Census Bureau: Important Activities for Improving Management of  
Key 2010 Decennial Acquisitions Remain to be Done (01-MAR-06,	 
GAO-06-444T).							 
                                                                 
The Census Bureau plans to increase its use of automation to	 
conduct the 2010 Decennial Census. Two key acquisitions are the  
Decennial Response Integration System (DRIS) and the Field Data  
Collection Automation program (FDCA). DRIS is expected to	 
standardize and integrate data from census forms and other	 
response modes. FDCA is expected to provide automation support	 
for field data collection activities. Last year, Congress asked  
GAO to assess the status, plans, and management capabilities of  
both of these projects. In January 2006, GAO briefed		 
Congressional staff on the results of that work. This testimony  
summarizes key findings from that briefing, including the status 
and management capabilities of each project.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-444T					        
    ACCNO:   A48022						        
  TITLE:     Census Bureau: Important Activities for Improving	      
Management of Key 2010 Decennial Acquisitions Remain to be Done  
     DATE:   03/01/2006 
  SUBJECT:   Census						 
	     Data collection					 
	     Federal procurement				 
	     Internal controls					 
	     Mechanization					 
	     Program evaluation 				 
	     Program management 				 
	     Quality assurance					 
	     Risk management					 
	     2010 Decennial Census				 
	     Decennial Response Integration System		 
	     Field Data Collection Automation Program		 

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GAO-06-444T

     

     * Testimony Before the Subcommittee on Federalism and the Census,
       Committee on Government Reform, House of Representatives
          * For Release on Delivery Expected at 10:00 a.m. EST Wednesday,
            March 1, 2006
     * CENSUS BUREAU
          * Important Activities for Improving Management of Key 2010
            Decennial Acquisitions Remain to be Done
          * Results in Brief
          * Background
          * DRIS Project Under Way but Key Management Activities Remain To Be
            Implemented
          * FDCA Program Has Been Initiated but Key Management Activities
            Remain To Be Performed
          * Conclusions
          * Recommendations for Executive Action
          * Agency Comments and Our Evaluation
          * Contacts and Acknowledgements
     * Appendix II: Objectives, Scope, and Methodology
     * PDF5-Ordering Information.pdf
          * Order by Mail or Phone

                 United States Government Accountability Office

Testimony

GAO

 Before the Subcommittee on Federalism and the Census, Committee on Government
                        Reform, House of Representatives

For Release on Delivery Expected at 10:00 a.m. EST Wednesday, March 1,
2006

CENSUS BUREAU

Important Activities for Improving Management of Key 2010 Decennial Acquisitions
                               Remain to be Done

Statement of David A. Powner, Director Information Technology Management
Issues

CENSUS BUREAU

Important Activities for Improving Management of Key 2010 Decennial
Acquisitions Remain to be Done

  What GAO Found

The Census Bureau has initiated efforts to acquire DRIS and FDCA, key
systems it needs to perform the 2010 Decennial Census. It awarded a
contract for DRIS in October 2005; the system is currently in a design and
development phase. The bureau expects to award a contract for FDCA
development in March 2006. While both projects' life cycle cost estimates
are currently considered procurement sensitive, together they are expected
to make up a large portion of the $1.8 billion program to develop, test,
and implement decennial census systems. Both acquisitions involve
ambitious schedules in order to be able to deliver the needed
functionality to support a planned 2008 census dress rehearsal and the
eventual 2010 census activities.

While both project offices have implemented initial acquisition management
activities, neither has the full set of capabilities they need to
effectively manage the acquisitions (see table below). Specifically, the
DRIS project completed its solicitation activities and the FDCA project
has completed most of its solicitation activities. However, activities in
other management areas have been initiated but not completed. For example,
the DRIS project office has established baseline requirements for the
acquisition, but the bureau has not yet validated them or implemented a
process for managing the requirements. Also, while the FDCA project office
has initiated efforts to oversee the contractor's performance, such as
requiring earned value management reporting (a project management tool
that integrates cost, schedule, and scope of work to aid project planning
and control) and hiring staff with contracting experience, it has not yet
determined which performance measures it will use to track the contractor
and its own internal project office performance. Until these and other
basic contract management activities are fully implemented, both projects
face increased risks that the systems will experience cost overruns,
schedule delays, and performance shortfalls.

Mr. Chairman and Members of the Subcommittee:

We appreciate the opportunity to participate in today's hearing to discuss
our work on key acquisitions supporting the 2010 Decennial Census. As you
know, the Census Bureau is currently planning the decennial census- the
nation's oldest and most comprehensive source of population and housing
data. While apportionment-the proportional distribution of the number of
members of the U.S. House of Representatives in each state on the basis of
the population of each state-is the most widely known use of census data,
the data are also used for congressional redistricting, managing federal
agencies, and allocating federal funds. These data are disseminated to
state and local governments, academia, and the private sector for use in
understanding this country's people and their social, demographic, and
economic characteristics. The next decennial census is required to begin
on April 1, 2010, and the Secretary of Commerce is required to report to
the President the tabulation of total population by states within 9 months
of that date.1

In June 2005, we reported on the Census Bureau's progress in five
information technology (IT) management areas-investment management,
systems development/management, enterprise architecture management,
information security, and human capital.2 These IT management areas are
important because they have substantial influence on the effectiveness of
organizational operations and-if applied effectively-can reduce the risk
of cost and schedule overruns, and performance shortfalls. We reported
that, while the bureau had many practices in place, much remained to be
done to fully implement effective IT management capabilities. We also made
several recommendations to improve the bureau's management. Given the
weaknesses we noted in the five management areas and the importance of IT
investments to the upcoming 2010 Decennial Census, you asked us to review
two planned Census Bureau acquisitions: the Decennial Response Integration
System (DRIS)-a system for integrating paper, Internet, and telephone
responses; and the Field Data Collection Automation (FDCA) program-the
systems, equipment, and infrastructure field staff will use to collect
census data.

113 U.S.C. 141 (a) and (b).

2GAO, Information Technology Management: Census Bureau Has Implemented
Many Key Practices, but Additional Actions Are Needed, GAO-05-661
(Washington, D.C.: June 16, 2005).

Page 2 GAO-06-444T

                                Results in Brief

In January, we presented a detailed briefing to the committee and
subcommittee staffs, which is provided in appendix I. At your request, I
will discuss key findings from that briefing, specifically covering each
project's status and management capabilities. An overview of the approach
we used to perform this work-our objectives, scope, and methodology-is
provided in appendix II.

The Census Bureau has initiated efforts to acquire DRIS and FDCA, key
systems it needs to perform the 2010 Decennial Census. It awarded a
contract for DRIS in October 2005; the system is currently in a design and
development phase. The bureau expects to award a contract for FDCA
development in March 2006. While both projects' life cycle cost estimates
are currently considered procurement sensitive, together they are expected
to make up a large portion of the $1.8 billion program to develop, test,
and implement decennial census systems. Both acquisitions involve
ambitious schedules in order to be able to deliver the needed
functionality to support a planned 2008 census dress rehearsal and the
eventual 2010 census activities.

While both project offices have implemented initial acquisition management
activities, neither has the full set of capabilities they need to
effectively manage the acquisitions. Specifically, the DRIS project
completed its solicitation activities and the FDCA project has completed
most of its solicitation activities. However, activities in other
management areas have been initiated but not completed. For example, the
DRIS project office has established baseline requirements for the
acquisition, but the bureau has not yet validated them or implemented a
process for managing the requirements. Also, the project office identified
project risks, but has not yet developed written mitigation plans or
established milestones for completing key risk mitigation activities.
Regarding FDCA, the project office has developed baseline functional
requirements for the acquisition, but the bureau has not yet validated
them. Also, while the FDCA project office has initiated efforts to oversee
the prospective contractor's performance, such as requiring earned value
management3 reporting and

3Earned value management is a project management tool that integrates the
investment scope of work with schedule and cost elements for investment
planning and control. This method compares the value of work accomplished
during a given period with that of the work expected in the period.
Differences in expectations are measured in both cost and schedule
variances.

