    [Analytical Perspectives]
    [Crosscutting Programs]
    [9. Integrating Services with Information Technology]
    [From the U.S. Government Printing Office, www.gpo.gov]

    [[Page 153]]

              9.  INTEGRATING SERVICES WITH INFORMATION TECHNOLOGY

      As one of the largest users and acquirers of data, information and
    supporting technology systems in the world, the United States Government
    will continue its efforts to strengthen its capabilities in managing
    technology and information in order to be the world's leader in
    information technology. This year, the President proposes to spend about
    $65 billion for Information Technology (IT) and the associated support
    services. Departments and agencies continue to build upon their
    successes including their efforts with portfolio management by applying
    the principles and methods of Earned Value Management (EVM) to achieve
    greater savings, better results and improved customer service levels.

                    ACHIEVING RESULTS FOR THE AMERICAN PEOPLE

      The Federal government continues to make progress by maximizing its,
    IT investments to deliver program results through the adoption of
    electronic government management principles and best practices.
    Departments and agencies continue to focus on:
        Improving service levels to citizens and government decision
              makers;
        Making better purchasing decisions;
        Securing our systems and data; and
        Reducing duplication and related costs.
       This Budget chapter and Table 9-1, ``Effectiveness of Agency's IT
    Management and E-Gov Processes,'' included on the CD-ROM, fulfill the
    statutory reporting requirement of the Clinger-Cohen Act of 1996. Other
    management guidance provided to Federal departments and agencies is
    included on Table 9-2, ``Management Guidance,'' and is available at
    www.whitehouse.gov/OMB/memoranda.
       Government Performance.--The Federal government has shown improvement
    over the last year in achieving the goals specifically included in the
    President's Management Agenda, the Expanded Electronic Government (E-
    Government) initiative. For example, each IT investment must have
    specific performance targets tied to a specific, significant, beneficial
    impact for our citizens. Performance functions must be defined, valued
    and deliver measurable results.
      The Federal departments and agencies continue to improve in their
    efforts to guarantee the success and results for the taxpayer. There
    were 263 major investments representing about $10 billion on the
    ``Management Watch List,'' i.e., those IT investment justifications
    needing improvement in performance measurement, earned value management
    or system security. Before the start of the fiscal year, agencies were
    directed to remediate the shortfalls identified prior to expending
    additional funds. The agencies have worked to remediate the weaknesses
    or have put measures in place to monitor the progress of the IT
    investment which could include multiple projects. If an investment is
    still on the ``Management Watch List,'' agencies must describe their
    plans to manage or mitigate risk before undertaking or continuing
    activities related to that investment. As of December 31, 2006, 81
    percent of the agencies (22 of 27) had all acceptable FY 2007 business
    cases. Thus, remaining on last year's Management Watch list, there were
    84 business cases valued in FY 07 at $4.3 billion from five agencies.
    This year, 346 of the 840 FY 2008 major IT investments are on the
    ``Management Watch List.'' These investments still need to address
    performance measures, implementation of earned value management,
    security or other issues before obligating funding in Fiscal Year 2008.
    See Table 9-3, ``Agencies with IT Investments on the Management Watch
    List.''
      The Report on Information Technology (IT) Spending for the Federal
    Government (Exhibit 53) will be published in the spring of 2007 and is
    located at www.whitehouse.gov/OMB. It provides details of the
    Administration's proposed 2008 IT investments. Related documents on IT
    security and Electronic Government (E-Government) are also available at
    www.whitehouse.gov/OMB.
      Fiscal Year 2008 proposed IT investments were analyzed for trends and
    potential duplications across government entities. At about $65 billion,
    the Fiscal Year 2008 Federal IT portfolio represents a 3 percent
    increase over Fiscal Year 2007 President's Budget. The following
    represents the highlights:

                                                                 Percent \1\
                                    FY 2006   FY 2007   FY 2008    Change
    ------------------------------------------------------------------------
    Major IT Investments.........     1,087       857       840        -2%
    Not Well Planned and Managed.       358       263       346        32%
    Well Planned and Managed.....       682       594       494       -17%
    ------------------------------------------------------------------------
    \1\ Change from FY 2007 to FY 2008.

