Information Management: Energy Lacks Data to Support Its Information
System Streamlining Effort (Letter Report, 07/23/96, GAO/AIMD-96-70).

In the past, GAO reported that the Energy Department (DOE) had spent
considerable sums to develop and operate duplicate information systems
that supported its environmental management and other programs. This
report discusses problems that could impair DOE's ability to eliminate
duplicate information systems as it streamlines its information systems.
DOE has developed a baseline inventory of data on specific systems used
by the Department and its contractors. However, the inventory is
substantially incomplete and lacks enough information describing the
systems' functional capabilities. As a result, the inventory will not be
adequate to help eliminate duplicate information systems as part of the
streamlining effort. The data deficiencies exist largely because DOE has
allowed its contractors wide latitude in developing and implementing
software inventory procedures and standards and has not required them to
follow its software management guidance.  As a result, these contractors
do not consistently develop and maintain information on their systems
and use varying methods to classify systems according to their functions
and capabilities.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-96-70
     TITLE:  Information Management: Energy Lacks Data to Support Its 
             Information System Streamlining Effort
      DATE:  07/23/96
   SUBJECT:  Information resources management
             Computer software
             Data bases
             Management information systems
             Computer services contracts
             Requirements definition
             Data integrity
             Cost control
IDENTIFIER:  DOE Environmental Management Program
             DOE Strategic Alignment and Downsizing Initiative
             DOE System Review Inventory System
             
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Cover
================================================================ COVER


Report to the Secretary of Energy

July 1996

INFORMATION MANAGEMENT - ENERGY
LACKS DATA TO SUPPORT ITS
INFORMATION SYSTEM STREAMLINING
EFFORT

GAO/AIMD-96-70

DOE Information Management

(511389)


Abbreviations
=============================================================== ABBREV

  DOE - Department of Energy
  EM - Environmental Management
  ITMRA - Information Technology Management Reform Act
  OIM - Office of Information Management
  OMB - Office of Management and Budget
  SRIS - System Review Inventory System

Letter
=============================================================== LETTER


B-261820

July 23, 1996

The Honorable Hazel R.  O'Leary
The Secretary of Energy

Dear Madam Secretary: 

We recently conducted a review of software systems acquired to
support the Department of Energy's Environmental Management (EM)
Program.\1 We initiated this work to follow up on earlier GAO and
Energy reviews which found that the Department had spent significant
resources on developing and operating duplicate information systems
to support its environmental management and other missions.\2 This
letter discusses problems we found which, if not addressed, could
significantly impair the Department's ability to eliminate duplicate
information systems as it seeks to streamline its information systems
environment and achieve savings. 


--------------------
\1 The Environmental Management Program was created in 1989 to
accomplish a number of distinct missions, including compliance and
program coordination, waste management, environmental restoration,
technology development, and facility transition and management. 

\2 Management Information Systems for Environmental Compliance
Activities (DOE/I-0284, April 23, 1990) and Department of Energy: 
Better Information Resources Management Needed To Accomplish Missions
(GAO/IMTEC-92- 53, September 29, 1992). 


   BACKGROUND
------------------------------------------------------------ Letter :1

Historically, the Department has invested about 10 percent of its
approximately $20 billion annual budget in information technology
resources.  The majority of all information technology resource
expenditures--over 90 percent--are made by management and operating
contractors, who identify and acquire resources needed to support the
Department's programs at the site (field) level.  A past GAO review
found that the Department's contractors had wide latitude in
controlling their information technology resources and spent
substantial resources on developing and operating duplicate systems
at the site level.\3

