OMB takes aim at poorly performing IT projects

By Jason Miller
Executive Editor
Federal News Radio

The Obama administration is trying its hand at boosting the success rate of federal technology projects.

After years where systemic problems such as scope creep, inadequate project management and not enough senior level attention have littered the landscape with failures from every agency – the FBI’s Virtual Case File to the Defense Department’s DIHMRS to the Veterans Affairs Department’s FLITE are some of the most well known – the Office of Management and Budget in October will give agencies possible roadmaps to success.

“The future of these projects is going to be dependent frankly on the structural reforms we will highlight at the end of October as part of the 120 day process,” says Vivek Kundra, federal chief information officer during a press conference with reporters Wednesday.

The reason is the challenge here is we have a system in place that frankly is creating an environment where these projects aren’t able to success. That is why we want to be able to go through the process of looking at number of areas from requirements to project management to what we are doing as far as governance is concerned, acquisition, standards and architecture and personnel. There are a number of variables that lead to these failures.

Kundra says the October release of best practices is the third in the series of steps OMB is taking to improve federal IT project management. The White House detailed those requirements in a June 28 memo on reforming federal IT.

Like past administrations, OMB is trying to stop the flow of money on projects that fail to produce expected results.

Over the past year, Kundra and his OMB colleagues have been laying the ground work. The most recent piece is a memo issued Wednesday to agency heads asking them to develop a list of their IT projects that are most at-risk because of cost, schedule, performance and/or leadership deficiencies by Aug. 23. OMB detailed a schedule starting Aug. 2 with the departments of Energy and Interior and going through every major agency over the following two weeks.

OMB then will develop a list of between 25 and 30 projects that are in the worst shape and put them through TechStat sessions. Kundra started TechStat sessions in January where he and OMB controller Danny Werfel lead reviews of troubled agency projects by bringing together the CIO, CFO, program manager, contracting officer and other key personnel to come up with a plan of action and milestones to fix it.

Kundra now plans to expand this idea to the top 25-to-30 worst performing projects.

“Agencies will need to demonstrate that these projects will be able to deliver for the American people, making sure we are setting the appropriate scope, defining clear deliverables and putting in place strong governance structures with explicit, explicit executive sponsorship,” he says. “Projects that do not meet this criteria will not be continued.”

TechStat sessions are expected to start in September and Kundra says these meetings will help inform the 2012 budget request and 2011 apportionment process.

This latest memo comes about six weeks after OMB issued a similar mandate for reviews of all financial systems projects.

Kundra says agencies should submit improvement plans for these most at-risk projects by Sept. 23, and should work internally on other problematic programs that don’t make the top 25-to-30 list.

“Agency proposed improvement plans should be based on thorough analysis of the projects’ issues and risks,” the memo states. “Plans should be comprehensive, risk-adjusted, and reviewed through appropriate agency governance bodies. The plan may incorporate short and long term solutions that may extend through Budget Year 2012. 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.”

OMB received positive feedback from several observers for this latest step.

“For too long, those in key leadership positions have kept their heads in the sand and allowed these problems to get out of hand,” says Sen. Tom Carper (D-Del.), co-author of the IT Oversight Enhancement and Waste Prevention Act of 2009 (S. 920) in a release. “This memorandum is an important step towards holding senior agency leaders accountable for their decisions and stopping the wasteful spending before it begins. I commend the administration and especially Mr. Kundra for tackling this problem head on and forcing agencies to make the tough decisions required to trim the federal budget and spend taxpayer dollars wisely.”

Sen. Susan Collins (R-Maine) is the other co-sponsor of the bill. She says too much money has been wasted over the years.

“I applaud the administration’s efforts to hold agencies’ feet to the fire on the performance of high-risk IT investments,” Collins says. “These effective measures to prevent cost and schedule overruns and performance shortfalls are the type of oversight mechanisms Sen. Carper and I have been encouraging for major IT investments for years. We will continue to push agencies and the administration to thoroughly and properly plan IT projects and be aggressive in overseeing their implementation and operations.”

Dan Mintz, a former Transportation Department CIO and now chief operating officer of PowerTek Corp., says much of what OMB is doing is building on the last administration’s efforts.

Under the Bush administration, OMB put hundreds of projects on two separate lists: Management Watch List and High Risk list.

As of October 2008, OMB reported that there still were 216 investments worth more than $20 billion on the management watch list. The Defense Department has the most projects on the list with 63, while the Veterans Affairs Department has 40 and the Agriculture Department has 37.

The High Risk List had 549 projects worth more than $26 billion. DoD had the most with 75 projects, followed by the Treasury Department 69 and VA 52.

Mintz says the memo continues to move IT project management in a positive direction.

“On one hand the emphasis is on a small number of projects at the OMB level that they want to pay attention to,” he says. “On the other hand, there is a big emphasis on the transparency of the status and process, such as the use of dashboards, and it’s those kinds of tools that allow you to make the process more robust. No matter how much attention you pay to small number of high risk list projects, you cannot cover the vast amount of IT spend. But these reviews of the high risk list could give CIOs greater leverage so they have greater control over the spend.”

Mintz says when he was at DoT the Federal Aviation Administration had a project on the high-risk list. DoT conducted monthly internal meetings and had quarterly meetings with OMB. Mintz says the project received the senior level attention it deserved and needed, and eventually was put back on the right track.

“These reviews mean you have to pay attention to the process and the involvement of important stakeholders who make decisions,” Mintz says. “If you are a CIO one of things if you want to cause change you use these kinds of meetings and the involvement of senior executives as a lever. It gives CIOs a lever to make sure the CFO and political leadership are involved in the decision process, and OMB makes that involvement more possible.”

He adds that if an agency has one project on the high-risk list, CIOs could use that to leverage the hundreds of others that also need help.

Kundra says the goal is not to cancel projects or halt them, but fix programs so they meet agency mission needs.

“What’s different about these 25-to-30 projects is the CIOs at agencies and OMB will be deeply engaged in making sure that we are very execution focused to make sure that some of the best practice are applied whether it’s breaking these projects into smaller chunks so you don’t have deliverables that are five to 10 years out, whether it’s making sure that we are rationalizing requirements across the board or whether it’s making sure we are holding project managers across in the government and contractors accountable for results,” Kundra says.

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