Key Issues > IT Acquisitions and Operations - High Risk Issue
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IT Acquisitions and Operations - High Risk Issue

The federal government invests more than $80 billion annually on information technology (IT), therefore better management techniques and improved oversight can help IT investments perform more effectively.

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The federal government plans to invest more than $80 billion on IT in fiscal year 2017. Historically, these investments have frequently failed, incurred cost overruns and schedule slippages, or contributed little to mission-related outcomes. In light of these ongoing challenges, in February 2015, we added improving the management of IT acquisitions and operations to our list of high-risk areas for the federal government. The Office of Management and Budget (OMB) and federal agencies have several key initiatives under way to help address the government’s poor track record of implementing new IT systems. However, implementation of these initiatives has been inconsistent.

  • Reviewing poor performing investments. OMB and federal agencies lead TechStat sessions—face-to-face meetings to fix or terminate IT investments that are failing or are not producing results, but these sessions have not addressed the majority of medium- and high-risk investments across the government due, in part, to weaknesses in OMB’s oversight.
  • Developing incrementally. OMB has emphasized the need to implement IT investments in increments to reduce risk and more quickly increase capabilities. An IT acquisition reform law requires covered agency chief information officers to certify that investments are implementing OMB’s guidance. However, approximately half of the software projects across some agencies have not followed OMB’s guidance to deliver investment functionality every 6 months.
  • Enhancing transparency. To improve government transparency, OMB established a public website (referred to as the “IT Dashboard”) that provides detailed information on major federal IT investments—including ratings from chief information officers that should accurately reflect the level of risk facing an investment. However, 60 of 95 risk ratings on the IT Dashboard did not indicate the appropriate level of risk.

Comparison of Selected Investments' Risk Ratings

Comparison of  Selected Investments' Risk Ratings
In addition to spending money on new IT systems, federal agencies also operate and maintain systems they already own. Many of these systems are inefficient, ineffective, and increasingly obsolete, but federal spending on them has increased over the past 7 fiscal years from about $55 billion to about $63 billion. As a result, agencies will spend $7.3 billion less in fiscal year 2017 than they did in fiscal year 2010 on activities that could develop, modernize, and enhance their IT systems.  

Total Federal IT Spending by Type (in billions)

Total Federal IT Spending by Type (in  billions)
Federal agencies have also faced issues managing software licenses. Most major agencies do not have comprehensive software license policies or inventories. As a result, their oversight of software license spending has been limited or lacking, which may lead to agencies missing out on savings on activities like consolidating enterprise license agreements.

Two cross-cutting initiatives can help agencies better manage their existing IT systems:

  • Portfolio reviews. OMB launched the PortfolioStat initiative, which requires agencies to conduct an annual, agency-wide IT portfolio review to help reduce spending on common IT purchases (like e-mail systems or computers). This initiative has the potential to save billions of dollars, if OMB and agencies can resolve some implementation challenges.
  • Consolidating data centers. OMB launched a consolidation initiative in 2010 to help reduce the growing number of data centers. While federal agencies have reported closing over 3,000 of the more than 10,000 federal data centers (and saving $2.8 billion) by the end of fiscal year 2015, data center performance still needs to be improved.
Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.


Federal Legacy IT SystemsWednesday, May 25, 2016
  • portrait of David A. Powner
    • David A. Powner
    • Director, Information Technology
    • (202) 512-9286