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. 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 760 major IT investments at 27  federal agencies, including ratings of their performance against cost  and schedule targets. 2.) According to the  former Federal CIO, the efforts of OMB and federal agencies to  improve management and oversight of IT investments have resulted  in almost $4 billion in savings. OMB believes that this initiative has the potential to  provide about $3 billion in savings by the end of 2015. IT Reform Plan. 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. To do so,  agencies can rely on IT acquisition best practices, incremental  development, and initiatives such as OMB’s IT Dashboard and OMB- mandated TechStat sessions. 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 created. Nevertheless, the rating issues that we identified with performance  reporting and annual baselining, some of which are now corrected,  serve to highlight the need for agencies’ continued attention to the  timeliness and accuracy of submitted information in order to allow the  Dashboard to continue to fulfill its stated purpose. We  continue to believe that our recommendations are valid. 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. 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. In the  report being released today, we recommend 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. Four agencies—Defense, HHS, DHS, VA—generally agreed with the  report or had no comments and one agency—Transportation—did not  agree that its recommendation should be dependent on OMB first taking  action. Among other things, we  recommended that OMB require agencies to report on how they validated  the outcomes. Continued Oversight Needed to Consolidate Federal Data Centers  and Achieve Cost Savings  In an effort to consolidate the growing number of federal data centers, in  2010, OMB launched a consolidation initiative intended to close 40  percent of government data centers by 2015, and, in doing so, save $3  billion. Among other things, we  recommended that OMB track and report on key performance measures,  such as cost savings to date, and improve the execution of important  oversight responsibilities. We also recommended that agencies complete  inventories and plans. OMB agreed with these two recommendations,  and most agencies agreed with our recommendations to them. Specifically, as of May 2013, agencies had reported closing 484 data  centers by the end of April 2013 and were planning to close an additional  571 data centers—for a total of 1,055—by September 2014. 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 addition, we made  several recommendations to improve agencies’ implementation of  PortfolioStat requirements. OMB partially agreed with these  recommendations, and responses from 20 of the agencies commenting  on the report varied.
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 acquisitions.
GAO is testifying today on the results and recommendations from selected reports that focused on how best practices and IT reform initiatives can help federal agencies better manage major acquisitions and legacy investments.

What GAO Found

GAO recently reported on nine critical factors underlying successful major information technology (IT) acquisitions. Factors cited included (1) program officials were actively engaged with stakeholders and (2) prioritized requirements.
One key IT reform initiative undertaken by the Office of Management and Budget (OMB) is the IT Dashboard, which provides information, including ratings of risk, on 760 major investments at 27 federal agencies. As of April 2014, according to the Dashboard, 559 investments were low or moderately low risk, 159 were medium risk, and 42 were moderately high or high risk.
GAO has issued a series of reports on Dashboard accuracy and, in 2011, found that, while there were issues with the accuracy and reliability of cost and schedule data, the accuracy of these data had improved over time. However, 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 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, in its report released today, GAO found 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, while others disagreed or had no comment. GAO continues to believe that its recommendations are valid.
In an effort to consolidate the number of federal data centers, OMB launched a consolidation initiative intended to close 40 percent of data centers by 2015, and in doing so, save $3 billion. GAO reported that agencies planned to close 1,055 data centers by the end of fiscal year 2014, but also highlighted the need for continued oversight. Among other things, GAO recommended that OMB improve the execution of important oversight responsibilities, with which OMB agreed.
To better manage the government's existing IT systems, OMB launched the PortfolioStat initiative, which, among other things, requires agencies to conduct annual reviews of their IT investments and make decisions on eliminating duplication. GAO reported that agencies continued to identify duplicative spending as part of PortfolioStat and that this initiative has the potential to save at least $5.8 billion by fiscal year 2015, but that weaknesses existed in agencies' implementation of the initiative's requirements. Among other things, GAO made several recommendations to improve agencies' implementation of PortfolioStat requirements. OMB partially agreed with these recommendations, and most of the other 20 agencies agreed to implement them.

What GAO Recommends

GAO has previously made numerous recommendations to OMB and federal agencies on key aspects of IT management, including the IT Dashboard and efforts to consolidate federal data centers. Additionally, in its report being released today, GAO also recommended that agencies take actions to improve their incremental development approaches.