United States Government Accountability Office Testimony Before the Subcommittees on Government Operations and Information Technology Committee on Oversight and Government Reform House of Representatives For Release on Delivery Expected at 9 30 a m ET Friday June 10 2016 DIGITAL SERVICE PROGRAMS Assessing Results and Coordinating with Chief Information Officers Can Improve Delivery of Federal Projects Statement of David A Powner Director Information Technology Management Issues GAO-16-733T June 2016 DIGITAL SERVICE PROGRAMS Highlights of GAO-16-733T a testimony before the Subcommittees on Government Operations and Information Technology Committee on Oversight and Government Reform House of Representatives Why GAO Did This Study In an effort to improve IT across the federal government in March 2014 GSA established a team known as 18F that provides IT services to agencies In addition in August 2014 the Administration established USDS which aims to improve the federal IT services provided to citizens OMB also required agencies to establish their own digital service teams GAO was asked to summarize its draft report that 1 describes 18F and USDS efforts to address problems with IT projects and agencies’ views of services provided 2 assesses these programs’ efforts against practices for performance measurement and project prioritization and 3 assesses agency plans to establish their own digital service teams In preparing the draft report on which this testimony is based GAO reviewed 32 18F projects and 13 USDS projects that were underway or completed as of August 2015 and surveyed agencies about these projects reviewed 18F and USDS in key performance measurement and project prioritization practices reviewed 25 agencies’ efforts to establish digital service teams and reviewed documentation from four agencies which were chosen based on their progress made in establishing digital service teams What GAO Recommends GAO’s draft report includes two recommendations to GSA and three recommendations to OMB to improve goals and performance measurement In addition GAO’s draft report is recommending that OMB update USDS policy to define the relationships between CIOs and digital services teams View GAO-16-733T For more information contact David A Powner at 202 512-9286 or pownerd@gao gov Assessing Results and Coordinating with Chief Information Officers Can Improve Delivery of Federal Projects What GAO Found In a draft report GAO determined that the General Service Administration’s GSA 18F and Office of Management and Budget’s OMB U S Digital Service USDS have provided a variety of services to agencies supporting their information technology IT efforts Specifically 18F staff helped 18 agencies with 32 projects and generally provided development and consulting services including software development solutions and acquisition consulting In addition USDS provided assistance on 13 projects across 11 agencies and generally provided consulting services including quality assurance problem identification and recommendations and software engineering Further according to GAO’s survey managers were generally satisfied with the services they received from 18F and USDS on these projects see table Results of GAO Survey on Satisfaction with Digital Services Projects Program 18F U S Digital Service Very satisfied Moderately Neither satisfied nor satisfied dissatisfied Moderately dissatisfied No response 16 7 0 3 5 6 3 0 0 4 Source GAO survey of agency project managers that engaged with 18F and USDS GAO-16-733T Both 18F and USDS have partially implemented practices to identify and help agencies address problems with IT projects Specifically 18F has developed several outcome-oriented goals and related performance measures as well as procedures for prioritizing projects however not all of its goals are outcomeoriented and it has not yet fully measured program performance Similarly USDS has developed goals but they are not all outcome-oriented and it has established performance measures for only one of its goals USDS has also measured progress for just one goal Further it has not fully implemented its procedures for prioritizing projects Until 18F and USDS fully implement these practices it will be difficult to hold the programs accountable for results Agencies are beginning to establish digital service teams Of the 25 agencies that requested funding for these teams OMB has established charters with 6 agencies for their digital service teams In addition according to the USDS Deputy Administrator USDS plans to establish charters with an additional 3 agencies by the end of the fiscal year—the Department of Education as well as the Social Security Administration and Small Business Administration For the remaining 16 agencies as of April 2016 8 agencies reported that they plan to establish digital service teams but have yet to establish charters with USDS The other 8 agencies reported that they do not plan to establish digital service teams by September 2016 because they did not receive requested funding Further of the four agencies GAO selected to review only one has defined the relationship between its digital service team and the agency Chief Information Officer CIO This is due in part to the fact that USDS policy does not describe the expected relationship between CIOs and these teams Until OMB updates its policy and ensures that the responsibilities between the CIOs and digital services teams are clearly defined it is unclear whether CIOs will be able to fulfill their statutory responsibilities with respect to IT management of the projects undertaken by the digital service teams United States Government Accountability Office Letter 441 G St N W Washington DC 20548 Chairmen Meadows and Hurd Ranking Members Connolly and Kelly and Members of the Committees Thank you for the opportunity to participate in today’s hearing on the General Services Administration’s GSA 18F and the Office of Management and Budget’s OMB U S Digital Service USDS programs Information systems are critical to the health economy and security of the nation To support these systems the federal government plans to invest more than $89 billion on information technology IT in fiscal year 2017 However prior IT expenditures too often have produced failed projects—that is projects with multimillion dollar cost overruns and schedule delays measured in years with questionable mission-related achievements 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 1 In an effort to improve federal IT management in March 2014 the General Services Administration GSA established 18F 2 a team that provides IT services e g develop websites and provide software development training to federal agencies on a reimbursable basis Similar to 18F in August 2014 the Administration established the U S Digital Service USDS within the Office of Management and Budget OMB which aims to improve the federal IT services that citizens rely on the most In addition the President’s Budget for fiscal year 2016 proposed funding for agencies to establish their own agency digital service teams As requested this statement summarizes key preliminary findings based on our draft report reviewing 18F and USDS as well as agency digital service teams that 1 describes 18F and USDS efforts to identify and address problems with IT projects and agencies’ views of services provided 2 assesses these programs’ efforts against practices for performance measurement and project prioritization and 3 assesses agency plans to establish their own digital service teams The draft report 1 GAO High-Risk Series An Update GAO-15-290 Washington D C Feb 11 2015 2 The name of the 18F program references its office location Northwest Washington D C at 18th and F Streets Page 1 GAO-16-733T is currently out for comment with selected agencies We anticipate issuing the report in July 2016 In that report for our first objective we reviewed 32 projects across 18 agencies for which 18F provided services to agencies 3 and 13 projects at 11 agencies for which USDS provided services To identify the projects we obtained the list of completed and ongoing projects at agencies for which 18F and USDS provided services as of August 2015 and removed projects without agency customers e g internal projects and development of guides for other agencies We then analyzed information obtained from the projects describing the services each of the selected projects received from 18F and USDS We also conducted a customer satisfaction survey of the managers of all selected projects to determine their level of satisfaction with the services provided by USDS and 18F Although the survey responses cannot be used to generalize the opinions and satisfaction of all customers that receive services from 18F and USDS programs the responses provide data for our defined population To address the second objective we compared 18F and USDS policies procedures plans and practices to leading practices identified by federal law and GAO on performance measurement 4 and project prioritization 5 To address our third objective we administered a data collection instrument on plans to establish digital service teams to the 25 agencies 3 We did not review projects associated with the Presidential Innovation Fellows program which is administratively housed within 18F but largely operates as a separate program 4 The GPRA Modernization Act of 2010 5 U S C § 306 31 U S C §§ 1115-1116 11201124 GAO Executive Guide Effectively Implementing the Government Performance and Results Act GAO GGD-96-118 Washington D C June 1 1996 and Designing Evaluations 2012 Revision GAO-12-208G Washington D C Jan 31 2012 5 GAO Information Technology Investment Management A Framework for Assessing and Improving Process Maturity Supersedes AIMD-10 1 23 GAO-04-394G Washington D C March 2004 Page 2 GAO-16-733T with funding proposed in the President’s Budget for fiscal year 2016 6 Additionally we reviewed USDS’s plans—to include interviews with USDS officials—for providing assistance to agencies that planned to establish a digital service team in fiscal year 2016 In addition we selected four agencies as case studies to review the relationships between agency Chief Information Officers CIO and agency digital service teams To choose these agencies we identified the three agencies that had established a charter with USDS as of January 2016—the Departments of Defense Homeland Security and State We also selected the Department of Veterans Affairs because as of January 2016 it had the most staff of any agency digital service team 7 For these agencies we evaluated agency policies and procedures to determine the extent to which agencies had documented the relationships between digital service teams and agency CIOs We also conducted interviews with the CIOs of the Departments of Defense Homeland Security and State as well as the Veterans Affairs Principal Deputy Assistant Secretary for the Office of Information and Technology 8 More information on our scope and methodology can be found in the report we are issuing next month The work upon which this testimony is based is being conducted in accordance with generally accepted government auditing standards Those standards require that we plan and perform the audit to obtain sufficient appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives We believe that 6 The 25 major departments and agencies with funding proposed for digital service teams in the President’s Budget for fiscal year 2016 are the Departments of Agriculture Commerce Defense Education Energy Health and Human Services Homeland Security Housing and Urban Development the Interior Justice Labor State Transportation the Treasury and Veterans Affairs the Environmental Protection Agency General Services Administration