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 timeframe for incremental delivery should be changed to every 12 months. Subsequently, OMB has begun to take steps to address our policy 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 provide new or improved capability to the end user. Additionally, in June 2015, OMB issued its guidance on how agencies are to implement recently enacted 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 August 2015, OMB budget guidance still required that projects associated with major IT investments deliver functionality every 6 months, as we found in our report, and not every 12 months, as we recommended. In the absence of our recommended delivery timeframe change, OMB is at risk of continuing to require functionality delivery in a timeframe that we found to be unrealistic for many IT investments based on their current level 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's guidance calls for agencies to provide a justification for projects that do not plan to deliver functionality every 6 months in their exhibit 300 submissions. As a result, OMB should be better able to oversee the extent to which projects and investments are implementing its incremental development guidance.

    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: Open

    Comments: The Department of Homeland Security (DHS) agreed with, and has begun to take steps to address, this recommendation. Specifically, DHS has drafted guidance on incremental development. While DHS has yet to finalize this guidance, according to DHS officials, the department expects the guidance to be finalized by September 2015. Additionally, preliminary results from our ongoing follow-up work have shown that DHS has not yet consistently implemented incremental development approaches. Until DHS finalizes and implements its incremental development policy, its information technology expenditures are more likely to produce sub-optimal results. We will continue to evaluate DHS'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 Homeland Security

  4. Status: Open

    Comments: The Department of Defense (DOD) has begun to take steps to address this recommendation. Specifically, in January 2015, DOD finalized its revised acquisition framework, which calls for information technology (IT) investments to use incremental development approaches. However, the framework does not provide a timeframe for how often functionality is to be delivered. Additionally, preliminary results from our ongoing follow-up work has shown that DOD has not yet consistently implemented incremental development approaches. Until DOD modifies and implements its incremental development policy, its IT expenditures are more likely to produce sub-optimal results. We will continue to evaluate DOD'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 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. However, HHS has yet to finalize this development methodology and did not provide a timeframe for when it might do so. Additionally, preliminary results from our ongoing follow-up work has shown that HHS has not yet consistently implemented incremental development approaches. 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: 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: Open

    Comments: The Department of Transportation (DOT) has begun to take steps to address this recommendation. Specifically, in January 2015, DOT released interim investment management guidance, which calls for its information technology (IT) governance board to review how often investments deliver functionality. However, the guidance does not provide a timeframe for how often functionality is to be delivered. Additionally, preliminary results from our ongoing follow-up work have shown that DOT has not yet consistently implemented incremental development approaches. Until DOT modifies and implements its incremental development policy, its IT expenditures are more likely to produce sub-optimal results. We will continue to evaluate DOT'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 Transportation

  7. Status: Open

    Comments: The Department of Homeland Security (DHS) agreed with, and has begun to take steps to address, this recommendation. Specifically, DHS has drafted guidance on incremental development and modified this guidance to address the factors identified in our report. While DHS has yet to finalize this guidance, according to DHS officials, DHS expects the guidance to be finalized by September 2015. Until DHS finalizes and implements its incremental development policy, it may not be positioned to address the challenges the department faces in acquiring IT investments faster and more efficiently. We will continue to monitor the department'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 Homeland Security

  8. Status: Open

    Comments: According to an official from the Department of Defense (DOD) Office of the Chief Information Officer, in January 2015, the department finalized its revised acquisition framework, which includes an acquisition model for incrementally deploying software intensive programs. Specifically, in August 2015, this official also stated that this model is intended to address the factors identified in our report. However, we found that this updated version of the acquisition model did not address any of the factors identified in our report. Until DOD updates its acquisition framework to address these factors, the department may not be positioned to address the challenges the department faces in acquiring IT investments faster and more efficiently. We will continue to monitor the department'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 Defense

  9. Status: Open

    Comments: According to an official from the Department of Health and Human Services Office of the Chief Information Officer, as of August 2015, the department has not implemented this recommendation. That official added that the department is working on a more detailed work plan for the recommendation but did not provide a timeframe for when this plan would be completed. We will continue to monitor the department'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: Open

    Comments: According to the Department of Transportation's Director of Information Technology Compliance, as of August 2015, the department has not incorporated any of the factors identified in the report into its incremental development policy. That official added that the department is waiting on OMB to issue clear guidance on incremental development before updating its policy. We will continue to monitor Transportation'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 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's revised policy requires information technology (IT) programs to use contracting strategies that increase flexibility, use key technologies to accelerate development work, and implement risk management best practices, all of which are practices that we recommended. By updating its incremental development policy to address these factors, VA is better positioned to address the challenges the department faces in acquiring IT investments faster and more efficiently.

    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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