Key to the Department's success in eliminating its duplicate
information systems is ensuring that information technology is
acquired, used, and managed effectively.  This includes knowing what
information resources exist or are planned and how they improve
performance of agency missions.  The Congress and the Office of
Management and Budget have supported the need for effective
management of agencywide information resources through (1) the
Paperwork Reduction Act of 1995, which requires agencies to follow a
number of practices aimed at improving the productivity,
efficiencies, and effectiveness of government operations, (2) the
Information Technology Management Reform Act (ITMRA) of 1996, which
supplements the Paperwork Reduction Act, and requires agencies to
design and implement a strategic process for maximizing the value and
managing the risks of their technology investments, and (3) the
Office of Management and Budget's (OMB) Evaluating Information
Technology Investments:  A Practical Guide, published in November
1995, which guides agencies in planning for, acquiring, and
implementing information systems.  Developing and maintaining a
complete inventory of the Department's information resources is a key
requirement of the Paperwork Reduction Act and is essential to
meeting the goals of ITMRA.  Further, a critical element of OMB's
investment guide is the need for agencies to create a portfolio of
their information technology investments. 


--------------------
\3 Department of Energy:  Better Information Resources Management
Needed To Accomplish Missions (GAO/IMTEC-92-53, September 29, 1992). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The Department of Energy developed a baseline inventory of data on
specific systems used by the Department and its management and
operating contractors.  It planned to use this inventory in
streamlining its information systems.  However, the inventory is
substantially incomplete and lacks sufficient information describing
systems' functional capabilities.  As a result, the inventory will
not be adequate to help eliminate duplicate information systems as
part of the streamlining effort. 

The data deficiencies exist largely because the Department has
allowed its management and operating contractors wide latitude in
developing and implementing software inventory procedures and
standards and has not required them to follow the Department's
software management guidance.  Consequently, these contractors do not
consistently develop and maintain information on their systems and
use varying methods for classifying systems according to their
functions and capabilities. 


   CRITICAL DATA LACKING TO ASSESS
   DOE INFORMATION SYSTEMS
------------------------------------------------------------ Letter :3

As part of its strategy for streamlining information systems, the
Department plans to eliminate or consolidate systems which have the
same or similar capabilities and analyze requirements for new systems
to prevent additional purchases of duplicate systems.  As a key step
in this process, the Department's Office of Information Management
(OIM) developed a baseline inventory to identify the functions and
capabilities of software systems that are being developed, proposed,
and operated by the Department and its management and operating
contractors.  OIM intended to use this inventory to analyze the
Department's existing information systems environment and help
identify systems that could be eliminated or consolidated.  This
intent was expressed in the Department's strategic alignment
initiative plan to integrate information management.\4 To most
effectively carry out this effort, therefore, OIM needs an inventory
that contains complete and accurate data, fully describes system
capabilities, and is based on consistent reporting by the
Department's management and operating contractors. 

Currently, however, the baseline inventory is substantially
incomplete and lacks information describing systems' functional
capabilities.  Specifically, in developing the baseline inventory,
OIM relied primarily on data gathered from the Department and its
management and operating contractors in early 1995 for inclusion in
the System Review Inventory System (SRIS).  SRIS is a headquarters
database used by OIM to maintain information on the Department's
software systems, including the name, primary function, specific
capabilities, data content, operating platforms, and cost of the
systems.  The Department requires that all systems being developed,
proposed, and operated by the Department and its sites that have
life-cycle costs exceeding $250,000 be reported to OIM for inclusion
in the SRIS database. 

We believe that OIM's baseline inventory of software systems will not
be adequate to support the Department's streamlining efforts because
the SRIS data is incomplete and inconsistently reported.  OIM's
analyses showed that only two-thirds of the Department's management
and operating contractors responded to its request for updated SRIS
information in 1995.  Moreover, according to this analysis, the
information which contractors did submit was incomplete in that it
did not identify the functional capabilities of about two-thirds of
the 2,053 systems reported in the SRIS database.  Without this type
of information, the Department cannot accurately assess its existing
information systems environment or make informed decisions regarding
the most appropriate candidates for elimination or consolidation. 

