	Background

The federal government invests more than $80 billion annually in IT, but  many of these investments fail to meet cost and schedule expectations or  make significant contributions to mission-related outcomes. We have  previously testified that the federal government has spent billions of  dollars on failed IT investments, such as  the Department of Defense’s (DOD) Expeditionary Combat Support  System, which was canceled in December 2012, after spending more  than a billion dollars and failing to deploy within 5 years of initially  obligating funds;  the Department of Homeland Security’s Secure Border Initiative  Network program, which was ended in January 2011, after the  department obligated more than $1 billion to the program, because it  did not meet cost-effectiveness and viability standards;  the Department of Veterans Affairs’ (VA) Financial and Logistics  Integrated Technology Enterprise program, which was intended to be  delivered by 2014 at a total estimated cost of $609 million, but was  terminated in October 2011 due to challenges in managing the  program;  the Farm Service Agency’s Modernize and Innovate the Delivery of  Agricultural Systems program, which was to replace aging hardware  and software applications that process benefits to farmers, was halted  after investing about 10 years and at least $423 million, while only  delivering about 20 percent of the functionality that was originally  planned. Federal IT projects have also failed due to a lack of oversight and  governance. Recent Legislation Can Improve Agencies’ Management of IT

Recognizing the severity of issues related to government-wide  management of IT, in December 2014, Congress enacted IT reform  legislation, FITARA. FITARA includes specific requirements related to seven areas. Agency CIO authority enhancements. Agency CIOs are required  to (1) approve the IT budget requests of their respective agencies, (2)  certify that IT investments are adequately implementing the Office of  Management and Budget’s (OMB) incremental development  guidance, (3) review and approve contracts for IT, and (4) approve the  appointment of other agency employees with the title of CIO. Enhanced transparency and improved risk management. OMB  and agencies are to make publicly available detailed information on  federal IT investments, and agency CIOs are to categorize their IT  investments by risk. Additionally, in the case of major IT investments  rated as high risk for 4 consecutive quarters, the law requires that the  agency CIO and the investment’s program manager conduct a review  aimed at identifying and addressing the causes of the risk. Portfolio review. Agencies are to annually review IT investment  portfolios in order to, among other things, increase efficiency and  effectiveness, and identify potential waste and duplication. In  developing the associated process, the law requires OMB to develop  standardized performance metrics, to include cost savings, and to  submit quarterly reports to Congress on cost savings. Federal data center consolidation initiative (FDCCI). Agencies are  required to provide OMB with a data center inventory, a strategy for  consolidating and optimizing the data centers (to include planned cost  savings), and quarterly updates on progress made. The law also  requires OMB to develop a goal of how much is to be saved through  this initiative, and provide annual reports on cost savings achieved. Maximizing the benefit of the federal strategic sourcing initiative. Federal agencies are required to compare their purchases of services  and supplies to what is offered under the Federal Strategic Sourcing  initiative. In addition, in June 2015, OMB released guidance describing how  agencies are to implement the law. In this regard, the guidance reiterates OMB’s existing guidance on  PortfolioStat, the IT Dashboard, and the federal data center consolidation  initiative, and expands its existing guidance on TechStat sessions. For example, agencies  were required to conduct a self-assessment and submit a plan describing  the changes they will make to ensure that common baseline  responsibilities are implemented. As of October 30,  2015, none of the 24 Chief Financial Officers Act agencies had made  their plans publicly available. IT Acquisitions and Operations Recently Added as a GAO High-Risk Area

Our government-wide high-risk area Improving the Management of IT  Acquisitions and Operations highlights critical IT initiatives, four of which  align with provisions in FITARA: (1) an emphasis on incremental  development, (2) a key transparency initiative, (3) efforts to consolidate  data centers, and (4) efforts to streamline agencies’ portfolios of IT  investments. Implementing the  provisions from the law, along with our outstanding recommendations, will  be necessary for agencies to demonstrate progress in addressing this  high-risk area. In the  last 6 years we made approximately 800 recommendations to multiple  agencies. As of October 2015, about 32 percent of these  recommendations had been implemented. Also in our high-risk report, we stated that OMB and agencies will need to  demonstrate measurable government-wide progress in the following key  areas:  implement at least 80 percent of GAO’s recommendations related to  the management of IT acquisitions and operations within 4 years. GAO Contacts and Staff Acknowledgments