National Aeronautics and Space Administration National Archives and Records Administration National Science Foundation Nuclear Regulatory Commission Office of Personnel Management Small Business Administration Social Security Administration and U S Agency for International Development 7 In May 2016 VA established a charter with USDS for its digital service team 8 We requested an interview with the Veterans Affairs Assistant Secretary for Information and Technology who is the CIO for the department In lieu of meeting with the CIO the department instead made the Principal Deputy Assistant Secretary for the Office of Information and Technology available for an interview Page 3 GAO-16-733T the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives Background Investments in IT can enrich people’s lives and improve organizational performance During the last two decades the Internet has matured from being a means for academics and scientists to communicate with each other to a national resource where citizens can interact with their government in many ways such as by receiving services supplying and obtaining information asking questions and providing comments on proposed rules However while these investments have the potential to improve lives and organizations some federally funded IT projects can—and have— become risky costly unproductive mistakes We have previously testified that the federal government has spent billions of dollars on failed and troubled IT investments 9 such as • the Office of Personnel Management’s Retirement Systems Modernization program which was canceled in February 2011 after spending approximately $231 million on the agency’s third attempt to automate the processing of federal employee retirement claims • the tri-agency 10 National Polar-orbiting Operational Environmental Satellite System which was stopped in February 2010 by the White House’s Office of Science and Technology Policy after the program spent 16 years and almost $5 billion 11 9 GAO Information Technology Additional Actions and Oversight Urgently Needed to Reduce Waste and Improve Performance in Acquisitions and Operations GAO-15-675T Washington D C June 10 2015 10 The weather satellite program was managed by the National Oceanic and Atmospheric Administration the Department of Defense and the National Aeronautics and Space Administration 11 See for example GAO Polar-Orbiting Environmental Satellites With Costs Increasing and Data Continuity at Risk Improvements Needed in Tri-agency Decision Making GAO-09-564 Washington D C June 17 2009 and Environmental Satellites PolarOrbiting Satellite Acquisition Faces Delays Decisions Needed on Whether and How to Ensure Climate Data Continuity GAO-08-518 Washington D C May 16 2008 Page 4 GAO-16-733T • the Department of Veterans Affairs’ Scheduling Replacement Project which was terminated in September 2009 after spending an estimated $127 million over 9 years and • the Department of Health and Human Services’ HHS Healthcare gov website and its supporting systems which were to facilitate the establishment of a health insurance marketplace by January 2014 encountered significant cost increases schedule slips and delayed functionality In a series of reports we identified numerous planning oversight security and system development challenges faced by this program and made recommendations to address them 12 In light of these failures and other challenges last year we introduced a new government-wide high-risk area Improving the Management of IT Acquisitions and Operations 13 Digital Service Teams Are Intended to Improve the Federal Government’s IT Efforts 18F and USDS were formed in 2014 to help address the federal government’s troubled IT efforts Both programs have similar missions of improving public-facing federal digital services 14 12 See GAO Healthcare gov CMS Has Taken Steps to Address Problems but Needs to Further Implement Systems Development Best Practices GAO-15-238 Washington D C Mar 4 2015 Healthcare gov Actions Needed to Address Weaknesses in Information Security and Privacy Controls GAO-14-730 Washington D C Sept 16 2014 and Healthcare gov Ineffective Planning and Oversight Practices Underscore the Need for Improved Contract Management GAO-14-694 Washington D C July 30 2014 13 GAO High-Risk Series An Update GAO-15-290 Washington D C Feb 11 2015 14 OMB defines digital services as the delivery of digital information data or content and transactional services e g online forms and benefits applications across a variety of platforms devices and delivery mechanisms e g websites mobile applications and social media Page 5 GAO-16-733T 18F’s Mission and Organization 18F was created in March 2014 by GSA with the mission of transforming the way the federal government 15 builds and buys digital services Agencies across the federal government have access to 18F services Work is largely initiated by agencies seeking assistance from 18F 16 and then the program decides how and if it will provide assistance According to GSA 18F seeks to accomplish its mission by providing a team of expert designers developers technologists researchers and product specialists to help rapidly deploy tools and online services that are reusable less costly and easier for people and businesses to use In addition 18F has several guiding principles to include the use of open source development 17 user-centered design and agile software development 18 18F is an office within the Technology Transformation Service within GSA that was recently formed in May 2016 19 18F is led by the Deputy Commissioner for the Technology Transformation Service who reports to the service’s Commissioner Prior to May 2016 18F was located within the Office of Citizen Services and Innovative Technologies and reported to the Associate Administrator for Citizen Services and Innovative 15 In February 2016 GSA announced the creation of the 18F State and Local Government Practice to assist federal agencies that provide grants to state and local programs According to GSA it decided to expand its services after a pilot project with the State of California through HHS As of May 2016 18F has yet to engage in any other projects with state or local programs Additionally 18F officials stated that GSA was working with White House counsel to determine the extent to which 18F can receive payment directly from state and local governments Once this decision has been made 18F officials told us that they will determine the key responsibilities of its State and Local Government Practice 16 In March 2016 GSA created an office within 18F that is responsible for among other things marketing and sales to agency partners 17 Open source software is publicly available for use study reuse modification enhancement and redistribution by the software’s users 18 Agile development calls for the delivery of software in small short increments rather than in the typically long sequential phases of a traditional waterfall approach 19 The Technology Transformation Service was created in May 2016 and is intended to transform the way government builds buys and shares technology It is responsible for among other things designing building and operating technology products and services for federal agencies consulting with federal agencies on technology and the recruitment of staff with related expertise designing building and operating government-wide technology products and platforms and educating federal agencies on modern technology design development operations and procurement methodologies Page 6 GAO-16-733T Technologies In March 2016 GSA created a new organizational structure for 18F that centers around five business units 20 • Custom Partner Solutions Provides agencies with custom application solutions • Products and Platforms Provides agencies with access to tools that address common government-wide needs • Transformation Services Aims to improve how agencies acquire and manage IT by providing them with consulting services to include new management models modern software development practices and hiring processes • Acquisition Services Provides acquisition services and solutions to support digital service delivery including access to vendors specializing in agile software development and request for proposal development consultation • Learn Provides agencies with education workshops outreach and communication tools on developing and managing digital services To provide the products and services offered by each business unit 18F relied on 173 staff to carry out its mission as of March 2016 The staff are assigned to different projects that are managed by the business units 21 According to18F officials the program used special hiring authorities for the vast majority of its staff Schedule A excepted service authorities were used to hire 162 staff 22 These authorities permit the appointment of qualified personnel without the use of a competitive examination process GSA has appointed its staff to terms that are not to exceed 2 years According to the Director of the 18F Talent division after the initial appointment has ended GSA has the option of appointing staff to an additional term not to exceed 2 years 20 In March 2016 18F officials told us that the GSA order on 18F’s organization would be updated to reflect this new structure by May 2016 21 Most staff are also assigned to one of five branches of 18F’s Chapters division engineering products experience design change strategist and acquisition specialists 22 For 33 of these staff members GSA relied on authority provided by the Office of Personnel and Management to use Schedule A authority for digital services expert positions 79 Fed Reg 44 474 July 31 2014 Regarding the other 129 staff GSA relied on authority provided to agencies by OPM in 5 C F R § 213 3102 r Page 7 GAO-16-733T GSA funds 18F through the Acquisition Services Fund—a revolving fund which operates on the revenue generated from its business units rather than an appropriation received from Congress 23 The Federal Acquisition Service is responsible for managing this fund and uses it to invest in the development of 18F products and services that will be used by other organizations 24 18F is to recover costs through the Acquisition Services Fund reimbursement authority for work related to acquisitions and the Economy Act reimbursement authority 25 for all other projects According to the memorandum of agreement between 18F and the Federal Acquisition Service 18F like all programs funded by the Acquisition Services Fund is required to have a plan to achieve full cost recovery 26 In order to recover its costs 18F is to establish interagency agreements with partner agencies and charges them for actual time and material costs as well as a fixed overhead amount Table 1 describes 18F’s revenue expenses and net revenue for fiscal years 2014 and 2015 Table 2 describes 18F’s projected revenue expenses and net revenue for fiscal years 2016 through 2019 Table 1 Reported Revenue Expenses and Net Operating Results for 18F Fiscal Years 2014 and 2015 Fiscal year 2014 2015 Operating expenses Net operating results a $8 563 700 $8 649 450 $22 262 000 $31 760 000 $9 498 000 Revenue $0 Source GSA documentation used as part of the financial statements for the Acquisition Services Fund GAO-16-733T a According to 18F officials although the program generated $1 388 887 million in revenue during fiscal year 2014 the Federal Acquisition Service which administers the Acquisition Services fund decided to account for this revenue in fiscal year 2015 23 40 U S C § 321 24 GSA reported that the Acquisition Services Fund had an unobligated balance of $2 074 000 000 at the end of fiscal year 2015 25 31 U S C § 1535 26 GSA Memorandum of Agreement between the Federal Acquisition