The data deficiencies that we noted exist largely because the
Department has allowed its contractors wide latitude in developing
and implementing software inventory procedures and standards, and has
not required them to follow the Department's software management
guidance.  Although the Department's existing software management
order requires each site to establish and operate its own software
management program,\5 the order allows sites to determine how to
accomplish this.  In addition, although the Department's "Software
Management Guide"\6 (which was put in place to assist the sites in
developing software management programs) states that sites should
maintain inventories of the software that they acquire, develop, or
operate, the Department does not require contractors to follow it. 
As a result, contractors (1) have inconsistent practices in
developing and maintaining information on their systems and (2) use
inconsistent methods for classifying systems by function and
capability.  For example, although the official responsible for
maintaining the software inventory at the Department's largest (in
terms of funding) EM site told us that the site recently reviewed in
detail the systems reported in its software inventory in order to
ensure that all the requested data were identified, some other sites
reported having starkly different practices, including the following: 

  -- Contractor officials at another major EM site stated that they
     had not verified any of the inventory data reported by their
     site and that hundreds of additional systems were probably
     unaccounted for in their inventory. 

  -- A field office official responsible for reviewing software
     management at two national laboratories stated that these
     laboratories have not inventoried the vast majority of the
     systems acquired by the sites to support their program and
     project requirements. 

  -- Our analyses of two major EM sites' inventories, which together
     identified 1,348 systems, showed that these inventories lacked
     data on (1) the functions of 59 percent of the systems and (2)
     the development cost of 84 percent of the systems. 

Management and operating contractors also use a variety of methods
for classifying site software systems by the specific capabilities
they provide.  Because of this lack of consistency in classifying
systems, some sites do not report the requested data to the
Department or they report incomplete data.  For example, EM's two
largest sites use different classification methods, and neither of
these methods is the same as that used for SRIS, which classifies the
functional capabilities of systems according to 12 primary and 48
secondary categories. 

One of the sites does not classify any of its systems according to
functional capabilities, with the exception of engineering systems. 
The other site classifies its systems according to 16 primary
categories of functional capabilities, including the 12 primary
categories identified for SRIS but does not classify systems
according to the secondary categories identified for SRIS.  An
official at this site stated that because its classification method
differs from that used for SRIS, the site did not provide OIM any
information on the functional capabilities of its systems in 1995. 
Contractor officials at both sites stated that before they can
provide the required updates to SRIS, they must perform
time-consuming word searches and other research, and modify their
systems classifications to agree with SRIS's classifications. 

The Department currently is developing a consolidated order for
information resources management that will replace the existing
software management order (DOE 1330.1D).  The new order, which is
still in draft, establishes Department policies, responsibilities,
and authorities for the planning, funding, development, acquisition,
security, and integration of information technology resources.  The
draft order states that a local software inventory management system
shall be developed to maintain an awareness of the software available
at each site.  However, as written, the order does not specify (1)
standards for classifying systems according to their functional
capabilities or (2) procedures for ensuring the integrity of software
systems data included in the inventories.  As a result, contractors
will continue to have wide latitude in how they choose to develop and
maintain software system inventories, and thus, the Department will
not likely progress toward having an inventory that it can
effectively use to identify duplicate systems. 


--------------------
\4 Integrate Information Management Implementation Plan, June 30,
1995. 

\5 According to DOE Order 1330.1D, the goals of the Software
Management Program are to establish and maintain control over
software integrity, and manage software acquisitions, developments,
changes, maintenance, and dispositions. 

\6 DOE/AD-0028, "Software Management Guide," June 1992. 


   CONCLUSIONS
------------------------------------------------------------ Letter :4

Streamlining information systems is essential to helping the
Department realize savings.  In addition, it is essential that the
Department and its contractors be able to assess the capabilities of
existing systems prior to acquiring new systems to avoid further
duplication and waste.  However, without mechanisms for ensuring more
reliable reporting by the Department's management and operating
contractors, these efforts will not succeed.  Because approximately
90 percent of all information technology resource expenditures are
made by management and operating contractors at the site level, the
success of the Department's improvement efforts hinges on their
effective participation. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :5

We recommend that you direct the Deputy Assistant Secretary for
Information Management to

