Information Technology: Agencies and OMB Should Strengthen	 
Processes for Identifying and Overseeing High Risk Projects	 
(15-JUN-06, GAO-06-647).					 
                                                                 
In August 2005, the Office of Management and Budget (OMB) issued 
a memorandum directing agencies to identify high risk information
technology (IT) projects and provide quarterly reports on those  
with performance shortfalls--projects that did not meet criteria 
established by OMB. GAO was asked to (1) provide a summary	 
identifying by agency the number of high risk projects, their	 
proposed budget for fiscal year 2007, agency reasons for the high
risk designation, and reported performance shortfalls; (2)	 
determine how high risk projects were identified and updated and 
what processes and procedures have been established to		 
effectively oversee them; and (3) determine the relationship	 
between the high risk list and OMB's Management Watch List--those
projects that OMB determines need improvements associated with	 
key aspects of their budget justifications.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-647 					        
    ACCNO:   A55604						        
  TITLE:     Information Technology: Agencies and OMB Should	      
Strengthen Processes for Identifying and Overseeing High Risk	 
Projects							 
     DATE:   06/15/2006 
  SUBJECT:   Evaluation criteria				 
	     Information technology				 
	     Performance management				 
	     Program evaluation 				 
	     Risk management					 
	     Strategic planning 				 
	     Reporting requirements				 
	     Performance measures				 
	     Corrective action					 
	     Policies and procedures				 
	     OMB High Risk List 				 
	     OMB Management Watch List				 

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                 United States Government Accountability Office

Report to the Chairman, Committee on

GAO

                  Government Reform, House of Representatives

June 2006

                             INFORMATION TECHNOLOGY

Agencies and OMB Should Strengthen Processes for Identifying and Overseeing High
                                 Risk Projects

GAO-06-647

INFORMATION TECHNOLOGY

Agencies and OMB Should Strengthen Processes for Identifying and
Overseeing High Risk Projects

  What GAO Found

In response to OMB's August 2005 memorandum, the 24 major agencies
identified 226 IT projects as high risk, totaling about $6.4 billion in
funding requested for fiscal year 2007. Agencies identified most projects
as high risk because their delay or failure would impact the essential
business functions of the agency. In addition, agencies reported that
about 35 percent of the high risk projects-or 79 investments-had a
performance shortfall, meaning the project did not meet one or more of
these four criteria: establishing clear baselines, maintaining cost and
schedule variances within 10 percent, assigning a qualified project
manager, and avoiding duplication with other investments (see figure).

Number of High Risk Projects with and without Performance Shortfalls (as
of March 2006) Number of projects

30 25 20 15 10 5

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    Agency

Source: GAO analysis of 24 CFO agencies' March 2006 high risk reports.

Although agencies, with OMB's assistance, generally evaluated their IT
portfolio against the criteria specified by OMB to identify their high
risk projects, the criteria were not always consistently applied.
Accordingly, GAO identified several projects that appeared to meet OMB's
definition for high risk but were not determined by agencies to be high
risk. In addition, OMB does not define a process for updating high risk
projects. As a result, agencies had inconsistent updating procedures.
Regarding oversight of these projects, agencies either established special
procedures or used their existing investment management processes. OMB
staff stated that they review the projects' performance and corrective
actions planned. However, OMB has not compiled the projects into a single
aggregate list, which would serve as a tool to analyze and track the
projects on a governmentwide basis.

High risk projects and Management Watch List projects are identified using
different criteria. The former is meant to track the management and
performance of projects, while the latter focuses on an agency's project
planning. Both sets of projects require attention because of their
importance in supporting critical functions and the likelihood that their
performance problems could potentially result in billions of taxpayers'
dollars being wasted if the problems are not detected early.