      The decreasing number of major IT investments is attributed to
    departments and agencies better managing their Capital Planning and
    Investment Control (CPIC) process in conformance with their enterprise
    architectures. The continued maturation of the CPIC processes provide
    for greater oversight and evaluation of the investments achieving and/or
    addressing intended results by departments' and agencies' Chief
    Information Officers. This oversight and understanding allows for
    changes in the IT portfolio to address mission

    [[Page 154]]

    priorities, consolidation and elimination of redundant investments.
      With the Administration's focus on achieving program results, the
    department and agencies partner with OMB to identify high-risk projects
    (those IT projects requiring special attention from oversight
    authorities and/or the highest level of agency management) and report on
    the agreed upon list of projects quarterly to OMB. As a result,
    oversight authorities and agency management now have available quarterly
    data on the progress of these projects to ensure improved execution and
    performance. OMB is working with departments and agencies to implement
    corrective action plans in cases where a project did not meet one or
    more of the four principle criteria. Additional information about high-
    risk projects including agency performance for FY07Q1 can be found at:
    www.whitehouse.gov/omb/egov/b-1-information.html#io.
      When duplication across Federal agencies has been identified, the
    Administration has an ongoing process to bring together the appropriate
    agencies and help them to consider broad-based approaches to promote
    inter-agency data sharing and cooperation in building common solutions,
    rather than maintaining separate investments. Upon migration to common,
    government-wide solutions, agencies will shut down existing systems--
    which will not only save money but also free-up resources for agencies
    to better focus on achieving their missions. These inter-agency
    taskforces focus on the agency Lines of Business (LoB) rather than a
    specific technology or investment. The following are the current LoB
    initiatives underway:
        Case Management;
        Federal Health Architecture;
        Financial Management;
        Human Resources Management;
        Grants Management;
        Information System Security;
        Budget Formulation and Execution;
        IT Infrastructure; and
        Geospatial.
      The inter-agency taskforces have driven significant accomplishments
    for each LoB initiative. The Information System Security (ISS) LoB
    evaluated agency proposals to become shared service centers in the areas
    of security awareness training and Federal Information Security
    Management Act (FISMA) reporting. On the basis of the evaluation and
    recommendations, the following agencies were selected to be the initial
    shared service centers:
        Security Awareness Training:
         --Office of Personnel Management
         --Department of State/United States Agency for International
             Development
         --Department of Defense

        FISMA Reporting:
         --Environmental Protection Agency
         --Department of Justice

      Accomplishments of this LoB and the remaining LoB initiatives as well
    as the next steps are included in Table 9-5, ``Lines of Business (LoB)
    Update.''
      The Administration continues to leverage government buying power while
    reducing redundant purchases through the SmartBUY program. Launched in
    June 2003, the SmartBUY program continues to provide increased cost
    avoidance savings to federal agencies through new and existing
    agreements with commercial software providers. In FY 2006, the Federal
    Government has achieved cost avoidance of over $300 million for the
    Oracle agreement alone. The SmartBUY Office located at the General
    Services Administration (GSA) continues to manage a total of nine
    agreements. In December 2006, the Administration established an
    agreement with the first of several Antivirus software developers with
    projected cost avoidance of as much as $18 million annually compared
    with the current best pricing available on GSA schedule and projected
    agency buying patterns. SmartBUY will continue to identify and develop
    new agreements throughout the year. In particular, SmartBUY will pursue
    a multiple award agreement in support of OMB policy memorandum, M-06-16,
    ``Protection of Sensitive Agency Information,'' which would include data
    at rest and remote access.
       Government IT Workforce.--With rapid advances in IT, improved program
    performance is first and foremost driven by the Federal employees who
    manage the IT projects and portfolios. Qualified project managers and an
    IT workforce with the necessary skills and competencies help ensure
    agency investments are well planned and managed. In 2005, agencies
    submitted plans to OMB for closing critical IT skill and competency
    gaps. Progress against these plans is measured and included in the
    President's Management Agenda Human Capital Scorecard. As of September
    30, 2006, out of the 26 scorecard agencies:
        17 agencies (65 percent) have met all planned skill or
              competency gap closure milestones; and
        15 agencies (58 percent) have met or are consistently
              meeting their IT hiring targets.
      The table below provides a summary of agency progress toward hiring
    goals.