Page 3 GAO-06-444T

                                   Background

hiring staff with contracting experience, it has not yet determined which
performance measures it will use to track the contractor and its own
internal project office performance. Additionally, the project office
identified risks, but it has not yet implemented a risk management
process. Specifically, it has not yet assigned responsibilities, developed
detailed mitigation plans for managing the risks, or established
milestones for completing key mitigation activities.

Until these and other basic management activities are fully implemented,
both projects face increased risks that the systems will experience cost
overruns, schedule delays, and performance shortfalls. We are making
recommendations to the Director of the Census Bureau to ensure that both
project offices complete key activities needed to effectively manage
acquisitions, including activities associated with effective project
planning, requirements management, risk management, and performance
measurement.

The Census Bureau's mission is to serve as the leading source of quality
data about the nation's people and economy. While apportionment is the
most widely known use of census data, the data are also used for
congressional redistricting, managing federal agencies, allocating federal
funds, and they are disseminated to state and local governments, academia,
and the private sector. Data from a decennial census provide official,
uniform information gathered over the decades on the country's people and
their social, demographic, and economic characteristics. They provide the
baselines for countless other surveys and are used to develop sampling
frames for a number of other federal data collections, such as the Current
Population Survey, which is used to measure participation in the labor
market and unemployment rates.4

The bureau's decennial census organization, which is responsible for the
decennial census program, is comprised of several divisions and offices.
The Decennial Management Division is responsible for implementing the
decennial census. The Decennial Systems and Contracts Management Office
manages selected system contracts supporting the decennial census.

4For more information see GAO, Decennial Census: Overview of Historical
Census Issues, GAO/GGD-98-103 (Washington, D.C.: May 1, 1998).

Page 4 GAO-06-444T

To support the 2010 Decennial Census, the bureau manages a $1.8 billion
program called "2010 Testing, Evaluation, and Systems Design," which calls
for the acquisition and testing of systems and technologies. Two of the
key acquisitions associated with this program are DRIS and FDCA. In
addition, other key systems support the planned 2010 decennial census.
Together, these and other systems are to support the collection,
processing, and dissemination of census data. Figure 1 shows an overview
of the key systems planned to support the 2010 Decennial Census.

To effectively manage major IT programs, organizations should use sound
acquisition and management processes to minimize risks and thereby
maximize chances for success. Such processes include project and
acquisition planning, solicitation, requirements development and
management, risk management, contract tracking and oversight/project
monitoring and control, quality assurance, and executive oversight (see
table 1 for a description of each process). Such processes have been
identified and endorsed by leading organizations such as the Software
Engineering Institute and the Chief Information Officer's Council, and in
our prior work analyzing best practices in industry and government. Our
work has shown that such processes are significant factors in successful
systems acquisitions and development programs, and they improve the
likelihood of meeting cost and schedule estimates as well as performance.

        Table 1: Selected Processes for Effectively Managing IT Programs

                            Process area Description

Project and acquisition planning

Effective project planning involves establishing and maintaining plans
defining project scope and activities, including overall budget and
schedule, key deliverables, and milestones for key deliverables. It also
involves ensuring that the project team has the skills and knowledge
needed to manage the project and obtaining stakeholder commitment to the
project plan. Effective acquisition planning involves developing an
acquisition strategy that includes objectives, projected costs and
schedules, and risks.

Solicitation This activity includes identifying the needs within a
particular acquisition, developing and implementing a solicitation plan,
preparing for the evaluation of responses, issuing a solicitation package,
evaluating responses, conducting supporting negotiations, and making
recommendations for award of the contract.

Requirements development Requirements development involves eliciting,
analyzing, and validating customer and stakeholder needs

and management and expectations. Requirements management involves
establishing an agreed-upon set of requirements, ensuring traceability
between operational and product requirements, and managing any changes to
the requirements in collaboration with stakeholders.

Risk management An effective risk management process identifies potential
problems before they occur, so that risk-handling activities may be
planned and invoked as needed across the life of the product and project
in order to mitigate adverse impacts on achieving objectives. Key
activities include identifying and analyzing risks, assigning resources,
developing risk mitigation plans and milestones for key mitigation
deliverables, briefing senior-level managers on high-priority risks, and
tracking risks to closure.

Contract tracking and These processes provide oversight of the
contractor's and the project office's performance, in order to
oversight/project monitoring allow appropriate corrective actions if
actual performance deviates significantly from the plan. Key activities
and control in tracking both the contractor's and the project office's
performance include the selection of performance

measures, communicating status, taking corrective actions, and determining
                                   progress.

Process and product quality assurance

This process area provides staff and management with objective insight
into processes and associated work products. This includes the objective
evaluation of project processes and products against approved descriptions
and standards. Key activities include developing a quality assurance plan,
assigning resources to quality assurance activities, and implementing
quality assurance activities. Through quality assurance, the project team
is able to identify and document noncompliance issues and provide
appropriate feedback to project staff.

(Continued From Previous Page)

Process area Description

Executive oversight and governance Office of Management and Budget and GAO
guidance call for agencies to establish IT investment management boards
comprised of key executives to regularly track the progress of major
systems acquisitions. These boards should have documented policies and
procedures for management oversight of IT projects and systems, and should
be able to adequately oversee the project's progress toward cost and
schedule milestones and their risks. The board should also employ early
warning systems that enable it to take corrective actions at the first
sign of cost, schedule, and performance slippages.

  DRIS Project Under Way but Key Management Activities Remain To Be Implemented

Source: GAO summary of leading practices, including practices identified
by the Software Engineering Institute, the Chief Informatiion Officer's
Council, and the Office and Management and Budget.

DRIS is intended to receive, capture, and standardize census data provided
by respondents via census forms, telephone agents, and the Internet. DRIS
is also intended to standardize data collected via mobile computing
devices and perform other functions, such as provide assistance to the
public via telephone and the Internet.

On October 5, 2005, the bureau awarded a cost-plus-award-fee contract for
DRIS to Lockheed Martin Corporation and its seven subcontractors to
design, develop, and implement a system for standardizing and integrating
the data from all of the response modes. The contract has a 6-year
performance period, which includes designing and developing the system,
conducting the census dress rehearsal in 2008, conducting 2010 census
operations, and archiving data and disposing of equipment after the census
is completed. After the contract was awarded, the project got off to a
slow start because of a bid protest that has since been withdrawn. The
DRIS project office is currently reassessing the project schedule due to
delays associated with the bid protest. The project office plans to
complete this assessment and perform an integrated baseline review by
March 2006.5

The DRIS project office has initiated activities supporting key project
management processes, but does not yet have the full set of acquisition
management capabilities it needs to effectively manage the acquisition.
Table 2 provides a summary of the status of the DRIS project in each of
the process areas we evaluated.

5An integrated baseline review is a joint assessment by the contractor and
the project team of the technical plans for a work segment as well as the
adequacy of the budgets, resources, and schedules estimated to complete
that work. This review results in a detailed plan for work activities,
costs, and schedules that is used as the basis for tracking the earned
value of the contractor's deliverables.

Page 7 GAO-06-444T

Table 2: Summary of the Status of DRIS Acquisition Management Capabilities

Capability                               Status                            
                                            Initiated, but key activities     
Project and acquisition planning         remain to be completed, such as   
                                            finalizing the                    
                                            project management plan and       
                                            identifying key deliverables      
                                            beyond 2008.                      
                                            Key activities completed and      
Solicitation                             contract awarded ahead of         
                                            schedule.                         
                                            Initiated, but key activities     
Requirements development and management  remain to be completed, such as   
                                            validating                        
                                            requirements and implementing a   
                                            requirements management process.  
                                            Initiated, but key activities     
Risk management                          remain to be performed such as    
                                            preparing                         
                                            mitigation plans and holding      
                                            senior-level briefings.           
Contract tracking and oversight/project  Initiated, but project office     
monitoring and                           performance measures have not yet 
                                            been                              
control                                  established.                      
                                            Initiated, but a quality          
Process and product quality assurance    assurance process is not yet in   
                                            place.                            
                                            Initiated, but key governance     
Executive oversight/governance           activities remain to be           
                                            completed.                        

