	Background

The federal government plans 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 mission-related  outcome. Federal data center consolidation initiative (FDCCI). Enhanced transparency and improved risk management. As of May  2016, about 33 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, ensure that a minimum of 80 percent of the government’s major  acquisitions deliver functionality every 12 months, and achieve no less than 80 percent of the planned PortfolioStat savings  and 80 percent of the planned savings for data center consolidation. In total, we have made 111  recommendations to OMB and agencies to improve the execution and  oversight of the initiative. Specifically, as of November 2015, agencies had  identified a total of 10,584 data centers, of which they reported closing  3,125 through fiscal year 2015. See  figure 1 for a summary of agencies’ total data centers and reported and  planned closures. 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. Finally, we reported that agencies made limited progress against OMB’s  fiscal year 2015 core data center optimization performance metrics. To better ensure that federal data center consolidation and optimization  efforts improve governmental efficiency and achieve cost savings, we  recommended that 10 agencies take action 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. In total, we have made 22 recommendations to OMB  and federal agencies to help improve the accuracy and reliability of the  information on the IT Dashboard and to increase its availability. Most  agencies agreed with our recommendations or had no comment. Specifically, our assessment of 95 investments at 15  agencies matched the CIO ratings posted on the Dashboard 22 times,  showed more risk 60 times, and showed less risk 13 times. 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. Most agencies agreed with our  recommendations or had no comment. Specifically, as of August 31, 2015, on  the IT Dashboard, 22 federal agencies reported 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. For example, the percentage of software  projects delivering every 6 months that was reported to us by the  Department of Commerce decreased by about 42 percentage points from  what was reported on the IT Dashboard. We determined that the significant differences in delivery rates were due,  in part, to agencies having different interpretations of OMB’s guidance on  reporting software development projects and because the information  reported to us was generally more current than the information reported  on the IT Dashboard. To improve the use of incremental development, we are recommending in  our draft report, which is with the applicable agencies for comment, that  agencies take action to update their policies for incremental development  and IT Dashboard project information. High-Risk Series: An Update. Information Technology: Agencies Need to Establish and Implement  Incremental Development Policies.
Why GAO Did This Study

The federal government plans 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 into law, aimed at improving agencies' acquisition of IT. Further, in February 2015, 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. Between fiscal years 2010 and 2015, GAO made about 800 recommendations related to this high-risk area to OMB and agencies. As of May 2016, about 33 percent of these had been implemented.
This statement primarily summarizes: (1) GAO's published work on data center consolidation, and (2) GAO's draft reports on the risk of major investments as reported on the IT Dashboard and the implementation of incremental development practices. These draft reports with recommendations are currently with applicable agencies for comment.

What GAO Found

The Office of Management and Budget (OMB) and agencies have taken steps to improve federal information technology (IT) through a series of initiatives; however, additional actions are needed.
Consolidating data centers. In an effort to reduce the growing number of data centers, OMB launched a consolidation initiative in 2010. GAO recently reported 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. However, these planned savings may be higher because 10 agencies had not fully developed their planned savings goals. In addition, agencies made limited progress against OMB's fiscal year 2015 data center optimization performance targets, such as the utilization of data center facilities. GAO recommended that the agencies take action to complete their cost savings targets and improve optimization progress. 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. In a draft report, GAO's assessments of the risk ratings showed more risk than the associated CIO ratings. In particular, of the 95 investments reviewed, GAO's assessments 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 ratings not being updated frequently. In its draft report, GAO is recommending that agencies improve the quality and frequency of their CIO ratings.
Implementing incremental development. An additional key reform initiated by OMB has emphasized the need 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 a draft report, GAO determined that 22 agencies reported that 64 percent of 469 active software development projects had plans to deliver usable functionality every 6 months for fiscal year 2016. Further, for seven selected agencies, GAO identified significant differences in the percentage of software projects delivering every 6 months reported to GAO compared to what was reported on the IT Dashboard. For example, the percentage of software projects reported to GAO by the Department of Commerce decreased by about 42 percentage points from what was reported on the IT Dashboard. These differences were due, in part, to agencies having different interpretations of OMB's guidance on reporting software development projects. In its draft report, GAO is recommending that OMB and agencies improve the use of incremental development.

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 comment.