  -- develop, and include in the draft consolidated information
     resources management order, (1) specific standards for
     classifying software systems according to their functional
     capabilities and (2) procedures for ensuring that the data
     included in software system inventories are complete and
     reliable; and

  -- require all management and operating contractors to immediately
     evaluate their software system inventories for completeness and
     accuracy, address any weaknesses identified, and create and
     provide OIM a database which is consistent with the Department's
     standards. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :6

Department of Energy officials, including the Deputy Assistant
Secretary for Information Management, provided written comments on a
draft of this report.  We have incorporated their comments where
appropriate and reprinted them in appendix I. 

These officials disagreed with our recommendations.  Specifically,
the officials said that they had not meant to imply that a complete
inventory of departmental and contractor systems would be available
or needed to support the Department's streamlining effort.  Moreover,
they stated that they did not believe that it was appropriate for the
Department to require its management and operating contractors to
either maintain information system inventories or to adhere to
specific systems classifications for identifying their information
systems.  They stated that such inventories are not required by
either the Paperwork Reduction Act of 1995 or the Information
Technology Management Reform Act of 1996.  They further stated that
"collective experience of the [Department's] Information Management
staff is that detailed inventories are too expensive and
time-consuming to develop and maintain and that they do not yield the
necessary insight in either consolidating applications or precluding
duplications." They stated that they will rely on performance-based
contracts to consolidate and eliminate duplicate systems. 

We disagree with the Department's position that such inventories lack
value for consolidating and eliminating duplicate systems and that
the cited legislation does not require systems inventories.  Knowing
what information resources an organization has is necessary to
effectively manage them, and further, to make decisions regarding the
investment in additional resources.  As noted in our report, the
Department has spent significant resources on developing and
implementing duplicate information systems at its sites.  In its
Integrate Information Management Implementation Plan, the Department,
itself, acknowledged the need for a baseline inventory of its
information resources to facilitate its streamlining effort and help
maximize its investment in information systems.  For example, the
plan called for developing a comprehensive corporate information
management program to maximize the Department's information system
investments by avoiding unnecessary duplication of effort and
reducing redundant systems.  To help achieve this, the plan cited a
critical need to obtain an accurate baseline inventory of current and
planned system development/acquisition activities and costs,
including baselining existing information management architectures,
infrastructures, standards, information structures, and resources
departmentwide.  In addition, OIM officials involved in implementing
the streamlining initiative told us during our review that a baseline
inventory was being developed to help identify systems that could be
consolidated or eliminated. 

Moreover, developing and maintaining a complete inventory of the
Department's information resources is essential to implementing a
strategic information resources management process, as required by
the Paperwork Reduction Act and the recently enacted Information
Technology Management Reform Act of 1996.  These acts require
agencies to design and implement a strategic process for maximizing
the value and assessing and managing the risks of information
technology acquisitions.  This process is to be used by the agency
head, Chief Information Officer, and program officials to select,
control, and evaluate agencywide investments in information
technology. 

To ensure that investments are effectively managed, the Paperwork
Reduction Act requires agencies to develop and maintain a current and
complete inventory of their information resources.\7 Information
resources include computers, software, and other automated data
processing equipment owned and operated by the agency directly, owned
by an agency and operated by a contractor, or owned and operated by a
contractor under contract with the agency.  The Act excludes
"governtment- owned contractor-operated facilities" from the
definition of the term "agency" (44 U.S.C.  Sec.  3502(1)).  Thus,
the broad management responsibilities imposed by Section 3506 fall on
the Department and not the contractor.  However, we do not read the
Act as excluding government-owned contractor-operated information
resources from the requirements imposed on agencies by Section 3506. 

In addition, the Office of Management and Budget's Evaluating
Information Technology Investments:  A Practical Guide provides a
systematic approach to managing the risks and returns of information
technology investments.  According to this guide, one of the
organizational attributes critical to the success of an agency's
information technology investments is defining a portfolio that
includes information technology projects in every phase (initial
concept, new, ongoing, or fully operational) and for every type
(mission critical, cross-functional, infrastructure, administrative,
and R&D) of information technology systems. 