Service And Office of Citizen Services Innovative Technologies and 18F June 2 2015 Page 8 GAO-16-733T Table 2 Projected Revenue Expenses and Net Operating Results for 18F Fiscal Years 2016 through 2019 Fiscal year Projected revenue Projected net Projected operating expenses operating results 2016 $33 518 000 $48 450 000 $14 932 000 2017 $62 381 000 $74 764 000 $12 383 000 2018 $91 872 000 $91 999 000 $127 000 2019 $101 697 000 $100 552 000 $1 145 000 Source 18F documentation GAO-16-733T As shown in table 2 according to its projections 18F plans to generate revenue that meets or exceeds operating expenses and cost of goods sold beginning in fiscal year 2019 In May 2016 the GSA Inspector General reported on an information security weakness pertaining to 18F 27 Specifically according to the report 18F misconfigured a messaging and collaboration application which resulted in the potential exposure of personally identifiable information PII 28 18F officials told us that based on the preliminary results of their ongoing review information such as individual’s first names last names e-mail addresses and phone numbers were made available on the messaging and collaboration platform’s databases which are managed by that application’s vendor Those officials also stated that based on the preliminary results of their ongoing review more sensitive PII such as Social Security numbers and protected health information were not exposed They added that they are continuing a detailed review in coordination with the GSA IT organization to confirm that more sensitive PII were not made available USDS’s Mission and Organization According to the Administration in 2013 it initiated an effort that brought together a group of digital and technology experts from the private sector that helped fix Healthcare gov In an effort to apply similar resources to 27 GSA Office of the Inspector General Office of Inspections and Forensic Auditing Management Alert Report GSA Data Breach JE16-004 May 12 2016 28 PII is any information that can be used to distinguish or trace an individual’s identity— such as name date and place of birth and Social Security number—or other types of personal information that can be linked to an individual—such as medical educational financial and employment information Page 9 GAO-16-733T additional projects in August 2014 the Administration announced the launch of USDS 29 to be led by an Administrator and Deputy Federal CIO who reports to the Federal CIO 30 According to OMB USDS’s mission is to transform the most important digital services for citizens USDS selects which projects it will apply resources to and generally initiates its effort with agencies To accomplish its mission USDS aims to recruit private sector experts e g IT engineers and designers and partner them with government agencies With the help of these experts OMB states that USDS applies best practices in product design and engineering to improve the usefulness user experience and reliability of the most important publicfacing federal digital services As of November 2015 USDS staff totaled about 98 individuals Similar to 18F USDS assigns individuals directly to projects aimed at achieving its mission 31 USDS has used special hiring authorities for the vast majority of it staff Specifically • Schedule A excepted service According to USDS as of November 2015 52 USDS staff members were hired using the schedule A excepted service hiring authority 32 According to the USDS Administrator appointments made using this authority are not to exceed 2 years At the end of that period staff can be appointed for an additional term of no more than 2 years 29 According to OMB USDS is part of the implementation of the May 2012 strategy for digital government Digital Government Building a 21rst Century Platform to Better Serve the American People 30 The Federal CIO is the presidential designation for the Administrator of the OMB Office of E-Government 31 USDS also assigns staff to one of four communities of practice Engineering Design StratOps and Talent 32 Under its authority to except positions from competitive examination requirements in June 2014 OPM approved OMB’s request to use Schedule A authority for up to 34 digital service expert positions 79 Fed Reg 44 474 July 31 2014 In December 2015 OPM approved OMB’s request for to increase the number of positions that could be filled using this authority from 34 to 85 Page 10 GAO-16-733T • Intermittent consultants According to USDS as of November 2015 39 USDS staff members were intermittent consultants—that is individuals hired through a noncompetitive process to serve as consultants on an intermittent basis or without a regular tour of duty 33 The USDS Administrator explained that some of these staff are eventually converted to temporary appointments under the Schedule A authority According to its Administrator USDS does not generally make permanent appointments for its staff because it allows the program to continuously bring in new staff and ensure that its ideas are continually evolving USDS reported spending $318 778 during fiscal year 2014 and approximately $4 7 million during fiscal year 2015 For fiscal year 2016 USDS plans to spend approximately $14 million and the President’s fiscal year 2017 budget estimated obligations of $18 million for USDS Agency Digital Service Teams In an effort to make improvements to critical IT services throughout the federal government the Presidents’ Budget for fiscal year 2016 proposed funding for the 24 Chief Financial Officers Act agencies 34 as well as the National Archives and Records Administration to establish digital services teams USDS policy calls for these agencies to among other things hire or designate an executive for managing their digital services teams According to USDS policy the digital service team leader is to report directly to the head of the agency or the deputy Additionally USDS has established a hiring pipeline for digital service experts—that is a unified process managed by USDS for accepting and reviewing applications performing initial interviews and providing agencies with candidates for their digital service teams According to 33 Pursuant to 5 U S C § 3109 an agency may contract for an expert or consultant to fill an intermittent or temporary position if that agency is authorized by an appropriation or other statute See also 5 C F R Part 304 34 31 U S C § 901 b The 24 Chief Financial Officers Act agencies are the Departments of Agriculture Commerce Defense Education Energy Health and Human Services Homeland Security Housing and Urban Development the Interior Justice Labor State Transportation the Treasury and Veterans Affairs the Environmental Protection Agency General Services Administration National Aeronautics and Space Administration National Science Foundation U S Nuclear Regulatory Commission Office of Personnel Management Small Business Administration Social Security Administration and U S Agency for International Development Page 11 GAO-16-733T OMB before using this service agencies must agree to a charter with the USDS Administrator Roles and Responsibilities for Overseeing IT Investments Over the last three decades several laws have been enacted to assist federal agencies in managing IT investments For example the Paperwork Reduction Act of 1995 requires that OMB develop and oversee policies principles standards and guidelines for federal agency IT functions including periodic evaluations of major information systems 35 In addition the Clinger-Cohen Act of 1996 among other things requires agency heads to appoint CIOs and specifies many of their responsibilities 36 With regard to IT management CIOs are responsible for implementing and enforcing applicable government-wide and agency IT management principles standards and guidelines assuming responsibility and accountability for IT investments and monitoring the performance of IT programs and advising the agency head whether to continue modify or terminate such programs 37 Most recently in December 2014 IT reform legislation commonly referred to as Federal Information Technology Acquisition Reform Act or FITARA was enacted which required most major executive branch agencies to ensure that the CIO had a significant role in the decision process for IT budgeting as well as the management governance and oversight processes related to IT 38 The law also required that CIOs review and approve 1 all contracts for IT services prior to executing them and 2 the appointment of any other employee with the title of CIO or who functions in the capacity of a CIO for any component organization within the agency OMB also released guidance in June 2015 that 35 44 U S C § 3501-3521 36 40 U S C § 11101-11318 37 40 U S C § 11315 38 Federal Information Technology Acquisition Reform provisions of the Carl Levin and Howard P ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 2015 Pub L No 113-291 div A title VIII subtitle D 128 Stat 3292 3438-3450 Dec 19 2014 Page 12 GAO-16-733T reinforces the importance of agency CIOs and describes how agencies are to implement the law 39 OMB plays a key role in helping federal agencies address these laws and manage their investments by working with them to better plan justify and determine how much they need to spend on projects and how to manage approved projects Within OMB the Office of E-Government and Information Technology headed by the Federal CIO directs the policy and strategic planning of federal IT investments and is responsible for oversight of federal technology spending 18F and USDS Provided a Variety of Development and Consulting Services Supporting Agency Technology Efforts and Agencies Were Generally Satisfied with the Programs As part of our ongoing work we determined that 18F and USDS have provided a variety of development and consulting services to agencies to support their technology efforts Specifically between March 2014 and August 2015 40 18F staff helped 18 agencies with 32 projects and generally provided six types of services to the agencies the majority of which related to development work In addition between August 2014 and August 2015 41 USDS provided assistance on 13 projects at 11 agencies and provided seven types of consulting services Further agencies were generally satisfied with the services they received from 18F and USDS Specifically of the 26 18F survey respondents 23 were very satisfied or moderately satisfied and 3 were moderately dissatisfied For USDS all 9 survey respondents were very satisfied or moderately satisfied 39 OMB Management and Oversight of Federal Information Technology Memorandum M15-14 Washington D C June 10 2015 40 As discussed in more detail later in this statement these projects were the subject of our customer satisfaction survey 41 As discussed in more detail later in this statement these projects were the subject of our customer satisfaction survey Page 13 GAO-16-733T 18F Has Provided a Variety of Products and Services the Majority of Projects Were Development Work Between March 2014 and August 2015 GSA’s 18F staff helped 18 agencies with 32 projects and generally provided services relating to its five business units Custom Partner Solutions Products and Platforms Transformation Services Acquisition Services and Learn In addition 18F also provided agency digital service team candidate qualification reviews in support of USDS Custom Partner Solutions 18F helped 11 agencies with a total of 19 projects relating to developing custom software solutions Out of the 19 projects 12 were related to website design and development For example regarding GSA’s Pulse project—a website that displays data about the extent to which federal websites are adopting best practices such as hypertext transfer protocol over