EXECUTIVE OFFICE OF THE PRESIDENTOFFICE OF MANAGEMENT AND BUDGETWASHINGTON, D.C. 20503

 

Remarks by Vivek KundraUS Chief Information OficerFederal CIO Council, September 20, 2010

Today, I would like to discuss the acons we have taken to reduce wasteful spending and our ongoing eorts to reform Federal IT.We are in the midst of the Informaon Revoluon. In the same way the Agricultural and Industrial Revoluons fundamentally and permanently transformed society, so too is the Informaon Revoluon reshaping the world today.Exponenal advances in processor performance, as predicted by Moore’s Law, have brought unprecedented compung power to the average person. The sharp decline of storage costs – from $10 per gigabyte in 2000 to $0.06 per gigabyte in 2010

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 – has removed tradional barriers to accessing and sharing informaon across the globe. Twenty-rst century technologies are aening communicaons and markets, contribung to a period of unprecedented innovaon and making us more producve, connected cizens. In our daily lives we can track the status of a shipment, make dinner reservaons, and share pictures of our children with family and friends around the world – all online, anyme and anywhere. Yet too oen we hear stories about how the Federal government, for one reason or another, lacks technological capabilies that are commonplace in the private sector and our everyday lives. This IT gap signicantly impacts our ability to improve the eciency of government and deliver beer services to the American people.

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As reported in “Exactly How Much Are the Times A-Changin’?” Newsweek Magazine, July 29, 2010, http://www.newsweek.com/feature/2010/by-the-numbers-how-the-digital-revolution-changed-our-world.html 

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 A B

RIEF

 H

ISTORY 

For too long we have witnessed runaway projects that waste billions of dollars and are years behind schedule. By the me these projects launch – if they launch at all – they are obsolete.In 1968, the Air Force Logiscs Command esmated that it would take 10 years and $821 million to develop, implement and operate a new computer-based informaon and data processing system. In 1975, aer $250 million had been spent, Congress ordered the terminaon of the project due to lack of progress.

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 In the early 1970s, the Federal Power Commission began developing a computerized system to provide access to current energy data to improve Federal and State energy regulaon. In 1979, aer nearly a decade of work, the Department of Energy terminated the project. GAO esmated this failed project cost taxpayers $26.5 million.

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 In 1974, the Farmers Home Administraon began developing a new computer-based informaon management system. By 1980, the project was ve years behind schedule, and GAO esmated that the project would exceed its original budget by $25 million.

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The scope and scale of problems only grew worse in the 1980s and 1990s.In 1988, the Naonal Instutes of Health spent $800 million on mainframe computers that its researchers refused to use. NIH’s failure to consult its users prior to the purchase contributed to millions of dollars of waste. Ulmately, some of the mainframes were sold while the rest were relegated to performing administrave tasks, at a fracon of their capacity.

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In 1996, the U.S. Agency for Internaonal Development deployed its customized New

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 U.S. Government Accountability Ofice, “The Air Force Continued to Develop the Advanced Logistics System, a Program it wasDirected to Cancel”, April 1978, http://archive.gao.gov/f0902d/105805.pdf .

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U.S. Government Accountability Ofice, “Millions Wasted Trying To Develop Major Energy Information System”, May 1981, http://archive.gao.gov/f0102/115237.pdf .

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U.S. Government Accountability Ofice, “Farmers Home Administration’s ADP Development Project—Current Status and Unresolved Problems,” February 1980, http://archive.gao.gov/f0202/111697.pdf .

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nvestigative Report of Senator William S. Cohen, “Computer Chaos: Billions Wasted Buying Federal Computer Systems”, October, 1994.

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 U.S. Government Accountability Ofice, “Poor Management Resulted in Unmet Scientists’ Needs and Wasted Millions”, November 1991, http://archive.gao.gov/d31t10/145582.pdf .

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Management System to serve as its primary system worldwide for performing core accounng and management funcons. However, due to numerous soware defects and design issues, aer just a year the Agency had to suspend overseas operaons of the system and limit the nancial transacon processing to its Washington, D.C. oces. In 1998, the agency decided to replace the New Management System with commercial o-the-shelf soware, despite an investment of over $100 million in the New Management System.

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More recently, the Defense Integrated Military Human Resources System (DIMHRS) was canceled in February 2010 aer 10 years of development and approximately $850 million spent

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 – despite originally being planned for deployment in 2007, at a cost of $427 million.

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 As Secretary of Defense Robert Gates put it "…years of eort, poor performance, and dicules" with DIMHRS have amounted to "an unpronounceable acronym."

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Somemes, the same project has been canceled twice. In July 2010, the Department of Veterans Aairs (VA) canceled its nancial management system modernizaon project, the Financial and Logiscs Integrated Technology Enterprise (FLITE) iniave, which was VA’s second aempt to replace its core nancial management soluon. VA had canceled FLITE’s predecessor (“Core FLS”) in 2004 aer spending approximately $249 million since 1998.

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Numerous laws, regulaons, and policies have been established to improve the way the Federal Government manages its informaon technology investments. Unfortunately, we connue to see major IT projects fail due to a lack of execuon.

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“Government At The Brink, Volume I: Urgent Federal Government Management Problems Facing the Bush Administration”, June 2001, http://hsgac.senate.gov/vol1.pdf 

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Advance Policy Questions for Testimony of Elizabeth A. McGrath to be Deputy Chief Management Oficer of the Department of Defense, March 2010, http://armed-services.senate.gov/statemnt/2010/03%20March/McGrath%2003-23-10.pdf  

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 U.S. Government Accountability Ofice, “GAO-04-149R: Military Personnel: DFAS Has Not Met All Information Technology Requirements for Its New Pay System.” October 2003, http://www.gao.gov/new.items/d04149r.pdf.

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DefenseNews, “Pentagon Dodges Budget Bullet”, February 2010, http://www.defensenews.com/story.php?i=4490383

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Department of Veterans Affairs Ofice of Inspector General, “Issues at VA Medical Center Bay Pines, Florida and Procurement and Deployment of the Core Financial and Logistics System (CoreFLS)”, August 2004, http://www4.va.gov/oig/52/reports/2004/VAOIG-04-01371-177.pdf 

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