Telecommunications Management: More Effort Needed by Interior and the
Forest Service to Achieve Savings (Letter Report, 05/08/97,
GAO/AIMD-97-67).

Pursuant to a congressional request, GAO reviewed efforts by the
Department of the Interior and the Forest Service to reduce costs by
consolidating their telecommunications services, focusing on whether
Interior: (1) has consolidated and optimized telecommunications services
to eliminate unnecessary services and maximize savings; and (2) and the
Forest Service are sharing telecommunications services where they can.

GAO noted that: (1) to its credit, Interior has undertaken a number of
telecommunications cost-savings initiatives that have produced
significant financial savings and helped reduce the Department's more
than $62 million annual telecommunications investment; (2) however,
Interior is not systematically identifying and acting on other
opportunities to consolidate and optimize telecommunications resources
within and among its bureaus or its 2,000-plus field locations; (3) the
cost-savings initiatives that have been undertaken have generally been
done on an isolated and ad hoc basis, and have not been replicated
throughout the Department; (4) GAO did not review consolidation and
sharing opportunities at all of Interior's field locations; (5) however,
at the four sites GAO visited, GAO found that telecommunications
resources were often not consolidated or shared, and bureaus and offices
were paying thousands of dollars annually for unnecessary services; (6)
Interior does not know to what extent similar telecommunications savings
may exist at its other offices because it lacks the basic information
necessary to make such determinations; (7) Interior and the Department
of Agriculture (USDA) may also be missing opportunities to save millions
of dollars by not sharing telecommunications resources; (8) even though
the Departments have a 2-year old agreement to identify and act on
sharing opportunities, little has been done to implement this agreement
and, accordingly, only limited savings have been realized; and (9)
moreover, while Interior and the Forest Service currently plan to
collectively spend up to several hundred million dollars to acquire
separate radio systems over the next 8 years, the Departments have not
jointly determined the extent to which they can reduce these costs by
sharing radio equipment and services.

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

 REPORTNUM:  AIMD-97-67
     TITLE:  Telecommunications Management: More Effort Needed by 
             Interior and the Forest Service to Achieve Savings
      DATE:  05/08/97
   SUBJECT:  Telecommunication equipment
             Federal procurement
             Cost control
             Interagency relations
             Cost effectiveness analysis
             Telecommunication
             Information resources management
             Data transmission
IDENTIFIER:  FTS 2000
             Federal Telecommunications System 2000
             USDA Telecommunications Network Analysis Model
             
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Cover
================================================================ COVER


Report to the Chairman and Ranking Minority Member, Subcommittee on
Interior and Related Agencies, Committee on Appropriations, House of
Representatives

May 1997

TELECOMMUNICATIONS MANAGEMENT -
MORE EFFORT NEEDED BY INTERIOR AND
THE FOREST SERVICE TO ACHIEVE
SAVINGS

GAO/AIMD-97-67

Telecommunications Management

(511414)


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

  AIMD - Accounting and Information Management Division
  ARTnet -
  AT&T - American Telephone and Telegraph
  BLM - Bureau of Land Management
  BOR - Bureau of Reclamation
  CIO - chief information officer
  DOInet - DOI communications network
  FTS - Federal Telecommunications System
  FWS - Fish and Wildlife Service
  GAO - General Accounting Office
  LATA - local access transport area
  NPR - National Performance Review
  OIRM - Office of Information Resources Management
  USDA - United States Department of Agriculture

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


B-274808

May 8, 1997

The Honorable Ralph Regula
Chairman
The Honorable Sidney Yates
Ranking Minority Member
Subcommittee on Interior and Related Agencies
Committee on Appropriations
House of Representatives

As requested, we are reporting to you the results of our review of
efforts by the Department of the Interior and the Department of
Agriculture's (USDA) Forest Service to reduce costs by consolidating
their telecommunications services.  As agreed, our objectives were to
determine whether (1) Interior has consolidated and optimized
telecommunications services to eliminate unnecessary services and
maximize savings and (2) Interior and the Forest Service are sharing
telecommunications services where they can. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

To its credit, Interior has undertaken a number of telecommunications
cost-savings initiatives that have produced significant financial
savings and helped reduce the Department's more than $62 million
annual telecommunications investment.  However, Interior is not
systematically identifying and acting on other opportunities to
consolidate and optimize telecommunications resources within and
among its bureaus or its 2,000-plus field locations.  The
cost-savings initiatives that have been undertaken have generally
been done on an isolated and ad hoc basis, and have not been
replicated throughout the Department.  We did not review
consolidation and sharing opportunities at all of Interior's field
locations.  However, at the four sites we visited, we found that
telecommunications resources were often not consolidated or shared,
and bureaus and offices were paying thousands of dollars annually for
unnecessary services.  Interior does not know to what extent similar
telecommunications savings may exist at its other offices because it
lacks the basic information necessary to make such determinations. 

Interior and USDA may also be missing opportunities to save millions
of dollars by not sharing telecommunications resources.  Even though
the Departments have a 2-year old agreement to identify and act on
sharing opportunities, little has been done to implement this
agreement and, accordingly, only limited savings have been realized. 
Moreover, while Interior and USDA's Forest Service currently plan to
collectively spend up to several hundred million dollars to acquire
separate radio systems over the next 8 years, the Departments have
not jointly determined the extent to which they can reduce these
costs by sharing radio equipment and services. 