                 United States Government Accountability Office

Contents

  Letter 1

Results in Brief 3 Background 5 Federal Agencies Identified 226 Projects
as High Risk 11 Processes Exist to Identify and Oversee High Risk
Projects, but

Opportunities Exist to Improve These Processes 16 High Risk and Management
Watch List Projects Identified Using

Different Criteria 22 Conclusions 23 Recommendations for Executive Action
24 Agency Comments and Our Evaluation 25

Appendix I Objectives, Scope, and Methodology

Appendix II Comments from the Office of Management and Budget

Appendix III Summary of High Risk IT Projects by Department or Agency

Appendix IV GAO Contact and Staff Acknowledgments

  Tables

Table 1: Management Watch List Budget for Fiscal Years 2004,

2005, 2006, and 2007 8 Table 2: Number of Projects on Management Watch
List for Fiscal

Years 2004, 2005, 2006, and 2007 9 Table 3: Number of High Risk Projects
and Funding by

Department/Agency 12 Table 4: Reasons for High Risk Designation by
Department/Agency 13 Table 5: Summary of High Risk Projects for the
Department of

Agriculture 31 Table 6: Summary of High Risk Projects for the Department
of

Commerce 33 Table 28: Summary of High Risk Projects for the U.S. Agency
for International Development

    Table 7: Summary of High Risk Projects for the Department of      
    Defense                                                               34 
    Table 8: Summary of High Risk Projects for the Department of      
    Education                                                             36 
    Table 9: Summary of High Risk Projects for the Department of      
    Energy                                                                38 
    Table 10: Summary of High Risk Projects for the Department of     
    Health and Human Services                                             39 
    Table 11: Summary of High Risk Projects for the Department of     
    Homeland Security                                                     41 
    Table 12: Summary of High Risk Projects for the Department of     
    Housing and Urban Development                                         44 
    Table 13: Summary of High Risk Projects for the Department of     
    Interior                                                              45 
    Table 14: Summary of High Risk Projects for the Department of     
    Justice                                                               46 
    Table 15: Summary of High Risk Projects for the Department of     
    Labor                                                                 47 
    Table 16: Summary of High Risk Projects for the Department of     
    State                                                                 48 
    Table 17: Summary of High Risk Projects for the Department of     
    Transportation                                                        50 
    Table 18: Summary of High Risk Projects for the Department of     
    Treasury                                                              52 
    Table 19: Summary of High Risk Projects for the Department of     
    Veterans Affairs                                                      53 
    Table 20: Summary of High Risk Projects for the Environmental     
    Protection Agency                                                     57 
    Table 21: Summary of High Risk Projects for the General Services  
    Administration                                                        58 
    Table 22: Summary of High Risk Projects for the National          
    Aeronautics and Space Administration                                  59 
    Table 23: Summary of High Risk Projects for the National Science  
    Foundation                                                            61 
    Table 24: Summary of High Risk Projects for the Nuclear           
    Regulatory Commission                                                 62 
    Table 25: Summary of High Risk Projects for the Office of         
    Personnel Management                                                  63 
    Table 26: Summary of High Risk Projects for Small Business        
    Administration                                                        66 
    Table 27: Summary of High Risk Projects for the Social Security   
    Administration                                                        68 

Figures 
                     Figure 1: Reported Data for Projects with Performance 15 
                                                                Shortfalls 
                  Figure 2: Number of Agencies High Risk Projects with and 
                                                                   without 
                      Performance Shortfalls (as of March 2006)            16 

                                 Abbreviations

CFO                     chief financial officer                            
CIO                                 chief information officer              
EVM                                  earned value management               
IT                      information technology                             
LOB                     line of business                                   
OMB                                        Office of Management and Budget 

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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separately.

United States Government Accountability Office Washington, DC 20548

June 15, 2006

The Honorable Tom Davis Chairman Committee on Government Reform House of
Representatives

Dear Mr. Chairman:

The federal government increasingly relies on information technology (IT)
systems to provide essential services affecting the health, economy, and
defense of the nation. To assist in providing these important services,
the President's budget request for fiscal year 2007 proposed approximately
$64 billion for IT projects. In the budget request, the Office of
Management and Budget (OMB) stated that about 30 percent of 857 major IT
projects needed improvements in key aspects of their budget justifications
and consequently were placed on the Management Watch List. OMB began using
this tool, initially referred to as the At-Risk List, in the fiscal year
2004 budget request, as a means to monitor the performance of agencies' IT
investments.