                                                                 Number of
                                                                  Vacant
                                                Fiscal Year      Positions
                                                2006--Total      Agencies
                    Job Area                     Number of      Planned to
                                                  Current       Fill by the
                                               Positions \1\   End of Fiscal
                                                               Year FY 2006
    ------------------------------------------------------------------------
    IT Project Management...................           4,619             600
    IT Security.............................           9,030             488
    IT Architecture (Enterprise)............           1,169             180
    IT Architecture (Solutions).............             942             148
                                             -------------------------------
      Total.................................          15,760           1,416
    ------------------------------------------------------------------------
    \1\ As of date agencies reported to OMB.

    [[Page 155]]

      Agencies have also made progress in assignment of project managers to
    major IT investments. As reported by agencies on their FY 2008 Exhibit
    53 submissions, 83 percent of major IT investments have qualified
    project managers, an increase from approximately 70 percent in agency FY
    2007 submissions.
      Going forward, agencies are completing a new IT Workforce Assessment
    Survey developed and administered by the Chief Information Officers
    (CIO) Council. The survey collects information from Federal IT
    professionals about the types of work they perform, as well as their
    level of proficiency in competencies and skills. The survey also
    identifies top training needs; gathers information on the types of
    certifications owned by employees; and provides key demographic data.
    Using the survey results, agencies will prepare a gap analysis report
    and improvement plan. OMB will be working in conjunction with OPM and
    the CIO Council to review the survey results as well as the agency plans
    to address identified gaps.
       Securing Government Systems.--The Federal government continues to
    improve information security performance; however, declines in a few
    agencies have resulted in a net decrease in overall performance in some
    areas. Additionally, aspects of IT security such as securing data on
    removable media remain under addressed government-wide. Departments and
    agencies progress against their corrective actions plans will be
    measured in the President's Management Agenda Expanded Electronic
    Government Scorecard. On balance, the majority of agencies continue to
    improve or sustain high performance. Agencies report quarterly on their
    efforts to address IT security weaknesses against key IT security
    performance measures.
      The 2006 agency FISMA reports reveal continued progress in the area of
    system certification and accreditation. In FY 2006, the percentage of
    certified and accredited systems rose from 85 percent to 88 percent,
    despite a 3 percent increase in the total system inventory to 10,600
    operational systems. A few larger agencies made exceptional progress in
    closing the gap on certification and accreditation and testing of
    security controls and contingency plans. The State Department and
    Department of Homeland security both more than doubled their percentage
    of secured systems. Several departments achieved impressive increases in
    the percentage of systems with tested security controls and/or
    contingency plans, most notably Homeland Security, the Department of
    Housing and Urban Development, the Department of Defense, Department of
    Energy, Education, and the General Services Administration.
      Overall quality of the certification and accreditation processes as
    determined by agency Inspectors General (IG) decreased slightly compared
    to 2005, with 60 percent of agencies reporting ``satisfactory'' or
    better processes. Over 72 percent of agencies can demonstrate they have
    an effective process in place for identifying and correcting weaknesses,
    a slight decrease from 2005.
      The overall security status and progress in percentage of systems,
    from FY 2002 to FY 2006, is as follows:

                                                    (In Fiscal Years)
    ----------------------------------------------------------------------------------------------------------------
                                                                      2002      2003      2004      2005      2006
    ----------------------------------------------------------------------------------------------------------------
    Effective Security and Privacy Controls (C&A).................       47%       62%       77%       85%       88%
    Tested Contingency Plans......................................       35%       48%       57%       61%       88%
    Tested Security Controls......................................       60%       64%       76%       72%       77%
    Total Systems Reported........................................     7,957     7,998     8,623    10,289    10,600
    ----------------------------------------------------------------------------------------------------------------