   BACKGROUND
------------------------------------------------------------ Letter :2

As the nation's principal conservation agency, Interior has
responsibility for managing most of our nationally owned public lands
and natural resources.  This includes fostering the wisest use of our
land and water resources, protecting our fish and wildlife, and
preserving the environmental and cultural values of our national
parks and historic places.  Interior employs about 70,000 full-time
equivalent staff\1 and delivers a wide range of services through its
bureaus, services, and offices\2 at over 2,000 field locations across
the country.  Three Interior bureaus--the Bureau of Land Management
(BLM), the National Park Service, and the Fish and Wildlife Service
(FWS)--and USDA's Forest Service\3

share responsibilities for managing public lands.  While all have
separate missions, they manage adjacent lands in many areas
throughout the country and have some responsibilities that overlap. 
Over the last several years, Interior and the Forest Service have
collocated some offices or shared space with other federal agencies,
and have pursued other means of streamlining, sharing resources, and
saving rental costs. 

To carry out its broad missions, Interior and its bureaus spend more
than $62 million each year on telecommunications resources\4 that are
used to provide a wide array of voice, data, radio, and video
services.  These include a variety of telecommunications services
acquired under the General Services Administration's Federal
Telecommunications System (FTS) 2000 contract\5 as well as from local
and long-distance telephone carriers and commercial vendors. 
Interior was unable to provide us with its total fiscal year 1996
telecommunications costs because commercial telecommunications costs
and costs for some other services are paid directly by Interior
bureaus; these costs are not aggregated or tracked at the Department
level.  However, for 1 year--fiscal year 1995--in response to a
survey we conducted, Interior estimated that it spent about $62
million on telecommunications equipment and services.\6 This included
about $29 million for FTS 2000 services and about $33 million for
commercial and other services.  Estimated fiscal year 1995 costs for
radio equipment and service are not included in these totals. 

The Forest Service, which employs more than 30,000 full-time staff,
spent about $33 million for telecommunications in fiscal year 1996. 
The Forest Service and Interior expect to collectively spend up to
several hundred millon dollars over the next 8 years acquiring new
radio equipment and services to convert to narrowband requirements by
2005.\7

As we previously reported at USDA, consolidating and optimizing
telecommunications offers organizations a way to reduce costs by
combining resources and services where sharing opportunities exist
and by eliminating unnecessary services.\8 For example, the cost to
access FTS 2000 services can sometimes be greatly reduced where there
are multiple FTS 2000 service delivery points that can be combined to
increase the volume of communications traffic among fewer points,
thereby, obtaining volume discounts.  Additional savings can be
achieved by selecting more efficient service and equipment
alternatives.  Because there can be additional equipment and
transmission costs associated with implementing consolidation and
optimization alternatives, such costs will offset some of the
savings. 

The 1996 Clinger-Cohen Act\9 and federal guidance\10 highlight the
need for federal organizations to acquire and use information
technology in the most cost-effective way and identify and act on
opportunities to reduce costs by sharing resources where possible. 
In so doing, federal organizations should identify areas of
duplication and work together to best utilize telecommunications and
other information technology that can reduce expenditures and
redundant functions.  Not taking steps that maximize use of
telecommunications resources and achieve optimum service at the
lowest possible cost can result in the needless waste of government
dollars.  Our 1995 report noted that USDA had hundreds of field
office sites where multiple agencies, located within the same
building or geographic area, obtained and used separate and often
redundant telecommunications services.  Because of this and because
USDA had not acted on opportunities to consolidate and optimize
telecommunications services, the Department wasted millions of
dollars each year paying for redundant services it did not need.\11

Interior's acting chief information officer (CIO) is responsible for
advising and assisting the Secretary and other senior managers to
ensure that the Department's information technology investments are
acquired and managed consistent with federal law and the priorities
of the Secretary.  Under the direction and leadership of the acting
CIO, Interior's Office of Information Resources Management (OIRM) is
responsible for ensuring that the Department's telecommunications
resources are cost effectively managed and for overseeing and guiding
Interior bureaus in the acquisition, development, management, and use
of such resources.  In addition, heads of Interior bureaus are
responsible for implementing a program that will ensure compliance
with Interior policies and for designating telecommunications
managers who plan, implement, and manage telecommunications
activities within their respective organizations.  The bureaus are
also responsible for determining whether their telecommunications
requirements can be satisfied through existing resources and for
sharing telecommunications services and equipment with other bureaus
and agencies to the maximum extent practical.  As with Interior, the
Forest Service delegates responsibility for telecommunications
management and the sharing of these resources to its regional and
field components. 


--------------------
\1 As a result of streamlining and downsizing at the Department,
Interior's fiscal year 1998 budget request shows a total reduction of
over 7,500 full-time equivalent staff since fiscal year 1993. 

\2 Interior's components include the Office of the Secretary and
eight major bureaus, services, and offices:  the Bureau of Land
Management, the Bureau of Reclamation, the Office of Surface Mining
Reclamation and Enforcement, the National Park Service, the Fish and
Wildlife Service, the Minerals Management Service, the Geological
Survey, and the Bureau of Indian Affairs.  Hereafter, these
components will be referred to as "bureaus."

\3 The Forest Service has over 800 offices across the country. 

\4 Telecommunications can be defined as the electronic transmission
of information of any type, such as data, sound, television picture,
and facsimile. 

\5 FTS 2000 is a network of long-distance voice, data, and video
telecommunications services intended to satisfy the federal
government's needs in the continental United States through 1998. 

\6 Telecommunications:  Costs Reported by Federal Organizations for
Fiscal Year 1995 (GAO/AIMD-96-105, June 17, 1996). 