Source: GAO analysis of Census Bureau data.

The DRIS project office has made progress in building management
capabilities, but more remains to be done in key areas. For example, the
project office completed its solicitation activities and awarded the
contract ahead of schedule. In the area of requirements development and
management, the project office established basic functional requirements
for the acquisition and the Decennial Management Division has developed a
detailed change control process for managing requirements for all 2010
Decennial Census systems, including DRIS. However, the division has not
yet conducted a thorough validation of DRIS requirements, ensured
traceability between DRIS and operational requirements, or approved the
DRIS baseline requirements. Further, the division has not yet staffed the
teams responsible for managing requirements or initiated any requirements
management activities.

Until the bureau obtains validation and approval of DRIS requirements, it
faces increased risk that new and changing requirements could be
identified throughout the system's development. Changes identified late in
the development cycle could be costly to implement and could increase the
risk that the system will not be ready in time to support census
activities. Further, until the bureau staffs and implements its planned
requirements management process, it may not be able to effectively ensure
that resulting products meet requirements.

In the area of risk management, the DRIS project office has developed a
pre-award risk management plan that defines staff roles and
responsibilities and includes procedures for identifying and tracking
risks and risk mitigation actions. Since awarding the contract, the team
has updated the pre-award risks. However, the project team has not written
mitigation steps or dates associated with the team's plans for addressing
high-impact risks, and the project team has not conducted senior-level
briefings. Until the project team develops risk mitigation plans with
milestones for key activities and regularly briefs senior-level managers
on risks and risk mitigation plans, it faces increased probability that
DRIS will not be delivered on schedule, within budget, or perform as
expected.

In the area of contract and project monitoring, the DRIS project team
plans to provide contract tracking and oversight through reports including
earned value management and monthly status reports. However, the project
office has not yet selected detailed performance measures for tracking the
contractor or its own internal progress (such as progress against planned
milestones, number of risks opened and closed, number and frequency of
changes to requirements, and frequency of quality assurance reviews). As a
result, the project team is not able to ensure that it will be able to
identify and document any noncompliance issues and take appropriate
corrective actions.

One of the root causes of the project's delay in completing key management
activities is that the Census Bureau lacks the organizational policies for
managing major acquisitions. As a result, the success of major
acquisitions such as DRIS is highly dependent on the knowledge, skills,
and qualifications of the project offices. Without a minimum set of
required steps and processes, Census acquisitions are at increased risk of
being run in an ad hoc and chaotic manner-potentially resulting in
increased project costs, delayed schedules, and performance shortfalls. In
commenting on a draft of our briefing, agency officials acknowledged that
the bureau does not have an organizational acquisition management policy,
but noted that, even if there were a policy, time and budget constraints
have driven the bureau to proceed with its acquisitions before all of the
recommended activities have been completed. Officials stated that they
plan to complete these activities as soon as possible.

  FDCA Program Has Been Initiated but Key Management Activities Remain To Be
  Performed

The FDCA program is expected to provide automation support for field data
collection operations for the 2010 Census. The program is expected to
provide office automation for regional and local census offices; the
telecommunications infrastructure for headquarters, regional, and local
offices; and mobile computing devices for field workers. The bureau plans
to have field-based enumerators use nearly 500,000 mobile computing
devices to support decennial census field operations. Our companion
testimony provides details on mobile computing devices and concerns about
the reliability observed during testing.6 Enumerators from local census
offices will use these mobile computing devices to complete activities
including address canvassing (visiting households to update address lists
and collect global positioning coordinates to update maps) and conducting
non-response follow-up (visiting households to obtain information from
households that do not provide responses via mail, Internet, or phone).
The bureau plans to award the FDCA contract, which is expected to be a
cost-reimbursement contract with multiple incentives, on March 31, 2006.
The contract is expected to have four phases-one planning and three
execution phases.

The FDCA project office has initiated many key processes to oversee and
manage the contract, but has not yet implemented the full set of
acquisition management capabilities it needs to fully manage the
acquisition. Table 3 provides a summary of the status of the FDCA project
in each of the process areas we evaluated.

6GAO, 2010 Census: Planning and Testing Activities Are Making Progress,
GAO-06-465T (Washington, D.C.: March 1, 2006).

Page 10 GAO-06-444T

Table 3: Summary of the Status of FDCA Acquisition Management Capabilities

Capability               Status                                            
Project and acquisition  Initiated, but key activities remain to be        
planning                 completed, such as identifying deliverables and   
                            milestones,                                       
                            and obtaining stakeholder buy-in on a project     
                            plan that includes the project's estimated costs, 
                            budget, and schedules.                            
                            Key activities completed; bureau officials said   
Solicitation             that they are on schedule to award the contract   
                            in                                                
                            March 2006.                                       
Requirements development Initiated, but key activities remain to be        
and                      completed such as validating requirements.        
management               
                            Initiated, but key activities remain to be        
Risk management          performed such as assigning responsibilities for  
                            risks and                                         
                            preparing mitigation plans.                       
Contract tracking and    Initiated, but key performance measures have not  
                            yet been established; bureau officials said that  
oversight/project        they expect to define these metrics after         
monitoring and           contract award.                                   
control                  
Process and product      Initiated; the quality assurance process is       
quality                  expected to be implemented after contract award.  
assurance                
Executive                Initiated, but key governance activities remain   
oversight/governance     to be completed.                                  

Source: GAO analysis of Census Bureau data.

The FDCA project office has made progress in building management
capabilities, but more remains to be done in key areas. For example, the
project office completed many key solicitation activities and plans to
award a contract in March 2006. In the requirements development and
management area, the project office and the Decennial Management Division
developed FDCA-specific functional requirements with participation from
stakeholders. The office has also drafted a requirements management plan.
However, the division has not yet validated and approved a baseline set of
operational requirements or ensured traceability between its operational
requirements and the FDCA request for proposal. Until the bureau finalizes
its operational requirements for the census and ensures that the FDCA
request for proposal is consistent with the baseline requirements, the
project will be at risk of having changes to the requirements, potentially
affecting its ambitious development and implementation schedule.

In the risk management area, the project office has developed a draft risk
management process and identified a number of high-level risks for the
FDCA project. Also, to manage its schedule and technical risks, the
project office has adopted an approach calling for pre-award prototype
development. However, the FDCA project office has not yet revisited or
analyzed the identified risks, begun prioritizing and tracking project
risks, or documented risk mitigation plans. Until the team implements an

                                  Conclusions

effective risk management process, it will lack a mechanism to address
known and unknown problems.

Additionally, in the contract and project monitoring area, the project
office has initiated efforts to oversee the contractor's performance, such
as requiring earned value management reporting and hiring staff with
contract tracking and oversight experience. However, the project office
has not yet selected detailed performance measures for tracking the
contractor or its own internal progress (such as progress against planned
milestones, number of risks opened and closed, number and frequency of
changes to requirements, and frequency of quality assurance reviews).
Without such practices in place, the project team is not able to ensure
that it will be able to identify problems and take appropriate corrective
actions in a timely manner.

While the DRIS and FDCA project offices have initiated important steps in
establishing sound and capable project management, neither has completed
all of the important activities needed to adequately manage the
acquisitions. Incomplete management activities, including those for
requirements management, risk management, and contract and project
monitoring, increase the risk that these projects will encounter problems
in meeting cost and schedule expectations. Given the immovable deadline
for performing the 2010 Decennial Census, if unexpected problems or
changes occur, it is more likely that the bureau will face cost overruns
or be forced to accept a system with limited functionality. Since the DRIS
contract was awarded in October 2005, and the FDCA contract is expected to
be awarded in March, it is critical that the DRIS project office
expeditiously put in place key elements of sound acquisition management
capability. Bureau officials acknowledge the importance of implementing
these acquisition management processes and state that they plan do to so
as soon as possible.

