From the U.S. Government Accountability Office, www.gao.gov Transcript for: Federal IT Acquisitions Description: Too often the federal government has spent money on IT projects that failed. We take a look at how IT acquisition reform efforts have fared. Related GAO Work: GAO-18-42: Information Technology: Agencies Need to Involve Chief Information Officers in Reviewing Billions of Dollars in Acquisitions Released: January 2018 [ Background Music ] [ Dave Powner: ] You need to know what we're contracting for so that we don't enter into services that are unneeded. [ Sarah Kaczmarek: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. I'm Sarah Kaczmarek. Federal IT projects can be critical to the economy and national security, but acquiring new IT can be incredibly expensive. In 2016, the federal government spent over $90 billion on IT. But too often federal IT projects fail. Recently, I sat down with Dave Powner, a director on our Information Technology team, to talk about GAO's new report on federal IT acquisition. First, I asked Dave if his report was saying that the federal government is paying for bad IT and, if so, why? [ Dave Powner: ] Well, it's well acknowledged that we have many challenges in the IT area. In 2015, we added IT acquisitions and operations to GAO's high risk list, and the reason is we had a lot of failed IT acquisitions over the years, and we've also had inefficient operations. And, what does that mean? We have duplicative investments that are out there, we have unused capacity at data centers, and we have some very old and archaic legacy systems that are very difficult to maintain and very difficult to secure. [ Sarah Kaczmarek: ] So, given the background of these problems, you went out and looked at different agencies and what are they doing when it comes to acquiring new IT systems. First of all, did you find they even had a handle on how many new IT acquisitions they were making? [ Dave Powner: ] Actually, they didn't have a complete grasp on what they had. And one of the important things, in addition to our high-risk area, is Congress put in a new law called, Federal IT Acquisition Reform Act, commonly referred to as FITARA, and one of the key areas in FITARA, they call for the approving of IT contracts by chief information officers at departments and agencies. The interesting thing is we looked over a period of time at a number of agencies, and they told us they had about $15 billion in these IT contracts, and we actually found about another 5 billion. So, no, they didn't have a good grasp on what we were contracting for. [ Sarah Kaczmarek: ] And why is it important that they should have a good grasp of what they're trying to buy? [ Dave Powner: ] Well, a couple of things, one is you want to avoid any duplication going forward, if you have some services that—that we don't need to pay for. The other thing is we have a lot of unused capacity in our data centers, so we don't need to be contracting for additional capacity and storage capabilities. And then third, you really want to make sure that we have a good handle on all of our major IT acquisitions so that we put the right management team in place, having the right governance processes, the right program offices, and those things. You know, a good example is the healthcare.gov website that failed. I mean, we did not have IT executives in charge of that acquisition, and that was one of the major reasons why it was a failure. [ Sarah Kaczmarek: ] Okay, so then thinking about the reforms that you mentioned in 2015, have they done any good? [ Dave Powner: ] They actually have. If you look at the data center, as a good example, we had about 12,000 data centers at one time in the federal government. We've actually closed and consolidated about half of those, almost 6,000 data centers, and that has resulted in about 2 to 3 billion dollars in savings for the federal government. [ Sarah Kaczmarek: ] And so you've mentioned CIOs, or chief information officers, what is their role supposed to be here? [ Dave Powner: ] Well, ultimately, what you want is you want CIOs to be in charge of cybersecurity issues and IT issues for departments and agencies. The challenge that we have, and the reason why FITARA is so important, is many of them don't have the authorities to do their job. However, if you have a big data breach or if you have a failed acquisition, who gets called in front of Congress and they're accountable? It's the CIOs. So what FITARA is really about is strengthening their authorities, and you strengthen your authorities by approving budgets, by approving contracts, and they do this not working in a silo, but working with chief financial officers and chief acquisition officers, is partnering with that executive suite. [ Background Music ] [ Sarah Kaczmarek: ] Given the problems with IT acquisitions, agencies could award IT contracts that are duplicative of each other, wasteful, or even just poorly-conceived. I asked Dave to walk me through some of the 40 recommendations in his team's report. [ Dave Powner: ] So if you look at those 40 recommendations, they really fall into two buckets. One, they are recommendations to agencies to identify all their contracts that we can effectively manage those going forward. Then, when you looked at the review and approval process, the new law has a requirement that CIOs approve these contracts going forward and OMB has accompanying guidance. We only found about 6 agencies that had processes that were consistent with OMB's guidance, and we added additional recommendations for the other agencies to bolster their processes so that they could improve these contracts going forward. [ Sarah Kaczmarek: ] And, taking a step back, there's so much here that needs to be addressed. What would say is the bottom line of your report? [ Dave Powner: ] Well, the bottom line is you need to know what we're contracting for so that we don't enter into services that are unneeded and that we don't need to be paying for. But for those services that we do need, we need to make sure they're appropriately managed and we're getting the right return on the taxpayer's dollar. [ Background Music ] [ Sarah Kaczmarek: ] Thanks for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts. [ Background Music ] [ Sarah Kaczmarek: ] For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at GAO.gov.