In April 2005,1 we reported on OMB's processes and criteria for including
IT projects on its Management Watch List. We reported that although these
processes allowed OMB to identify opportunities to strengthen investments
and promote improvements in IT management, OMB had not compiled a single,
aggregate list identifying these projects and their weaknesses, nor had it
developed a structured, consistent process for deciding how to follow up
on corrective actions. Accordingly, we recommended that OMB develop a
central list of projects and their deficiencies.

To continue to ensure that taxpayers' dollars were being invested wisely,
in August 2005 OMB issued a memorandum directing federal agencies to
identify high risk IT projects-those requiring special attention from
oversight authorities and the highest level of agency management because
of one or more of four reasons. The reasons are (1) the agency failed to

1

GAO, Information Technology: OMB Can Make More Effective Use of Its
Investment Reviews, GAO-05-276 (Washington, D.C.: April 15, 2005).

    Page 1 GAO-06-647 High Risk IT Projects

demonstrate the ability to manage complex projects; (2) the projects had
exceptionally high development, operating, or maintenance costs; (3) the
projects are addressing deficiencies in the agencies' ability to perform
mission critical business functions; or (4) the projects' delay or failure
would impact the agencies' essential business functions. The memorandum
also required agencies to begin, in September 2005, to provide quarterly
reports to OMB on identified high risk projects that had performance
shortfalls, meaning that they did not meet one or more of four performance
evaluation criteria. The performance criteria are (1) establishing
baselines with clear cost, schedule, and performance goals;

(2) maintaining the project's cost and schedule variances within 10
percent; (3) assigning a qualified project manager; or (4) avoiding
duplication by leveraging interagency and governmentwide investments.

To gain insight into the processes for identifying and overseeing these
high risk projects, our objectives were to (1) provide a summary of high
risk projects that identifies by agency the number of high risk projects,
their proposed budget for fiscal year 2007, agency reasons for the high
risk designation, and reported performance shortfalls; (2) determine how
high risk projects were identified and updated and what processes and
procedures have been established to effectively oversee them; and (3)
determine the relationship between the high risk list and OMB's Management
Watch List. To address these objectives, we reviewed quarterly performance
reports on high risk projects from each of the 24 chief financial officer
(CFO) departments and agencies.2 These reports were self-reported, and we
did not independently verify the data. However, we asked all agencies to
confirm the data in appendix III on their high risk projects. We also
reviewed and analyzed OMB's policies and procedures and interviewed
officials from OMB's Office of E-Government and Information Technology.
Moreover, we obtained information from each of the 24 CFO agencies to
determine how high risk projects were identified and updated and what
policies and procedures had been established to effectively monitor the
projects. We performed our work from October 2005 through May 2006 in
accordance with generally accepted government

The 24 CFO agencies are the Departments of Agriculture, Commerce, Defense,
Education, Energy, Health and Human Services, Homeland Security, Housing
and Urban Development, the Interior, Justice, Labor, State,
Transportation, the Treasury, and Veterans Affairs; and the Environmental
Protection Agency, General Services Administration, National Aeronautics
and Space Administration, National Science Foundation, Nuclear Regulatory
Commission, Office of Personnel Management, Small Business Administration,
Social Security Administration, and U.S. Agency for International
Development.

                                Results in Brief

auditing standards. Appendix I contains details about our objectives,
scope, and methodology.

In response to OMB's memorandum, the 24 CFO agencies identified 226 IT
projects as high risk, totaling about $6.4 billion and representing about
10 percent of the President's total IT budget request for fiscal year
2007. According to the agencies, these projects were identified as such
mainly because of one or more of the four reasons provided in OMB's August
2005 memorandum. The most frequent reason reported by agencies for a
project being designated as high risk was because its delay or failure
would impact the agency's essential business functions, comprising about
70 percent of the projects identified. In addition, agencies reported that
79 of the 226 high risk projects, representing about 35 percent or
collectively totaling about $2.2 billion in fiscal year 2007 planned
funding, had a performance shortfall primarily in one of the four
performance areas to be reported on-maintaining the project's cost and
schedule variances within 10 percent.