To ensure that the bureau adequately manages the DRIS project, we

  Recommendations for

recommend that the Director of the Census Bureau direct the project office
to take the following six actions:

o  Complete the DRIS project plan and obtain stakeholders' commitment to
the plan before initiating further development work.

  Agency Comments and Our Evaluation

     o Obtain validation, management, and customer approval of DRIS
       requirements.
     o Staff teams and perform planned requirements management activities.
     o Develop mitigation plans with milestones for key activities, and
       regularly brief senior managers on important risks.
     o Establish performance measures and monitor results for contractor and
       project office activities.
     o Implement a quality assurance process by establishing responsibilities
       for assuring product quality and defining how inspections, reviews,
       and walkthroughs will be used to measure quality.

Further, to ensure that the bureau improves its ability to manage this and
other acquisitions, we recommend that the Director of the Census Bureau
immediately establish and enforce a system acquisition management policy
that incorporates best practices in system and software acquisition
management (including those highlighted in our briefing).

To ensure that the bureau adequately manages the FDCA project, we
recommend that the Director of the Census Bureau direct the project office
to take the following four actions:

     o Obtain stakeholder commitment to a project plan that includes
       estimated project costs and schedules, including deliverables and
       milestones.
     o Obtain validation and approval of baseline requirements.
     o Identify, prioritize, and assign responsibilities for risks, and
       develop and implement risk mitigation plans and actions.
     o Develop internal and contractor performance measures and prepare to
       track project cost, schedule, and performance.

In providing oral and e-mail comments on a draft of our briefing, Census
Bureau officials-including the Associate Director for the Decennial Census
and the Assistant Director for Decennial Information Technology and
Geographic Systems-generally agreed with our recommendations and

Page 13 GAO-06-444T

stated that time constraints and budgets have driven the bureau to proceed
with its acquisitions before all of the recommended activities have been
completed. Officials stated that they plan to complete these activities as
soon as possible.

Bureau officials also stated that they intend to rely on the DRIS and FDCA
contractors to help refine requirements, project plans, and performance
measures. However, our experience in reviewing major system acquisitions
in recent years has shown that there are risks associated with relying too
heavily on contractors to perform key management and oversight activities.
For example, after a long history of significant cost increases and
schedule delays on its Business System Modernization program, the Internal
Revenue Service recently began transferring responsibility for key program
management operations (including cost and schedule estimation and
measurement, integration testing, and risk management) away from its
contractor and back to the agency because of the contractor's poor
performance in these areas.7 Clearly, it is important for the government
to exercise strong leadership in managing requirements, plans, risks, and
performance measures. Bureau officials also offered technical corrections,
which we incorporated in the briefing and in this statement as
appropriate.

This concludes my statement. I would be pleased to respond to any
questions that you or other members of the Subcommittee may have at this
time.

If you have any questions regarding this testimony, please contact David

  Contacts and

Powner at (202) 512-9286 or by e-mail at p [email protected]. Individuals
making contributions to this testimony include Neil Doherty, Amanda Gill,
Nancy Glover, Colleen Phillips, and Cynthia Scott.

7GAO, Internal Revenue Service: Assessment of Fiscal Year 2006 Budget
Request and Interim Results of the 2005 Filing Season, GAO-05-416T
(Washington, D.C.: April 7, 2005); and GAO, Business Systems
Modernization: Internal Revenue Service's Fiscal Year 2005 Expenditure
Plan, GAO-05-774 (Washington, D.C.: July 22, 2005).

Page 14 GAO-06-444T

Appendix I: GAO Briefing to Committee and Subcommittee Staffs on January 30,
2006

    Census Bureau Key Acquisitions Supporting the 2010 Decennial Census Face
                                   Challenges

    Briefing for the Committee on Government Reform and its Subcommittee on
               Federalism and the Census House of Representatives

                                January 30, 2006

Introduction Objectives Scope and Methodology Results in Brief Background
Decennial Response Integration System

o  Overview, Status, and Plans

o  Acquisition Management Capabilities

o  Conclusions

o  Recommendations

Field Data Collection Automation program

o  Overview, Status, and Plans

o  Acquisition Management Capabilities

o  Conclusions and Recommendations

Agency Comments and Our Evaluation

Briefing Outline

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In June 2005, we reported on the Census Bureau's progress in five
information technology (IT) management areas-investment management,
systems development/management, enterprise architecture management,
information security, and human capital.1 We reported that, while the
bureau had many practices in place, much remained to be done to fully
implement effective IT management capabilities. We made several
recommendations intended to improve these capabilities across the bureau.

Given the weaknesses we noted in the five IT management areas and the
importance of IT investments to the upcoming 2010 Decennial Census, the
Chairman of the House Committee on Government Reform and the Chairman and
Ranking Member of the Subcommittee on Federalism and the Census requested
that we assess the bureau's ability to manage important new acquisitions
intended to support the decennial census.

1GAO, Information Technology Management: Census Bureau Has Implemented
Many Key Practices, but Additional Actions Are Needed,
GAO-05-661(Washington, D.C.: June 16, 2005).

As part of the Census Bureau's plans to increase the use of automation and
technology for the 2010 Decennial Census, the bureau will be undertaking
several major acquisitions including the Decennial Response Integration
System (DRIS)-a system for integrating paper, Internet, and telephone
responses, and the Field Data Collection Automation (FDCA) program-the
systems and support equipment for field office data collection activities.

Our objectives for each of these acquisitions are to:

     o provide an overview, status, and plans (including costs, schedule, and
       deliverables) and
     o determine if the bureau has capabilities in place to successfully
       manage and oversee the acquisitions.

To provide the project's overview, status, and plans, we analyzed current
project documents including plans, acquisition documents, and
deliverables, and we interviewed project officials.

To determine if the bureau has capabilities in place to successfully
manage and oversee the acquisitions, we identified sound IT systems
acquisition and management processes from industry standards, including
those developed by the Software Engineering Institute, and compared them
to the Census Bureau's practices for the selected acquisitions. We
evaluated the following processes:

     o project and acquisition planning  o  contract tracking and oversight/
     o solicitation project monitoring and control
     o requirements development and  o  process and product quality
       management assurance
     o risk management  o  executive oversight and governance

In each process area, we evaluated project documentation and interviewed
project officials to determine the status of the bureau's efforts.

We conducted our review between July 2005 and January 2006 at Census
Bureau headquarters in Suitland, Maryland, in accordance with generally
accepted government auditing standards.

The Census Bureau has initiated efforts to acquire the major systems it
needs to perform the 2010 Decennial Census, including the Decennial
Response Integration System (DRIS), and the Field Data Collection
Automation (FDCA) program. It awarded a contract for DRIS in October 2005
and the system is currently in a design and development phase. The bureau
expects to award a contract for FDCA development in March 2006. While both
projects' life cycle cost estimates are currently considered procurement
sensitive, together they are expected to make up a large portion of the
$1.8 billion program to develop, test, and implement decennial census
systems. Both acquisitions involve ambitious schedules in order to be able
to deliver the needed functionality to support a planned 2008 census dress
rehearsal and the eventual 2010 census activities.

While both projects have implemented initial project management
activities, neither has the full set of acquisition management
capabilities they need to fully manage the acquisitions. For example, the
DRIS project office has a draft project plan that contains many of the
needed elements, but it has not yet completed the plan or obtained written
stakeholder buy-in on it. It established baseline requirements for the
acquisition, but the bureau has not yet validated them or implemented a
process for managing the requirements. Also, the project office identified
risks, but has not yet implemented a risk management process.
Specifically, the project office has not yet developed written mitigation
plans or established milestones for completing key risk mitigation
activities.

Regarding FDCA, its project office has initiated a project plan, but has
not yet obtained written stakeholder buy-in on an overall plan that
includes the project's estimated costs, budget, and schedules. It has
identified requirements for the acquisition, but the bureau has not yet
approved a validated set of requirements or ensured that the acquisition
requirements are traceable to the broader set of operational requirements
for the decennial census. Further, while the project office identified
risks, it has not yet assigned responsibilities or developed detailed
mitigation plans for managing the risks, or established milestones for
completing key mitigation activities.