Since approximately 90 percent of the Department's information
technology investments are made by its management and operating
contractors, it is incumbent upon the Department to collect and
maintain accurate information on these information resources. 
Without this information, the Department cannot expect to develop a
full and accurate accounting of its information technology
expenditures or to adequately assess the extent to which its
information resources contribute to program productivity, efficiency,
and effectiveness.  In addition, even with performance-based
contracts, information on what resources exist agencywide will be
essential to contractors in identifying the appropriate systems to
consolidate or eliminate, and to the Department in assessing how well
contractors meet performance goals aimed at eliminating systems
duplication to achieve savings. 


--------------------
\7 Paperwork Reduction Act of 1995, P.L.  104-13(1995), Sec. 
3506(b)(4). 


---------------------------------------------------------- Letter :6.1

As you know, 31 U.S.C.  720 requires the head of a federal agency to
submit a written statement of actions taken on our recommendations. 
You must send the statement to the Senate Committee on Governmental
Affairs and the House Committee on Governmental Reform and Oversight
within 60 days after the date of this report.  You must also submit a
written statement to the House and Senate Committees on
Appropriations with the agency's first request for appropriations
made over 60 days after the date of this letter. 

We are sending copies of this report to the Chairmen and Ranking
Minority Members of the House and Senate Committees on
Appropriations, the Senate Committee on Governmental Affairs, the
House Committee on Governmental Reform and Oversight, and the
Director of the Office of Management and Budget.  We will also make
copies available to others upon request. 

We performed our review from July 1995 through March 1996, in
accordance with generally accepted government auditing standards. 
Details on the scope and methodology of this work are in appendix II. 

If you have questions about this report, please contact me on (202)
512-6240 or Valerie C.  Melvin, Assistant Director, on (202)
512-6304.  Major contributors to this report are listed in appendix
III. 

Sincerely yours,

Jack L.  Brock, Jr.
Director, Information Resources Management/
 Resources, Community, and Economic Development




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
ENERGY
============================================================== Letter 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


SCOPE AND METHODOLOGY
========================================================== Appendix II

To assess software systems acquired to support the Department of
Energy's Environmental Management (EM) Program, we obtained and
analyzed software systems inventory data describing the names,
functional capabilities, costs, developmental stages, and operating
platforms of software systems at 8 departmental offices and 19 sites
supporting the EM program.  We interviewed Department of Energy field
office staff and management and operating contractor officials
responsible for developing and maintaining site software system
inventories. 

We also analyzed documentation provided by officials in the
Department's Office of Information Management regarding the
collection, analysis, and use of departmental and site software
systems inventory data, policies and procedures for developing and
maintaining software system inventories, and strategies and plans for
streamlining information systems.  In addition, we analyzed
legislative criteria on managing information technology investments
contained in the Paperwork Reduction Act of 1995 and the Information
Technology Management Reform Act of 1996.  Finally, we analyzed
applicable sections of the Department's software management guidance,
including DOE Order 1330.1D, Computer Software Management, and
discussed with responsible information resources management
officials, software management provisions contained in the
Department's draft consolidated information resources management
order. 

We performed our work from July 1995 through March 1996, in
accordance with generally accepted government auditing standards. 
Our work was conducted primarily at the Department's headquarters in
Washington, D.C., and its field offices in Albuquerque, New Mexico;
Richland, Washington; Golden, Colorado; and Aiken, South Carolina. 
The Department of Energy provided comments on a draft of this report. 
These comments are presented in appendix I and evaluated in the
report. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C. 

Valerie C.  Melvin, Assistant Director
Cristina T.  Chaplain, Communications Analyst

DENVER REGIONAL OFFICE

Peggy A.  Stott, Senior Information Systems Analyst
Peter Fernandez, Senior Information Systems Analyst

*** End of document. ***