Information Technology:

Agencies Need to Strengthen Oversight of Multibillion Dollar Investments in Operations and Maintenance

GAO-14-66: Published: Nov 6, 2013. Publicly Released: Nov 6, 2013.

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What GAO Found

The 10 federal information technology (IT) operations and maintenance (O&M) investments with the largest budgets in fiscal year 2012—and the eight agencies that operate them—are identified by GAO in the table below. They support agencies by providing, for example, global telecommunications infrastructure and information transport services for the Department of Defense.

Of the 10 investments, only the Department of Homeland Security (DHS) investment underwent an operational analysis (OA)—a key performance evaluation and oversight mechanism required by the Office of Management and Budget (OMB) to ensure O&M investments continue to meet agency needs. DHS’s OA addressed most factors that OMB calls for; it did not address three factors (e.g., comparing current cost and schedule against original estimates). DHS officials attributed these factors not being addressed to the department still being in the process of implementing its new OA policy. The remaining agencies did not assess their investments, which accounted for $7.4 billion in reported O&M spending. Agency officials cited several reasons for not doing so, including relying on budget submission and related management reviews that measure performance; however, OMB has noted that these are not a substitute for OAs. Until the agencies ensure their operational investments are assessed, there is a risk that they will not know whether these multibillion dollar investments fully meet intended objectives.

For the eight agencies in this review, the majority of their 401 major IT investments were mixed life cycle (i.e., having activities and systems that are in both development and O&M) with regard to total spending and number of investments. Specifically, 193 (48 percent) of the investments were mixed investments, accounting for about $18 billion (61 percent) of planned spending. As such, successful oversight of such investments should involve a combination of conducting OAs to address operational portions of an investment and establishing IT governance and program management disciplines to manage those portions under development. GAO’s experience at the agencies and this report have identified agency inconsistencies in conducting OAs and establishing the capabilities that are key to effectively managing IT investments; accordingly, GAO has made prior recommendations to strengthen agency efforts in these areas.

Why GAO Did This Study

Of the over $82 billion that federal agencies plan to spend on IT in fiscal year 2014, at least $59 billion is to be spent on O&M, which consists of legacy systems (i.e., steady state) and systems that are in both development and O&M (known as mixed life cycle). OMB calls for agencies to perform annual OAs, which are a key method for examining the performance of O&M investments.

GAO was asked to review IT O&M investments and agency use of OAs. The objectives of this report were to among other things (1) identify the federal IT O&M investments with the largest budgets, including their responsible agencies and how each investment supports its agency’s mission; (2) determine the extent to which these investments have undergone OAs; and (3) assess whether the responsible agency’s major IT investments are in development, mixed life cycle, or steady state. To do so, GAO focused on the 10 IT investments with the largest budgets in O&M and their responsible eight agencies, and assessed whether OAs were conducted on the investments. In addition, GAO evaluated what agencies spent on mixed, development, and O&M investments and whether agencies were using O&M funds for development activities.

What GAO Recommends

GAO is recommending that the seven agencies that did not perform OAs on their large IT O&M investments do so, and that DHS ensure that its OA is complete and addresses all OMB factors. Of the seven agencies, three agreed with GAO’s recommendations; two partially agreed; and two had no comments. DHS agreed with the GAO recommendation to it.

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

Recommendations for Executive Action

  1. Status: Open

    Comments: In January 2014, the Department of Defense (DOD) performed an operational analysis (OA) on its Defense Information System Network (which is one of the two DOD investments identified in our report). The OA addressed the factors required by Office of Management and Budget guidance on OAs. Specifically, it provided a review of the investment based on financial and other performance metrics (e.g., customer results, innovation). DOD reported that the Defense Information System Network is currently meeting both its financial and performance goals, and that the department plans to monitor the investment for improvement. In addition, the department reported that the Next Generation Enterprise Network (which is the second DOD investment identified in our report) is being modernized and is no longer in the operations and maintenance phase but rather in the development phase. According to DOD, it plans to conduct an OA on this investment when it is operational for at least 12 months (i.e., back in the operations and maintenance phase), although DOD did not provide a date for when these events were to occur.

    Recommendation: To ensure that the largest IT O&M investments are being adequately analyzed, Secretary of Defense should direct appropriate officials to perform OAs on the two investments identified in this report, including ensuring the analyses include all OMB factors.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In August 2013, the Department of Energy performed an operational analysis (OA) on its Consolidated Infrastructure investment (which is the investment identified in our report). The OA in large part addressed the factors required by Office of Management and Budget guidance on OAs. Specifically, it provided a review of the investment based on financial and other performance metrics (e.g., customer results, innovation). As a result of the OA, Energy reported that the investment is meeting both its financial and performance goals, and that it plans to monitor the investment on a regular basis.