\7 Narrowband refers to the method of gaining more channels (and
hence more capacity) by splitting FM channels into channels that are
narrower in bandwidth. 

\8 USDA Telecommunications:  Missed Opportunities To Save Millions
(GAO/AIMD-95-97, April 24, 1995). 

\9 P.L.  104-106, Section 5122, 110 Stat.  684 (1996). 

\10 Executive Order 13011, "Federal Information Technology," July 16,
1996. 

\11 GAO/AIMD-95-97, April 24, 1995. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To address our objectives, we reviewed documentation reporting
telecommunications usage and costs for Interior and USDA's Forest
Service and we interviewed Interior and USDA officials to discuss
consolidation and sharing activities.  To review consolidation and
sharing activities, we selected four locations where Interior
officials told us offices were collocated and actions were underway
to consolidate and optimize telecommunications resources and
services.  Specifically, we visited Interior bureau offices in
Lakewood and Durango, Colorado; Farmington, New Mexico; and Cheyenne,
Wyoming.  In addition, we discussed sharing projects underway or
planned with Interior and Forest Service officials at offices in
Lakewood and Durango.  We also reviewed reports and billing
information showing FTS 2000 and commercial carrier costs to confirm
our results.  Appendix I provides further details on our scope and
methodology. 

We conducted our review from August 1996 through March 1997, in
accordance with generally accepted government auditing standards.  We
provided a draft of this report to Interior and USDA for comment. 
Interior's and USDA's comments are discussed in the report and are
included in full in appendixes II and III, respectively. 


   SAVINGS OPPORTUNITIES MISSED
   BECAUSE TELECOMMUNICATIONS
   RESOURCES NOT CONSOLIDATED AND
   OPTIMIZED
------------------------------------------------------------ Letter :4

To its credit, Interior has undertaken a number of cost-saving
initiatives to eliminate some unused telephone lines and unnecessary
data services.  While significant savings have been achieved in some
cases, such efforts have generally been isolated and ad hoc rather
than departmentwide.  Savings are being missed because Interior is
not systematically identifying and acting on opportunities to
consolidate and share telecommunications resources within and among
its bureaus or its 2,000-plus field locations.  At just four of these
field locations, we found that bureaus and offices were paying
thousands of dollars annually for telecommunications services that
were redundant and unnecessary.  Interior does not know to what
extent similar telecommunications savings may exist at its other
offices because it lacks the basic information necessary to make such
determinations. 


      CONSOLIDATING AND OPTIMIZING
      TELECOMMUNICATIONS RESOURCES
      AMONG INTERIOR BUREAUS IS
      RARE
---------------------------------------------------------- Letter :4.1

Interior is not systematically identifying opportunities among
collocated bureau offices to consolidate and optimize
telecommunications resources.  Interior's multiple bureaus have
numerous field office sites in the same building or geographic area,
but they obtain and use telecommunications equipment and services
independently.  This can result in the use of redundant and/or more
costly telecommunications services than necessary at these sites. 
Nevertheless, OIRM--which has responsibility for managing and
overseeing Interior's telecommunications activities--has not
exercised effective leadership by establishing a departmentwide
program for systematically identifying telecommunications
inefficiencies that may exist and achieving savings among bureaus and
offices across the Department.  Instead, OIRM relies on each of
Interior's separate bureaus to identify and act on such
opportunities.  Yet, according to bureau telecommunications
officials, this is rarely done and savings opportunities may be lost. 

Although we only visited a few of Interior's field sites during our
review, we found that bureau offices in Lakewood, Durango, and
Farmington spent thousands of dollars over the last several years for
unnecessary commercial long-distance telephone and redundant FTS 2000
data services.  In one case, billing records show that two bureau
offices in the one building in Lakewood were spending about $4,400
annually for unnecessary FTS 2000 services because these services had
not been consolidated and shared.  In addition, we found bureau
offices in Farmington located close by one another yet still using
separate data connections to the same cities; opportunities to share
these services in order to reduce costs had not been investigated. 

While many bureau telecommunications managers and staff told us they
would like to take advantage of savings by consolidating and sharing
resources at locations, given their other duties, it is not a
priority.  Specifically, these officials said that they spend most of
their time maintaining current operations and providing their bureau
field offices with technical assistance.  As a result, they assert
that they rarely have time to look for such consolidation
opportunities among bureau offices. 

Even if pursuing consolidation opportunities was a priority, the
bureaus do not have the information necessary to identify where
Interior offices are collocated and determine whether
telecommunications savings opportunities exist at these locations. 
Specifically, at the time of our review, neither OIRM nor the bureaus
had determined which of the Department's 2,000-plus field sites are
located within the same building or geographic area, and OIRM was
unable to provide us with a current list of all Interior office
sites.\12 Following our exit briefing with Interior at the end of
February 1997, the Department began to develop this information by
extracting and analyzing data from several of its administrative
management databases.  These are positive steps that should help the
Department begin to identify savings opportunities. 

Interior bureaus also lack information needed to adequately analyze
cost-savings opportunities that may exist at collocated bureau sites. 
According to Interior policy, bureaus are required to maintain
inventories of all of their telecommunications resources.  However,
at the time of our review, the bureaus did not maintain up-to-date
and complete inventories of all their telecommunications resources
and OIRM has not followed up to ensure that they do so.  Without
information such as this that describes types of telecommunications
equipment and services at individual bureau offices, Interior cannot
easily determine where it has opportunities to consolidate and
optimize telecommunications resources among multiple bureau offices. 