Until these and other basic management capabilities are fully implemented,
both projects face increased risks that the systems will experience cost
overruns, schedule delays, and performance shortfalls. We are making
recommendations to both project offices and to the bureau to help improve
acquisition management capabilities.

In commenting on a draft of this briefing, Census Bureau officials,
including the Associate Director for the Decennial Census and the
Assistant Director for Decennial Information Technology and Geographic
Systems, generally agreed with our recommendations and stated that time
constraints and budgets have driven the bureau to proceed with its
acquisitions before all of the recommended activities have been completed.
Officials noted that they plan to complete these activities as soon as
possible. They also offered technical corrections, which we have
incorporated as appropriate.

Background Census Bureau Mission and Core Activities

The Census bureau's mission is to serve as the leading source of quality
data about the nation's people and economy. The bureau's core activities
include:

     o conducting decennial, economic, and government censuses,
     o conducting demographic and economic surveys,
     o managing international demographic and socioeconomic databases and
       providing technical advisory services to foreign governments, and
     o performing other activities such as producing official population
       estimates and projections.

Public and private decision makers use census population and socioeconomic
data for various purposes. For example:

     o decennial census data are used to determine congressional and state
       legislative districts and to distribute hundreds of billions of
       dollars in federal funds each year,
     o federal agencies use census data to evaluate the effectiveness of
       established programs, and
     o businesses use census data to target new services and products and to
       tailor existing ones to demographic changes.

The bureau's Decennial Census organization is responsible for the
decennial census program, the nation's oldest and most comprehensive
source of population and housing information.

Conducting a decennial census involves:

     o identifying and correcting addresses for all known living quarters in
       the United States,
     o sending questionnaires to housing units,
     o following up with non-respondents through personal interviews,
     o trying to identify people with non-traditional living arrangements,
     o managing a voluminous workforce responsible for follow-up activities,
     o collecting census data from questionnaires, calls, and personal
       interviews,
     o summarizing and tabulating census data, and
     o disseminating census analytical results to the public.

The Decennial Census organization is comprised of divisions and offices,
including the Decennial Management Division (DMD), which is responsible
for implementing the decennial census, and the Decennial Systems and
Contracts Management Office, which manages selected system contracts
supporting the decennial census.

Background Plans for the 2010 Decennial Systems To support the 2010
Decennial Census, the bureau manages a $1.8 billion program called "2010
Testing, Evaluation, and Systems Design," which calls for the acquisition
and testing of systems and technologies. Two of the key acquisitions are
the Decennial Response Integration System (DRIS) and the Field Data
Collection Automation (FDCA) program.

DRIS is expected to be a system for collecting data and integrating census
responses that come in through multiple routes, including census forms,
telephone agents, the Internet, and from mobile computing devices used by
field staff. DRIS is expected to standardize the response data and to
provide it to other bureau systems for analysis and processing.

The FDCA program is expected to provide mobile computing devices, office
automation, and an IT infrastructure to support collection of census data
in local and regional offices. Mobile computing devices will be used to
update the bureau's address list, to perform follow up at addresses for
which no questionnaire was returned, and to perform activities to measure
census coverage.

Background Plans for the 2010 Decennial Systems In addition to DRIS and
FDCA, other key systems support the planned 2010 decennial census. These
include:

     o master address file/topologically integrated geographic encoding and
       referencing- this is an existing system that contains the master list
       of addresses for the census
     o headquarters data processing systems-these are existing systems used
       to process census data as well as a management information system
     o data access and dissemination system II-this is a planned upgrade to
       an existing system to disseminate 2010 census data to the public

Together, these systems are to support the collection, processing, and
dissemination of census data, as illustrated on the next page.

Background Plans for the 2010 Decennial Systems The bureau plans a series
of tests in the years leading up to the decennial census.

2004: The bureau tested critical field operations using systems under
conditions similar to those to be used during the decennial census. In
particular, the agency studied the feasibility of using hand-held mobile
computing devices equipped with Global Positioning System capability to
conduct non-response follow-up operations. We recently reported on lessons
learned during this test.2

2006: The bureau plans to test the methodology and functions of the
integration of systems needed to carry out the census, focusing on efforts
to automate non-response follow-up activities and the initiatives to
update the address list.

2008: The bureau plans to conduct a final operational test of the entire
complement of methodological, procedural, and systems innovations for the
2010 Decennial Census. This test is known as the Dress Rehearsal.

2GAO, 2010 CENSUS: Basic Design Has Potential, but Remaining Challenges
Need Prompt Resolution, GAO-05-9 (Washington, D.C.: Jan. 12, 2005).

DRIS Overview, Status, and Plans During the prior decennial census, called
Census 2000, responsibilities for designing and developing a system for
capturing census data and related functions were shared by the bureau and
several contractors. The bureau designed and developed a system for
collecting data from the Internet, while one contractor developed a system
for providing telephone assistance to the public, and another contractor
developed a system for capturing data from responses returned by mail and
from the field operations targeting non-responders. Another contractor
provided the staffing and facilities for operating the data capture system
while the census was underway. The bureau then integrated all of the data.
Subsequently, the bureau found that this diversified approach resulted in
data that was not standardized and added to the cost of processing census
data.

For the 2010 Decennial Census, the bureau plans to have a single
contractor design, develop, and implement a system (DRIS) for
standardizing and integrating the data from all of the response modes
(paper, telephone, Internet, and from field operations).3 DRIS is intended
to:

     o receive, capture, and standardize census data provided by respondents
       via census forms, telephone agents, and the Internet,
     o standardize data collected via mobile computing devices,
     o provide the data to the headquarters data processing system,
     o provide assistance to the public via telephone and the Internet, and
     o monitor the quality and status of data capture operations.

3While the DRIS contractor is expected to standardize and organize
response data from the hand-held computers, the 15scope of the DRIS
contract does not include providing the systems or staff used for field
enumeration operations.

DRIS Overview, Status, and Plans

DRIS is expected to process an estimated 90 million mailed paper
responses, 40 million field responses, 9 million telephone calls, and 9
million Internet visits.

According to the bureau, qualitative improvements expected from DRIS
include:

     o integrating paper, Internet, and telephone responses within a workflow
       control system that will provide more timely information than existed
       in previous censuses and reduce the number of cases of non-response
       follow-up,
     o providing near real-time data that will support the planned second
       mailing to nonresponding addresses, and
     o reducing redundant efforts for the Census Bureau and contractors that
       existed for different contracts during Census 2000 by integrating key
       functions under one contract. In particular, efforts in the areas of
       security, data integration, change control, and contractor
       administration are expected to be reduced.

DRIS Overview, Status, and Plans The bureau began acquisition planning for
DRIS in 2003. Between 2003 and September 2005, the bureau spent about $7.5
million on researching data capture technologies, conducting web-based
vendor briefings, obtaining comments from prospective vendors, and
developing DRIS planning documents, strategies, and analyses. During this
time, the bureau also established the DRIS project office within the
Decennial Systems and Contracts Management Office (DSCMO).

Further, between February and August 2005, the bureau completed
solicitation activities as follows:

     o In February 2005, the bureau issued a request for proposal (RFP) for
       DRIS.
     o From March 2005 through August 2005, the bureau solicitation team
       reviewed and evaluated proposals and obtained oral presentations from
       vendors.
     o In August 2005, the solicitation team made a presentation to the
       Source Selection Evaluation Board and recommended a vendor for
       contract award.

DRIS Overview, Status, and Plans On October 5, 2005 the bureau awarded the
contract for DRIS to Lockheed Martin Corporation and its 7 subcontractors.
The DRIS performance contract is a cost-plus-award-fee contract. The
contract has a 6-year performance period divided into 3 primary phases as
follows:

    Phase I: October 2005 through December 2008

Includes delivering detailed design documentation, developing and testing
DRIS, conducting the 2008 dress rehearsal, and identifying data centers
for the 2010 Census.

    Phase II: August 2008 through the end of January 2011

Includes opening data center sites, completing operational testing,
conducting 2010 Census operations, and closing down the DRIS 2010
operations facilities once the census is complete.

