	Background

The federal government is likely to invest more than $89 billion on IT in  fiscal year 2017. 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. FITARA Can Improve Agencies’ Management of IT

Recognizing the severity of issues related to government-wide  management of IT, FITARA was enacted in December 2014. Federal data center consolidation initiative (FDCCI). Enhanced transparency and improved risk management. Further, in our February 2015 high-risk report, we identified actions that  OMB and the agencies need to take to make progress in this area. Specifically, between fiscal years 2010 and 2015, we made  803 recommendations to OMB and federal agencies to address  shortcomings in IT acquisitions and operations, including many to  improve the implementation of the recent initiatives and other  government-wide, cross-cutting efforts. Most agencies agreed with our  recommendations or had no comments. Specifically, as of November 2015, these agencies had identified  a total of 10,584 data centers, of which they reported closing 3,125  through fiscal year 2015. Further, 21 agencies collectively reported planning  an additional $5.4 billion in cost savings and avoidances, for a total of  approximately $8.2 billion, through fiscal year 2019. To better ensure that federal data center consolidation and optimization  efforts improve governmental efficiency and achieve cost savings, we  recommended that 10 of the 24 agencies take actions to complete their  planned data center cost savings and avoidance targets for fiscal years  2016 through 2018. 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. Among other things, agencies are to submit ratings  from their CIOs, which, according to OMB’s instructions, should reflect the  level of risk facing an investment relative to that investment’s ability to  accomplish its goals. Most  agencies agreed with our recommendations or had no comments. Specifically, our assessments of risk for 95 investments at 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. 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. More recently, 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 IT 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. These differences were due to (1) our identification of fewer software  development projects than agencies reported on the IT Dashboard and  (2) the fact that information reported to us was generally more current  than the information reported on the IT Dashboard. To improve the reporting of incremental data on the IT Dashboard and  policies for CIO certification of adequate incremental development, we  made 12 recommendations to seven agencies and OMB. In addition, the Department of  Defense partially agreed with one recommendation and disagreed with  another, OMB did not agree or disagree, and the Department of the  Treasury did not comment on the recommendations. To their credit, 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,  and incremental development; 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. High-Risk Series: An Update.
Why GAO Did This Study

The federal government is likely to invest more than $89 billion on IT in fiscal year 2017. Historically, these investments have frequently failed, incurred cost overruns and schedule slippages, or contributed little to mission-related outcomes. Accordingly, in December 2014, IT reform legislation was enacted, 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. Between fiscal years 2010 and 2015, GAO made about 800 recommendations related to this high-risk area to OMB and agencies.
This statement summarizes agencies' progress in improving the management of IT acquisitions and operations. To do so, we reviewed and summarized GAO's prior and recently published work on (1) data center consolidation, (2) risk levels of major investments as reported on OMB's IT Dashboard, and (3) implementation of incremental development practices.

What GAO Found

Consolidating data centers. In an effort to reduce the growing number of data centers, OMB launched a consolidation initiative in 2010. GAO reported in March 2016 that agencies had closed 3,125 of the 10,584 total data centers and achieved $2.8 billion in cost savings and avoidances through fiscal year 2015. Agencies are planning a total of about $8.2 billion in savings and avoidances through fiscal year 2019. GAO recommended that the agencies take actions to meet their cost savings targets and improve optimization progress related to their data center consolidation and optimization efforts. Most agencies agreed with the recommendations or had no comment.
Enhancing transparency. OMB's IT Dashboard provides detailed information on major investments at federal agencies, including ratings from Chief Information Officers (CIO) 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 major investments on the IT Dashboard. In particular, of the 95 investments reviewed, GAO's assessments of risks matched the CIO ratings 22 times, showed more risk 60 times, and showed less risk 13 times. Several issues contributed to these differences, such as CIO ratings not being updated frequently. 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. A key reform initiated by OMB has emphasized the need for federal 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 22 agencies had reported that 64 percent of 469 active software development projects planned to deliver usable functionality every 6 months for fiscal year 2016. Further, for 7 selected agencies, GAO identified significant differences in the percentages of software projects reported to GAO as delivering functionality every 6 months, compared to what was reported on the IT Dashboard. This was due to, among other things, inconsistencies in agencies' reporting on non-software development projects, and the timing of reporting data. GAO made 12 recommendations to 7 agencies and OMB to improve the reporting of incremental data on the IT Dashboard and the policies for CIO certification of adequate incremental development. Most agencies agreed or did not comment on our recommendations, and OMB did not agree or disagree.

What GAO Recommends

GAO has previously made numerous recommendations to OMB and federal agencies to improve the oversight and execution of the data center consolidation initiative, the accuracy and reliability of the IT Dashboard, and incremental development policies. Most agencies agreed with GAO's recommendations or had no comments. GAO will continue to monitor agencies' implementation of these recommendations.