The Current State of Federal Information Technology Acquisition Reform and Management Updated February 3 2020 Congressional Research Service https crsreports congress gov R44843 The Current State of Federal IT Reform and Management Summary The Government Accountability Office GAO has reported that the federal government budgets more than $90 billion each year on information technology IT investments Historically the projects supported by these investments have often incurred “multi-million dollar cost overruns and years-long schedule delays ” In addition GAO has reported that these projects may contribute little to mission-related outcomes and in some cases may fail altogether These undesirable results according to GAO “can be traced to a lack of disciplined and effective management and inadequate executive-level oversight ” The Federal Information Technology Acquisition Reform Act FITARA was enacted on December 19 2014 to establish a long-term framework through which federal IT investments could be tracked assessed and managed to significantly reduce wasteful spending and improve project outcomes These requirements of FITARA are carried out by the Federal Chief Information Officer CIO The position of the Federal CIO was created by the E-Government Act of 2002 as the “Administrator Office of Electronic Government ” Congress and GAO have actively monitored the activities of the Federal CIO and the initiatives carried out by the office Both have been especially attentive to the topics of data center use and cloud deployment as they relate to achieving the goals of FITARA As of November 2019 GAO reported that federal agencies had fully implemented 61% of the 1 320 IT management-related recommendations that GAO has made to them since FY2010 Likewise agencies had implemented 76% of the 3 323 security-related recommendations that GAO has made since FY2010 The House Committee on Oversight and Reform has held two hearings on FITARA in the 116th Congress June 26 2019 and December 11 2019 No legislation that would impact FITARA implementation has been introduced Congressional Research Service The Current State of Federal IT Reform and Management Contents Introduction 1 FITARA Overview 1 Applicability of FITARA 3 FITARA Implementation 3 Modernizing Government Technology MGT Act 4 Oversight of Federal CIO Initiatives 4 Congressional Oversight 116th Congress 4 Government Accountability Office Reports and Testimony 2019 4 Recent Activity FITARA Scorecard 9 0 6 CIO Responsibilities 6 CIO IT Acquisition Review 6 Consolidating Data Centers 7 Managing Software Licenses 7 Ensuring the Nation’s Cybersecurity 7 Figures Figure 1 Practices that Selected Agencies Used to Effectively Implement Key Provisions of FITARA 5 Figure 2 FITARA 9 0 Scorecard December 2019 6 Contacts Author Information 8 Congressional Research Service The Current State of Federal IT Reform and Management Introduction The federal government spends about $90 billion each year on information technology IT investments 1 The Government Accountability Office GAO has found that historically the projects supported by these investments have often incurred “multi-million dollar cost overruns and years-long schedule delays ” In addition they may contribute little to mission-related outcomes and in some cases may fail altogether 2 These undesirable results according to GAO “can be traced to a lack of disciplined and effective management and inadequate executive-level oversight ”3 The Federal Information Technology Acquisition Reform Act FITARA was enacted on December 19 2014 4 to address these issues5 and codify existing initiatives managed by the Federal Chief Information Officer CIO 6 FITARA Overview FITARA outlined seven areas of reform that affect how federal agencies purchase and manage their information technology IT assets including 1 Testimony of Carol C Harris Director Information Technology Acquisition Management Issues before the Subcommittees on Government Operations and Information Technology Committee on Oversight and Government Reform Agencies and OMB Need to Continue Implementing Recommendations on Acquisitions Operations and Cybersecurity House of Representatives December 11 2019 https oversight house gov sites democrats oversight house gov files Harris%20Testimony pdf 2 For example the Department of Defense DOD canceled its Expeditionary Combat Support System in December 2012 after it had spent more than a billion dollars but had not deployed the system within five years of initially obligating funds the Department of Homeland Security’s DHS Secure Border Initiative Network program was canceled in January 2011 after DHS had spent more than $1 billion because the program did not meet costeffectiveness and viability standards the Department of Veterans Affairs’ VA Financial and Logistics Integrated Technology Enterprise program which was intended to be delivered by 2014 at a total estimated cost of $609 million was terminated in October 2011 due to challenges in managing the program the Farm Service Agency’s Modernize and Innovate the Delivery of Agricultural Systems program which was to replace aging hardware and software applications that process benefits to farmers was canceled after 10 years at a cost of at least $423 million while delivering only about 20% of the functionality that was originally planned and the Office of Personnel Management’s Retirement System Modernization program was canceled in February 2011 after the agency had spent approximately $231 million on its third attempt to automate the processing of federal employee retirement claims U S Government Accountability Office Additional Actions and Oversight Urgently Needed GAO-15-675T June 10 2015 hereinafter Additional Actions and Oversight Urgently Needed GAO 3 Additional Actions and Oversight Urgently Needed