    Phase III: July 2010 through end of contract

Includes archiving DRIS data and images in accordance with National
Archives and Records Administration guidelines and disposing of DRIS
equipment once it is no longer needed.

Phases I and II of this contract are valued up to $553 million. The total
life cycle cost of the project is considered procurement sensitive pending
the pricing of phase III.

DRIS Overview, Status, and Plans Phase I of the contract involves the
following key activities

Activity                                             Due Date              
Perform integrated baseline review4                  March 2006            
Deliver DRIS acquisition planning documents          February-October 2006 
Certify DRIS as ready for use at all 2008 dress      December 2007         
rehearsal                                            
facilities                                           
Deliver proposal for phase II-system operations and  September 2008        
facilities                                           
Complete dress rehearsal and production activities   December 2008         

The DRIS project team is currently reassessing these phase I dates due to
delays associated with a bid protest that has since been withdrawn. It
expects to identify new dates by March 2006. These new dates will likely
result in the first modification to the contract.

Also, the team expects to work with the contractor during phase I to
develop the milestones and deliverables for phases II and III.

4An integrated baseline review is a joint assessment by the contractor and
the project team of the technical plans for a work segment as well as the
adequacy of the budgets, resources, and schedules estimated to complete
that work. This review results in a detailed plan for work activities, 19
costs, and schedules that is used as the basis for tracking the earned
value of the contractor's deliverables.

To effectively manage major IT programs, organizations use sound
acquisition and management processes to minimize risks and thereby
maximize chances for success. Such processes have been identified by
leading organizations such as the Software Engineering Institute, the
Chief Information Officer's Council, and in our prior work analyzing best
practices in industry and government. Key areas include:

     o project and acquisition planning  o  contract tracking and
       oversight/project monitoring and
     o solicitation control
     o requirements development and  o  process and product quality
       management assurance
     o risk management  o  executive oversight and governance

Our work has shown that such processes are significant factors in
successful systems acquisitions and development programs and that they
improve the likelihood of meeting cost and schedule estimates as well as
performance requirements.

Summary of the status of DRIS acquisition management capabilities.

         Capability                              Status                       
Project and acquisition Initiated, but key activities remain to be         
                           completed, such as finalizing the project          
planning                management plan and identifying key deliverables   
                           beyond 2008.                                       
Solicitation            Key activities completed and contract awarded      
                           ahead of schedule.                                 
Requirements                    Initiated, but key activities remain to be 
                                   completed, such as validating requirements 
development and         and implementing a requirements management         
                           process.                                           
management              
Risk management         Initiated, but key activities remain to be         
                           performed such as preparing mitigation             
                           plans and holding senior-level briefings.          
    Contract tracking and  Initiated, but project office performance measures 
                           have not yet been established.                     
oversight/project       
monitoring and control  
     Process and product   Initiated, but a quality assurance process is not  
                           yet in place.                                      
quality assurance       
Executive               Initiated, but key governance activities remain to 
                           be completed.                                      
    oversight/governance   

The DRIS project team has

     o defined the overall project scope, budget, and schedule,
     o developed a draft project management plan that identifies key
       deliverables and milestones for these deliverables through the 2008
       dress rehearsal,
     o assigned an experienced and certified project manager and project
       team, and
     o developed an acquisition strategy that outlines the acquisition
       objectives, scope, costs, schedules, and risks.

However, the project team has not yet finalized its project plan,
identified key deliverables beyond 2008, or obtained stakeholder
commitment to the plan. The project team has not yet completed these
activities in part because there is no Census Bureau policy requiring them
to do so prior to contract award.

Until a project plan is completed and approved, the project lacks
assurance that it is moving in the right direction. Without this
assurance, it is more likely to encounter unanticipated changes in
direction-which could affect system cost, schedule, and deliverables.

DRIS Acquisition Management Capabilities

    Requirements development and management (continued)

However, DMD has not yet conducted a thorough validation of DRIS
requirements, ensured traceability between DRIS and operational
requirements, or approved the DRIS baseline requirements. Part of the
reason that these activities have not been completed is that there is no
Census Bureau policy requiring them to do so prior to contract award.
Further, DMD has not yet staffed the teams responsible for managing
requirements or initiated any requirements management activities.

Until the project team obtains validation and approval of DRIS
requirements and ensures these requirements are traceable to the
operational requirements, it faces increased risk that new and changing
requirements could be identified throughout the system's development.5
Changes identified late in the development cycle could be costly to
implement and could increase the risk that the system will not be ready in
time to support census activities.

Further, until the bureau staffs and implements its planned requirements
change management process, it may not be able to effectively ensure that
resulting products meet requirements. As a result, DRIS may not provide
the functionality needed or the bureau may experience cost increases and
schedule delays.

5While there have not been any contract modifications to date, the project
team expects to modify the contract to reflect the revised schedule.

DRIS Acquisition Management Capabilities

  Risk Management (continued)

Since contract award in October 2005, the project team has:

     o assigned a risk manager to provide oversight for the risk program,
     o implemented a tool for tracking risks and actions taken, and
     o reviewed risks and updated the risk database.

Also, the project team plans to:

     o conduct monthly internal reviews of DRIS risks and refer high risks to
       higher-level officials for input and approval of actions,
     o participate in the contractor's risk reviews and monitor the
       contractor's risk management plans as part of the contract's
       surveillance process, and
     o implement a process to assess risks based on the probability of
       occurrence and the impact on business drivers.

DRIS Acquisition Management Capabilities

    Risk Management (continued)

However, in the months since the contract was awarded, the project team
has not developed written risk mitigation plans, identified milestones for
key mitigation activities, or briefed senior management on its risks and
risk mitigation plans. Specifically, there are no written mitigation steps
or dates associated with the agencies' plans for addressing high-impact
risks, and senior-level briefings on these risks have not been held. Part
of the reason that these activities have not been completed is that there
is no organizational policy requiring completion of these activities.

Until the project team develops risk mitigation plans with milestones for
key activities, and regularly briefs senior-level managers on risks and
risk mitigation plans, it faces increased probability that DRIS will not
be delivered on schedule, within budget, or perform as expected.

DRIS Acquisition Management Capabilities

      Contract and Project Monitoring and Control (continued)

However, the project office has not yet selected detailed performance
measures for tracking the contractor or its own internal progress (such as
progress against planned milestones, number of risks opened and closed,
number and frequency of changes to requirements, and frequency of quality
assurance reviews), in part because there is no Census policy requiring
that these measures be implemented. Without such performance measures, the
team cannot perform the other key activities of communicating status,
taking corrective actions, and determining progress.

As a result, the project office's view into when performance deviates from
plans or when key activities are showing troubling trends is limited. This
can lead to unexpected cost increases, schedule delays, and performance
shortfalls.

DRIS Acquisition Management Capabilities

      Process and Product Quality Assurance (continued)

However, the project team has not yet established a quality assurance
plan, assigned resources, or implemented a quality assurance process.
Specifically, the team has not yet determined how they will use the
planned inspections, reviews, and walkthroughs to evaluate product
quality. The delay in implementing this process is due in part to a lack
of Census policy requiring these processes be in place prior to or soon
after contract award. As a result, the project team is not able to ensure
that it will be able to identify and document any noncompliance issues and
take appropriate corrective actions.

DRIS Acquisition Management Capabilities Executive-level oversight for
DRIS is to continue as follows:

     o The DRIS project manager is reporting progress directly to the chief
       of the Decennial Systems and Contracts Management Office.
     o The DRIS Program Office is reporting weekly on the status of the DRIS
       project to Decennial Management Division officials.
     o The DRIS Program Office is expected to participate in quarterly
       reviews with the Commerce Information Technology Review Board, Census
       Bureau managers, and the Associate Director for Decennial Census
       Leadership Team.
     o Commerce and Census executive-level IT governing boards expect to
       review the DRIS project as part of its annual preparation for meeting
       OMB requirements, under the 2010 Testing, Evaluation, and System
       Design program.

