The guidance  also calls for such corrective efforts to be defined and documented. Our analysis of the cost and schedule performance for DHS’s 68 major IT  investments shows that approximately two-thirds of these investments  and their subsidiary projects were meeting cost and schedule  commitments; the remaining one-third had at least one subsidiary project  that was not meeting its commitments. The remaining  21 investments had one or more subsidiary projects that were not  meeting cost and/or schedule commitments; the total planned cost for all  projects in development for the 21 investments is approximately $1 billion. Causes of Investment Cost and Schedule Shortfalls Vary

The primary causes of the shortfalls in cost and schedule associated with  DHS’s 21 major IT investments were (in descending order of frequency):  inaccurate preliminary cost and schedule estimates, technical issues in  the development phase, changes in agency priorities, lack of  understanding of user requirements, and dependencies on other  investments that had schedule shortfalls. A summary of these causes by  investment and the associated component are shown in table 3 and are  followed by (1) our analysis of these causes by category and (2)  discussion of our past work on the department’s major investments and  related IT management processes where we identified some of these  same causes and made recommendations to strengthen management in  these areas. According to investment officials, this was due in part to  project staff developing the cost estimates very quickly and not fully  validating them before proceeding with the project. Technology issues in the development phase: Technical issues in the  development phase caused cost or schedule slippages in six  investments. Specifically,  the handheld devices used for scanning license plates used a  wireless spectrum that had interference problems at certain sites, and  resolving this issue took more time than had been planned for. In particular,  GAO’s Information Technology Investment Management framework calls  for agencies to develop and document corrective efforts for  underperforming projects. In addition, DHS policy requires  corrective actions when cost or schedule variances exceed 8 percent. DHS developed and documented corrective efforts for 12 of the 21 major  investments with a shortfall, but the remaining 9 did not have documented  corrective efforts. DHS took corrective actions to address investment shortfalls in 12  investments. With regard to the remaining nine investments, three were unable to  provide us with documentation, even though project officials stated that  they had developed some corrective efforts, and six did not engage in  corrective efforts to address shortfalls. This is inconsistent with the  direction of OMB, which requires agencies to report (via the IT  Dashboard) on the cost and schedule performance of their projects and  considers those projects with a 10 percent or greater variance to be at an  increased level of risk of not being able to deliver promised capabilities on  time and within budget, and thus they require special attention from  management. Recommendations for Executive Action

We recommend that the Secretary of Homeland Security direct the  appropriate officials to:
Establish guidance that provides for developing corrective efforts for  major IT investment projects that are experiencing cost and schedule  shortfalls of 10 percent or greater, similar to those identified in this  report. GAO staff who made  major contributions to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

The objectives of our review were to determine the (1) extent to which  Department of Homeland Security (DHS) IT investments are meeting their  cost and schedule commitments, (2) primary causes of any commitment  shortfalls, and (3) adequacy of DHS’s efforts to address these shortfalls  and causes. To address our first objective, we analyzed how each of DHS’s 68 major  investments under development was performing against its cost and  schedules commitments, as reported by the agency to the Office of  Management and Budget (OMB) for inclusion on OMB’s federal IT  Dashboard. Appendix III: List of DHS Major IT Investments and Subsidiary Projects with Shortfalls

Table 6 lists the DHS major IT investments with cost and/or schedule  shortfalls, their costs and subsidiary projects, whether or not they had a  cost and/or schedule shortfall, and their planned costs.
Why GAO Did This Study

DHS has responsibility for the development and management of the IT systems for the 22 federal agencies and offices under its jurisdiction. Of its 363 IT investments, 68 are in development and are classified by DHS as a major investment that requires special management attention because of its mission importance. Given the size and significance of these investments, GAO was asked to determine the (1) extent to which DHS IT investments are meeting their cost and schedule commitments, (2) primary causes of any commitment shortfalls, and (3) adequacy of DHSs efforts to address these shortfalls and their associated causes.
To address these objectives, GAO analyzed recent cost and schedule performance for DHSs major IT investments, as reported to OMB. To identify the primary cause(s) of any shortfalls and whether any corrective efforts were being taken to address them, GAO analyzed project plans and related documentation and interviewed responsible DHS officials and compared the corrective efforts to applicable criteria to assess their adequacy.

What GAO Found

Approximately two-thirds of the Department of Homeland Securitys (DHS) major information technology (IT) investments are meeting their cost and schedule commitments (i.e., goals). Specifically, out of 68 major IT investments in development, 47 were meeting cost and schedule commitments. The remaining 21which total about $1 billion in spendinghad one or more subsidiary projects that were not meeting cost and/or schedule commitments (i.e., they exceeded their goals by at least 10 percent, which is the level at which the Office of Management and Budget (OMB) considers projects to be at increased risk of not being able to deliver planned capabilities on time and within budget.)
The primary causes for the cost and schedule shortfalls were (in descending order of frequency):
inaccurate preliminary cost and schedule estimates,
technology issues in the development phase,
changes in agency priorities,
lack of understanding of user requirements, and
dependencies on other investments that had schedule shortfalls.
Eight investments had inaccurate cost and schedule estimates. For example, DHSs Critical Infrastructure Technology investment had a project where actual costs were about 16 percent over the estimated cost, due in part to project staff not fully validating cost estimates before proceeding with the project. In addition, six investments had technical issues in the development phase that caused cost or schedule slippages. For example, DHSs Land Border Integration investment had problems with wireless interference at certain sites during deployment of handheld devices used for scanning license plates, which caused a project to be about 2.5 months late. In past work on DHS investments, GAO has identified some of the causes of DHSs shortfalls and made recommendations to strengthen management in these areas (e.g., cost estimating, requirements), and DHS has initiated efforts to implement the recommendations.
DHS often did not adequately address shortfalls and their causes. GAOs investment management framework calls for agencies to develop and document corrective efforts to address underperforming investments. DHS policy requires documented corrective efforts when investments experience cost or schedule variances. Although 12 of the 21 investments with shortfalls had defined and documented corrective efforts, the remaining 9 did not. Officials responsible for 3 of the 9 investments said they took corrective efforts but were unable to provide plans or any other related documentation showing such action had been taken. Officials for the other 6 investments cited criteria in DHSs policy that excluded their investments from the requirement to document corrective efforts. This practice is inconsistent with the direction of OMB guidance and related best practices that stress developing and documenting corrective efforts to address problems in such circumstances. Until DHS addresses its guidance shortcomings and ensures each of these underperforming investments has defined and documented corrective efforts, these investments are at risk of continued cost and schedule shortfalls.

What GAO Recommends

GAO is recommending that the Secretary of Homeland Security direct the appropriate officials to address the guidance shortcomings and develop corrective actions for all major IT investment projects having cost and schedule shortfalls. In commenting on a draft of this report, DHS concurred with GAOs recommendations.