In addition, neither OIRM nor the bureaus have used
telecommunications tools such as USDA's network analysis model\13 to
help identify potential savings opportunities across the Department. 
USDA developed and successfully used this model to identify millions
of dollars in cost-effective options for reducing telecommunications
costs at the Department and at other agencies.  USDA gave its model
to Interior over a year ago, but Interior never used it.  Until OIRM
and the bureaus develop the basic information and use the tools
available to systematically identify cost-reduction opportunities at
collocated bureau offices, Interior will not be able to determine
where and to what extent similar savings opportunities may exist in
Washington, D.C., and at the Department's hundreds of offices across
the country. 

Some bureau officials said that, through the normal course of their
duties, they have sometimes become aware of opportunities to
consolidate and share telecommunications resources.  Even in such
cases, however, savings opportunities may not be pursued because
getting the separate Interior bureaus to agree to make changes in
telecommunications arrangements is difficult and time-consuming.  In
one case, for example, three small bureau offices in Cheyenne,
Wyoming, gave up trying to consolidate and share services because no
one bureau was willing to spend the approximately $2,000 needed to
purchase the required equipment, even though services would have been
upgraded and overall bureau savings would have paid for this
equipment in a few months. 

During our review, OIRM and the bureaus began identifying some
cost-savings opportunities using available FTS 2000 reports and other
information.  For example, on October 21, 1996, OIRM and the bureaus
initiated an agreement with American Telegraph and Telephone (AT&T)
to take advantage of FTS 2000 intra-LATA (local access transport
area) savings opportunities for local toll call telephone service.\14
In November 1996, further positive steps were taken by OIRM and the
bureaus to begin identifying opportunities where Interior bureaus
could aggregate some of their FTS 2000 services to obtain volume
discounts.  As of the end of our review in March 1997, these efforts
were still underway and no savings had yet been reported. 

Another effort by the Department that was designed to improve data
communications by establishing a backbone communications network
(DOInet) is also being used to help identify opportunities to reduce
costs by eliminating some redundant data services.  By building on
existing networks and establishing common network node locations at
high traffic sites, Interior is establishing DOInet to provide
improved interconnectivity and interoperability among its bureaus. 
Under this initiative, OIRM recently began working with the bureaus
to identify and try to eliminate data communications circuits that
duplicate DOInet capabilities at high traffic sites.  Also, as part
of this effort, OIRM began to review FTS 2000 billing records to
identify some opportunities for eliminating redundant and unnecessary
data circuits in the bureaus themselves. 

However, OIRM has not acted to ensure that savings on all
opportunities identified as part of the DOInet initiative will be
realized.  Consequently, some savings opportunities have been missed
and others could not be confirmed.  For example, after determining
from FTS 2000 billing data during the months of August through
November 1995 that Interior bureaus were paying over $1.1 million
annually for over 100 duplicate data circuits, OIRM recommended that
bureaus either disconnect these data lines or explain why they are
needed.  But OIRM did not follow up on all its recommendations and,
near the end of our review in February 1997, documentation showed
that only about $200,000 of the $1.1 million in potential savings
identified had been achieved.  In March, OIRM officials said that
further action was underway to eliminate more of these unnecessary
circuits and that 19 additional duplicate circuits with an annual
cost of over $100,000 had been eliminated.  OIRM did not, however,
provide the billing data necessary to confirm any of these reported
cost-savings. 


--------------------
\12 OIRM did give us an outdated, 2-year-old list from Interior's
Division of Space and Facilities Management showing sites.  This list
was developed for emergency preparedness purposes and does not show
collocated offices.  In the absence of current information on
Interior sites, we attempted to develop this information ourselves by
obtaining data on collocated sites from USDA's National Information
Technology Center in Fort Collins, Colorado.  Initial lists were
provided to us in November 1996, but data irregularities--caused by
programming difficulties--precluded our using this information.  (See
appendix I.)

\13 An automated tool used by USDA to identify millions of dollars in
potential savings, the network analysis model is designed to automate
a process in which different telecommunications configurations for
given locations can be analyzed to determine where services can be
combined for volume discounts and where more cost-effective
telecommunications arrangements can be selected for an individual
service, on the basis of actual traffic, tariffs, and rates. 

\14 Calls between locations within a LATA but not within the free
calling area for the caller's telephone number are defined as
intra-LATA toll calls.  These calls were originally classified as
local exchange carrier business, while calls from one LATA to another
(inter-LATA) belong to the interexchange carrier selected by the
caller.  Changes enacted by some state legislatures offer federal
government agencies use of FTS 2000 services in lieu of local
exchange carriers for intra-LATA toll calls. 


      SOME SAVINGS ACHIEVED WITHIN
      BUREAUS, BUT OTHERS MISSED
---------------------------------------------------------- Letter :4.2

Some Interior bureaus have taken positive steps to reduce
telecommunications costs within their own organizations and have
achieved significant savings by doing so.  For example, according to
FWS telecommunications officials, they have reduced FTS 2000 usage
costs throughout the bureau.  In one example, FWS reported saving
about $66,000 annually by moving some commercial telephone service to
FTS 2000 Virtual On-Net service to achieve lower cost-per-minute
charges at many of its office locations. 

