Oil and Gas: Interior Urgently Needs Leadership and Oversight to Address IT System Development Failure
Fast Facts
The Department of the Interior's Bureau of Land Management is tasked with protecting health and the environment and ensuring a fair return for allowing oil and gas production on federal lands. In 2013, the Bureau tried to modernize a critical IT system it uses to track oil and gas activities.
However, Interior didn't effectively lead this modernization project—and the agency declared it a failure in 2021. Interior officials who oversee the agency's IT systems said they were unaware the project had failed until we raised it to their attention.
Our recommendations are to improve Interior's IT leadership, among other things.
Example of an Error Message from Oil and Gas System Software
Highlights
What GAO Found
The Bureau of Land Management (BLM) initiated an effort in 2013 to modernize its data system for tracking oil and gas activities on federal and tribal trust lands. After fully deploying this system, known as the Automated Fluid Minerals Support System 2, BLM declared it a failure in 2021.
- While BLM anticipated the modernization would increase productivity, it found that the new system required an additional 564,770 hours of labor to complete tasks in 2021 alone, costing over $19 million in lost productivity.
- The extent of the system's problems was so severe that Interior could not use the new system as the system of record for oil and gas activities, relying instead on paper records. According to BLM, the system remains operational but has continued to have significant reliability and data integrity issues.
- BLM found that the system cost at least $40 million—triple BLM's original estimate—and was fully deployed 4 years later than planned.
Although project baselines are important management tools to control cost, schedule, and performance, BLM did not have an approved baseline for the system until over 2 years into the effort. Contrary to federal requirements, Interior does not have a policy governing baselines and their review. Without such a policy, Interior risks other IT projects proceeding without control of cost and schedule.
Another key factor contributing to the system failing was the lack of effective leadership and oversight. Interior officials who oversee IT projects stated they were not aware of the system's failure until GAO raised it to their attention. After being notified of the failure, Interior has continued to publicly report that the system is a very low-risk investment. However, serious problems have continued since its deployment in 2021. As a result, BLM has started a new initiative intended to replace the system. Effective Interior leadership and oversight are essential to preventing a repeat of the problems that have plagued the system.
Automated Fluid Minerals Support System 2 Events Compared with Interior's Risk Ratings
Why GAO Did This Study
The mission of the Department of the Interior's BLM's oil and gas program is to protect human health and the environment and ensure a fair return from energy production on federal lands. To help manage permitting, inspection, and enforcement for oil and gas activities, an updated IT system became operational in 2021.
In September 2020, GAO identified this effort to modernize as one of the 16 most critical information technology acquisitions across the federal government.
GAO was asked to review Interior and BLM's efforts to modernize. This report examines the extent to which (1) the modernization project had met user needs and cost, schedule, and performance goals; (2) BLM had approved project baselines; and (3) Interior has effectively overseen the project.
GAO reviewed agency documents and interviewed officials who use the system and were involved in developing it. GAO also reviewed leading practices for major IT modernization initiatives.
Recommendations
GAO is making three recommendations to Interior and BLM, including developing a policy for project baselines, and strengthening leadership and oversight for the effort to replace the system. Interior partially concurred with one recommendation, concurred with the other two, and agreed to implement all of GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Interior | The Secretary of the Interior should direct Interior's CIO to ensure its new IT investment baseline management policy meets OMB requirements and strengthens internal controls to ensure baselines are approved by appropriate milestones. (Recommendation 1) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of the Interior | The Secretary of the Interior should direct Interior's CIO to strengthen IT leadership and oversight by implementing leading practices in executive-level IT governance for major IT investments including the AFMSS 2 replacement. (Recommendation 2) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Bureau of Land Management | The Director of BLM should document concurrence from Interior's CIO that BLM is implementing policies and procedures for developing IT systems, including the AFMSS 2 replacement, that are in alignment with the CIO's direction. Such policies and procedures should include that root cause analyses and corrective action plans are completed for projects that exceed established cost, schedule, and performance thresholds. (Recommendation 3) |
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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