	Background

According to the President’s budget, the federal government plans to  invest more than $96 billion on IT in fiscal year 2018—the largest amount  ever. However, as we have previously reported, investments in federal IT  too often result in failed projects that incur cost overruns and schedule  slippages, while contributing little to the desired mission-related  outcomes. Federal data center consolidation initiative (FDCCI). Enhanced transparency and improved risk management. Specifically, from fiscal years 2010  through 2015, we made 803 recommendations to OMB and federal  agencies to address shortcomings in IT acquisitions and operations. In February 2017, we issued an update to our high-risk series and  reported that, while progress had been made in improving the  management of IT acquisitions and operations, significant work still  remained to be completed. For example, as of May 2017, OMB and the  agencies had fully implemented 380 (or about 47 percent) of the 803  recommendations. Most agencies and  OMB agreed with our recommendations or had no comments. Specifically, as of August 2016, these agencies had identified a  total of 9,995 data centers, of which they reported having closed 4,388,  and having plans to close a total of 5,597 data centers through fiscal year  2019. To better ensure that federal data center consolidation and optimization  efforts improve governmental efficiency and achieve cost savings, in our  May 2017 report, we recommended that 11 of the 24 agencies take action  to ensure that the amounts of achieved data center cost savings and  avoidances are consistent across all reporting mechanisms. Risks Need to Be Fully Considered When Agencies Rate Their Major Investments on OMB’s IT Dashboard

To facilitate transparency across the government in acquiring and  managing IT investments, OMB established a public website—the IT  Dashboard—to provide detailed information on major investments at 26  agencies, including ratings of their performance against cost and  schedule targets. In total, we have made 47 recommendations to  OMB and federal agencies to help improve the accuracy and reliability of  the information on the Dashboard and to increase its availability. Most  agencies agreed with our recommendations or had no comments. Specifically, our assessments of risk for  95 investments at the 15 selected agencies  matched the CIO ratings  posted on the Dashboard 22 times, showed more risk 60 times, and showed less risk 13 times. Twelve agencies generally agreed  with or did not comment on the recommendations and three agencies  disagreed, stating that their CIO ratings were adequate. Agencies Need to Increase Their Use of Incremental Development Practices

OMB has emphasized the need to deliver investments in smaller parts, or  increments, in order to reduce risk, deliver capabilities more quickly, and  facilitate the adoption of emerging technologies. In 2010, it called for  agencies’ major investments to deliver functionality every 12 months and,  since 2012, every 6 months. Subsequently, in August 2016, we reported that agencies had not fully  implemented incremental development practices for their software  development projects. Specifically, we noted that, as of August 31, 2015,  22 federal agencies  had reported on the Dashboard that 300 of 469  active software development projects (approximately 64 percent) were  planning to deliver usable functionality every 6 months for fiscal year  2016, as required by OMB guidance. Further, in conducting an in-depth review of seven selected agencies’  software development projects, we determined that 45 percent of the  projects delivered functionality every 6 months for fiscal year 2015 and 55  percent planned to do so in fiscal year 2016. The Department of the Treasury did  not comment on its recommendation. Effective  management of these licenses can help avoid purchasing too many  licenses, which can result in unused software, as well as too few licenses,  which can result in noncompliance with license terms and cause the  imposition of additional fees. In May 2014, we reported on federal agencies’ management of software  licenses and determined that better management was needed to achieve  significant savings government-wide. In particular, 22 of the 24 major  agencies did not have comprehensive license policies and only 2 had  comprehensive license inventories. Among other things, we recommended that the agencies  regularly track and maintain a comprehensive inventory of software  licenses and analyze the inventory to identify opportunities to reduce  costs and better inform investment decision making. Most agencies generally agreed with the recommendations or had no  comments. As of May 2017, 123 of the recommendations had not been  implemented, but 4 agencies had made progress. Most agencies have taken steps to improve the management of IT  acquisitions and operations by implementing key FITARA initiatives,  including data center consolidation, efforts to increase transparency via  OMB’s IT Dashboard, incremental development, and management of  software licenses; and they have continued to address recommendations  we have made over the past several years. In addition, we will  continue to monitor agencies’ implementation of our previous  recommendations.
Why GAO Did This Study