However, in many cases, bureau efforts to reduce telecommunications
costs were done ad hoc, not systematically applied throughout the
bureau or replicated among other bureaus.  For example, a BLM office
in Cheyenne reviewed telecommunications services and associated
charges 2 years ago, finding that it had paid an extra $90,000
because the local carrier had incorrectly applied tariff rates to
some of its services.  The office received a total reimbursement for
these erroneous charges.  However, according to the BLM official who
completed the review, this was a onetime initiative undertaken after
the office upgraded its telecommunications services, and no
additional reviews had been performed. 

In another case, a Bureau of Reclamation telecommunications official
who initiated a review of telephone lines at the office in Lakewood,
in September 1995, found that it was paying as much as $20 per line
in monthly charges for lines that were no longer being used.  In this
case, bureau officials found that the office had 2,656 telephone
lines for 1,060 staff and that at least 1,405 of these lines were
unnecessary.  In July 1996, bureau officials completed work reducing
the number of lines to 1,251 and reported annual savings totaling
more than $320,000.\15 Again, however, despite the significant
cost-savings achieved by the Bureau of Reclamation, we were unable to
find any cases during our review where other bureaus had undertaken
similar attempts to identify and eliminate unused telephone lines. 
March 1997 records from AT&T show that, after downsizing, Interior
bureaus currently have almost twice as many telephone lines as
staff--about 137,000 lines for about 70,000 people.\16 Until similar
reviews are done throughout the Department, Interior will not know to
what extent other headquarters, bureau, and field offices may be
paying for lines they do not use. 

Because efforts to reduce costs, such as the ones discussed above,
are not systematically applied and replicated throughout the
Department, some bureaus and offices may also be paying for other
telecommunications services that are not used, are uneconomical, or
are otherwise not cost-effective.  For example, two bureau offices we
visited were spending several thousand dollars annually paying for
redundant FTS 2000 services they did not need or know they had.  In
one case, billing records showed that one bureau office in Durango
spent about $4,000 more than necessary during the past year paying
for redundant FTS 2000 services that should have been consolidated
with other services at that office.  Office officials told us they
were not aware of the redundant services because bills are not
reviewed to identify this kind of problem.  In another similar case,
one bureau office in Cheyenne paid several thousand dollars annually
for unnecessary local telephone services and redundant FTS 2000
services that should also have been consolidated. 


--------------------
\15 Bureau of Reclamation officials said that action is underway at
other Reclamation offices to identify unused lines and the Lakewood
office is considering making additional system upgrades that may
allow even further reductions in lines. 

\16 Telephone line information for Interior and its bureaus was
extracted from AT&T's inventory of telephone lines.  We did not
verify the accuracy of this information. 


   INTERIOR AND USDA ALSO MISSING
   SAVINGS OPPORTUNITIES
------------------------------------------------------------ Letter :5

Interior and USDA may likewise be missing opportunities to save
millions of dollars by not sharing telecommunications resources among
Interior bureaus and the Forest Service.  While the two departments
have a 2-year old agreement to identify and act on sharing
opportunities, they have taken little action on this agreement and
accordingly, only limited savings have been realized.  Moreover,
while Interior and USDA's Forest Service plan to spend several
hundred million dollars to acquire separate radio systems over the
next 8 years, the Departments have not jointly determined the extent
to which they can reduce these costs by sharing radio equipment and
services. 


      INACTION ON INTERIOR/USDA
      SHARING AGREEMENT LIMITS
      SAVINGS OPPORTUNITIES
---------------------------------------------------------- Letter :5.1

Interior's bureaus (e.g., BLM, FWS, and the Park Service) and USDA's
Forest Service recognize that opportunities to share
telecommunications resources among their offices exist.  While these
organizations acquire and use separate telecommunications resources
and services to fulfill their individual missions, they work in many
of the same geographic areas, overseeing adjacent public lands and
natural resources.  Because of this, savings may be achieved by
sharing resources and services where opportunities exist among these
agencies to do so. 

In recognition of such sharing opportunities, Interior and USDA
established a memorandum of agreement in January 1995 to support
interdepartmental cooperative efforts "to seek aggressively,
opportunities for sharing telecommunications resources" and institute
steps necessary to act on these opportunities.  While Interior and
USDA were to work together to identify potential candidate sites for
aggregating and sharing telecommunications resources, they never did. 
In fact, they have not yet identified Interior bureaus and the Forest
Service sites that are in common areas where it may be possible to
share telecommunications resources to reduce costs.  Senior Interior
and USDA managers could not provide a valid basis for not
implementing this sharing agreement. 

Despite inaction on the agreement, we found isolated cases in which
Interior and Forest Service offices are reducing their
telecommunications costs by sharing some resources.  For example, as
part of a National Performance Review (NPR) pilot called Trading
Post, BLM and the Forest Service said they are achieving thousands of
dollars in annual savings by sharing voice communications and local
telephone services in Durango.\17 In another case, Interior bureaus
and the Forest Service have begun sharing common network and
telecommunications resources at several Alaska sites under an NPR
initiative known as ARTnet.\18 According to initial results, three
Interior bureaus and the Forest Service have said they reduced their
annual telecommunications costs over 44 percent (from about $197,000
to $110,000).  While such initiatives are positive, they so far
involve only a few sites and are not being replicated across the
country in other areas where Interior and USDA likely have similar
kinds of sharing opportunities. 


--------------------
\17 The Trading Post is a partnership formed between BLM and the
Forest Service to demonstrate and experiment with new and more
effective ways of doing business at several office sites in Colorado,
Montana, and Oregon.  Like the trading posts of the American
frontier, this initiative focuses on trying to offer customers a
common-sense, one-stop-shopping approach by sharing resources to
promote more cost-effective delivery of services. 

