Information Technology:

Agencies Need to Establish and Implement Incremental Development Policies

GAO-14-361: Published: May 1, 2014. Publicly Released: May 8, 2014.

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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.

Assessment of Selected Agencies' Incremental Development Policies

Component

Defense

HHS

DHS

Transportation

VA

Require delivery of functionality every 6 months

Define functionality

Define a process for enforcing compliance

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.

Number of Selected Investments Planning to Incrementally Deliver Functionality

Agency

Total number of selected investments

Investments planning to deliver functionality every 6 months

Investments planning to deliver functionality every 12 months

Defense

37

1

11

HHS

14

9

11

DHS

12

2

6

Transportation

20

5

7

VA

6

6

6

Totals

89

23

41

Source: GAO analysis of agency data.

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 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.

For more information, contact David A. Powner at (202) 512-9286 or pownerd@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: The Office of Management and Budget (OMB) agreed with our recommendation to update and issue incremental guidance, but disagreed that the time frame for incremental delivery should be changed to every 12 months. Subsequently, OMB began to take steps to address aspects of our recommendation. Specifically, in June 2014, OMB updated its information technology (IT) budget guidance to, among other things, define project functionality as any changes to an IT system that primarily provides new or improved capability to the end user. Additionally, in June 2015, OMB issued its guidance on how agencies are to implement December 2014 federal IT acquisition reform legislation. As part of that guidance, OMB required CIOs to ensure that all acquisition strategies and acquisition plans that include IT apply adequate incremental development principles. However, as of June 2017, OMB's annually updated IT budget capital planning guidance still requires that projects associated with major IT investments deliver functionality every 6 months, rather than every 12 months, as we recommended. In the absence of our recommended delivery time frame change, OMB is at risk of continuing to require functionality to be delivered in a time frame that we found to be unrealistic for many IT investments based on their current levels of performance. We will continue to evaluate OMB's progress in implementing the recently issued guidance and in considering a change in how often projects are to deliver functionality.

    Recommendation: The Director of the Office of Management and Budget should direct the Federal Chief Information Officer to update, and clearly and explicitly issue incremental development guidance that addresses the following three components: (1) 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; (2) specifies how agencies are to define the project functionality that is to be delivered; and (3) requires agencies to define a process for enforcing compliance with incremental functionality delivery, such as the use of TechStat sessions.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: The Office of Management and Budget (OMB) agreed with, and has taken steps to implement, this recommendation. Specifically, since June 2014, OMB has required as part of its annual information technology (IT) budget guidance that agencies identify on exhibit 300 submissions whether each project associated with major IT investments will deliver functionality every 6 months. OMB has also made this information publicly available on the IT Dashboard. Additionally, OMB

    Recommendation: The Director of the Office of Management and Budget should direct the Federal Chief Information Officer to require agencies to clearly identify on exhibit 300 submissions whether, for each project, functionality will be delivered within the time frames called for by this incremental development guidance, and to provide justification for projects that do not plan to do so.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: The Department of Homeland Security (DHS) agreed with our recommendation and stated that it would finalize its guidance governing incremental development to ensure it complied with OMB guidance. In April 2016, DHS finalized its guidance on Agile Development and Delivery for Information Technology, which included time frames for when a project should deliver useable functionality, a definition of useable functionality, and a process for enforcing compliance with incremental delivery through its acquisition review process. By finalizing its incremental development guidance to include these three components, DHS is better positioned to deliver functionality more rapidly, measure how often projects are delivering functionality, and enforce compliance with the time frames identified in their guidance.

    Recommendation: The Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should modify, finalize, and implement their agencies' policies governing incremental development to ensure that those policies comply with OMB's guidance, once that guidance is made available.

    Agency Affected: Department of Homeland Security

  4. Status: Closed - Implemented

    Comments: The Department of Defense (Defense) has taken steps to address our recommendation. Specifically, in January 2015, Defense finalized Department of Defense Instruction 5000.02: Operation of the Defense Acquisition System, which calls for information technology (IT) investments to use incremental development approaches. Subsequently, in August 2016, the department issued its Fiscal Year 2018 IT Budget Guidance, which included a definition of useable functionality, time frames for delivery, and a process for enforcing compliance with incremental delivery through its process for Chief Information Officer certification of an investment

    Recommendation: The Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should modify, finalize, and implement their agencies' policies governing incremental development to ensure that those policies comply with OMB's guidance, once that guidance is made available.