    Recommendation: To ensure that the largest IT O&M investments are being adequately analyzed, Secretary of Energy should direct appropriate officials to perform an OA on the investment identified in this report, including ensuring the analysis includes all OMB factors.

    Agency Affected: Department of Energy

  3. Status: Open

    Comments: We have requested documentation for the implementation of this recommendation and are awaiting HHS's reponse.

    Recommendation: To ensure that the largest IT O&M investments are being adequately analyzed, the Secretary of Health and Human Services should direct appropriate officials to perform an OA on the investment identified in this report, including ensuring the analysis includes all OMB factors.

    Agency Affected: Department of Health and Human Services

  4. Status: Closed - Implemented

    Comments: In February 2014, the Department of the Treasury performed an operational analysis (OA) on its Main Frames and Servers Services and Support investment (which is the Treasury investment identified in our report). The OA in large part addressed an overwhelming majority of factors required by Office of Management and Budget guidance on OAs. Specifically, it provided a review of the investment based on financial and other performance metrics (e.g., customer results, innovation). Treasury reported that the investment is currently meeting both its financial and performance goals and that the department plans to continue to review the program for improvement.

    Recommendation: To ensure that the largest IT O&M investments are being adequately analyzed, the Secretary of Treasury should direct appropriate officials to perform an OA on the investment identified in this report, including ensuring the analysis include all OMB factors.

    Agency Affected: Department of the Treasury

  5. Status: Open

    Comments: We have requested documentation for the implementation of this recommendation and are awaiting VA's reponse.

    Recommendation: To ensure that the largest IT O&M investments are being adequately analyzed, the Secretary of Veterans Affairs should direct appropriate officials to perform OAs on the two investments identified in this report, including ensuring the analyses include all OMB factors.

    Agency Affected: Department of Veterans Affairs

  6. Status: Closed - Implemented

    Comments: In March 2014, the National Aeronautic and Space Administration (NASA) performed an operational analysis (OA) on its Information Technology Infrastructure Integration Program investment (which is the NASA investment identified in our report). The OA included all factors identified by the Office of Management and Budget guidance on OAs. Specifically, it provided a review of the investment based on financial and other performance metrics (e.g., customer results, innovation). NASA reported that the Information Technology Infrastructure Integration Program is currently meeting both its financial and performance goals but that the agency plans to continue to review the program for improvement and innovative solutions to cut costs.

    Recommendation: To ensure that the largest IT O&M investments are being adequately analyzed, the National Aeronautics and Space Administration Administrator should direct appropriate officials to perform an OA on the investment identified in this report, including ensuring the analysis includes all OMB factors.

    Agency Affected: National Aeronautics and Space Administration

  7. Status: Closed - Implemented

    Comments: In January 2014, the Social Security Administration (SSA) performed an operational analysis (OA) on its Infrastructure Data Center investment (which is the SSA investment identified in our report). The OA largely addressed the factors required by Office of Management and Budget guidance on OAs. Specifically, it provided a review of the investment based on financial and other performance metrics (e.g., customer results, innovation). In the OA, SSA reported that the Infrastructure Data Center is within its expected performance variances relative to cost and schedule and that the agency plans to monitor the performance of the O&M portion of the program on a regular basis.

    Recommendation: To ensure that the largest IT O&M investments are being adequately analyzed, the Commissioner of Social Security should direct appropriate officials to perform an OA on the investment identified in this report, including ensuring the analysis includes all OMB factors.

    Agency Affected: Social Security Administration

  8. Status: Closed - Implemented

    Comments: In July 2014, the Department of Homeland Security (DHS) performed an operational analysis (OA) on its Customs and Border Protection Infrastructure investment (which is the DHS investment identified in our report). The OA addressed all factors required by Office of Management and Budget guidance on OAs. Specifically, it provided a review of the investment based on financial and other performance metrics (e.g., customer results, innovation). DHS reported that the investment is currently meeting both its financial and performance goals and that the department plans to continue to review the program for improvement.

    Recommendation: The Secretary of Homeland Security should direct appropriate officials to ensure the department's OA for the Customs and Border Protection Infrastructure is complete and assesses missing OMB factors identified in this report.

    Agency Affected: Department of Homeland Security

 

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