\18 Interior won the Vice President's Hammer Award and a 1996 Federal
Technology Leadership Award for its efforts in leading this National
Performance Review initiative. 


      SAVINGS OPPORTUNITIES NOT
      CONSIDERED IN UPCOMING RADIO
      SYSTEMS PROCUREMENTS
---------------------------------------------------------- Letter :5.2

Interior bureaus and USDA's Forest Service plan to collectively spend
up to several hundred million dollars over the next 8 years to
purchase new radio systems required under new federal narrowband
standards.  Under a directive from the National Telecommunications
and Information Administration, all federal radio users are required
to begin implementing new narrowband technologies to make additional
radio channels available to federal agencies.  These new narrowband
capabilities are expected to be fully implemented governmentwide by
January 1, 2005.  Interior bureaus plan to spend about $270 million
making this transition.  While the Forest Service has not determined
how much its actual transition to narrowband systems will cost,
budget estimates show that it expects to spend tens of millions of
dollars replacing radio equipment over the next several years. 

According to Interior documentation, its bureaus and the Forest
Service run parallel radio systems in some areas, with opportunities
to share portions of these systems.  Further, Interior and Forest
Service officials at headquarters and some field locations said they
are interested in sharing radio communications; in some cases,
Interior and Forest Service field locations have begun to share
mountaintop maintenance, radio frequencies, and dispatch operations. 
Both agencies have also studied, to some degree, implications of
sharing radio communications resources.  In fact, Interior determined
that sharing radio resources as part of the effort to transition to
narrowband standards could reportedly bring about a 25 percent
overall cost reduction (including equipment and personnel).\19
However, at the time of our review, no decisions about this had been
reached and Interior and the Forest Service are each proceeding with
plans to acquire separate radio equipment and services that address
their individual needs. 


--------------------
\19 We could not validate or assess these cost-savings because
Interior documentation supporting them was unavailable, and the
Forest Service told us that it has prepared no similar estimates. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

While Interior has taken some positive steps to reduce
telecommunications costs, it has not done what is necessary to take
advantage of departmentwide opportunities to eliminate unnecessary
services and maximize savings, and has no systematic approach for
doing so.  Until OIRM and the bureaus develop basic information and
use the tools available to them to systematically identify
cost-savings opportunities, Interior will not be able to determine
where and to what extent sharing opportunities may exist throughout
the Department and its hundreds of offices across the country. 
Similarly, until Interior and USDA follow their 1995 agreement to
actively pursue opportunities for sharing telecommunications
resources among bureaus and the Forest Service, millions of dollars
in potential savings will not have a chance of being realized. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

In order to help bring about significant potential savings from
consolidated and shared telecommunications resources, we recommend
that the Secretary of the Interior direct--and hold accountable--the
Department's acting CIO to immediately establish and fully implement
among Interior's bureaus, a departmentwide program for systematically
identifying and acting on all opportunities to consolidate and
optimize telecommunications resources, including voice, data, video,
and radio equipment and services, where it is cost-effective to do
so.  At a minimum, the acting CIO should: 

  Determine and maintain a current list of Department field locations
     that are collocated and the extent to which telecommunications
     resources and services are shared. 

  Direct and ensure that all Interior bureaus and offices establish
     and maintain up-to-date and complete inventories of their
     telecommunications resources and services at collocated sites. 

  Direct and ensure that all Interior bureaus and offices review and
     analyze telecommunications bills at regular intervals, using a
     cost-effective approach to ensure that all charges are
     appropriate and services needed. 

  Identify potential savings opportunities at these sites using
     inventories and telecommunications tools, such as USDA's network
     analysis model. 

  Monitor these activities and follow up as needed to ensure that all
     identified savings opportunities are acted upon. 

In addition, we recommend that the Secretary of the Interior
direct--and hold accountable--each of the Department's assistant
secretaries to cooperate with the acting CIO and immediately
establish and fully implement bureauwide programs for similarly
identifying and acting on all opportunities to consolidate and
optimize telecommunications resources within each bureau, using the
steps discussed. 

We also recommend that the acting CIO report to the Secretary every
6 months on the progress of these efforts and savings achieved. 

We further recommend that the Secretary of the Interior and the
Secretary of Agriculture ensure that their respective acting CIO's
are responsible and accountable for implementing the 1995 joint
sharing agreement.  At a minimum, the acting CIOs should: 

  Determine where Interior and USDA field sites are collocated and
     the extent to which services are shared. 

  Identify potential savings opportunities for all telecommunications
     equipment and services at these sites using the information
     specified above and telecommunications tools such as USDA's
     network analysis model. 

  Stop further radio system purchases, except those necessary for
     meeting immediate technology needs that are critical to ongoing
     operations, until both departments jointly determine and
     document where radio equipment and services can be
     cost-effectively shared and savings achieved. 

  Monitor these activities and follow up where needed to ensure that
     all identified savings opportunities are acted upon. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :8

The Department of the Interior's Assistant Secretary for Policy,
Management and Budget provided written comments on April 7, 1997, on
a draft of this report.  Written comments were also provided by
USDA's acting CIO on April 8, 1997.  These comments are summarized
below, and are reproduced in appendixes II and III, respectively. 