DRIS Acquisition Management Capabilities However, in June 2005, we
reported that the Census Bureau's executive oversight of IT projects was
incomplete.6 Specifically, we noted that the bureau lacked

     o written procedures outlining the IT investment board's operations and
       ensuring consistent investment management and decision making
       practices and
     o written policies and procedures for monitoring the progress of its IT
       projects and systems.

As a result, we reported that the bureau lacks assurance that investment
oversight and decision making is being performed in a consistent and
repeatable manner, and that consistent and appropriate actions will be
taken when cost, schedule, and performance expectations are not met. We
recommended that the bureau develop and implement these policies and
procedures. The bureau agreed to implement these recommendations, and
expects to do so by the end of July 2006.

Until these efforts are completed, the bureau cannot ensure that it is
providing effective and consistent oversight for the DRIS project.

6 GAO-05-661.

DRIS Conclusions While the DRIS project team has initiated important steps
in establishing a sound and capable project management office, it has not
yet completed important activities it needs to adequately manage this
acquisition. Incomplete project plans, requirements, and risk management
activities increase the risks that this project will encounter problems in
meeting cost and schedule expectations. Given that the contract was
awarded in October and is currently under way, it is critical that the
DRIS project office expeditiously put in place key elements of a sound
acquisition management capability.

One of the root causes of the project's delay in completing key management
activities is that the Census Bureau lacks organizational policies for
managing major acquisitions. As a result, the success of major
acquisitions such as DRIS and FDCA are extremely dependent on the
knowledge, skills, and qualifications of the project teams. Without a
minimum set of required steps and processes, Census acquisitions are at
increased risk of being run in an ad hoc and chaotic manner-potentially
resulting in increased project costs, delayed schedules, and performance
shortfalls.

DRIS Recommendations To ensure that the bureau adequately manages the DRIS
project, we recommend that the project office take the following six
actions:

        * complete the DRIS project plan and obtain stakeholders' commitment
          to the plan
        * before initiating further development work,  o  obtain validation
          and management and customer approval of DRIS requirements,
     o staff teams and perform planned requirements management activities,
     o develop mitigation plans with milestones for key activities, and
       regularly brief senior managers on important risks,
     o establish performance measures and monitor results for contractor and
       project office activities, and
     o implement a quality assurance process by establishing responsibilities
       for assuring product quality, and defining how inspections, reviews,
       and walkthroughs will be used to measure quality.

Further, to ensure that the bureau improves its ability to manage this and
other acquisitions, we recommend that the Director of the Census Bureau
immediately establish and enforce a system acquisition management policy
that incorporates best practices in system and software acquisition
management (including those highlighted in this briefing).

FDCA Overview, Status, and Plans The Field Data Collection Automation
(FDCA) program is expected to provide automation support for field data
collection operations for the 2010 Census. Specific requirements include:

o  office automation for the twelve regional census centers, the Puerto
Rico area office, and more than 450 local census offices,

     o the telecommunications infrastructure for headquarters, regional, and
       local offices,
     o mobile computing devices for field workers,
     o integration with other 2010 Census systems (e.g., DRIS and
       headquarters processing systems), and
     o development, deployment, technical support, de-installation, and
       disposal services.

Automating field data collection activities is expected to help reduce
overall 2010 Census costs as well as improve data quality and operational
efficiency.

FDCA Overview, Status, and Plans Mobile computing devices are a key
technology component of FDCA. Census plans to have field-based enumerators
use nearly 500,000 mobile computing devices to support the following
decennial census functions:

     o case management and automated payroll for enumerators,
     o address canvassing (visiting households to update address lists and
       collect global positioning system coordinates to update maps),
     o non-response follow-up (visiting households to obtain information from
       those that did not provide responses via mail, Internet, or phone),
     o assignment updating to avoid unnecessary follow-up on late responses,
     o data transmission, and
     o conducting additional interviews at a sample of households in order to
       help measure census undercounts or overcounts.

FDCA Overview, Status, and Plans In fiscal year 2002, the bureau conducted
market research on purchasing mobile computing devices and then purchased
and tested these devices during the 2004 census test. After encountering
technical problems and realizing that they lacked resources and expertise
to manage the project in-house, bureau officials decided to use an
integration contractor to help develop and manage the FDCA project.

The bureau has:

     o established a FDCA project office in January 2005
     o held an industry symposium in February 2005
     o issued a draft RFP and a pre-solicitation notice in April 2005,
       requesting that vendors submit examples of previous experience with
       projects similar to FDCA and describe the challenges facing the FDCA
       project. (Based on these proposals, the bureau then invited five
       vendors to develop and test prototypes for address canvassing. Of the
       five, three vendors chose to do so.)
     o released the final RFP in June 2005, and
     o conducted a technical exchange period from October to December 2005,
       during which the three vendors developed prototypes and the FDCA
       project team evaluated draft proposals.

FDCA Overview, Status, and Plans Project officials acknowledge that the
FDCA schedule is ambitious. Key near-term

activities include:                            
Final proposals and prototypes due                  January 20, 2006       
Final evaluation                                      Feb. 6-Mar. 17, 2006 
Source evaluation board review/decision             March 20-30, 2006      
Contract award                                       March 31, 2006        
Integrated baseline review                           March 31-May 31, 2006 
Dress rehearsal offices open                          January 2007         
(FDCA office automation ready)                 
Dress rehearsal address canvassing                   April-May 2007        
(using FDCA mobile computing devices)          

FDCA Overview, Status, and Plans

The FDCA contract is expected to be a cost-reimbursement contract with
multiple incentives. Cost estimates for FDCA are considered procurement
sensitive.

The FDCA RFP calls for a baseline planning period and three execution
periods as follows:

        * Baseline planning period: March 2006ˁMay 2006
        * o  involves the project team and contractor reaching agreement on
          schedule, cost, quality, scope, and technical performance
          measurement for the first contract execution period.
        * Execution period 1: June 2006ˁDecember 2008
        * o  includes activities leading up to and during the 2008 dress
          rehearsal
        * Execution period 2: January 2009ˁSeptember 2011
        * o  includes activities leading up to and during the 2010 Census
     o Execution period 3: August 2010ˁDecember 2011

o  includes activities to wrap up operations after the completion of the
2010 Census

FDCA Summary - Acquisition Management Capabilities Summary of the status
of FDCA acquisition management capabilities.

         Capability                              Status                       
Project and acquisition         Initiated, but key activities remain to be 
                                  completed, such as identifying deliverables 
planning                  and milestones, and obtaining stakeholder buy-in 
                                          on a project plan that includes the 
                           project's estimated costs, budget, and schedules.  
Solicitation            Key activities completed; the contract is expected 
                           to be awarded in March 2006.                       
Requirements                    Initiated, but key activities remain to be 
                                  completed, such as validating requirements. 
development and         
management              
Risk management                 Initiated, but key activities remain to be 
                                 performed such as assigning responsibilities 
                           for risks and preparing mitigation plans.          
    Contract tracking and  Initiated, but key performance measures have yet   
                           not been established.                              
oversight/project       
monitoring and control  
     Process and product          Initiated; the quality assurance process is 
                                    expected to be implemented after contract 
quality assurance       award.                                             
Executive               Initiated, but key governance activities remain to 
                           be completed.                                      
    oversight/governance   

FDCA Acquisition Management Capabilities

    Project and acquisition planning (continued)

However, the office has not yet:

o  established an overall project schedule (including deliverables and
milestones) for the project team and for the contractor for each contract
execution period, or

o  obtained stakeholder commitment to a comprehensive project management
plan that includes the project's estimated costs, budget, and schedules.

Bureau officials expect the project's costs and many management processes
to be finalized shortly after the contract is awarded in early 2006, and
they plan to work with the contractor to complete a master product
schedule and integrated baseline review during the initial baseline
planning period. By that time, Decennial Management Division (DMD)
officials also plan to have the schedule for key dress rehearsal
activities complete so that it can be considered during the integrated
baseline review.

.

