Statements and Speeches

"Off-line and Off-Budget: The Dismal State of Information Technology Planning in the Federal Government"

Opening Statement: Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security

Jul 31 2008

The Subcommittee will come to order.

My thanks to our guests and witnesses for being here today, the third hearing this Subcommittee has held on the issue of poorly planned and poorly performing IT investments. This hearing will focus – once again – on the ability of the Office of Management and Budget to oversee and provide Congress visibility into the $71 billion that agencies will spend on information technology. Up until March, Congress had an extremely limited ability to understand why OMB considered an IT investment to be “poorly planned.” I must commend OMB, and in particular Ms. Evans, for finally releasing this data. Although this is a good start, more complete and accurate information needs to be shared. I firmly believe that in order to hold agencies accountable for their investments, Congress and OMB need to work together as partners – the American taxpayers demand it.

Information technology investments, if planned and implemented properly, can increase productivity, improve efficiency; and reduce an agency’s costs. However, some of these projects can be extremely difficult to manage and mistakes may be made along the way. I experienced this firsthand when I was Governor of Delaware. Sometimes, we bit off more than we could chew and the project would quickly spiral out of control. When this happened, sometimes we came to the conclusion that the best course of action was to just pull the plug. It was a tough decision, but it was the right thing to do in some cases.

Unfortunately, many agencies in the federal government are allowed to spend billions of taxpayer dollars on investments that are duplicative, lack clear goals, and are managed by unqualified individuals. In fact, according to recently released GAO data, $25 billion in IT investments are poorly planned, poorly performing, or both. Even worse, some of these projects have been delayed up to a decade and are costing us billions more than was originally expected. This is simply unacceptable. And it makes me wonder whether it’s time for Congress to pull the plug on some of these failed investments.

Regrettably, Congress still does not have the information necessary from OMB to hold agencies accountable and choose where we want to invest scarce resources each year. With risky investments – such as IT – it is important to increase collaboration and visibility, not hinder it. So far, this hasn’t been the case.
Since 1994, Congress – through legislation called the Federal Acquisition Streamlining Act – has required agencies to keep costs, delivery dates, and performance goals of major acquisitions within 90 percent of the originally-proposed plan. OMB then was required to annually report to Congress on agency progress. Unfortunately, despite this requirement in law, OMB has only issued 3 reports in 14 years.
Moreover, agencies are required to create an investment “baseline” that takes into account potential risks that could lead to increased costs, delayed delivery dates, or reduced performance. Agencies then use this baseline to track whether an investment is progressing according to plan. There are some legitimate reasons an agency may change the original baseline on a given project, but I’m disappointed to say though that some agencies have used rebaselining to hide the cost overruns or schedule delays from Congress.
We are about to hear an extremely troubling report from the Government Accountability Office today revealing that almost 50 percent of all federal agencies’ IT investments are rebaselined. Even more disturbing, some agencies – such as the Departments of Agriculture, Commerce, and Veteran Affairs – have rebaselined more than 5 times on a single investment.
Although agencies are responsible for the excessive rebaselining, there is one thing in common between all of these investments. Every baseline and rebaseline was approved by OMB. Someone, somewhere – in my view – is not fulfilling their responsibility to ensure that taxpayer dollars are spent only on those investments that are well thought out and truly necessary.
Using the information that was provided to our Subcommittee in March, we have created a scorecard for agencies that takes into account several criteria related to the planning and implementation of IT investments. As we can clearly see, the federal government is miserably failing. In fact, half of the 28 agencies received an “F.” In total, these agencies are overseeing $57 billion in IT investments. And from what we can tell right now, we’re getting little to nothing in return for those investments.
In addition, you’ll notice that the Department of Housing and Urban Development (HUD) received a perfect score of “A+.” HUD received this A+ partly because they reported that every project was being delivered on-cost, on-schedule, and performing as planned. However, as GAO will testify today, HUD rebaselined at least one project 7 times, possibly to mask spiraling costs. And GAO has consistently testified that the data provided by agencies to OMB is often times inaccurate or even incomplete. So we don’t have the complete picture, even for those agencies that are allegedly doing a better job than others.
That is why I plan on introducing legislation today, along with Senator Collins, which will give Congress and OMB the information needed to make better decisions about which IT investments should continue, and which should be shut down. Our bill, the Information Technology Investment Oversight Enhancement and Waste Prevention Act of 2008, would make agencies report regularly on significant deviations in cost, schedule, and performance.

But we don’t just want better information. Our bill also helps OMB take a crucial step aimed at preventing IT investments from drifting towards failure.   Recognizing that agencies may not have the skills necessary to manage complex IT investments and may have trouble recruiting qualified managers, our bill would set up a team of experts from inside and outside of government that agencies may use as a resource. This team – which my staff and I have taken to calling a kind of “IT Strike Force” – would have the skills and background necessary to make sure that agencies are focusing on the right things, making the right decisions, and spending the money we entrust to them wisely.

Thank you again to our witnesses for joining us today, and I look forward to hearing the discussion. The American taxpayer demands we be good stewards of their money, and I know everyone here in this room wants to see that a reality.

Click here to see the agencies’ scorecards.