Interior's Assistant Secretary for Policy, Management and Budget
stated that the Department will use our report to focus additional
efforts on eliminating unnecessary telecommunications services and to
implement sharing opportunities.  Specifically, the Assistant
Secretary stated that Interior will use the results of our review to
develop guidance and direction needed by bureau telecommunications
managers to better manage their acquisition and sharing of
telecommunications services and develop a telecommunications
management improvement strategy for the Department.  The Assistant
Secretary also stated that Interior's strategy will be implemented by
identifying projects, staffing them with Departmental and bureau
managers, prioritizing actions, and monitoring results.  She also
said that actions have already begun on several of these improvement
projects. 

We are encouraged by Interior's statements to better manage its
acquisition and sharing of telecommunications services.  It will now
be important for the Department to develop specific actions it plans
to take on each of our recommendations as it moves ahead on efforts
to better manage and share telecommunications resources.  Given
Interior's decentralized telecommunications management structure and
its reliance on bureaus to identify and act on savings opportunities,
it is especially important for the Secretary to implement our
recommendations to direct--and hold accountable--the Department's
acting CIO and assistant secretaries for establishing and fully
implementing, both among and within Interior's bureaus, programs for
systematically identifying and acting on all opportunities to
consolidate and optimize telecommunications resources--including
voice, data, video, and radio equipment and services--where it is
cost-effective to do so. 

Interior's Assistant Secretary and USDA's acting CIO stated that
their departments plan to work together to share telecommunications
resources and achieve savings.  While these statements are
encouraging, neither department responded to our specific
recommendations relating to implementing the 1995 joint sharing
agreement.  Given the little action taken on this agreement, we
believe it is especially important that the Secretary of the Interior
and the Secretary of Agriculture ensure that their respective acting
CIOs are both held responsible and accountable for fully implementing
the 1995 agreement as well as our other recommendations for
increasing levels of telecommunications resources sharing between the
departments. 

Interior's Assistant Secretary stated that Interior did not agree
with our recommendation to stop further radio purchases, except those
necessary for meeting immediate technology needs that are critical to
ongoing operation, until both departments jointly determine and
document where radio equipment and services can be cost effectively
shared and savings achieved.  The Assistant Secretary did state,
though, that Interior supports the goal of implementing shared radio
systems, and will implement procedures within Interior and with the
Forest Service to ensure that all land mobile radio systems designs
are reviewed for sharing and other savings potential prior to radio
purchase.  USDA's acting CIO stated that additional work on sharing
radio systems is needed by the Forest Service and Interior, but did
not comment on our specific recommendation. 

We are also encouraged by Interior's and USDA's statements indicating
their willingness to work toward increased levels of radio sharing. 
Nevertheless, we stand by our recommendation that Interior and USDA
should stop further radio system purchases, except those necessary
for meeting immediate technology needs that are critical to ongoing
operations, until both Departments jointly determine and document
where radio equipment and services can be cost effectively shared and
savings achieved.  Regarding the costs of Interior's transition to
narrowband radio systems, Interior's Assistant Secretary also stated
that the Department now plans to spend $270 million for the
narrowband radio system transition; not the $200 million we were told
during our review.  We have amended the report to reflect Interior's
revised estimate of $270 million. 

Interior's Assistant Secretary also provided several specific
comments.  Regarding use of USDA's network analysis model tool to
identify cost savings opportunities, the Assistant Secretary stated
that the Department had used USDA's model to eliminate $100,000 in
addition to what is stated in the report and that the tool had also
been used to identify $750,000 in redundant data circuits at the
Bureau of Indian Affairs. 

Our information, however, continues to indicate otherwise. 
Specifically, in February 1997, and again on April 8, 1997, the
official responsible for the network analysis model at USDA stated
that while he had given Interior a copy of the model in September
1995, Interior had never used it.\20 Even so, our report does
recognize the more than $1.1 million in duplicate circuits that
Interior said it identified by reviewing FTS 2000 billing records and
this amount includes circuits at the Bureau of Indian Affairs. 
However, as the report also states, OIRM did not provide us with the
billing records necessary to confirm that the Department had actually
achieved any of these savings, despite several requests during our
review for these records. 

The Assistant Secretary also commented that Interior believes AT&T's
records include some telephone lines that are not active or being
billed to the Department.  However, the Assistant Secretary agreed
with the report's premise that Interior may have unused telephone
lines and, as a result, the Department will conduct a thorough review
of AT&T's records to verify the number of telephone lines it has and
take corrective action where necessary.  We agree that AT&T's records
may include inactive lines in some cases.  However, as we discuss in
our report, hundreds of thousands of dollars in savings have been
achieved at one Bureau of Reclamation office where AT&T's records
were used to identify and eliminate unnecessary telephone lines. 
Given this and the fact that Interior does not know to what extent it
may be paying for unnecessary or inactive telephone lines, we believe
that this action by Interior, if fully carried out across the
Department, could achieve additional savings by helping to identify
and eliminate further unnecessary telephone lines and services. 

Finally, Interior's Assistant Secretary named numerous examples that
were not cited in our report in which radio service is being shared
between Interior bureaus and USDA agencies.  Our report recognizes
that Interior and USDA have taken some steps to share radio services,
but have done little to ensure that radio and other
telecommunications resources are shared in all cases throughout the
country where there are opportunities to do so. 


--------------------
\20 According to this official, the model was not used by Interior
because Interior officials had never requested and obtained the input
data necessary to operate it.  The USDA official further stated that
on April 3, 1997, Interior requested input data for the model and
asked to be trained in its use. 


