Agencies fail to scrutinize billions in legacy IT spending

Monday - 11/19/2012, 8:21pm EST

David Powner, director of information technology management issues, GAO

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Despite spending billions to maintain legacy IT systems, many agencies are failing to properly review whether there is a sound basis for continuing them, according to a new report from the Government Accountability Office.

The majority of IT spending at federal agencies does not go toward developing or deploying new capabilities but instead toward maintaining legacy IT systems, GAO reported. Spending on maintenance and operations, also known as steady-state investments, accounted for nearly 70 percent of the $79 billion agencies spent on IT in fiscal 2011, according to GAO.

The Office of Management and Budget requires agencies to analyze the effectiveness of steady-state investments annually (considering factors such as cost, schedule and customer satisfaction).

"What it basically does is it ensures the investment or the system continues to add value to the agency's mission," said David Powner, director of information technology management issues at GAO, in an interview on the Federal Drive with Tom Temin and Emily Kopp. "And then, secondly, [asks] is there a more efficient way to perform these capabilities?"

But it's largely left up to each agency to create its own policy for carrying out the reviews.

$3 billion in steady-state IT investments not analyzed

GAO examined the departments of Homeland Security, Defense, Treasury, Health and Human Services and Veterans Affairs. The watchdog agency found that while some agencies conducted assessments, they often left out key IT investments worth billions of dollars. Other agencies simply failed to perform reviews on any legacy systems at all.

DHS and HHS developed policies for conducting reviews based on OMB's guidelines, GAO found. But the agencies omitted many of their steady-state IT investments. DHS, for example, analyzed only 16 of its 44 legacy investments, leaving out 28 projects to the tune of $1 billion, according to GAO.

DoD, VA and Treasury did not develop policies for reviewing existing IT investments, totaling 23 such projects and about $2.1 billion, GAO said.

Across the five agencies, GAO looked at 75 systems and found that 52 of them — totaling about $3 billion — did not undergo review.

'You can't manage what you can't measure...'

Not all legacy IT systems are antiquated or unnecessary. But without the comprehensive reviews, it's hard to quantify how effective existing IT investments have been, Powner said.

Sen. Tom Carper (D-Del.), the chairman of the Senate Subcommittee on Federal Financial Management, called on agencies to "step up" and follow OMB's guidance on conducting reviews.

"The fact that a number of agencies are failing to properly assess these investments during this key phase is troubling," he said in a statement. "You can't manage what you can't measure, and information technology investments are no exception. Clearly, we need to do a better job."

Further, the overwhelming amount of money spent to maintain existing systems compared to that spent on new developments and acquisition is concerning, Powner said.

"Thats not an appropriate mix," he said. "You want to be spending much more money on acquisition and development where we're actually modernizing the federal government, not spending it on old legacy systems."

The review process could help agencies free up savings in operations and maintenance spending, Powner said, which could be repurposed into new investments and acquisitions.

GAO recommended that OMB add some teeth to its guidance to ensure the reviews take place. Powner suggested that OMB require agencies to post the results of the annual assessments on the IT Dashboard, which he called "one of the most important transparency mechanisms today."

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