GAO 4 Title VIII Subtitle D of the National Defense Authorization Act NDAA for Fiscal Year 2015 P L 113-291 5 Title VIII Subtitle D of the National Defense Authorization Act NDAA for Fiscal Year 2015 P L 113-291 See also H Rept 113-359 Not all federal agencies are subject to the requirements of FITARA Generally agencies identified in the Chief Financial Officers CFO Act of 1990 as well as their subordinate divisions and offices are subject to the requirements of FITARA The DOD the intelligence community and portions of other agencies that operate systems related to national security are subject to only certain portions of FITARA Additionally executive branch agencies not named in the CFO Act are encouraged but not required to follow FITARA guidelines 6 The position of the Federal CIO and the CIO Council were created within the Office of Management and Budget OMB by the E-Government Act of 2002 The role of the Federal CIO is to provide leadership and direction to the executive branch on IT implementation throughout the federal government Specific responsibilities include directing the activities of the CIO Council advising the Director of OMB on the performance of IT investments and overseeing specific IT reform initiatives and activities The CIO Council is the principal interagency forum on federal agency practices for IT management Originally established by Executive Order 13011 Federal Information Technology and later codified by the E-Government Act of 2002 the CIO Council’s mission is to help improve practices related to the design acquisition development modernization use sharing and performance of federal government information resources CIO gov is the website of the U S Chief Information Officer and the Federal CIO Council Congressional Research Service 1 The Current State of Federal IT Reform and Management        enhancing the authority of agency CIOs improving transparency and risk management of IT investments setting forth a process for agency IT portfolio review refocusing the Federal Data Center Consolidation Initiative FDCCI from only consolidation to optimization expanding the training and use of “IT Cadres ” as initially outlined in the “25 Point Implementation Plan to Reform Federal Information Management Technology” 7 maximizing the benefits of the Federal Strategic Sourcing Initiative FSSI 8 and creating a government-wide software purchasing program in conjunction with the General Services Administration Among other provisions FITARA codified elements of existing Federal CIO initiatives In addition FITARA requires the Federal CIO in conjunction with federal agencies to       refocus the Federal Data Center Consolidation Initiative FDCCI from consolidation to optimization to include adoption of cloud services 9 set forth a process for agency IT portfolio review and oversight improve transparency and risk management of IT investments identify and publish cost savings and optimization improvements provide public updates on cumulative cost savings and optimization improvements and review agencies’ data center inventories and management strategies FITARA requires federal agencies to submit annual reports that include     comprehensive data center inventories multiyear strategies to consolidate and optimize data centers performance metrics and a time line for agency action and yearly calculations of investment and cost savings related to FITARA implementation The “25-Point Implementation Plan to Reform Federal IT Management” was one of the original policy documents developed as part of a comprehensive effort to increase the operational efficiency of federal technology assets “A 25Point Implementation Plan to Reform Federal IT Management ” Office of the U S Chief Information Officer December 9 2010 https www dhs gov sites default files publications digital-strategy 25-point-implementation-planto-reform-federal-it pdf 8 Strategic sourcing is “a method of managing procurement processes for an organization in which the procedures methods and sources are constantly re-evaluated to optimize value to the organization Strategic sourcing which is considered a key aspect of supply chain management involves elements such as examination of purchasing budgets the landscape of the supply market negotiation with suppliers and periodic assessments of supply transactions ” BusinessDictionary com http www businessdictionary com definition strategic-sourcing html 9 For additional background on the FDCCI see the “25-Point Implementation Plan to Reform Federal IT Management ” This plan was one of the original policy documents developed as part of a comprehensive effort to increase the operational efficiency of federal technology assets Office of the U S Chief Information Officer “A 25Point Implementation Plan to Reform Federal IT Management ” December 9 2010 https www dhs gov sites default files publications digital-strategy 25-point-implementation-plan-to-reform-federal-it pdf 7 Congressional Research Service 2 The Current State of Federal IT Reform and Management Applicability of FITARA Generally agencies identified in the Chief Financial Officers CFO Act of 1990 10 as well as their subordinate divisions and offices are subject to the requirements of FITARA The DOD the intelligence community and portions of other agencies that operate systems related to national security are subject to only certain portions of FITARA Additionally executive branch agencies not named in the CFO Act are encouraged but not required to follow FITARA guidelines FITARA Implementation On June 10 2015 OMB published guidance11 to implement the requirements of FITARA and harmonize existing policy and guidance12 with the new law Among other goals the requirements are intended to        assist agencies in establishing management practices that align IT resources