Agencies begin to identify failing IT projects for high-risk list

Federal agencies immediately will begin flagging about 30 high-risk information technology projects that could be scrapped in the fiscal 2012 budget if they are not improved by winter, the Office of Management and Budget announced on Wednesday.

The move is part of a multistep initiative launched in June to identify and fix the root causes of IT project failures. The effort also includes an ongoing freeze of all financial system modernizations to determine which ones should be canceled, as well as forthcoming recommendations for reforming the IT acquisition process.

A memo OMB released on Wednesday says federal Chief Information Officer Vivek Kundra, in consultation with each agency's CIO, will label high-risk IT projects that are over budget, underperforming, frequently rescheduled or lacking strong leadership. They are expected to cost more than $30 billion throughout their life cycles. Among the faltering programs that prompted this effort are a financial system the Veterans Affairs Department canceled in June for the second time and a human resources system the Defense Department abandoned after spending 12 years and $1 billion trying to integrate it departmentwide.

Kundra will meet with CIOs between Aug. 2 and Aug. 18 to pinpoint the highest risk projects, and OMB will announce the selections by Aug 23.

In a call with reporters, Kundra said ideally the government would like to save these programs rather than defund them. "The focus here is not just to discontinue projects but to ensure the dollars that we're spending on information technology are also producing what's intended," he said. "The CIOs at agencies and OMB will be focused on making sure that best practices are applied on execution," which could include segmenting projects into smaller objectives.

Agencies must submit an improvement plan for each targeted project, within 30 days of the announcement, or late September. "If the agency CIO does not have high confidence in the probability of success of the investment, the agency CIO should recommend that the project be materially altered or terminated," the OMB memo said.

The plans must include stronger contractor performance metrics for existing contracts and revised acquisition strategies for awards in the next fiscal year. Agencies are to describe how project management will be more rigorous because of the improvement plan and provide a summary of risks, mitigation strategies and accountability.

Between September and November, the Obama administration will assess each turnaround plan through a formal meeting process, called TechStat, which brings together OMB officials and key agency managers to evaluate the sustainability of IT projects. The TechStat sessions will drive decisions about which projects should be nixed or slashed in the fiscal 2012 budget.

Kundra said this list will be different from other program watchlists that OMB and the Government Accountability Office regularly distribute, noting the administration will be "making the tough decisions" about the systems, which could mean either "stopping them or halting them."