Some IT projects may have $2 billion in overruns, GAO says

Overspending likely to increase

The Homeland Security and Commerce departments along with NASA have the largest cost overruns among current major federal information technology projects, according to a new report from the Government Accountability Office. Overall, GAO found $2 billion in cost overruns in 16 federal IT acquisition programs with overruns or schedule slippages, or both.

DHS’ Automated Commercial Environment is about $741 million over its original budget, while NASA’s Mars Science Lab is about $652 million over budget and Commerce’s Decennial Response Integration System has overspent by $372 million, GAO said in a report Nov. 6.

The report said agencies would develop better management of cost and schedule estimates by using earned value management (EVM) techniques. Without those techniques, the agencies are vulnerable to unpredictable cost and schedule slippage.

“Few of our 16 case study programs had fully implemented EVM capabilities, raising concerns that programs cannot efficiently produce reliable estimates of cost at completion,” the GAO concluded.

GAO predicted that the total overspending is likely to continue to increase, with another $1 billion in overspending projected on completion of 11 of the 16 programs.

Two programs account for most of those last-minute overruns, the GAO report said. NASA’s James Webb Space Telescope is expected to have a cost overrun at completion of $449 million, and the Veterans Affairs Department’s Veterans Health Information Systems and Technology Architecture will likely have an overrun at completion of $351 million.

For those last-minute overruns, the trend might still be reversed, the GAO suggests.

“With timely and effective action taken by program and executive management, it is possible to reverse negative performance trends so that the projected cost overruns at completion may be reduced,” the report states.

Although some agencies have established EVM policies and requirements, none of the agencies reviewed by GAO had comprehensive EVM policies.

“Until agencies expand and enforce their EVM policies, it will be difficult for them to optimize the effectiveness of this management tool, and they will face an increased risk that managers are not getting the information they need to effectively manage the programs,” the GAO report states.

GAO said it distributed a draft of the report to the agencies it reviewed, and all agreed with the findings and recommendations except for DHS, which had no comment.

GAO, in a previous report, praised the Federal Aviation Administration for implementing EVM techniques. Meanwhile, the Coast Guard recently advertised for a contractor to handle EVM for several of its IT acquisition programs.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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Reader comments

Tue, Nov 10, 2009

EVM only works if you have requirements defined. Without defined requirements, EVM is just another SWAG.

Tue, Nov 10, 2009

Everyone wants to know what is wrong with the acquisition process? Continuing to "reward" contractors who have this much of a cost overrun is rewarding failure - what is the incentive to complete the project if the government continues to pay and pay and pay....

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