or backup storage on an alternative
medium.     Clearly,     the existing       disk capacity   management process is
not resulting        in overall,    efficient    minicomputer   disk use.
ASCS' method for projecting             future county office         minicomputer    disk
capacity     requirements     is based upon current         inefficient       disk use.
As a result,      ASCS’ estimates        of future minicomputer          disk capacity
needs are questionable          because ASCS projects        wasted disk space into
future periods.         By not eliminating        these files      from ASCS'
projections,       inaccurate    estimates     of disk capacity        requirements     and
associated     equipment needs occur.

Given our concerns with ASCS' procedure          for estimating future disk
storage and equipment upgrade needs, we made our own estimate.            We
limited   our estimate of ASCSI needs to the 1990 to 1992 period
because the new farm bill      may substantially     change the agency's
future equipment needs.      Before the end of 1992, ASCS should be
cognizant   of these changes and be able to modify its request for
procurement   funds accordingly.

We made calculations      based on more judicious     disk usage that
basically    assumes compliance with existing       ASCS disk management
procedures.     We also incorporated     historical   rates of growth for
software    and data files,    and then used this to project    future
needs.    Our estimates      indicate     that ASCS funding requirements       for
minicomputer     equipment upgrades, maintenance,            and software for the
remainder of fiscal       year 1990 through fiscal          year 1992 would be
approximately     $20 million.        Our projections     assume that the average
disk storage trend in growth for the past 2 years would continue
through 1992.      If we increase our funding estimate by 25 percent to
account for automation        changes ASCS may face after such events as
the passage of the 1990 farm,bill             (the practice     employed by ASCS
for its own funding estimates),            the figure would rise to about $25
million.     This increase could be met within ASCS' remaining
procurement    authority,     eliminating      the need for the additional      $57
million   in procurement      authority     ASCS specified      in its May 1990


Ineffective   contract   management, poor systems design planning,             and
inadequate  project    oversight     have directly    contributed   to ASCS
spending more in systems I development costs for GIMS and PCIMS
than was originally     estimated.      Unless these deficiencies        in
information   resources management are corrected,            future information
systems projects    may suffer     from similar    problems.

An improved disk capacity         management program would help ASCS better
manage existing      disk space usage and more accurately        identify
requirements    for future disk capacity        needs.   Improvements in its
minicomputer    capacity     and performance monitoring     could lessen the
need for the additional         equipment purchases planned through 1992.
Until ASCS corrects        shortcomings   in its disk management procedures
and the methodology used to estimate           future minicomputer     equipment
needs, risks increase that additional           ASCS funding requests will
not be fully    justified.

More important,  these     problems raise concerns for ASCS' upcoming
effort to replace all      county office  computer equipment by the end
of 3.996. This project         will be one of the most significant
automation      undertakings     the agency will face in the 19908, with a
current    estimated     life cycle cost of close to $1 billion.          Delay in
starting    this major effort       has already resulted     in the need for
millions    to be spent on interim       computer upgrades.       In constructing
its approach to this major agency automation             project,   we believe
ASCS will need to resolve the weaknesses found in our review of
important     information     systems development projects.

During the course of our review, ASCS' Kansas City Management
Office did initiate      steps to improve disk capacity    management
procedures,   including     more comprehensive  guidance on methods that
county staff    can use to help better use and manage their
minicomputer   disk capacity.      We view these as positive   steps, and
the changes could improve the accuracy and timeliness         of KCMO's
disk capacity    monitoring.

To facilitate     ASCS’ efforts     at resolving    problems identified    in our
report,    we are making a series of recommendations          to the Secretary
of Agriculture      to improve the way ASCS manages system development
projects     and estimates   and justifies      computer needs at county
offices.      In particular,    we believe    that measures should be taken
to ensure that information        needs are sufficiently      identified  before
advancing to the systems development stage and that project              size
and scope are reasonably        controlled.

In addition,     we are recommending that ASCS' fiscal            year 1990-92
funding request for county office           minicomputer     upgrades,
maintenance,     software,     and other equipment should be reestimated.
Any additional      funding needed beyond the approximately              $26 million
remaining    in existing      procurement    authority    should be contingent
upon improvements in ASCS' forecasting              methods to more accurately
estimate    equipment needs.        Approval of ASCS' requests         for county
office   minicomputer      procurement    authority    for fiscal   year 1993 and
beyond should   be contingent  upon implementation   of a more effective
disk capacity   management program.

Mr. Chairman, this concludes my     statement.  Thank you again    for
this opportunity  to present our    views to the Subcommittee.     I will
be happy to answer any questions     that you or members of the
Subcommittee may have about our     work.