For additional information about this high-risk area, contact David A.  Powner at (202) 512-9286 or pownerd@gao.gov, Carol Cha at (202) 512- 4456 or chac@gao.gov, or Valerie Melvin at (202) 512-6304 or  melvinv@gao.gov. Federal Chief Information Officers: Reporting to OMB Can Be Improved  by Further Streamlining and Better Focusing on Priorities. Information Technology: Additional OMB and Agency Actions Are Needed  to Achieve Portfolio Savings.
Why GAO Did This Study

The federal government invests more than $80 billion annually in IT. However, these investments frequently fail, incur cost overruns and schedule slippages, or contribute little to mission-related outcomes. As GAO has previously reported, this underperformance of federal IT projects can be traced to a lack of disciplined and effective management and inadequate executive-level oversight. Accordingly, in December 2014, IT reform legislation was enacted, aimed at improving agencies' acquisition of IT. Further, earlier this year GAO added improving the management of IT acquisitions and operations to its high-risk list—a list of agencies and program areas that are high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement, or are most in need of transformation.
This statement provides information on FITARA and GAO's designation of IT acquisitions and operations as a high-risk area. In preparing this statement, GAO relied on its previously published work in these areas.

What GAO Found

The law commonly known as the Federal Information Technology Acquisition Reform Act (FITARA) was enacted in December 2014 and aims to improve federal information technology (IT) acquisition and operations. The law includes specific requirements related to seven areas. For example, it addresses
Agency Chief Information Officer (CIO) authority enhancements . Among other things, agency CIOs are required to approve the IT budget requests of their respective agencies and certify that IT investments are adequately implementing the Office of Management and Budget's (OMB) incremental development guidance.
Enhanced transparency and improved risk management . OMB and agencies are to make publicly available detailed information on federal IT investments, and agency CIOs are to categorize IT investments by risk. Additionally, if major IT investments are rated as high risk for 4 consecutive quarters, the agencies are to conduct a review of the investment.
Portfolio review. Agencies are to annually review IT investment portfolios in order to, among other things, increase efficiency and effectiveness, and identify potential waste and duplication. OMB is required to develop standardized performance metrics, to include cost savings, and to submit quarterly reports to Congress on cost savings.
Federal data center consolidation initiative. Agencies are required to provide OMB with a data center inventory, a strategy for consolidating and optimizing the data centers (to include planned cost savings), and quarterly updates on progress made. OMB is required to develop a goal of how much is to be saved through this initiative, and report on progress annually.
Maximizing the benefit of the federal strategic sourcing initiative . Federal agencies are required to compare their purchases of services and supplies to what is offered under the Federal Strategic Sourcing initiative.
OMB has released guidance for agencies to implement provisions of FITARA, which includes actions agencies are to take regarding responsibilities for CIOs. The guidance also reiterates OMB's existing guidance on IT portfolio management, a key transparency website, and the federal data center consolidation initiative; and expands its existing guidance on reviews of at-risk investments. Agencies were to conduct a self-assessment and submit a plan to OMB by August 2015 describing the changes they will make to ensure that responsibilities are implemented. Further, portions of these plans are required to be made publicly available 30 days after OMB's approval; as of October 30, 2015, none of the 24 Chief Financial Officers Act agencies had done so.
Further, FITARA's provisions are similar to areas covered by GAO's high-risk area to improve the management of IT acquisitions and operations. For example, GAO has noted that improvements are needed in federal efforts to enhance transparency, consolidate data centers, and streamline agencies' IT investment portfolios. To demonstrate progress in addressing this high-risk area, agencies will need to implement the legislation's provisions and GAO's outstanding recommendations.

What GAO Recommends

Over the last 6 years, GAO made about 800 recommendations to OMB and agencies to improve acquisition and operations of IT. As of October 2015, about 32 percent of these had been implemented. It will be critical for agencies to implement the remaining GAO recommendations and the requirements of FITARA to achieve improvements.
, Carol Cha at (202) 512-4456 or chac@gao.gov , or Valerie Melvin at (202) 512-6304 or melvinv@gao.gov .