Although all five selected agencies developed policies that address  incremental development, the majority of the agencies’ policies did not  fully address all three components. The other four agencies did not address this  policy component. Only one of the five agencies—VA—fully  addressed this policy component. Agencies cited several underlying reasons that contributed to these  weaknesses: (1) they were not always aware of OMB guidance, (2) they  did not believe that the guidance was realistic, and (3) they said the  guidance was not always clear. Although OMB issued later  guidance on incremental development, it has not yet specified what  agencies’ incremental development policies are to include. Until OMB explicitly issues realistic and clear guidance and Defense,  HHS, DHS, and Transportation address the identified weaknesses in their  incremental development policies, it will be difficult to deliver project  functionality more rapidly, measure how often projects are delivering  functionality, and enforce compliance with the delivery time frames called  for in their policies. Most Selected Investments Do Not Plan to Deliver Functionality Every 6 or 12 Months

In its 2010 IT Reform Plan, OMB called for IT programs to deliver  functionality at least every 12 months. These concerns have merit. However, OMB’s guidance does  not make this distinction. The previously discussed weaknesses in agency policies have permitted  the inconsistent implementation of incremental development approaches. Regarding implementation of incremental development, slightly more than  one-fourth of selected investments planned to deliver functionality every 6  months—and less than one-half planned to do so every 12 months. Update, and clearly and explicitly issue incremental development  guidance that addresses the following three components:  requires projects associated with major IT investments to deliver  incremental functionality at least every 12 months, with the  exception of the three types of investments identified in this report;  specifies how agencies are to define the project functionality that  is to be delivered; and requires agencies to define a process for enforcing compliance  with incremental functionality delivery, such as the use of  TechStat sessions. OMB agreed with one recommendation and  partially disagreed with the other; Defense generally concurred with the  report; HHS neither agreed nor disagreed with the report’s  recommendations; DHS agreed with our recommendations;  Transportation did not agree with the recommendations in that it did not  believe the department should be dependent on OMB first taking action;  and VA generally agreed with the report’s conclusions and concurred with  our recommendation. Appendix I: Objectives, Scope, and Methodology

Our objectives for this review were to (1) assess whether selected  agencies have established policies for incremental information technology  (IT) development, (2) determine whether selected agencies are using  incremental development approaches to manage their IT investments,  and (3) identify the key factors that enabled and inhibited the selected  agencies’ abilities to effectively use incremental development approaches  to manage their IT investments. Those agencies are the Departments  of Defense (Defense), Health and Human Services (HHS), Homeland  Security (DHS), Transportation (Transportation), and Veterans Affairs  (VA).
Why GAO Did This Study

Federal agencies plan to spend at least $82 billion on IT in fiscal year 2014. However, prior IT expenditures have often produced disappointing results. Thus, OMB has called for agencies to deliver investments in smaller parts or increments. In 2010, it called for IT investments to deliver capabilities every 12 months and now requires investments to deliver capabilities every 6 months. GAO was asked to review agencies' incremental development approaches. Among other things, this report (1) assesses whether selected agencies have established policies for incremental IT development; and (2) determines whether selected agencies are using incremental development approaches to manage their IT investments. To do so, GAO selected five agencies—Defense, HHS, DHS, Transportation, and VA—and 89 total investments at these agencies. GAO then reviewed the agencies' incremental development policies and plans.

What GAO Found

All five agencies in GAO's review—the Departments of Defense (Defense), Health and Human Services (HHS), Homeland Security (DHS), Transportation (Transportation), and Veterans Affairs (VA)—have established policies that address incremental development; however, the policies usually did not fully address three key components for implementing the Office of Management and Budget's (OMB) guidance (see table). Specifically, only VA fully addressed the three components. Among other things, agencies cited the following reasons that contributed to these weaknesses: (1) the guidance was not feasible because not all types of investments should deliver functionality in 6 months, and (2) the guidance did not identify what agencies' policies are to include or time frames for completion. GAO agrees these concerns have merit. Until OMB issues realistic and clear guidance and agencies address the weaknesses in their incremental development policies, it will be difficult to deliver project capability more rapidly.
Key =Fully met =Partially met =Not met
Source: GAO analysis of agency documentation.
The weaknesses in agency policies have enabled inconsistent implementation of incremental development approaches: almost three-quarters of the selected investments did not plan to deliver functionality every 6 months, and less than half planned to deliver functionality in 12-month cycles (see table). Without consistent use of incremental development approaches, information technology (IT) expenditures are more likely to continue producing disappointing results.
Source: GAO analysis of agency data.

What GAO Recommends

Among other things, GAO recommends that OMB develop and issue realistic and clear guidance on incremental development and that the selected agencies update and implement their incremental development policies to reflect OMB's guidance. OMB partially disagreed, believing its guidance is realistic. Four agencies generally agreed with the report or had no comments, and one agency did not agree that its recommendations should be dependent on OMB first taking action. GAO continues to believe that its recommendations are valid, as discussed in this report.