---------------------------------------------------------- Letter :8.1

As agreed with your offices, unless you publicly announce the
contents of this report earlier, we will not distribute it until 30
days from the date of this letter.  At that time we will send copies
to the Secretary of the Interior; the Secretary of Agriculture; the
Chairmen and Ranking Minority Members of the Senate Committee on
Governmental Affairs, the Senate and House Committees on
Appropriations, and the House Committee on Government Reform and
Oversight; the Director of the Office of Management and Budget; and
other interested parties.  Copies will also be made available to
others upon request. 

Please contact me at (202) 512-6408 if you or your staff have any
questions concerning this report.  I can also be reached by e-mail at
[email protected].  Major contributors to this report are
listed in appendix IV. 

Joel C.  Willemssen
Director, Information Resources Management


SCOPE AND METHODOLOGY
=========================================================== Appendix I

To address our objectives, we reviewed Interior policies on
telecommunications management, various memoranda and reports
discussing telecommunications management activities at the
Department, vendor billing data showing Interior telecommunications
usage and costs, and other materials outlining plans and efforts by
OIRM and the bureaus to identify opportunities to consolidate and
optimize telecommunications resources and services and implement
cost-savings solutions.  To identify Interior's overall
telecommunications costs, we obtained the Department's estimated
costs for fiscal year 1995, as it does not track costs for voice,
data, video, and other services.  We also reviewed documentation
relating to interagency efforts by Interior and USDA's Forest Service
to combine and share resources and obtained current estimated radio
replacement costs for Interior bureaus and the Forest Service. 

To determine whether Interior had consolidated and optimized
telecommunications resources to eliminate unnecessary services and
maximize savings, we interviewed OIRM officials responsible for
Departmentwide telecommunications management activities as well as
telecommunications managers and/or staff in Interior's major bureaus. 
In addition, we reviewed internal correspondence and other documents
describing actions taken to identify Departmentwide opportunities to
consolidate and optimize telecommunications services. 

Because Interior did not have a current list of sites where its
bureau offices are collocated with one another and with Forest
Service offices, we attempted to develop this information by
contacting USDA's National Information Technology Center in Fort
Collins, Colorado, which assists the General Services Administration
in managing the government's FTS 2000 billing database.  Because all
Interior bureaus and the Forest Service obtain services under the
government's FTS 2000 contract, in September 1996, we asked the
National Information Technology Center to develop information from
the FTS 2000 billing database showing addresses for Interior and
Forest Service offices, from which collocated sites could be
identified.  Initial lists were provided to us in November 1996, but
programming problems that caused some data irregularities precluded
us from using this information. 

To review consolidation and sharing activities, we selected four
locations where OIRM and bureau officials told us bureau offices were
collocated and where some actions had been taken to consolidate and
optimize telecommunications resources and services.  Specifically, we
visited Interior bureau offices in Lakewood and Durango, Colorado;
Farmington, New Mexico; and Cheyenne, Wyoming.  To determine the
extent to which telecommunications resources and services had been
consolidated at these locations, we interviewed bureau officials and
observed ongoing operations. 

At our site visits, we found cases in which Interior and the bureaus
had additional opportunities to consolidate and optimize
telecommunications services and had lost savings because no one had
identified and acted on these opportunities.  However, we were unable
to identify precise dollar amounts for these lost savings because
up-to-date, comprehensive information describing telecommunications
services and costs were generally not available at these offices. 
Therefore, in the absence of this information, we attempted to
estimate the lost savings by analyzing Interior telecommunications
usage and cost data that we had also obtained from USDA's National
Information Technology Center and commercial telephone company
vendors.\1

To determine whether Interior and the Forest Service were sharing
telecommunications services where possible, we interviewed
telecommunications managers involved in these activities and reviewed
the status of plans intended to expand sharing.  In addition, we
discussed sharing projects underway or planned with Interior and
Forest Service officials at offices in Lakewood and Durango and
opportunities for sharing voice, data, and radio equipment and
services.  We also reviewed telecommunications usage and cost data
obtained from USDA's National Information Technology Center and
commercial telephone company vendors to determine the extent to which
telecommunications resources had been consolidated and optimized. 

We performed our audit work from August 1996 through March 1997, in
accordance with generally accepted government auditing standards. 
Our work was primarily done at Interior and USDA headquarters offices
in Washington, D.C.  We also worked at Interior offices for the
National Park Service, the Bureau of Reclamation, and the Office of
Surface Mining Reclamation and Enforcement in Washington, D.C.; the
Bureau of Land Management, the Bureau of Reclamation, and the U.S. 
Fish and Wildlife Service in Lakewood; the Minerals Management
Service in Herndon, Virginia; and the U.S.  Geological Survey in
Reston, Virginia.  Our work also included visits to selected Interior
bureau offices in Farmington and Cheyenne; Interior and USDA Forest
Service offices in Durango; and Forest Service offices in Lakewood. 



(See figure in printed edition.)Appendix II

--------------------
\1 The National Information Technology Center's Telecommunications
Services Division had developed significant expertise in the
cost-based analysis of telecommunications services; its personnel
have been recognized for their technical excellence by the General
Services Administration and by the Interagency Committee on
Information Resources Management. 


COMMENTS FROM THE DEPARTMENT OF
THE INTERIOR
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)




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



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON
D.C. 

Stephen A.  Schwartz, Senior Assistant Director
William D.  Hadesty, Technical Director
Mark D.  Shaw, Assistant Director
Mirko J.  Dolak, Technical Assistant Director
Patricia Macauley, Senior Information Systems Analyst
Michael P.  Fruitman, Communications Analyst

*** End of document. ***