      The number of agencies where the IG has verified the process exists to
    remediate IT security weaknesses (Plan of Actions & Milestones):

    FY 2002................................  N/A (was not required in until
                                              FY 2003)
    FY 2003................................  12
    FY 2004................................  18
    FY 2005................................  19
    FY 2006................................  18

      Government-wide, incremental progress in resolving fundamental IT
    security weaknesses has been made in many aspects of information
    security; however departments and agencies must continually assess the
    risks associated with technological developments and service offerings.
    Thus, each year brings new challenges and approaches, and potentially
    new measures for performance. Additional information and detail
    concerning the Federal Government's IT security program and agency IT
    security performance can be found in OMB's Annual Report to Congress on
    IT Security. The next such report will be issued by March 1, 2007, and
    will be made available on OMB's website.
       Protecting Privacy.--In 2006, several agencies experienced high
    profile data security breaches involving personal information. Most
    notable of these was the Department of Veterans Affairs, but significant
    problems also exist at other departments and agencies. Virtually all of
    these incidents resulted from ``internal'' problems within agencies and
    not external attacks on agency systems.
      To help address this issue, in May 2006, the President signed an
    Executive Order creating the Federal Identity Theft Task Force. Several
    of the Task Force's interim recommendations address the need to improve
    data security in the government, improve the agencies' ability to
    respond to data breaches, and reduce the risk to personally identifiable
    information.
      In this context, OMB has issued four security and privacy policy and
    advisory memoranda. These memoranda reemphasize agency responsibilities
    under law and policy regarding protection and safeguard of sensitive
    personally identifiable information, including information accessed
    through removable media, and incident reporting. They are included in
    Table 9-2, ``Management Guidance,'' and are available at:
    www.whitehouse.gov/OMB/memoranda.
      To help ensure safeguard of personally identifiable information,
    agencies are required to report on several performance metrics related
    to information privacy. Additionally, this year agencies were also
    required to provide quantitative performance measures to assess the
    privacy of agencies' personally identifiable information. The FY 2006
    agency FISMA reports reveal modest suc

    [[Page 156]]

