The reported spending for IT is set for FY11 by OMB as $79 billion. However that number does not include 58 independent executive branch agencies. For instance exclusions include the Central Intelligence Agency, spending by the legislative and judicial branches of the Federal Government. In the case of DoD and DHS, which account for more than half of the $79 billion spending, the payroll costs of the uniformed and civilian payroll are also excluded. At close to $100 billion of IT spending, the Federal Government consumes close to 0.6% of global IT spending. As compared with the largest commercial enterprises, this exceeds their IT spending by a multiple of at least 30.(1)
The OMB budget also excludes IT costs that are components of operational systems such spacecraft’s ground systems (such as satellite command-and-control systems and satellite data-processing systems). There are also inconsistencies in how agencies report on IT spending included in R&D programs. Sometimes these costs are included, sometimes they are not.
The reported Federal Government IT costs are broken up into 7,248 investments, which account for a third of total IT budgets. As compared with commercial practice this is a high ratio because enterprises are able to operate with close to 80% of the budget because of effective spending for new projects. For instance, there are 1,536 separate development programs for improving the management of information technologies and particularly the management of the IT infrastructure. There are 781 investment programs for supply chain management and there are 661 investment programs for human resource management. Commercial practices would not tolerate such proliferation.
The Office of Management and Budget in the Office of the President OMB plays a key role in overseeing how federal agencies manage their IT investments. The source for this oversight is data about an agency’s investment portfolio (Exhibits 53) and capital assets planning (Exhibits 300). Additional web based “dashboards” summarize information about diverse projects, though the data and analysis are not reliable.
OMB does not provide oversight over IT spending expended in ongoing operations.
OMB and federal agencies have undertaken several initiatives to address potentially duplicative IT investments. Most of these efforts have not yet demonstrated results. Agencies also do not assess legacy systems to determine if they are duplicative.
The slow progress in managing Federal IT for greater efficiency can be traced to a lack of a coherent Federal Enterprise Architecture (FEA). When originally developed in 1999, the FEA was intended to provide federal agencies with a common construct for their architectures and thereby facilitate the coordination of common business processes and consistent system investments. As part of the fiscal year 2004 budget cycle, OMB required agencies to align proposed IT investments to the FEA reference models; this information was then used to develop the initial process improvement initiatives. Since that time, agencies have established individual enterprise architectures and used them to characterize their IT investments and to guide plans for the future. OMB’s Chief Architect reported that comprehensive changes to the FEA are planned for fiscal year 2012. But meanwhile the actual progress in rationalizing IT spending does not show progress.
Though the closure of a number of data center is proceeding, federal agencies’ data center inventories and consolidation plans are incomplete and do not as yet reflect verifiable net cost reductions.
OMB has also announced its trusted Internet connection initiative to improve security by reducing and consolidating external network connections. However, none of the 23 participating agencies had yet met all of this initiative’s requirements.
A major new initiative from OMB is the FedRAMP project, which is to provide, among other functions, continuous security monitoring of cloud computing systems for multiagency use. This project is currently behind schedule, and has not yet defined all performance metrics.
The FedSpace project, which is to provide federal employees and contractors collaboration tools for cross-agency knowledge sharing, is also behind schedule and has not defined its performance metrics.
The nation’s actual annual spending for IT is much higher than the $78.8 billion identified by OMB. Agencies do not routinely evaluate legacy systems to determine if they are duplicative and can be eliminated or consolidated.
(1) Reported in GAO-11-826