Secure Sockets Layer SSL Transport Layer Security TLS HTTPS 42—18F designed developed and delivered the first iteration of Pulse within 6 weeks of the project kick-off 43 According to the GSA office responsible for managing the project the first iteration has led to positive outcomes for government-wide adoption of best practices for example between June 2015 and January 2016 the percentage of federal websites using https increased from 27 percent to 38 percent • As another example officials from the Department of Education’s college choice project stated that 18F helped develop the College Scorecard website which the public can use to search among colleges to find schools that meet their needs e g degrees offered location size graduation rate average salary after graduation 44 18F also helped two agencies HHS and the Department of Defense on two projects to develop application programming interfaces—sets of routines protocols and tools for building software applications that specify how software components should interact 42 The HTTPS protocol is defined as hyper text transfer protocol—an application protocol that allows the transmitting and receiving of information across the Internet—over SSL TLS SSL TLS provide socket-layer security encrypting all communication over a particular session without altering it Through SSL TLS HTTPS supports authentication confidentiality and integrity of data sent between the endpoints The secure http protocol encrypts http and was developed to allow the authorization of users and secure transactions In June 2015 OMB required agencies to generally use https for existing websites and services by December 31 2016 43 https pulse cio gov 44 https collegescorecard ed gov Page 14 GAO-16-733T • Acquisition Services 18F helped seven agencies on seven projects relating to acquisition services consulting 45 For example 18F provided the Department of State’s Bureau of International Information Programs with cloud computing services 46 offered under a GSA blanket purchase agreement BPA —specifically cloud management services e g developers testing and quality assurance cloud architect and infrastructure-as-a-service 47 According to the Department of State the department was able to deploy its instance of the infrastructure service only 1 month after it executed an interagency agreement with 18F According to Social Security Administration officials 18F helped the agency to incorporate agile software development practices into their requests for proposals for their Disability Case Processing System • Learn 18F provided services to four agencies on four projects regarding training such as educating agency officials on agile software development 48 For example 18F conducted training workshops on agile software development techniques with the Social Security Administration and Small Business Administration In addition according to the Department of Labor’s Wage and Hour Division officials 18F conducted a 3-day workshop on IT modernization 45 Of the seven agencies and projects relating to acquisition services three agencies and projects also received services relating to the Learn business unit These three agencies and projects are the Department of Labor’s Wage and Hour Division consulting project the Social Security Administration’s Disability Case Processing System project and the Nuclear Regulatory Commission Master Data Management project 46 According to the National Institute of Standards and Technology cloud computing is “a means for enabling on-demand access to shared and scalable pools of computing resources with the goal of minimizing management effort or service provider interaction ” 47 According to the National Institute of Standards and Technology the infrastructure-as-a service model is used when an agency has the capability to provision processing storage networks and other fundamental computing resources and run its own software including operating systems and applications The agency does not manage or control the underlying infrastructure but controls and configures operating systems storage deployed applications and possibly selected networking components e g host firewalls 48 As previously mentioned three of four projects are also related to Acquisition Services the Department of Labor’s Wage and Hour Division consulting project and the Social Security Administration’s Disability Case Processing System project and the Nuclear Regulatory Commission Master Data Management Program project Page 15 GAO-16-733T • Transformation Services 18F assisted two agencies on two projects to help acquire the people processes and technology needed to successfully deliver digital services For example 18F assisted the Environmental Protection Agency on an agency-wide technology transformation According to an official within the office of the CIO 18F assisted the agency with e-Manifest—a system used to track toxic waste shipments The official noted that 18F provided user-centered design agile coaching prototype development services and agile and modular acquisition services Further the official stated that 18F helped turn around the project and significantly decreased the time of delivery for e-Manifest • Products and Platforms 18F helped two agencies on two projects related to developing software solutions that can potentially be reused at other federal agencies For example according to GSA officials responsible for managing GSA’s Communicart project 18F provided the agency with an e-mail-based tool for approving office supply purchases • Agency digital service team candidate qualification review 18F worked with USDS to recruit and hire team members for agency digital service teams According to 18F officials it provided USDS with subject matter experts to review qualifications of candidates for agency digital service teams Of the 32 projects 6 are associated with major IT investments 49 Cumulatively the federal government plans to spend $853 million on these investments in fiscal year 2016 Additionally risk evaluations performed by CIOs that were obtained from the IT Dashboard 50 showed that three of these investments were rated as low or moderately low risk and three investments were rated medium risk Table 3 describes the 49 According to OMB “major IT investment” means a system or an acquisition requiring special management attention because it has significant importance to the mission or function of the government significant program or policy implications high executive visibility high development operating or maintenance costs an unusual funding mechanism or is defined as major by the agency’s capital planning and investment control process 50 The IT Dashboard is a website maintained by OMB that displays federal agencies’ cost schedule and performance data for over 700 major federal IT investments at 26 federal agencies Page 16 GAO-16-733T associated investments including their primary functional areas 51 planned fiscal year 2016 spending and CIO rating as of May 2016 Table 3 Major Investments on which 18F Provided Assistance Investment’s planned fiscal year 2016 spending CIO assessment as of May 2016 Investment name Agency Primary functional area Transportation Security Administration Information Technology Infrastructure Program Department of Homeland Security Provide and maintain IT infrastructure $368 664 000 Moderately low risk United States Citizenship and Immigration Services Transformation Department of Homeland Security Immigration and naturalization $175 781 000 Medium risk Benefits 21st Century Paperless Delivery of Veterans Benefits Department of Veterans Affairs Veteran benefits and services $259 091 000 Moderately low risk Office of Government Contracting and Business Development SBA One Small Business Administration Business and industry development $5 383 000 Low risk Disability Case Processing System Social Security Administration Social security benefits $40 795 000 Medium risk eManifest Environmental Protection Agency Environmental waste management $3 241 000 Medium risk Source Information Technology Dashboard GAO-16-733T 18F is also developing products and services—including an agile delivery service blanket purchase agreement BPA cloud gov and a shared authentication platform • Agile delivery service BPA 18F established this project in order to support its need for agile delivery services including agile software development In August and September 2015 GSA awarded BPAs to 17 vendors The BPAs are for 5 years and allow GSA to place orders against them for up to 13 specific labor categories relating to agile software development e g product manager backend web developer agile coach at fixed unit prices 51 According to OMB’s annual budget guidance agencies are required to map each IT investment to a functional category These categorizations known as a primary function are intended to enable OMB and others to analyze investments with similar functions as well as identify and analyze potentially duplicative investments across agencies Page 17 GAO-16-733T The BPAs do not obligate any funds rather they enable participating vendors to compete for follow-on task orders from GSA In cases where 18F determines that it should use the agile BPA to provide services to partner agencies GSA anticipates that 18F will work with that agency to develop a request for quotations and the other documents needed for a competition with agile BPA vendors In March 2016 18F released its first request for quotations under the agile BPA for a task order relating to building a web-based dashboard that would describe the status of vendors in the certification process for FedRAMP—a government-wide program managed by GSA to provide joint authorizations and continuous security monitoring services for cloud computing services for all federal agencies GSA anticipates that the time required to complete the process from releasing a request for quotations to task order issuance will typically take between 4 to 8 weeks The initial BPAs were established under the first of three anticipated award pools—all of which are part of the “alpha” component of the Agile BPA project 18F officials stated that they planned to establish BPAs for the other two pools in June 2016 They also anticipate a future beta version of the project that could potentially allow federal agencies beyond 18F to issue task orders directly to vendors Officials stated that they expect to have a plan for the next steps of the beta version of this project by December of 2017 18F officials have also expressed interest in creating additional marketplaces such as those relating to data management developer productivity tools cybersecurity and health IT As of March 2016 18F did not have time frames for when it planned to develop these additional marketplaces • Cloud gov 18F also developed cloud gov service which is an open source platform-as-a-service 52 that agencies can use to manage and deploy applications 18F initially built cloud gov in order to enable the 52 The National Institute for Standards and Technology defines a platform as a service as a cloud computing solution wherein the service provider delivers and manages the underlying infrastructure i e servers software storage and network equipment as well as the platform i e operating system and programming tools and services on which the consumer can create applications using programming tools supported by the service provider In the case of cloud gov 18F uses Amazon Web Services as the underlying infrastructure-as-a-service cloud platform i e the basic computing infrastructure of servers software storage and network equipment Page 18 GAO-16-733T group to use applications it developed for partner agencies In creating the service 18F decided to offer the service to