However, as we have described in numerous reports,  although a variety of best practices exist to guide their successful  acquisition, federal IT projects too frequently incur cost overruns and  schedule slippages while contributing little to mission-related outcomes. Consequently, we recommended, among other things, that  OMB improve its guidance to agencies on identifying and categorizing IT  investments. In September 2011, we reported that the results of OMB initiatives to  identify potentially duplicative investments were mixed and that several  federal agencies did not routinely assess their entire IT portfolios to  identify and remove or consolidate duplicative systems. Given the importance of transparency, oversight, and  management of the government’s IT investments, in June 2009, OMB  established a public website, referred to as the IT Dashboard, that  provides detailed information on 759 major IT investments at 27  federal agencies, including ratings of their performance against cost  and schedule targets. As of June 2014, according to the IT Dashboard, 183 of the federal  government’s 759 major IT investments—totaling $10 billion—were in  need of management attention (rated “yellow” to indicate the need for  attention or “red” to indicate significant concerns). IT Reform Plan. This document established an ambitious plan for  achieving operational efficiencies and effectively managing large- scale IT programs. Opportunities Exist to Improve Acquisition and Management of IT Investments

Given the magnitude of the federal government’s annual IT budget, which  is expected to be more than $82 billion in fiscal year 2014, it is important  that agencies leverage all available opportunities to ensure that their IT  investments are acquired in the most effective manner possible. However, we have issued a series of reports highlighting  deficiencies with the accuracy and reliability of the data reported on the  Dashboard. Further, while we reported in 2011 that the accuracy of Dashboard cost  and schedule data had improved over time, more recently, in December  2013, we found that agencies had removed investments from the  Dashboard by reclassifying their investments—representing a troubling  trend toward decreased transparency and accountability. Additionally,  as of December 2013, the public version of the Dashboard was not  updated for 15 of the previous 24 months because OMB does not revise it  as the President’s budget request is being prepared. Six  agencies generally agreed with the report or had no comments and two  others did not agree, believing their categorizations were appropriate. In particular, in 2010 OMB called for IT investments to deliver  functionality every 12 months, and since 2012 has required investments  to deliver functionality every 6 months. Additionally, the weaknesses in agency policies enabled inconsistent  implementation of incremental development approaches. Specifically,  almost three-quarters of the selected investments we reviewed did not  plan to deliver functionality every 6 months and less than half planned to  deliver functionality in 12-month cycles. We  recommended that OMB develop and issue realistic and clear guidance  on incremental development, and that Defense, HHS, DHS, and  Transportation update and implement their incremental development  policies, once OMB’s guidance is made available. Accordingly, we continued to believe that our  recommendations were warranted and can be implemented. In 2013, we reported that OMB and selected agencies  had held multiple TechStats, but that additional OMB oversight was  needed to ensure that these meetings were having the appropriate impact  on underperforming projects and that resulting cost savings were valid. OMB agreed with these two recommendations,  and most agencies agreed with our recommendations to them. Agencies’ PortfolioStat Efforts Have the Potential to Save Billions of  Dollars  OMB launched the PortfolioStat initiative in March 2012, which required  26 executive agencies to, among other things, reduce commodity IT  spending and demonstrate how their IT investments align with the  agencies’ mission and business functions. In November 2013, we reported on agencies’ efforts to complete key  required PortfolioStat actions and make portfolio improvements. Our analysis,  which included these estimates, showed that collectively the 26 agencies  reported about 200 opportunities and at least $5.8 billion in potential  savings through fiscal year 2015—at least $3.3 billion more than the  number initially reported by OMB. We made more than 50 recommendations to improve agencies’  implementation of PortfolioStat requirements. OMB partially agreed with our recommendations, and  responses from 20 of the agencies commenting on the report varied. Last month, we also reported on OMB’s and agencies’ policies and  management of software licenses—one PortfolioStat focus area. We recommended that OMB issue a  directive to help guide agencies in managing licenses and made more  than 130 recommendations to the 24 agencies to improve their policies  and practices for managing licenses. OMB disagreed with the need for a  directive. Most agencies generally agreed with the  recommendations or had no comments.
Why GAO Did This Study

The federal government reportedly plans to spend at least $82 billion on IT in fiscal year 2014. Given the scale of such planned outlays and the criticality of many of these systems to the health, economy, and security of the nation, it is important that OMB and federal agencies provide appropriate oversight and transparency into these programs and avoid duplicative investments, whenever possible, to ensure the most efficient use of resources.
GAO has previously reported and testified that federal IT projects too frequently fail and incur cost overruns and schedule slippages while contributing little to mission-related outcomes. Numerous best practices and administration initiatives are available for agencies that can help them improve the oversight and management of IT investments.
GAO is testifying today on the results and recommendations from selected reports that focused on how federal IT reform efforts could be improved by more effective IT acquisition and more efficient management of existing IT systems.

What GAO Found

GAO has issued a number of reports on the federal government's efforts to efficiently acquire and manage information technology (IT). While the Office of Management and Budget (OMB) and agencies have taken steps to improve federal IT through a number of initiatives, additional actions are needed. For example, OMB's IT Dashboard provides information, including ratings of risk, on 759 major investments at 27 federal agencies. As of June 2014, according to the Dashboard, 576 investments were low or moderately low risk, 147 were medium risk, and 36 were moderately high or high risk. GAO has issued a series of reports on Dashboard accuracy and identified issues with the accuracy and reliability of cost and schedule data. Furthermore, a recent GAO report found that agencies had removed major investments from the Dashboard, representing a troubling trend toward decreased transparency. GAO also reported that, as of December 2013, the public version of the Dashboard was not updated for 15 of the previous 24 months. GAO made recommendations to ensure that the Dashboard includes all major IT investments and to increase its availability. Agencies generally agreed with the report or had no comments.
An additional key reform initiated by OMB emphasizes incremental development in order to reduce investment risk. In 2010 it called for agency investments to deliver functionality every 12 months and since 2012 has required investments to deliver functionality every 6 months. However, GAO recently reported that almost three-quarters of investments reviewed did not plan to deliver capabilities every 6 months and less than half planned to deliver capabilities in 12-month cycles. GAO recommended that OMB develop and issue clearer guidance on incremental development and that selected agencies update and implement their associated policies. Most agencies agreed with GAO recommendations or had no comment. GAO continued to believe that its recommendations were valid.
To better manage existing IT systems, OMB launched the PortfolioStat initiative, which, among other things, requires agencies to conduct annual reviews of their IT portfolio and make decisions on eliminating duplication. GAO reported that agencies continued to identify duplicative spending as part of PortfolioStat and that this initiative had the potential to save at least $5.8 billion through fiscal year 2015, but that weaknesses existed in agencies' implementation of the initiative, such as limitations in the Chief Information Officer's authority. Among other things, GAO made several recommendations to improve agencies' implementation of PortfolioStat requirements. OMB partially agreed with GAO's recommendations and responses from 20 of the agencies varied.
GAO also recently reported on software license management—one PortfolioStat focus area—and determined that better management was needed to achieve significant savings government-wide. In particular, 22 of the 24 major federal agencies did not have comprehensive license policies. GAO recommended that OMB issue needed guidance to agencies and made more than 130 recommendations to the agencies to improve their policies and practices for managing licenses.OMB disagreed with the need for guidance. However, without it the management of agencies' licenses may be weakened. Most agencies generally agreed with the recommendations or had no comments.

What GAO Recommends

GAO has previously made numerous recommendations to OMB and federal agencies on key aspects of IT management, including the IT Dashboard, incremental development approaches, and PortfolioStat implementation, including software license management.