with agency missions goals programmatic priorities and statutory requirements establish government-wide IT management controls that will meet FITARA requirements while providing agencies with the flexibility to adapt to agency processes and unique mission requirements establish universal roles responsibilities and authorities of the agency CIO and other senior agency officials 13 strengthen the agency CIO’s accountability for the agency’s IT costs schedules performance and security strengthen the relationship between agency and bureau CIOs establish consistent government-wide interpretation of FITARA terms and requirements and provide appropriate visibility and involvement of the agency CIO in the management and oversight of IT resources to support the implementation of effective cybersecurity policies 14 In addition to implementing FITARA the guidance also harmonized the requirements of FITARA with existing law primarily the Clinger-Cohen Act of 1996 and the E-Government Act of 2002 15 Those laws require OMB to issue management guidance for information technology and 10 P L 101-576 U S Office of Management and Budget Management and Oversight of Federal Information Technology OMB-M15-14 June 10 2015 https obamawhitehouse archives gov sites default files omb memoranda 2015 m-15-14 pdf hereinafter “Management and Oversight of Federal Information Technology” 12 In addition to implementing FITARA OMB Memorandum M-15-14 “Management and Oversight of Federal Information Technology” also harmonizes the requirements of FITARA with existing law primarily the Clinger-Cohen Act of 1996 and the E-Government Act of 2002 Those laws require OMB to issue management guidance for information technology and electronic government activities across the government respectively FITARA also contains provisions that required OMB interpretation before implementation 13 Senior Agency Officials as referred to in OMB M-15-14 include positions for example chief financial officer chief administrative officer chief operating officer and program manager 14 “Management and Oversight of Federal Information Technology” OMB-M-15-14 OMB 15 P L 104-106 40 U S C 1401 et seq and P L 107-347 43 U S C 1601 et seq respectively For information on federal acquisition generally see CRS Report R42826 The Federal Acquisition Regulation FAR Answers to Frequently Asked Questions coordinated by Erika K Lunder 11 Congressional Research Service 3 The Current State of Federal IT Reform and Management electronic government activities across the government respectively FITARA also contains provisions that required OMB interpretation before implementation Modernizing Government Technology MGT Act In December 2017 Congress enacted the Modernizing Government Technology MGT Act which authorized agencies to set up IT-specific working capital funds Thus far only three agencies have taken the steps necessary to set up their fund while five additional agencies have plans to set up an MGT working capital fund by the end of FY2020 The working capital funds authorized under the MGT Act allow agencies to fund IT modernization and reinvest savings for additional modernization projects One reason given for this low adoption rate is that the law did not provide agencies the authority to transfer money into their working capital funds Additional legislative actions to provide agencies with this authority may be needed The MGT Act also established a centralized Technology Modernization Fund TMF to fund large IT modernization projects The MGT Act originally authorized $500 million for the TMF but the fund has only received $125 million over the past two fiscal years limiting the effectiveness of the TMF While the Financial Services and General Government Fiscal Year 2020 Appropriation Act under consideration in the House would provide an additional $35 million for the fund some believe more funding is needed to address the long list of agency IT modernization needs Oversight of Federal CIO Initiatives Through hearings and GAO investigations Congress has been active in monitoring the activities of the Federal CIO and the initiatives carried out by the office Congress has been especially attentive to the topics of data center use and cloud adoption as they relate to achieving the goals of FITARA Congressional Oversight 116th Congress The 116th Congress has thus far not introduced any legislation directly related to FITARA The House Committee on Oversight and Reform Subcommittee on Government Operations has held two hearings “The Federal Information Technology Reform Act Scorecard 8 0 ”16 on June 26 2019 and “The Federal Information Technology Reform Act Scorecard 9 0 ” on December 11 2019 17 Government Accountability Office Reports and Testimony 2019 The GAO has conducted numerous investigations into the initiatives being carried out under the auspices of the U S CIO Most recently GAO published testimony provided before the December 11 2019 House Committee on Oversight and Reform Subcommittee on Government Operations “Agencies and OMB Need to Continue Implementing Recommendations on Acquisitions Operations and Cybersecurity” GAO-19-641T 18 Additionally on April 29 2019 GAO published “Effective Practices Have Improved Agencies’ FITARA Implementation GAO-20-311T In that report GAO reviewed 9 agencies and found 12 practices officials said helped them to effectively implement one or more of the FITARA 16 https oversight house gov legislation hearings fitara-80 https oversight house gov legislation hearings fitara-90 18 https www gao gov products GAO-20-311T 17 Congressional Research Service 4 The Current State of Federal IT Reform and Management provisions Figure 1 For example five of the agencies said that centralizing the management of software licenses was essential to meeting the software purchasing