other agencies because according to 18F officials cloud gov offers a developer-friendly secure platform with tools that agencies can use to accelerate the process of assessing information security controls and authorizing systems to operate According to 18F the goal of cloud gov is to provide government developers and their contractor partners the ability to easily deploy systems to a cloud infrastructure with better efficiency effectiveness and security than current alternatives According to a roadmap for cloud gov 18F plans to receive full FedRAMP Joint Authorization Board approval for this service by August 2016 Once available the group anticipates requiring agencies to pay for this service through an interagency agreement with 18F Shared authentication platform In May 2016 18F announced that it was initiating an effort to create a platform for users who need to log into federal websites for government services According to 18F this system is designed to be each citizen’s “one account” with the government and allow the public to verify an identity log into government websites and if necessary recover an account As of May 2016 18F plans to conduct prototyping activities through September 2016 and did not have plans beyond that time frame • In addition to developing future products and services 18F created a variety of guides and standards for use internally as well by agency digital service teams These guides address topics such as accessibility 53 application programming interfaces 54 and agile software development 55 53 https pages 18f gov accessibility 54 https github com 18f api-standards 55 https pages 18f gov agile Page 19 GAO-16-733T USDS Provided Seven Types of Consulting Services Aimed at Helping Agencies Improve IT From August 2014 through August 2015 USDS provided assistance on 13 projects across 11 agencies The group generally provided seven types of consulting services quality assurance problem identification and recommendations website consultation system stabilization information security assessment software engineering and data management • Quality assurance Three of the 13 projects related to providing quality assurance services For example regarding the Social Security Administration’s Disability Case Processing System USDS reviewed the quality of the software and made recommendations that according to the agency resulted in costs savings Additionally for the Departments of Veterans Affairs and Defense Service Treatment Record project USDS provided engineers who identified and resolved errors in the process of exchanging records between the two departments according to the Department of Veterans Affairs Further for the HHS Healthcare gov system the group performed services aimed at optimizing the reliability of the system according to HHS • Problem identification and recommendations USDS identified problems and made recommendations for three projects For all three projects it performed a discovery sprint—a quick typically 2 week review of an agency’s challenges which is to culminate in a clear understanding of the problems and recommendations for how to address the issues For example it performed a discovery sprint for the Department of the Treasury Internal Revenue Service that focused on three areas authentication of taxpayers modernizing systems through event-driven architecture 56 and redesigning the agency’s website USDS delivered a report to the Internal Revenue Service with recommendations and also suggested that work initially focus on taxpayer authentication Consistent with these recommendations the group and the agency decided to initially focus on authentication to include re-opening of the online application GetTranscript 57 56 Event-driven architecture is a software architecture framework that promotes the production detection consumption of and reaction to events 57 Get Transcript application allowed taxpayers to obtain a viewable and printable transcript on the agency’s website The application was taken offline on May 21 2015 because of significant security problems Page 20 GAO-16-733T For the Department of Justice Federal Bureau of Investigation’s National Incident Based Reporting System according to USDS the program performed a discovery sprint and made several recommendations for accelerating deployment of the system • Website consultation USDS provided consultation services for three agency website projects For example for the Office of the U S Trade Representative’s Trans-Pacific Partnership Trade Agreements website USDS provided website design advice and confirmed that the agency had the necessary scalability to support the number of anticipated visitors 58 Additionally it consulted with the Office of Personnel and Management OPM on the design implementation and development of a website for providing information on reported data breaches 59 • System stabilization For the Department of State’s Consular Consolidated Database 60 according to USDS it helped stabilize the system and return it to operational service after a multi-week outage in June 2015 • Information security assessment USDS helped with an information security assessment regarding Electronic Questionnaires for Investigations Processing which encompasses the electronic applications used to process federal background check investigations • Software engineering For the Department of Homeland Security U S Citizenship and Immigration Services Transformation project 61 USDS’s software engineering advisors provided guidance on private sector best practices in delivering modern digital services According to the department the group’s work has supported accomplishments such as increasing the frequency of software releases and improving adoption of agile development best practices 58 https ustr gov tpp 59 https www opm gov cybersecurity 60 The Consular Consolidated Database is used to among other things assist consular officers review and complete visa adjudications 61 U S Citizenship and Immigration Services processes millions of applications for persons seeking to study work visit or live in the United States The agency has been working since 2005 to transform its outdated systems into an account-based system with electronic adjudication and case management tools that will allow applicants to apply and track the progress of their application online Page 21 GAO-16-733T • Data management For the Department of Homeland Security Office of Immigration Statistics USDS helped to develop monthly reports on immigration enforcement priority statistics According to the department USDS supported the development of processes for obtaining data from other offices within the department and generating the monthly reports According to the department after 7 weeks of working with USDS it was able to develop a proof of concept that reduced the report generating process from a month to 1 day Seven of the 13 projects are associated with major IT investments Cumulatively the federal government plans to spend over $1 24 billion on these investments in fiscal year 2016 Three investments were rated by their CIOs as low or moderately low risk and four investments were rated as being medium risk Table 4 describes the associated investments including their primary functional areas planned fiscal year 2016 spending and CIO rating as of May 2016 Table 4 Major Investments on which U S Digital Service Provided Assistance Investment name Agency Primary functional area Defense Travel System Department of Defense Customer services Centers for Medicare and Medicaid Services Federally Facilitated Marketplace Department of Health and Human Services U S Citizenship and Immigration Services Transformation Enterprise Infrastructure and Operations Investment’s planned fiscal year 2016 spending CIO assessment as of May 2016 $37 900 000 Low risk Access to care $365 236 000 Moderately low risk Department of Homeland Security Immigration and naturalization $175 781 000 Medium risk Department of State Border and transportation security $329 893 000 Medium risk $259 091 000 Moderately low risk Benefits 21st Century Paperless Department of Veterans Veteran benefits Delivery of Veterans Benefits Affairs and services Federal Investigative Services Systems Transformation Office of Personnel Management Credential issuance and management $38 228 040 Medium risk Disability Case Processing System Social Security Administration Social security benefits $40 795 000 Medium risk Source Information Technology Dashboard GAO-16-733T In addition to helping agencies improve IT services USDS has developed guidance for agencies For example it developed the Digital Services Playbook to provide government-wide recommendations on practices for Page 22 GAO-16-733T building digital services 62 The group also created the TechFAR Handbook to explain how agencies can use the Digital Services Playbook in ways that are consistent with the Federal Acquisition Regulation 63 Further USDS in collaboration with 18F developed the draft version of U S Web Design Standards which includes a visual style guide and a collection of common user interface components 64 With this guide USDS aims to improve government website consistency and accessibility In addition to developing guidance USDS in collaboration with OMB’s Office of Federal Procurement Policy used challenge gov 65 to incentivize the public to create a digital service training program for federal contract professionals The challenge winner received $250 000 to develop and pilot a training program Additionally the Deputy Administrator for USDS stated that 30 federal contract professionals from more than 10 agencies completed this pilot program in March 2016 According to OMB the program is being revised and transitioned to the Federal Acquisition Institute where it will be included as part of a certification for digital service contracting officers 62 https playbook cio gov 63 https playbook cio gov techfar 64 https playbook cio gov designstandards getting-started 65 https www challenge gov This website is a listing of challenge and prize competitions all of which are run by more than 80 agencies across federal government These include technical scientific ideation and creative competitions where the U S government seeks innovative solutions from the public Page 23 GAO-16-733T A Majority of Surveyed Agency Project Managers Were Satisfied with Services Provided by 18F and USDS In response to a satisfaction survey we administered to agency managers of selected 18F and USDS projects 66 a majority of managers were satisfied with the services they received from the groups 67 Specifically the average score for services provided by 18F was 4 38 on a 5-point satisfaction scale where 1 is very dissatisfied and 5 is very satisfied and the average score for the services provided by USDS was 4 67 68 Table 5 describes the survey results for 18F and USDS Table 5 Results of GAO Survey on Satisfaction with Services Provided by 18F and U S Digital Service to Agency Projects Program 18F USDS Very satisfied Moderately satisfied Neither satisfied nor dissatisfied Moderately dissatisfied No response to survey 16 7 0 3 5 a 6 3 0 0 4 b Source GAO survey of agency project managers that engaged with 18F and USDS GAO-16-733T a This includes one project manager who responded to the survey but selected the “no response” survey option b This includes one project manager who responded to the survey but did not answer the question regarding satisfaction with USDS services In addition to providing scores the survey respondents also provided written comments Regarding 18F five factors were cited by two or more respondents as contributing to their satisfaction with the services the program provided delivering quality products and services providing good