recommended reading

Obama administration cracks down on late, over budget IT projects

OMB's Jeffrey Zients said that government IT projects "often fail to deliver promised results."Jennifer Trezza/Nextgov

The White House will review all technology projects that are behind schedule or over budget and halt those deemed too risky, starting with all plans to modernize financial systems, according to two memos the Office of Management and Budget released on Monday.

Within 30 days, federal Chief Information Officer Vivek Kundra will issue guidance on the review process for the highest risk IT projects, according to one of the memos. Agencies must submit improvement plans for projects that are behind schedule or have gone over budget, and "where serious problems are identified and cannot be corrected, further actions should be taken, including potential adjustments to fiscal 2012 agency budgets," according to the document.

"Too often, we don't get returns on our IT investments," said OMB Deputy Director for Management Jeffrey Zients during a conference call with reporters. "Yes, there are pockets of strong performance, but in too many situations, our IT projects run over budget, behind schedule and often fail to deliver promised results."

Kundra, who also was on the call, pointed to the Defense Department's failed effort to deploy an integrated human resources system as "an example of how broken federal IT is." The initiative spanned 12 years and cost the department $1 billion.

In another example, he said a program at the Small Business Administration to issue smart cards to employees for identity management cost $1,614 per card issued. OMB halted the contract. Now SBA will be purchasing the same smart cards for $240 each through a General Services Administration procurement vehicle.

To ensure future IT projects don't face the same cost overruns and delays, OMB pledged to develop recommendations within 120 days for improving IT procurement and management practices. That includes strengthening existing policies and procedures, eliminating outdated and cumbersome rules, and focusing on best practices from the public and private sectors, according to the directive. Among the recommendations will be higher standards for project management practices and personnel, additional mechanisms for holding managers accountable for results, and more rigorous review processes.

"The overall effort is to make sure $80 billion spent on IT each year is spent in a way that has much higher returns in efficiency of operations and service quality," Zients said. "This is not about cost reduction, but better return on taxpayer dollars."

A separate, related memo halted all new task orders or procurements for financial system projects with $20 million or more in planned development or modernization spending. It ordered agencies to provide within 60 days revised project plans that outline how they can reduce costs and risks and shorten the project timeline.

"Right now we have many financial systems in place that are operating in a steady state, doing basic accounting, and that won't change," said OMB Comptroller Danny Werfel. "What we're saying is that new, future investments in financial systems will be halted until agencies can show a better path forward."

According to a blog post by OMB Director Peter R. Orszag, an estimated 30 financial systems projects costing the federal government about $3 billion annually are affected by the new policy. Among them are two projects at the Veterans Affairs Department, which has invested more than $300 million over the past decade in the failed systems.

"While a productivity boom has transformed private sector performance over the past two decades, the federal government has almost entirely missed this transformation and now lags far behind on efficiency and service quality," Orszag said in his blog post. "We are wasting billions of dollars a year, and more importantly are missing out on the huge productively improvements other sectors have benefited from."

Threatwatch Alert

Thousands of cyber attacks occur each day

See the latest threats


Close [ x ] More from Nextgov

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Modernizing IT for Mission Success

    Surveying Federal and Defense Leaders on Priorities and Challenges at the Tactical Edge

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • Effective Ransomware Response

    This whitepaper provides an overview and understanding of ransomware and how to successfully combat it.

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.


When you download a report, your information may be shared with the underwriters of that document.