provision of the law By doing so agencies were able to make agency-wide purchasing decisions that saved them money Figure 1 Practices that Selected Agencies Used to Effectively Implement Key Provisions of FITARA Source “Effective Practices Have Improved Agencies’ FITARA Implementation GAO-19-131 April 29 2019 https www gao gov products GAO-19-131 GAO also published reports on cloud adoption and data center optimization In “Cloud Computing Agencies Have Increased Usage and Realized Benefits but Cost and Savings Data Need to Be Better Tracked” GAO-19-58 published April 4 2019 19 GAO noted that each year federal agencies spend $90 billion on IT The agency found though that agencies don't consistently track cloud-related savings making it hard for them to make informed decisions on whether to use cloud services GAO recommended that agencies improve their savings tracking In “Data Center Optimization Additional Agency Actions Needed to Meet OMB Goals” GAO19-241 published April 11 2019 20 GAO noted that federal agencies that since 2010 have been required to close unneeded data center facilities and improve the performance of remaining facilities Across the government agencies have closed 6 250 centers to date and saved $2 7 billion However GAO stated that only two agencies in its review planned to meet September 2018 government-wide optimization goals that include for example a target for how much time data servers sit unused 19 20 https www gao gov products GAO-19-58 https www gao gov products GAO-19-241 Congressional Research Service 5 The Current State of Federal IT Reform and Management Recent Activity FITARA Scorecard 9 0 The “FITARA Scorecard 9 0”21 was issued at a December 11 2019 hearing of the Committee on Oversight and Reform Subcommittee on Government Operations “The Federal Information Technology Reform Act Scorecard 9 0 ”22 Figure 2 Figure 2 FITARA 9 0 Scorecard December 2019 Source U S House of Representatives Committee on Oversight and Reform available at https oversight house gov sites democrats oversight house gov files 12 11 19_FITARA%20Scorecard%209 0 pdf At the hearing Carol Harris Director of Information Technology Management Issues at GAO cited five areas where significant actions remain to be completed CIO responsibilities CIO IT acquisition review consolidating data centers managing software licenses and ensuring the nation’s cybersecurity CIO Responsibilities Laws such as FITARA and related guidance assigned 35 key IT management responsibilities to CIOs to help address long-standing challenges In August 2018 GAO reported that none of the 24 selected agencies had established policies that fully addressed the role of their CIO GAO recommended that OMB and each of the 24 agencies take actions to improve the effectiveness of CIOs’ implementation of their responsibilities Although most agencies agreed or did not comment none of the 27 recommendations have yet been implemented CIO IT Acquisition Review According to FITARA covered agencies’ CIOs are required to review and approve IT contracts However in January 2018 GAO reported that most of the CIOs at 22 covered agencies were not 21 22 https oversight house gov sites democrats oversight house gov files Scorecard%208 0 pdf https oversight house gov legislation hearings fitara-80 Congressional Research Service 6 The Current State of Federal IT Reform and Management adequately involved in reviewing billions of dollars of IT acquisitions Consequently GAO made 39 recommendations to improve CIO oversight for these acquisitions Since then 23 of the recommendations had not been implemented Consolidating Data Centers OMB launched an initiative in 2010 to reduce the number of data centers In August 2018 22 agencies reported that they had achieved $1 94 billion in cost savings for fiscal years 2016 through 2018 while 2 agencies reported that they had not achieved any savings GAO has made 196 recommendations to OMB and agencies to improve the reporting of related cost savings and to achieve optimization targets As of November 2019 121 of the recommendations have been implemented Managing Software Licenses Effective management of software licenses can help avoid purchasing too many licenses that result in unused software In May 2014 GAO reported that better management of licenses was needed to achieve savings and made 135 recommendations to improve such management As of November 2019 all but 19 of the recommendations had been implemented Ensuring the Nation’s Cybersecurity GAO has consistently identified shortcomings in the federal government’s approach to cybersecurity and made 3 323 recommendations to agencies since 2010 These recommendations have identified actions for agencies to take to fully implement their information security programs and strengthen technical security controls over their computer networks and systems As of November 2019 76% of the recommendations had been implemented Congressional Research Service 7 The Current State of Federal IT Reform and Management Author Information Patricia Moloney Figliola Specialist in Internet and Telecommunications Policy Disclaimer This document was prepared by the Congressional Research Service CRS CRS serves as nonpartisan shared staff to congressional committees and Members of Congress It operates solely at the behest of and under the direction of Congress Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role CRS Reports as a work of the United States Government are not subject to copyright protection in the United States Any CRS Report may be reproduced and distributed in its entirety without permission from CRS However as a CRS Report may include copyrighted images or material from a third party you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material Congressional Research Service R44843 · VERSION 15 · UPDATED 8