customer service completing tasks in a timely manner employing staff with valuable knowledge and skills and providing valuable education to agencies For example one respondent stated that 18F has an expert staff that helped the team understand agile software development and incorporate user-centered design into the agency’s development process 66 As previously mentioned we selected 32 18F projects and 13 USDS projects 67 We received a response rate of 82 percent—84 percent for projects that obtained assistance from 18F and 77 percent for projects with assistance from USDS 68 Specifically we asked survey respondents to rate their organization’s satisfaction using the following scale 5 is “very satisfied ” 4 is “moderately satisfied ” 3 is “neither satisfied nor dissatisfied ” 2 is “moderately dissatisfied ” and 1 is “very dissatisfied ” Page 24 GAO-16-733T With respect to USDS four factors were cited by two or more respondents as contributing to their satisfaction with its services delivering quality services providing good customer service completing tasks in a timely manner and employing staff with valuable knowledge and skills For instance one respondent stated that USDS responded to the agency’s request in a matter of hours quickly developed an understanding of the agency’s IT system and pushed to improve the system even in areas beyond the scope of USDS’s responsibility Although the majority of agencies were satisfied a minority of respondents provided written comments describing their dissatisfaction with services provided by 18F For example six respondents cited poor customer service four respondents cited higher than expected costs and one respondent stated that 18F’s use of open source code may not meet the agency’s information security requirements In a written response to these comments 18F stated that it has received a variety of feedback from its partners and had modified and updated its processes continuously over the past 2 years For example with respect to higher than expected costs 18F stated that project costs sometimes needed to be adjusted mid-project to address among other things higher than expected infrastructure usage or unexpected delays To address this issue 18F stated that it uses the assistance of subject matter experts to estimate project costs and wrote a guide to assist with among other things better managing the budgets of ongoing projects Regarding 18F’s use of open source code it stated that it has worked with its partners to discuss the use of open source software and information security practices USDS and 18F Did Not Fully Measure Performance and Prioritize Projects To assess actual results prioritize limited resources and ensure that the most critical projects receive attention entities that provide IT services such as USDS and 18F should establish and implement the following key practices • Define outcome-oriented goals and measure performance Our previous work and federal law stress the importance of focusing on outcome-oriented goals and performance measures to assess the actual results effects or impact of a program or activity compared to Page 25 GAO-16-733T its intended purpose 69 Goals should be used to elaborate on a program’s mission statement and should be aligned with performance measures In turn performance measures should be tied to program goals and demonstrate the degree to which the desired results were achieved To do so performance measures should have targets to help assess whether goals were achieved by comparing projected performance and actual results Finally goals and performance measures should be outcome-oriented—that is they should address the results of products and services • 18F Has Goals and Procedures for Prioritizing Projects but Needs to Fully Define OutcomeOriented Goals and Measure Performance Establish and implement procedures for prioritizing IT projects We have reported that establishing and implementing procedures to include criteria for prioritizing projects can help organizations consistently select projects based on their contributions to the strategic goals of the organization 70 Doing so will better position agencies to effectively prioritize projects and use the best mix of limited resources to move toward its goals In our draft report we determined that 18F has developed several outcome-orientated goals performance measures and procedures for prioritizing projects which it has largely implemented However not all of its goals are outcome-oriented and it has not yet measured program performance Define Outcome-Oriented Goals and Measure Performance At the conclusion of our review in May 2016 18F provided 5 goals and 17 associated performance measures that the organization aims to achieve by September 2016 see table 6 69 5 U S C § 306 31 U S C §§ 1115-1116 1120-1124 GAO Executive Guide Effectively Implementing the Government Performance and Results Act GAO GGD-96-118 Washington D C June 1 1996 and GAO Designing Evaluations 2012 Revision GAO-12-208G Washington D C Jan 31 2012 70 GAO Information Technology Investment Management A Framework for Assessing and Improving Process Maturity Supersedes AIMD-10 1 23 GAO-04-394G Washington D C March 2004 Page 26 GAO-16-733T Table 6 18F Goals and Performance Measures Goal Performance measures • • • • Continuously improve how 18F works • • Grow 18F to 215 staff while sustaining a healthy 18F culture • • • • • Demonstrate that 18F has saved at least $250 million in government digital spending while achieving 90 percent customer satisfaction Deliver two different government-wide platform services to 10 different agency partners • • • • • Sign and begin two Transformation Services engagements • Establish and track success metrics and goals for each team Develop cadence and metrics for demonstrating performance against performance measures at orgmanagement- and unit level Establish and track success metrics and goals for every engagement Establish metrics and goals for improving 18F’s capacity management Establish metrics and goals for improving 18F’s internal information flow Replace 18F’s hourly pricing with weekly biweekly and or other less granular pricing approaches Onboard 47 new hires Establish retention goals for current 18F staff and meet or exceed the baseline Establish metrics for employee satisfaction and meet or improve current baseline Estimate the “but-for” cost of every past and current 18F project Between completed Custom Partner Solutions and Acquisitions projects demonstrate $200 million in past savings versus “but-for” costs Deliver on Custom Partner Solutions and Acquisition projects in April 2016 through September 2016 that together save another estimated $50 million Develop and implement a partner satisfaction metric to be measured continuously during and upon completion of all engagements Design and implement procedures to address partner dissatisfaction Deliver cloud gov services to 10 agency partners Deliver a prototype of the shared authentication platform with two participating agency partners Sign interagency agreements with two agencies to engage with the Transformation Service with agreement to all client prerequisites and establishment of success metrics and goals Kick off both engagements per plan Source 18F documentation GAO-16-733T To 18F’s credit several of its goals and performance measures appear to be outcome-oriented For example the goal of delivering two government-wide platform services and the associated performance measures are outcome-oriented in that they address results—that is delivering services to partner agencies However not all of the goals and performance measures appear to be outcome-oriented For example the goal of growing 18F to 215 staff while sustaining a healthy culture and its associated measure of hiring 47 staff do not focus on results of products or services Further not all of the performance measures have targets For example seven of the performance measures state that 18F will establish performance indicators but 18F has yet to do so Moreover 18F does not have goals Page 27 GAO-16-733T and associated measures that describe how it plans to achieve its mission after September 2016 In addition although 18F is required to have a plan to achieve full cost recovery it has yet to recover costs and its projections for when this will occur have slipped over time Specifically in June 2015 18F projected that it would fully recover its costs for an entire fiscal year beginning in 2016 however in May 2016 18F provided revised projections indicating that it would recover costs beginning in fiscal year 2019 Those projections also indicated that in the worst case it would not do so through 2022 the final year of its projections Establishing performance measures and targets that are tied to achieving full cost recovery would help management gauge whether the program is on track to meet its projections However 18F has not established such performance measures and targets Finally 18F has yet to fully assess the actual results of its activities Specifically the group has not assessed its performance in accordance with the 17 performance measures it developed 18F’s then-parent organization assessed its own performance quarterly beginning in the 4th quarter of fiscal year 2015 including for measures that 18F was responsible for However this review process did not include or make reference to the 17 measures developed to gauge 18F’s performance and thus do not provide insight into how well it is achieving its own mission In a written response GSA stated that 18F performance is measured as part of the Technology Transformation Service’s goals and measures and that these goals and measures should form the basis for our review However the Technology Transformation Service’s goals and measures do not describe how GSA aims to achieve the specific mission of 18F Until it establishes goals and performance measures beyond September 2016 ensures that all of its goals and performance measures are outcome-oriented and that its performance measures have targets 18F will not have clear definition of what it wants to accomplish Additionally without developing performance measures and targets tied to achieving full cost recovery GSA will lack a fully defined approach to begin recovering all costs in fiscal year 2019 Further until 18F fully measures actual results it will not be positioned to assess the status of its activities and determine the areas that need improvement Page 28 GAO-16-733T Establish and Implement Procedures for Prioritizing IT Projects 18F has developed procedures including criteria for prioritizing projects and largely implemented its procedures Specifically according to the Director of Business Strategy potential projects are discussed during weekly intake meetings As part of these meetings 18F discusses project decision documents which outline the business technical and design elements as well as the schedule scope and resources needed to fulfill the client’s needs Using these documents 18F determines whether proposed projects meet among other things the following criteria 1 the project is aligned with the products and services offered by 18F 2 it can be completed in a time frame that meets the agency’s needs and at a cost that fits the agency’s budget and 3 the project’s government transformation potential e g impact on the public cost savings These documents are used by the business unit leads to make a final decision about whether to accept the projects 18F has largely implemented its procedures To its credit with respect to the 14 projects that 18F selected since establishing its prioritization and selection process 71 18F developed a decision document for 12 of the 14 projects However 18F did not develop a decision document