    Agency Affected: Department of Defense

  5. Status: Open

    Comments: The Department of Health and Human Services (HHS) has begun to take steps to address this recommendation. Specifically, in January 2015, HHS established a working group on incremental development in order to define a methodology for more rapid development. Further, HHS officials reported in April 2017 that the department was working to finalize its new guidance on incremental development and CIO certification as required by OMB guidance but could not provide a time frame for when the policy would be finalized. Until HHS finalizes and implements its incremental development policy, its information technology expenditures are more likely to produce sub-optimal results. We will continue to evaluate HHS's progress in implementing this recommendation.

    Recommendation: The Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should modify, finalize, and implement their agencies' policies governing incremental development to ensure that those policies comply with OMB's guidance, once that guidance is made available.

    Agency Affected: Department of Health and Human Services

  6. Status: Closed - Implemented

    Comments: The Department of Transportation (Transportation) has taken steps to address our recommendation. Specifically, in June 2016, the department issued revised guidance on incremental development. Transportation

    Recommendation: The Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should modify, finalize, and implement their agencies' policies governing incremental development to ensure that those policies comply with OMB's guidance, once that guidance is made available.

    Agency Affected: Department of Transportation

  7. Status: Closed - Implemented

    Comments: The Department of Homeland Security (DHS) agreed with our recommendation and stated that it would update its guidance to encourage the factors identified in the report as enabling incremental development and would include strategies to minimize factors inhibiting this development. In April 2016, DHS finalized its guidance on Agile Development and Delivery for Information Technology, which addresses the factors identified in our report. For example, DHS?s revised policy establishes Agile development as the preferred development approach for all IT acquisitions, requires active engagement with all stakeholders throughout the acquisition process, and ensures staff have the necessary skills and experience in Agile development and contracting. By finalizing its incremental development guidance to address these factors, DHS is better positioned to address the challenges the department faces in acquiring IT investments faster and more efficiently.

    Recommendation: When updating their policies, the Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should consider the factors identified in this report as enabling and inhibiting incremental development.

    Agency Affected: Department of Homeland Security

  8. Status: Closed - Implemented

    Comments: The Department of Defense (Defense) has taken steps to address our recommendation. Specifically, in February 2017, Defense finalized Department of Defense Instruction 5000.75: Business System Requirements and Acquisition, which addresses the factors identified in our report. For example, Defense

    Recommendation: When updating their policies, the Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should consider the factors identified in this report as enabling and inhibiting incremental development.

    Agency Affected: Department of Defense

  9. Status: Open

    Comments: The Department of Health and Human Services (HHS) has begun to take steps to address this recommendation. Specifically, in January 2015, HHS established a working group on incremental development in order to define a methodology for incremental development that would address the factors identified in the report. Further, HHS officials reported in April 2017 that the department was working to finalize its new guidance on incremental development and CIO certification as required by OMB guidance but could not provide a time frame for when the policy would be finalized. Until HHS updates and implements its incremental development policy, its information technology expenditures are more likely to produce sub-optimal results. We will continue to evaluate HHS's progress in implementing this recommendation.

    Recommendation: When updating their policies, the Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should consider the factors identified in this report as enabling and inhibiting incremental development.

    Agency Affected: Department of Health and Human Services

  10. Status: Closed - Implemented

    Comments: The Department of Transportation (Transportation) has taken steps to address our recommendation. Specifically, the department issued two sets of guidance on incremental development in June 2016. Transportation's Enterprise Program Management Review Framework and Investment Management Process Guidance address the factors identified in our report. For example, Transportation's revised guidance requires all projects to use incremental development such as Agile or provide justification for an alternate approach, requires active engagement with all stakeholders throughout its investment review process, and establishes an annual operational analysis to measure investment performance against established cost, schedule, and performance parameters and share best practices departmentwide. By finalizing its incremental development guidance to address these factors, Transportation is better positioned to address the challenges the department faces in acquiring IT investments faster and more efficiently.

    Recommendation: When updating their policies, the Secretaries of Defense, Health and Human Services, Homeland Security, and Transportation should consider the factors identified in this report as enabling and inhibiting incremental development.

    Agency Affected: Department of Transportation

  11. Status: Closed - Implemented

    Comments: The Department of Veterans Affairs (VA) agreed with our recommendation and stated that it would review its existing policy for incremental development and consider incorporating the factors we identified. Subsequently, in June 2014, VA revised its incremental development guidance to address all of the factors identified in our report. For example, VA

    Recommendation: The Secretary of Veterans Affairs should consider incorporating the factors identified in this report as enabling and inhibiting incremental development in the department's related policy.

    Agency Affected: Department of Veterans Affairs

 

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