Congress Pressures Federal Agencies to Cut Wasteful IT Spending

The Obama administration’s program to more efficiently utilize information technology has worked — but not well enough to get a passing grade from the U.S. Congress. Lawmakers are ratcheting up the pressure on federal agencies to improve their IT resource management — including the way they procure IT products and services from the private sector.

There are significant flaws in the way the Office of Management and Budget (OMB) monitors the effectiveness of IT spending by federal agencies, the Government Accountability Office (GAO) notes in a report released last week.

“Given the (US)$80 billion the federal government spends annually on IT investments, and the critical role those investments play in improving the efficiency and effectiveness of federal services, we need an accurate analysis of which investments are working and which are not,” said Sen. Joseph Lieberman, I-Conn., in a response to the GAO report.

“We have already seen hundreds of millions of dollars wasted by the federal government due to poorly planned and poorly managed IT projects,” said Sen. Susan Collins, R-Maine.

OMB contends that a series of overview meetings with agencies (called “Techstat” sessions) and the launch of its “IT Dashboard” (an Internet site that rates agency IT performance) have resulted in a $3 billion reduction in lifecycle costs for IT.

While those efforts have contributed to data quality improvements, significant performance data inaccuracies remain, says GAO.

The ratings of selected IT investments on the dashboard did not always accurately reflect current performance, which runs counter to the website’s purpose of reporting near real-time performance, GAO maintains, adding that cost ratings were inaccurate for six of the investments that it reviewed, and OMB’s reports related to meeting IT implementation schedules were inaccurate for nine projects.

When to Pull the Plug

Sen. Tom Carper, D-Del., urged OMB to implement GAO’s recommendations to improve the analysis of IT projects. “TheIT dashboardhelps those of us in Congress clearly see which projects are experiencing hiccups so we can deal with them before they spiral out of control. And for those projects that may be beyond saving, it gives us the information we need to determine whether or not to pull the plug,” Sen. Carper said.

The disappointment with federal agency IT performance will likely go beyond oversight. “Sen. Carper is currently working with Sen. Collins on legislation to better monitor the approximate $80 billion agencies spend every year on information technology,” Emily Spain, spokesperson for Carper, told the E-Commerce Times. “We are hopeful that the legislation will be introduced later this spring.”

Last year, the Senate passed a bill directing OMB to improve the way it analyzes and reports on IT spending — but the measure was not adopted by the House. The Senate bill included a requirement that assessments be made using an “earned value management” (EVM) methodology. EVM features a management system that integrates several elements, including project organization, planning, budgeting, accounting, analysis and data control.

Contractor Tools and Better Training

“OMB has directed agencies to use EVM, but many program offices in those agencies are not doing so or are not doing so effectively. Not every IT project or initiative warrants EVM, but certainly the major IT investments chosen by GAO for review do warrant it,” Ray Bjorklund, senior vice president at FedSources, told the E-Commerce Times.

“GAO is correct in criticizing the IT dashboard for not reflecting EVM assessments. Based on more than two decades experience as a government IT program manager, I couldn’t rely on OMB’s IT dashboard to oversee or manage an IT program with confidence,” he said.

OMB’s current dashboard effort provides a useful general view of IT operations, but it does not involve the specificity needed to truly meet the stewardship requirement for major federal projects, according to Bjorklund.

“OMB must continue its journey toward improved measurement and reporting. They have indeed already made progress. Contractors could help. But improving the dashboard doesn’t overcome the ‘garbage-in, garbage-out’ syndrome. There are contractors and tools that can help in administering an EVM, but the first step should be to train the government program managers in the practical application of EVM,” he said.

OMB’s performance came under scrutiny not only in the Senate, but also in the House. At a House Appropriations subcommittee hearing on March 17, representatives of OMB, GAO and the General Services Administration (GSA) reported on IT management issues.

“As the committee works to reduce spending to the 2008 levels, we can no longer throw resources away on failed IT projects,” said Rep. Jo Ann Emerson, R-Mo., who chaired the session. Emerson put particular emphasis on examining IT contracting and program management.

At the hearing, Federal Chief Information Officer Vivek Kundra extolled the merits of the dashboard system and the Techstats process, pointing out that OMB’s vigilance had resulted in canceling a duplicative Commerce Department export control IT project.

OMB also has suspended all federal financial control IT projects, which represent about $3 billion in annual spending, until they can be reviewed more closely. However, much more effort would be needed to improve IT management, acknowledged Kundra, such as instituting better project development practices and taking advantage of private sector resources.