for the 2 remaining projects—the Nuclear Regulatory Commission Master Data Management project and GSA’s labs usa gov project With respect to the Nuclear Regulatory Commission Master Data Management project 18F officials explained that this project only required staff from one division as such that division was able to independently prioritize and select this project Additionally regarding the GSA labs usa gov project 18F officials said the Associate Administrator for Office of Citizen Services and Innovative Technologies directed 18F to provide assistance If 18F consistently follows its process for prioritizing projects it will be better positioned to apply resources to IT projects with the greatest need of improvement 71 18F established its process for prioritizing projects in March 2015 Page 29 GAO-16-733T USDS Has Goals and a Process for Prioritizing Projects but More Work Remains to Define Outcome-Oriented Goals Measure Performance and Implement Its Process for Prioritization As part of our ongoing work we determined that while USDS has developed a process for prioritizing projects and program goals it has not fully implemented important program management practices Define Outcome-Oriented Goals and Measure Performance In response to our inquiry in November 2015 USDS developed four goals to be achieved by December 2017 1 recruit and place over 200 digital service experts in strategic roles at agencies and cultivate a continually growing pipeline of quality technical talent through USDS 72 2 measurably improve five to eight of the government’s most important services 3 begin the implementation of at least one outstanding common platform and 4 increase the quality and quantity of technical vendors working with government and cultivate better buyers within government Additionally USDS established a performance measure with a target for one of its goals Specifically it has a measure for its first goal as it plans to measure the extent to which it will hire 200 digital service experts by December 2017 To its credit several of the goals appear to be outcome-oriented For example improving five to eight services is outcome-oriented in that it addresses results However USDS has not established performance measures or targets for its other goals In addition the program’s first goal—recruit and place over 200 digital service experts in strategic roles at agencies and cultivate a continually growing pipeline of quality technical talent through USDS—does not appear to be outcome-oriented Further USDS has only measured actual results for one of its goals Specifically for the goal of placing digital service experts at agencies as of May 2016 USDS officials stated that they had 152 digital service experts However USDS has not measured actual results for the other three goals 72 At the conclusion of our review in May 2016 the USDS Administrator stated that the group amended its original goal of placing 500 digital service experts at agencies to 200 The Administrator explained that the goal as originally written reflected staff from 18F and the Presidential Innovation Fellows which are outside the scope of USDS That official added that goal of placing 200 digital service experts addresses OMB resources as well as staff at agency digital service teams Page 30 GAO-16-733T USDS officials provided examples of how they informally measure performance for the other three goals For example for the goal of measurably improving five to eight of the government’s most important services the USDS Administrator stated that approximately 1 million visitors viewed the Department of Education’s College Scorecard website in the initial days after it was deployed However USDS has not documented these measures or the associated results to date Until USDS ensures that all of its goals are outcomeoriented and establishes performance measures and targets for each goal it will be difficult to hold the program accountable for results Additionally without an assessment of actual results it is unclear what impact USDS’s actions are having relative to its mission and whether investments in agency digital service teams are justified Establish and Implement Procedures for Prioritizing Projects USDS has developed procedures and criteria for prioritizing projects To identify projects to be considered USDS is to use among other sources a June 2015 OMB report to Congress that identifies the 10 highest-priority federal IT projects in development 73 To prioritize projects USDS has the following three criteria which are listed in their order of importance 1 What will do the greatest good for the greatest number of people in the greatest need 2 How cost-efficient will the USDS investment be and 3 What potential exists to use or reuse a technological solution across the government Using these criteria USDS intends to create a list of all potential projects to include their descriptions and information on resources needs This list is to be used by USDS leadership to make decisions about which projects to pursue 73 The explanatory statement for the Consolidated and Further Continuing Appropriations Act 2015 directed the Executive Office of the President to identify the 10 highest priority IT investment projects that are under development across federal agencies and report quarterly to Congressional committees on the status of these projects 160 Cong Rec H9736 daily ed Dec 11 2014 The explanatory statement for the Consolidated Appropriations Act 2016 includes a similar requirement in particular the statement calls for USDS to provide quarterly reports to Congress describing the status of current USDS teams and projects including the top 10 high priority programs a list of USDS accomplishments and agency project proposals 161 Cong Rec H10137 daily ed Dec 17 2015 Page 31 GAO-16-733T To its credit USDS created a list of all potential ongoing and completed projects which included project descriptions and resource needs Additionally USDS has engaged with 6 of the 10 priority IT projects identified in the June 2015 report 74 including the Department of Health and Human Services’ healthcare gov project and the Department of Homeland Security’s U S Citizenship and Immigration Services Transformation Additionally according to a USDS staff member USDS considered the remaining 4 projects and decided not to engage with them to date However USDS has yet to develop a quarterly report on the 10 high priority programs which it was directed by Congress to develop Specifically in December 2015 Congress modified its direction for the Executive Office of the President to develop the reports regarding the top 10 high priority programs and specifically called for USDS to do so on a quarterly basis According to a USDS staff member a second top 10 high priority investment report has been drafted and will be finalized prior to the issuance of our report However the second top 10 report will address the former congressional direction for the Executive Office of the President to develop reports and OMB did not have a time frame for when USDS would begin to develop reports that address the modified congressional direction Until USDS develops a time frame for the report on the top 10 programs develops the report within that time frame and on a quarterly basis thereafter and considers the programs identified in these reports as part of its prioritization process USDS has less 74 The 10 projects identified in this report are Department of Commerce’s Census 2020 Department of Defense’s Healthcare Management System Modernization Department of Education’s Federal Student Aid Systems Department of Health and Human Services’ healthcare gov Department of Homeland Security’s U S Citizenship and Immigration Services Transformation Department of State’s Consular Systems Modernization Department of Veterans Affairs’ Electronic Health Records Veterans Health Information Systems and Technology Architecture Department of Veterans Affairs’ Medical Appointment Scheduling System Department of Veterans Affairs Veterans’ Benefits Management System and Social Security Administration’s Service Modernization The OMB Office of E-Government and Information Technology and USDS developed criteria to identify these programs including 1 broad public impact 2 criticality to agency mission 3 large scale and or cost 4 national security or health and safety impact 5 challenging past performance 6 congressional interest and 7 current or anticipated USDS engagement Page 32 GAO-16-733T assurance that it will apply resources to the IT projects with the greatest need of improvement Agencies Have Begun to Establish Digital Service Teams but OMB Has Not Taken Steps to Ensure CIO Coordination To help agencies effectively deliver digital services the President’s Budget for fiscal year 2016 proposed funding for digital service teams at 25 agencies—the 24 Chief Financial Officers Act agencies as well as the National Archives and Records Administration According to USDS policy agencies are to among other things hire or designate an executive for managing their digital services teams In addition USDS has called for the deputy head of these agencies or equivalent to among other things agree to a charter with the USDS Administrator 75 After agreeing to a charter according to USDS agencies can use USDS’s hiring pipeline for digital service experts Of the 25 agencies that requested funding to establish teams OMB has established charters with 6 agencies for their digital service teams—the Departments of Defense Health and Human Services Homeland Security the Treasury State and Veterans Affairs The charters establish the executives for managing digital service teams and describe the reporting relationships between the team leaders and agency leadership In addition according to the Deputy USDS Administrator USDS plans to establish charters with an additional 3 agencies by the end of the fiscal year—the Department of Education the Social Security Administration and Small Business Administration For the remaining 16 agencies as of April 2016 8 agencies reported that they plan to establish digital service teams but have yet to establish charters with USDS—the Department of Housing and Urban Development Environmental Protection Agency General Services Administration National Aeronautics and Space Administration National Archives and Records Administration National Science Foundation Nuclear Regulatory Commission and Office of Personnel Management The other 8 agencies reported that they do not plan to establish digital service teams by September 2016 because they did not receive requested funding—the Departments of Agriculture Commerce Energy the Interior Justice Labor and Transportation and 75 OMB USDS Franchise Agreement Nov 2015 Page 33 GAO-16-733T the U S Agency for International Development Table 7 summarizes agency and OMB efforts to establish digital service teams Table 7 Summary of Agency and the Office of Management and Budget Efforts to Establish Agency Digital Service Teams as of April 2016 Established charter for Agencies with which OMB plans to digital service team establish a charter by September with OMB 2016 • Department of • Department of Education Defense • Small Business Administration • Department of • Social Security Administration Health and Human Services • Department of Homeland Security • Department of State • Department of Veterans Affairs • Department of the Treasury Agencies for which OMB has Agencies that do not plan to establish a yet to establish charters team by September 2016 • Department of Housing • Department of Agriculture and Urban Development • Department of Commerce • Environmental • Department of Energy Protection Agency • Department of the Interior • General Services • Department