Congress to OMB: More oversight needed

Evans argues the task should not be a paperwork exercise

Office of Management and Budget officials should provide better oversight of troubled information technology projects, valued at $15 billion, congressional regulators say. But OMB officials argue that legislative branch proposals for better oversight would amount to another paper exercise for agencies to complete.

A Government Accountability Office report released last week states that OMB officials should make their management watch list of projects a formal tool for oversight and develop a process for ensuring that agency officials correct those projects. Karen Evans, OMB's administrator of e-government and IT, rejects the congressional watchdog's recommendations.

Each year, a dozen OMB analysts grade agency business case submissions, known as Exhibit 300s. Analysts classify programs as "watch list" projects if the projects' business cases receive low scores, although they don't aggregate them into a single watch list.

"In our opinion, the current follow-up that does occur may leave unattended weak projects consuming significant budget dollars," said David Powner, GAO's director of IT management issues.

House Government Reform Committee Chairman Rep. Tom Davis (R-Va.) held a hearing on GAO's recommendations April 21. Davis said he favors having a single management watch list.

"Just having a list tracking these areas where you can go back gives a level of transparency and would make it easier to manage," he said.

Evans opposes the idea, saying that using the watch list as a formal oversight tool could have the unintended consequence of people "checking off the boxes and not really solving the problem."

Of the 1,087 major IT projects proposed for fiscal 2006, 342 projects, collectively worth $15 billion, scored low enough to be classified as watch list projects. Corrective actions taken this year have reduced that number to 248, Evans said. Officials with watch list business cases have until June 30 to submit corrective action plans.

OMB officials are completing new guidelines to clarify OMB's high-risk classification, Evans said.

Rep. Dutch Ruppersberger (D-Md.) asked Evans why OMB was unable to prevent the failure of several high-profile projects, such as the FBI's Virtual Case File. "Looking at your operation, what do you think you could have done better ...or do you think you were perfect?" he asked.

Evans said earlier that OMB oversight focused on agency planning documents, such as the Exhibit 300s, and did not track implementations. "A lot of our activities are focused on planning," she said. "The failure of Virtual Case File was in the execution."

The Exhibit 300s present static snapshots of agency plans, Evans said. Business cases are primarily planning documents and do not measure the actual execution of agency projects, she said.

But Davis said, "We can blame the agencies, but at the end of the day, it starts and stops with OMB."

Earned value management entails using a 32-point checklist to measure project performance against project milestones. OMB officials use it to ensure that troubled projects are monitored, Evans said.

Exhibit 300s require project managers to provide details of their program and risk management methods, Evans said. But earned value management provides data. "You take all the planning numbers that you said in your business case, and then you have to track your output, your execution," Evans said, talking to reporters outside the hearing room.

"Is the outcome for us to get the result that was described in the business case or is the outcome to get good business cases?" she asked.

Ensuring value

Earned value management is not the only tool that Office of Management and Budget officials use to monitor expensive information technology projects. But it is the tool that is getting attention lately. OMB requires managers to use it to measure progress toward meeting project cost and schedule milestones.

Some IT observers caution, however, that OMB officials should not rely too much on earned value management. The approach focuses too narrowly on cost to be useful as a metric for determining success, said Russ Caple, director of management consulting at Fujitsu Consulting.

"You cannot tell that a project has been successful by the fact that you get a great EVM report," he said. "The real measure at the end of the day is 'Did I produce the citizen-centered outcome that Congress was looking for?'"

Some projects end up on OMB's management watch list because agencies lack a robust earned value management system, said David Powner, the Government Accountability Office's director of IT management issues. An aggregated list of low-scoring business case projects and a structured process for monitoring corrective actions would be a better oversight tool, he said.

OMB officials are worried that agencies would respond to such a list by expending more of their limited resources on making picture-perfect business cases rather than addressing underlying management problems. GAO officials are already evaluating business case submissions from six agencies for accuracy, Powner said.

Agency officials could hide management problems through language crafted to satisfy OMB analysts, Powner said. But agencies already expend considerable resources on business cases, and weaknesses still appear, he added.

The main reason for creating an aggregated list would be to track how agencies are fixing their problems, he said.

— David Perera

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