FDCA Acquisition Management Capabilities

    Project and acquisition planning (continued)

In commenting on a draft of this briefing, bureau officials reiterated
that they have an independent government cost estimate, an overall budget
that they did not share with us due to its sensitivity, and an overall
schedule for census activities. Officials also noted that they do not
believe they can finalize cost, budget, deliverables, and milestones until
after the contract is awarded because they are contracting for a
solution-not a set of services or specific products.

While we acknowledge the various activities that the bureau has undertaken
to begin planning the FDCA project and the fact that a project plan will
continue to evolve as the program proceeds, the FDCA project management
plan does not provide stakeholders and other reviewers a comprehensive
overview of the project's estimates of costs, schedules, and deliverables.
Such a plan is often used to form a baseline for the program and to obtain
buy in from stakeholders.

Until the bureau completes key activities, including establishing budgets
and schedules and documenting stakeholder commitment to its plans, it
lacks assurance that reasonable plans for the project have been developed,
and faces increased risk that the project may not achieve expected cost,
schedule, and technical performance goals.

. The project office has

     o identified needs for the FDCA acquisition,
     o developed criteria for evaluating vendor proposals,
     o generated the solicitation package,
     o developed a source selection plan, and
     o conducted training on the evaluation process.

In addition, the project office has begun evaluating proposals, has
completed a technical exchange process, and plans to obtain
recommendations from the Source Selection Board for the award of the
contract in March 2006.

FDCA Acquisition Management Capabilities

    Requirements development and management (continued)

However, DMD has not yet

     o validated and approved a baseline set of operational requirements, or
     o ensured traceability between its operational requirements and the FDCA
       RFP.

DMD officials attribute the delay in finalizing operational requirements
primarily to the challenge of managing the magnitude and scope of the
census and its unique environment. Until the bureau finalizes its
operational requirements for the census and ensures that the FDCA RFP is
consistent with the baseline requirements, the project will be at risk of
later changes to the requirements, potentially affecting its ambitious
development and implementation schedule. This is especially important
given the acknowledged programmatic risk that there could be late changes
in census scope.

FDCA Acquisition Management Capabilities

      Risk management (continued)

However, the team has not yet implemented its risk management process.
Specifically, the project team has not yet

     o revisited or analyzed the identified risks,
     o begun prioritizing and tracking project risks,
     o assigned resources to manage risks, or
     o documented risk mitigation plans.

Bureau officials reiterated that they have managed FDCA risks throughout
the pre-award process and plan to continue to do so after the contract is
awarded, though not in the more formal manner outlined in our study of
best practices.

While we acknowledge that the program office continues to work to address
key risks, ad hoc risk management activities are not a substitute for a
more formal process where risks are routinely identified, prioritized, and
mitigated. Until the project team implements an effective risk management
process, it will lack a mechanism to address known and unknown problems.
Without such a process, potential problems are more likely to become
actual problems and have adverse effects on objectives-including FDCA
cost, schedule, and performance.

FDCA Acquisition Management Capabilities

      Contract tracking and oversight/project monitoring and control (continued)

Project officials acknowledged the need for additional planning for these
processes and activities, but do not plan to fully implement many aspects
of these processes until after contract award. In commenting on a draft of
this briefing, bureau officials stated that there would be little value in
establishing metrics in advance of having a FDCA solution and that they
plan to work with the winning vendor to establish meaningful metrics.
Officials also stated that they have already begun tracking internal
office performance and noted that they have already submitted earned value
management metrics for the program office to the Department of Commerce.

Given the importance of monitoring program office and contractor
performance, best practices show that it is not too soon to begin
identifying performance measures and developing a process for monitoring
and managing both the program office and contractor's performance.
Further, earned value management metrics are valuable, but do not comprise
a comprehensive set of metrics for monitoring a program. The program
office may identify and track other performance measures, including
metrics for changes in risks and requirements. Moving forward, it will be
important for the project team to establish strong project monitoring and
control over internal performance as well as solid processes for tracking
and overseeing the FDCA contractor's progress. Until it does so, the
project faces increased risk of delays in identifying problems and taking
appropriate corrective actions.

FDCA Acquisition Management Capabilities Executive-level oversight of FDCA
is expected to continue:

     o the FDCA Program Office is expected to report weekly on the status of
       the FDCA project to Decennial Management Division officials,
     o the FDCA Program Office is expected to participate in quarterly
       reviews with the Commerce Information Technology Review Board and
       bureau managers, and
     o Commerce and Census executive-level IT governing boards expect to
       review the FDCA project as part of its annual budgetary planning,
       under the 2010 Testing, Evaluation, and System Design program.

As previously noted, we reported in June 2005 on weaknesses in the
bureau's executive oversight of IT projects. Specifically, we reported
that, because the bureau did not have written procedures on how executive
oversight was to be performed, it had less assurance that investment
oversight and decision making was performed in a consistent and reasonable
manner. Without clear, documented, and consistent governance procedures,
the bureau cannot ensure that it is effectively and consistently
overseeing these investments.

FDCA Conclusions and Recommendations While the FDCA project team has
initiated important steps in establishing a capable project management
office, it has not yet completed important activities it needs to
adequately manage this acquisition. For example, the bureau has not yet
implemented needed processes for managing risks or measuring project
performance. Without these processes in place, the bureau remains at
increased risk of not developing and delivering FDCA on time and within
budget. The project may also be at risk of falling short of promised
functionality. Given the immovable deadline for performing the decennial
census, the bureau faces greater risk of cost overruns or limited system
functionality.

To ensure that the bureau adequately manages the FDCA project, we
recommend that the FDCA program office take the following four actions:  o
    obtain stakeholder commitment to a project plan that includes estimated
project costs and schedules, including deliverables and milestones,  o 
obtain validation and approval of baseline requirements,

     o identify, prioritize, and assign responsibilities for risks, and
       develop and implement risk mitigation plans and actions, and
     o develop internal and contractor performance measures and prepare to
       track project cost, schedule, and performance.

    Agency Comments and Our Evaluation

In providing oral and email comments on a draft of this briefing, Census
Bureau officials, including the Associate Director for the Decennial
Census and the Assistant Director for Decennial Information Technology and
Geographic Systems, generally agreed with our recommendations and stated
that time constraints and budgets have driven the bureau to proceed with
its acquisitions before all of the recommended activities have been
completed. Officials stated that they plan to complete these activities as
soon as possible.

Bureau officials also stated that they intend to rely on the DRIS and FDCA
contractors to help refine requirements, project plans, and performance
measures. However, our experience in reviewing major system acquisitions
over the last several years has shown that it is important for the
government to exercise strong leadership in managing requirements, plans,
and measures.

Bureau officials also offered technical corrections which we have
incorporated as appropriate.

Appendix II: Objectives, Scope, and Methodology

For both the Decennial Response Integration System and Field Data
Collection Automation program acquisitions, our objectives were to (1)
provide an overview, status, and plans (including costs, schedule, and
deliverables) and (2) determine if the bureau has capabilities in place to
successfully manage and oversee the acquisitions.

To provide each project's overview, status, and plans, we analyzed current
project documents, including plans, acquisition documents, and
deliverables; we also interviewed project officials.

To determine if the bureau had capabilities in place to successfully
manage and oversee the acquisitions, we identified sound IT systems
acquisition and management processes from industry standards, including
those developed by the Software Engineering Institute, and compared them
to the Census Bureau's practices for the selected acquisitions. We
evaluated the following processes:

     o project and acquisition planning;
     o solicitation;
     o requirements development and management;
     o risk management;
     o contract tracking and oversight/project monitoring and control;
     o process and product quality assurance; and
     o executive oversight and governance.

In each of the process areas listed above, we evaluated project
documentation and interviewed project officials to determine the status of
the bureau's efforts. We obtained comments from bureau officials,
including the Associate Director for the Decennial Census and the
Assistant Director for Decennial Information Technology and Geographic
Systems, on a draft of the briefing in attachment I. We conducted our
review between July 2005 and January 2006 at Census Bureau headquarters in
Suitland, Maryland, in accordance with generally accepted government
auditing standards.
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