of Justice Administration • Department of Labor • National Aeronautics • Department of Transportation and Space Administration • U S Agency for International Development • National Archives and Records Administration • National Science Foundation • Nuclear Regulatory Commission • Office of Personnel Management Source GAO analysis of responses from agency officials GAO-16-733T OMB Did Not Ensure That Agencies Defined the Relationship between the Digital Services Team and CIOs Congress has recognized the importance of having a strong agency CIO In 1996 the Clinger-Cohen Act established the position of agency CIO and among other things gave these officials responsibility for IT investments including IT acquisitions monitoring the performance of IT programs and advising the agency head whether to continue modify or terminate such programs More recently in December 2014 FITARA was enacted into law It required most major executive branch agencies to ensure that the CIO has a significant role in the decision process for IT budgeting as well as the management governance and oversight processes related to IT The law also required that CIOs review and approve 1 all contracts for IT services associated with major IT investments prior to executing them and 2 the appointment of CIOs for any component within the agency OMB also released guidance in June Page 34 GAO-16-733T 2015 that reinforces the importance of agency CIOs and describes how agencies are to implement FITARA 76 Further according to our prior work leading organizations clearly define responsibilities and authorities governing the relationships between the CIO and other agency components that use IT 77 Only one of the four agencies we selected for review—the Department of Homeland Security—defined the relationship between the executive for managing the digital services team and the agency CIO Specifically the Department of Homeland Security established a charter for its digital services team signed by both the Administrator of USDS and the Deputy Secretary which outlines the reporting structure and authorities for the digital services executive including the relationship with the CIO For example according to the charter the digital services executive will report on a day-to-day basis to the CIO but will also report directly to the Deputy Secretary However the other three agencies we reviewed—the Departments of Defense State and Veterans Affairs—have not defined the role of agency CIOs with regard to these teams Although they have established charters for these teams which describe the reporting structure between the digital services executive and senior agency leadership 78 the charters do not describe the role of the agencies’ CIOs and they have not documented this information elsewhere The Department of Defense CIO and the Department of Veterans Affairs Principal Deputy Assistant Secretary for the Office of Information and Technology told us that they work closely with their agency digital service team However while these officials have coordinated with the agency 76 OMB Management and Oversight of Federal Information Technology Memorandum M15-14 Washington D C June 10 2015 77 GAO Federal Chief Information Officers Opportunities Exist to Improve Role in Information Technology Management GAO-11-364 Washington D C Sept 15 2011 and Library of Congress Strong Leadership Needed to Address Serious Information Technology Management Weaknesses GAO-15-315 Washington D C Mar 31 2015 78 The Director of the Defense Digital Service team is to report to the Chief of Staff the head of the State Digital Service team is to report to the Deputy Secretary for Management and Resources and the Veterans Affairs Digital Service Executive is to report to the Deputy Secretary Page 35 GAO-16-733T digital service teams the roles and responsibilities governing these relationships should be described to ensure that CIOs can carry out their statutory responsibilities In contrast to the Departments of Defense and Veterans Affairs the State CIO told us that he has had limited involvement in the department’s digital services team 79 He added that he believes it will be important for CIOs to be involved in agency digital services teams in order to sustain their efforts In written comments OMB acknowledged that the Department of State’s charter does not describe the role of the CIO but stated that the Departments of Defense and Veterans Affairs digital service team charters at least partially address the relationship between digital service teams and agency CIOs Specifically with respect to the Department of Defense OMB stated that the charter calls for senior leadership including the department’s CIO to ensure that digital service team projects proceed without delay 80 Additionally according to OMB the charter for the Veterans Affairs digital service team calls for the team to be located in and supported by VA’s CIO organization However these requirements do not address the specific responsibilities or authorities of the Veterans Affairs’ CIO with regard to the digital service team The lack of defined relationships is due in large part to the fact that USDS policy on digital service teams does not describe the expected relationship between agency CIOs and these teams As previously mentioned USDS policy calls for the digital service team leader to report directly to the head of the agency or its deputy however it does not describe the expected responsibilities and authorities governing the relationship of the CIO Until OMB updates the USDS policy to clearly define the responsibilities and authorities governing the relationships between CIOs and digital 79 According to the Department of State CIO he has attended meetings pertaining to information security with the digital services team 80 Our analysis did not find this statement in the Department of Defense charter Instead our analysis identified this requirement in a January 2015 memorandum regarding the Defense Digital Service from the Secretary of Defense to the Secretaries of the Military Departments Page 36 GAO-16-733T services teams and ensures that existing agency digital service team charters or other documentation reflect this policy agency CIOs may not be effectively involved in the digital service teams This is inconsistent with long-standing law as well as the recently enacted FITARA and OMB’s guidance on CIO responsibilities and may hinder the ability for CIOs to carry out their responsibilities for IT management of the projects undertaken by the digital service teams In summary by hiring technology and software development experts and using leading software development practices both 18F and USDS have provided a variety of useful services to federal agencies Most surveyed agency project managers that partnered with 18F and USDS were satisfied with the services provided It is important for USDS and 18F to establish outcome-oriented goals measure performance and prioritize projects particularly since these are valuable management tools that could aid in the transfer of knowledge when critical temporary staff leave these organizations and are replaced To their credit both 18F and USDS have developed several outcomeorientated goals and procedures for prioritizing projects However the goals and associated performance measures and targets were not always outcome-oriented Additionally they have not fully measured program performance As a result it will be difficult to hold the programs accountable for results Moreover without documented measures and results for USDS it is unclear whether investments in agency digital service teams are justified Further by delaying the date for when it projects to fully recover its costs and not having associated performance measures 18F is at risk of not having the information necessary for GSA leadership to determine whether to continue using the Acquisition Services Fund for 18F operations Finally USDS has yet to develop a quarterly report on the 10 high priority programs meaning that it may be applying resources to investments that are not in the most need of their assistance Although OMB has called for agencies to establish digital service teams USDS policy does not require agencies to define the expected responsibilities and authorities governing the relationships between CIOs and digital service teams To fulfill their statutory responsibilities including as most recently enacted in FITARA and reinforced in OMB guidance and ensure that CIOs have a significant role in the decision making process for projects undertaken by the digital service teams such defined relationships are essential Page 37 GAO-16-733T Accordingly our draft report contains two planned recommendations to GSA and four to OMB Specifically the report recommends that GSA • • ensure that goals and associated performance measures are outcome-oriented and that performance measures have targets including • performance measures and targets tied to fully recovering program costs and • goals performance measures and targets for how the program will achieve its mission after September 2016 and assess actual results for each performance measure The draft report also includes recommendations for OMB to • ensure that all goals and associated performance measures are outcome-oriented and that performance measures have targets • assess actual results for each performance measure • establish a time frame for developing the report identifying the highest priority projects develop the report within that established time frame and on a quarterly basis thereafter and consider the highest priority IT projects as part of the established process for prioritizing projects and • update USDS policy to clearly define the responsibilities and authorities governing the relationships between CIOs and the digital services teams and require existing agency digital service teams to address this policy In doing so the Federal Chief Information Officer should ensure that this policy is aligned with relevant federal law and OMB guidance on CIO responsibilities and authorities If GSA implements our recommendations it will be better positioned to effectively measure performance Additionally OMB’s implementation of our recommendations will position it to effectively measure performance prioritize USDS resources and ensure that CIOs play an integral role in agency digital service teams Chairmen Meadows and Hurd Ranking Members Connolly and Kelly and Members of the Committees this completes my prepared statement I would be pleased to respond to any questions that you may have at this time Page 38 GAO-16-733T GAO Contact and Staff Acknowledgments 100907 If you have any questions on matters discussed in this testimony please contact David A Powner at 202 512-9286 or at pownerd@gao gov Other key contributors include Nick Marinos Assistant Director Kavita Daitnarayan Rebecca Eyler Kaelin Kuhn Jamelyn Payan and Tina Torabi Page 39 GAO-16-733T This is a work of the U S government and is not subject to copyright protection in the United States The published product may be reproduced and distributed in its entirety without further permission from GAO However because this work may contain copyrighted images or other material permission from the copyright holder may be necessary if you wish to reproduce this material separately GAO’s Mission The Government Accountability Office the audit evaluation and investigative arm of Congress exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people GAO examines the use of public funds evaluates federal programs and policies and provides analyses recommendations and other assistance to help Congress make informed oversight policy and funding decisions GAO’s 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