    cess in meeting several key privacy performance measures:
        Program Oversight. In 2006, the majority of agencies report
              having appropriate oversight over their privacy programs in
              place. All agencies report having a privacy official who
              participates in privacy compliance activities, however, 84
              percent report coordinated oversight coordination with the
              Office of the Inspector General (OIG). Most agencies report
              privacy training for Federal employees and contractors, with
              92 percent reporting general privacy training and 84 percent
              reporting job-specific privacy training.
        Privacy Impact Assessments. In 2006, 82 percent of
              applicable systems government-wide have publicly posted
              privacy impact assessments verses the goal of 90 percent.
        System of Records Notices (SORNs). In 2006, 82 percent of
              systems government-wide with personally identifiable
              information contained in a system of records covered by the
              Privacy Act have developed, published, and maintained current
              systems of records notices verses the goal of 90 percent.
       Initiative to Secure Federal Information Systems and Facilities.--
    Inconsistent agency approaches to facility security and computer
    security are inefficient and costly, and increase risks to the Federal
    government. On August 27, 2004, the President signed Homeland Security
    Presidential Directive (HSPD) 12, ``Policy for a Common Identification
    Standard for Federal Employees and Contractors,'' which requires
    agencies to implement a mandatory, government-wide standard for secure
    and reliable forms of identification for Federal employees and
    contractors. In October 2006, agencies met the major milestone of their
    HSPD-12 implementation plans which was to begin issuance of compliant
    identification cards. During FY2007--FY2008, agencies are required to
    complete issuance of these IDs to all applicable employees and
    contractors and install infrastructure to use them.
       Initiative for Improving Government Networking Capabilities.--In
    order for the departments and agencies to overcome technical limitations
    arising from this need to interoperate and support emerging requirements
    and technologies, the Administration set June 2008 as the date by which
    all agencies' infrastructure (network backbones) must be IPv6-capable.
    In August 2005, OMB issued guidance to agencies to ensure an orderly and
    secure transition from Internet Protocol Version 4 (IPv4) to Version 6
    (IPv6). Since the Internet Protocol is core to an agency's IT
    infrastructure, in February 2006, the Administration began using the
    Enterprise Architecture (EA) Assessment Framework to evaluate agency
    IPv6 transition planning and progress. The agencies are responsible for
    a series of actions by specific dates. For instance, by June 30, 2006,
    agencies were to complete:
                --an inventory of existing routers, switches, and hardware
              firewalls; and
                --an impact analysis of fiscal and operational impacts and
              risks.
      Agencies are required to submit status reports with their quarterly EA
    submissions showing progress against the agency-specific milestones
    detailed in their IPv6 transition plans.
      To avoid unnecessary costs in the future, agencies are also required
    to the maximum extent practicable, to ensure all new IT procurements are
    IPv6 compliant. Any exceptions to the use of IPv6 require the agency's
    CIO to give advance, written approval. In support of this requirement,
    the National Institute of Standards and Technology (NIST) will release a
    standards profile. The profile will be released for public comment in
    January 2007.
      Additionally, the President's National Strategy to Secure Cyberspace
    directed the Secretary of Commerce to form a task force to examine the
    most recent iteration of the Internet Protocol, IP version 6 (IPv6). The
    President charged the task force with considering a variety of IPv6-
    related issues, ``including the appropriate role of government,
    international interoperability, security in transition, and costs and
    benefits.'' The task force, co-chaired by the Administrator of the
    National Telecommunications and Information Administration (NTIA) and
    the Director of the NIST, prepared a report discussing the benefits and
    impacts of IPv6. This report was published in January 2006.
       Making Government Accessible to All.--The efficient, effective, and
    appropriately consistent use of Federal agency public websites is
    important to promote a more citizen centered government. Federal agency
    public websites are information resources funded in whole or in part by
    the Federal government and operated by an agency, contractor, or other
    organization on behalf of the agency. They present government
    information or provide services to the public or a specific non-Federal
    user group and support the proper performance of an agency function.
      GSA's Office of Citizen Services and Communications manages the
    operations of FirstGov.gov and recently upgraded their search capability
    and changed its name to USA.gov in order to improve public access to
    Federal government information.
      An interagency ``web content'' working group, sponsored by GSA,
    regularly hosts training for Federal agency webmasters and public
    affairs officers. Recent courses provided instructions for making agency
    websites more effective and relevant to popular search engines.
    Additionally, a web content working group maintains www.webcontent.gov,
    conducts interagency meetings to assist agencies in managing their
    websites, and exchanges best practices among other agencies. These
    activities support agency efforts to provide access to and dissemination
    of government information to the public. GSA plans to complete the
    online tutorial by April 2007. This service will complement other
    services at USA.gov and elsewhere to aid the public in locating
    government information.

    [[Page 157]]

