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

The federal government invests billions of dollars annually on information technology (IT)—and better management techniques and oversight can help these investments perform more effectively. 

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The federal government plans to invest more than $90 billion on IT in fiscal year 2019. But historically, these investments have frequently been delayed, gone over budget, or failed to contribute to their missions. In light of these challenges, GAO added improving the management of IT acquisitions and operations to its list of high risk areas for the federal government in 2015.

Purchasing New IT Systems

The Office of Management and Budget (OMB) and other federal agencies have several key initiatives under way to address the government’s poor track record of implementing new IT systems. However, implementation of these initiatives has been inconsistent.

  • The role of the CIO. Both IT acquisition reform law and OMB’s guidance address how federal agencies should enhance the authority of agency chief information officers (CIOs). However, none of the 24 major federal agencies have IT management policies that fully address the role of their CIOs.

Extent to Which Agency Policies Address the Role of the Chief Information Officer

Extent to Which Agency Policies Address the Role of the Chief Information Officer

  • Incremental development.  Federal law requires that covered agency CIOs certify that their IT investments are implementing incremental development. Further, OMB has issued guidance on developing IT investments in increments to reduce risk and more quickly increase capabilities. But, while a majority of covered agencies have improved their ability to deliver IT incrementally, most still lack the required policies needed to ensure that their CIO completes this certification.
  • IT contracting. The President’s Management Agenda identifies improving the transparency of IT spending as a priority. However, many federal agencies have not identified all of their obligations for IT contracts in their procurement systems—resulting in an excess of $4.5 billion in obligations for IT contracts beyond those reported by the agencies. Additionally, a majority of selected agency CIOs have not reviewed and approved IT acquisitions as required.

Agency IT-related Contract Obligations

Extent to Which Agency Policies Address the Role of the Chief Information Officer

Maintaining Existing IT Systems

Federal agencies have reported using some IT systems with components that are at least 50 years old, and few have concrete plans to modernize or replace these systems. This lack of specific plans could result in unplanned and wasteful spending.

Federal agencies have also faced issues managing their software licenses. While most agencies now have comprehensive software license policies or inventories, a lack of comprehensive oversight of software license spending may lead to agencies missing out on potential savings, such as through consolidating enterprise license agreements. Two initiatives can help agencies better manage their existing IT systems:

  • Portfolio reviews. Pursuant to OMB’s PortfolioStat initiative, federal agencies conduct an annual, agency-wide IT portfolio review to help reduce spending on common IT purchases (like e-mail systems or computers). This could save billions of dollars—if OMB and agencies can resolve some implementation challenges with this initiative.
  • Consolidating and optimizing data centers. OMB launched a consolidation initiative in 2010 to help reduce the growing number of data centers, and to optimize the performance of the remaining centers. While federal agencies have reported closing almost 6,000 of the more than 12,000 federal data centers (and saving $4.7 billion in the process), the efficiency of the remaining data centers still needs to be improved.
Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.


Federal Legacy IT SystemsWednesday, May 25, 2016
Federal IT AcquisitionsWednesday, January 3, 2018
IRS IT RisksThursday, June 28, 2018
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    • Carol C. Harris
    • Director, Information Technology and Cybersecurity
    • (202) 512-4456