The federal government plans to invest almost $96 billion on IT in fiscal year 2018. Historically, these investments have too often failed, incurred cost overruns and schedule slippages, or contributed little to mission-related outcomes. Accordingly, in December 2014, Congress enacted FITARA, aimed at improving agencies' acquisitions of IT. Further, in February 2015, GAO added improving the management of IT acquisitions and operations to its high-risk list.
This statement summarizes agencies' progress in improving the management of IT acquisitions and operations. This statement is based on GAO prior and recently published reports on (1) data center consolidation, (2) risk levels of major investments as reported on OMB's IT Dashboard, (3) implementation of incremental development practices, and (4) management of software licenses.

What GAO Found

The Office of Management and Budget (OMB) and federal agencies have taken steps to improve information technology (IT) through a series of initiatives, and as of May 2017, had fully implemented about 47 percent of the approximately 800 related GAO recommendations. However, additional actions are needed.
Consolidating data centers . OMB launched an initiative in 2010 to reduce data centers, which was reinforced by the Federal Information Technology Acquisition Reform Act (FITARA) in 2014. GAO reported in May 2017 that agencies had closed 4,388 of the 9,995 total data centers, and had plans to close a total of 5,597 through fiscal year 2019. As a result, agencies reportedly saved or avoided about $2.3 billion through August 2016. However, out of the 23 agencies that submitted required strategic plans, only 7 had addressed all required elements. GAO recommended that agencies complete their plans to optimize their data centers and achieve cost savings and ensure reported cost savings are consistent across reporting mechanisms. Most agencies agreed with the recommendations.
Enhancing transparency . OMB's IT Dashboard provides information on major investments at federal agencies, including ratings from Chief Information Officers that should reflect the level of risk facing an investment. GAO reported in June 2016 that agencies had not fully considered risks when rating their investments on the Dashboard. In particular, of the 95 investments reviewed, GAO's assessments of risks matched the ratings 22 times, showed more risk 60 times, and showed less risk 13 times. GAO recommended that agencies improve the quality and frequency of their ratings. Most agencies generally agreed with or did not comment on the recommendations.
Implementing incremental development . OMB has emphasized the need for agencies to deliver investments in smaller parts, or increments, in order to reduce risk and deliver capabilities more quickly. Since 2012, OMB has required investments to deliver functionality every 6 months. In August 2016, GAO reported that while 22 agencies had reported that about 64 percent of 469 active software development projects planned to deliver usable functionality every 6 months for fiscal year 2016, the other 36 percent of the projects did not. Further, for 7 selected agencies, GAO identified differences in the percentages of software projects reported to GAO as delivering functionality every 6 months, compared to what was reported on the Dashboard. GAO made recommendations to agencies and OMB to improve the reporting of incremental data on the Dashboard. Most agencies agreed or did not comment on the recommendations.
Managing software licenses . Effective management of software licenses can help avoid purchasing too many licenses that result in unused software. In May 2014, GAO reported that better management of licenses was needed to achieve savings. Specifically, only two agencies had comprehensive license inventories. GAO recommended that agencies regularly track and maintain a comprehensive inventory and analyze that data to identify opportunities to reduce costs and better inform decision making. Most agencies generally agreed with the recommendations or had no comments; as of May 2017, 4 agencies had made progress in implementing them.

What GAO Recommends

From fiscal years 2010 through 2015, GAO made about 800 recommendations to OMB and federal agencies to address shortcomings in IT acquisitions and operations, and included recommendations to improve the oversight and execution of the data center consolidation initiative, the accuracy and reliability of the Dashboard, incremental development policies, and software license management. Most agencies agreed with GAO's recommendations or had no comments. In addition, in fiscal year 2016, GAO made about 200 new recommendations in this area. GAO will continue to monitor agencies' implementation of these recommendations.