                    SUCCESSFULLY USING ELECTRONIC GOVERNMENT

      The departments and agencies continue to leverage information
    technologies to make government services available to citizens while
    ensuring security of those systems, the privacy of the citizen
    information and the prudent use of taxpayer money. E-Government is about
    providing direct and measurable results supporting departments' and
    agencies' mission and goals. For departments and agencies, the benefits
    will far outweigh the cost of implementation. Increased agency adoption
    and customer utilization will become the primary measures of success.
    The expanded availability of government information and the utilization
    of an increased percentage of transactions between the Federal
    government and citizens will be measured, where appropriate and made
    available on line at www.egov.gov.
      Examples of how the tenets of E-Government are helping to deliver
    services to the citizen and make the government more effective include:
       Department of Commerce. The Online Positioning User Service (OPUS)
    transforms how users of global positioning systems obtain highly
    accurate geographic coordinates and elevation data (see:
    www.ngs.noaa.gov/OPUS/). The system allows users, such as professional
    surveyors, to electronically submit geospatial information via the
    Internet to the Department, where data are processed to determine
    corresponding three-dimensional positional coordinates. As a result, the
    Department is able to provide access to and disseminate more accurate
    and quality geospatial information to the public. For example,
    construction, transportation, and mapping industries reduce surveying
    time and costs (estimated $270 million cost savings to the public) of
    creating specific maps and other products needed to operate their
    business to a fraction of those previously reported.
      User forums and workshops to obtain feedback are held regularly across
    the country, and usage of the system has grown from 1,000 data
    submissions per month in 2002, to over 13,000 per month in 2006.
    Extensive interaction between the National Oceanic and Atmospheric
    Administration (NOAA) and system users takes place during these
    sessions, and NOAA is currently identifying and surveying
    representatives from individual counties to ensure their diverse needs
    are being met. Additionally, users can complete an online survey to
    provide the Department comments and suggestions on how to improve the
    system and related positioning products and services. OPUS users include
    more than 175 organizations, including other Federal agencies, state and
    local governments, universities, the private sector, foreign
    governments, and others who share the goal of making more accurate
    positioning available worldwide. Users without Internet access and those
    with disabilities can mail their GPS observations to NOAA on a compact
    disk and receive the results back via the same mechanism on a
    prearranged basis.
       U.S. Department of Agriculture. The Animal and Plant Health
    Inspection Service (APHIS) launched its new electronic permitting system
    (ePermits) on April 3, 2006. The system allows customers to apply for a
    permit, check its status, and view it online. The ability to submit
    applications and receive permits via the Internet and in some cases the
    ability to pay applicable permit application fees online, saves
    customers and APHIS the time and effort associated with the paper-based
    process. Additional information on system features can be found on the
    Web site at www.aphis.usda.gov/permits/.
      To successfully implement the system, USDA demonstrated a desire to
    team with customers, state officials, and peer agencies by facilitating
    outreach sessions and customer tests. USDA continues to maintain ongoing
    dialogue with system developers, users, partners, and stakeholders to
    plan and implement additional features. Customers without Internet
    access at their facility can still use the paper permit application
    process and USDA developed the system to be compliant with Section 508
    of The Rehabilitation Act of 1998.
      Previously, the permit processing workload was growing to become
    unmanageable with current staff and resources. By eliminating the cost
    of processing paper and automating the system, more efficiency will
    result, with benefits to the Federal Government, state governments, and
    the general public estimated at $1.2 million per year in the first full
    year of operating the system. APHIS estimated that when the system is
    fully deployed it will cut in half the time it takes to process
    applications to import enterable plants and timber when the applications
    are entered online. In addition, the system will make it more difficult
    to tamper with a permit because the system provides immediate access to
    information relating to applications and permits
      The Administration continues the focus of the department and agency
    specific services movement to citizen-centered services. Overall funding
    for the President's E-Government initiatives has reduced annually since
    Fiscal Year 2004 as the initiatives have met their milestones and have
    become incorporated into the daily operations of Federal departments and
    agencies. This reduction has come as result of moving the initiatives to
    fee-for-service models where appropriate, thereby eliminating the need
    for agency contributions. Table 9-4, ``Status of the Presidential E-
    Government Initiatives,'' included on the CD-ROM, provides an update for
    each project.

                          CONTINUING TO ACHIEVE RESULTS

      The Administration will continue to use the Federal Enterprise
    Architecture data for business analysis to focus our efforts to direct
    information technology investments to improve service delivery to
    citizens and other

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    entities. The Administration will continue to improve performance and
    achieve results by continuing our efforts in linking IT investments to
    program performance as demonstrated by the analytical tool called the
    Program Assessment Rating Tool (PART).
      In 2008 and beyond, the Federal government will continue to identify
    IT opportunities for collaboration and consolidation while improving
    services. Although the Federal government continues to improve, much
    more work is needed to better serve the citizen. Through the PMA, the
    Clinger-Cohen Act, the E-Government Act, FISMA, budget guidance and
    other management tools, the Federal government has the ability to be the
    best manager, innovator and user of information, services and
    information systems in the world. The Federal Government has huge
    potential and opportunities for growth and to ensure program success and
    results through the effective use of information technology. Each
    department and agency will leverage existing capabilities to the maximum
    potential while ensuring reliability, security, privacy and continuity
    of services. The institution of the management practices within each
    department and agency and throughout the government will ensure these
    results.