Spending

Waste in IT spending takes many forms

GAO Dave Powner

GAO's David Powner, shown testifying at the Jan. 22 hearing, says the IT Dashboard's figures on wasteful spending are understated. (House Oversight Committee photo)

Wasteful projects that run over budget or never become operational have long been the ugly reality of federal IT. Now an oversight committee has had enough and is demanding the Office of Management and Budget step up and hold agencies responsible for these lavish failures.

In his opening statement at a Jan. 22 hearing before the Committee on Oversight & Government Reform, Chairman Darrell Issa (R-Calif.) noted how botched programs and project overruns make up 75 percent of all larger federal IT programs. A considerable portion of agencies’ IT budgets also goes to sustaining archaic IT systems, wasting as much as $20 billion every year, he said.

"But let’s understand: In this case, it’s not the waste of the $20 billion – it’s what that $20 billion could do [if] properly applied to our transparency into our government,” the chairman stressed. “The leveraging of $20 billion to save $200 billion is why it’s essential what we fix this part of government that seems to be so broken.”

As examples of projects gone awry, Issa cited the Air Force’s billion-dollar logistics system that failed and was recently terminated. The Agriculture Department spent $94 million in four years to develop supply-chain management systems for food distribution – without any successes ever materializing, he said.

“We will not allow the federal government to continue doing things over and over again when in fact, more money has not made it work better,” Issa said.

And money has undoubtedly been spent: In the past decade, federal IT cost taxpayers $600 billion, often to pay for pricey systems and projects that were already redundant. Rep. John Mica (R-Fla.), chairman of the Subcommittee on Government Operations, cited a Government Accountability Office report which showed that the federal government in 2011 funded 622 human resources systems, 580 financial management systems and 777 supply-chain management systems.

These duplicatative resources add up to  “some pretty significant costs,” Mica said. But money has also been poured into systems that never see daylight, he said. For example, the National Archives and Records Administration funnelled $375 million into developing an electronic records archives system, a project that never became fully functional. Similarly, the Office of Personnel Management shuttered its retirement modernization program after spending $250 million.

Despite these unsuccessful investments, OMB in the past years abandoned the practice of detailing along with the president’s annual budget submission troublesome  federal IT investments, Mica said.  He urged the agency to identify the responsible parties and hold them accountable.

“OMB has to be willing to step up and take responsibility and say, ‘the buck stops here,’” he said.

Currently, the IT Dashboard – a White House tool that tracks the progress of federal IT projects – shows 250 at-risk investments totaling $12.5 billion. However, that figure is an understatement, said David Powner, director of IT management issues at GAO.

Areas that need extra attention include better transparency and action on troubled projects, starting with accurate information on the IT Dashboard, he said.

“We can’t have situations where agencies like [the Defense Department] report no high-risk systems when in fact, they have many,” Powner said. “On the other hand, some agencies like [the Homeland Security Department] report actively and moving more their project toward a green status. However, overall agencies are nowhere near accomplishing their IT reform goal of turning around one-third of underperforming projects.” 

The 2014 Federal 100

Get to know the 100 women and men honored this year for going above and beyond in federal IT.

Reader comments

Sat, Jan 26, 2013

If this oversight was to become active shares of Oracle, HP, IBM and other fed contractors would collapse. That is where much of that spending is getting recycled.

Fri, Jan 25, 2013 USDA, AMS

The statement that the US Department of Agriculture’s Web-Based Supply Chain Management System (WBSCM) is not successful is inaccurate. WBSCM has been fully operational since April 2011 and has supported many important domestic and international programs. The system, used by four USDA agencies (FNS, FAS, AMS, and FAS) as well as USAID, streamlined commodity purchases made by these agencies and reduced any potential redundancies. In FY 2012, WBSCM facilitated the order, procurement, and delivery of nearly 10 billion pounds of domestic farm food commodities valued at nearly $3 billion. These foods were distributed to USDA and USAID feeding programs, including the National School Lunch Program, The Emergency Food Assistance Program, Title II of the Food for Peace Act, and the Food for Progress Program. In addition to supporting these programs, the system enabled the expedient purchase of $170 million in lamb, catfish, pork, and chicken as part of USDA’s drought assistance, supporting our nation’s producers in FY 2012. WBSCM continues to meet all of its performance measures and looks to continue this trend in the future.

Fri, Jan 25, 2013

I agree also. Waste in product development is only one area where funds are not used efficiently. Each branch of service has a supply management system, an equipment maintenance system, various document management sustems and property accountability systems. Each branch of service has their own IT organizations to manage these types of applications. Each service is trying to get its arms around records management, audit readiness, etc. I understand each service has their own processes and hence require their own IT systems. The question, why not look at standardizing these processes so that the IT systems can become standardized. Again there are numerous reasons for the diversity of processes. Let punch through this reasons find ways to standardize.

Thu, Jan 24, 2013 Mark

This is not limited to governmantal IT, commercial programs have the same isues. A more meaningful comparison would be to plot governmental IT project failures and cost overruns versus comperable commercial projects. I suspect that these failures, no matter how spectacular, are in line with commercial IT project failures and cost overruns.

Thu, Jan 24, 2013

I agree there is to much duplication and waste if IT resources that need to be cleaned up. As an IT member I see duplication of records cause they are not willing to share across the agencies, yet they are working for the same issues or persons in charge. When are we going to stop hiding informaiton from other agencies especially in Judicial and Law enforcement. How can we do a better job if we are always hiding the real truth about our Justice system. Let us get it right.

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above