Although agencies, with OMB's assistance, generally evaluated their IT
portfolio against the four criteria specified by OMB to identify their
high risk projects, the criteria were not always consistently applied. In
addition, OMB has not defined a process for updating the list,
specifically,

     o OMB's criteria were not always consistently applied. As a result, some
       agencies reported using reasons other than OMB's criteria to identify
       high risk projects. Further, we identified several projects that
       appeared to meet OMB's criteria for high risk, but agencies did not
       identify them as such.
     o OMB's guidance does not define a process for updating high risk
       projects, including identifying new projects and removing current
       ones. As a result, agencies had different procedures for updating the
       list.

To oversee high risk projects, agencies reported having either established
special procedures or using existing investment management processes.
However, we have previously reported on numerous weaknesses associated
with agencies' existing investment management processes and made several
recommendations to improve them. Until these recommendations are
implemented, agencies may not be able to effectively monitor their
investments' performance. To perform oversight of high risk projects, OMB
analysts review the quarterly performance reports of these projects to
determine how well the projects are progressing and whether the actions
described in the planned improvement efforts are adequate. However, OMB
does not compile a single aggregate list of high risk projects. By not
maintaining a single list, OMB is not fully exploiting the opportunity to
use the quarterly reports as a tool for analyzing high risk projects on a
governmentwide basis and is limiting its ability to identify and report on
the full set of IT investments across government that requires special
oversight and greater agency management attention.

The high risk projects and the Management Watch List projects are
identified using different sets of criteria. The high risk projects are
meant to track the execution of projects while the Management Watch List
focuses on project planning. However, agencies identified 37 high risk
projects that were also on OMB's Management Watch List. While the criteria
for the two types of projects differ, both require close attention because
of their importance in supporting critical functions and the likelihood
that performance problems associated with them could potentially result in
billions of taxpayers' dollars being wasted if they are not detected
early.

To improve the way high risk projects are identified and updated, we are
recommending that the Director of OMB direct agencies to ensure that they
are consistently applying the criteria for the high risk designation. We
also recommend the Director of OMB establish a process for agencies to
update high risk projects on a regular basis. Finally, we are recommending
OMB develop a single aggregate list of high risk projects aimed at
improving the reporting and oversight of high risk projects on a
governmentwide basis.

In commenting on a draft of this report, OMB's Administrator for
E-Government and Information Technology stated that she appreciated our
careful review of OMB's process for identifying and overseeing high risk
projects. However, OMB disagreed with our recommendations. Specifically,
regarding our recommendations to direct agencies to consistently apply the
criteria for designating projects as high risk and to establish a
structured, consistent process to update the initial list of high risk
projects, OMB stated that the process and criteria for designating
projects as high risk are clear and that some flexibility in the
application of the criteria is essential. While some flexibility in the
application of the criteria may be appropriate, we believe these criteria
should be applied more consistently so that projects that clearly appear
to meet them, such as those we mention in the report, are identified.

                                   Background

OMB also disagreed with our recommendation to develop a single aggregate
list of projects and their deficiencies to perform adequate oversight and
management. As noted in the report, we believe that, by not having this
list, OMB is not fully exploiting the opportunity to use the agencies'
quarterly reports as a tool for analyzing high risk projects on a
governmentwide basis and for tracking governmentwide progress. In
addition, OMB is limiting its ability to identify and report on the full
set of IT investments across the federal government that require special
oversight and greater agency management attention.

Each year, OMB and federal agencies work together to determine how much
government plans to spend for IT and how these funds are to be allocated.
Over the past decade, federal IT spending has risen to an estimated $64
billion in fiscal year 2007.

OMB plays a key role in overseeing these IT investments and how they are
managed, stemming from its predominant mission: to assist the President in
overseeing the preparation of the federal budget and to supervise budget
administration in Executive Branch agencies. In helping to formulate the
President's spending plans, OMB is responsible for evaluating the
effectiveness of agency programs, policies, and procedures; assessing
competing funding demands among agencies; and setting funding priorities.
OMB also ensures that agency reports, rules, testimony, and proposed
legislation are consistent with the President's budget and with
administration policies. In carrying out these responsibilities, OMB
depends on agencies to collect and report accurate and complete
information; these activities depend, in turn, on agencies having
effective IT management practices.

To drive improvement in the implementation and management of IT projects,
Congress enacted the Clinger-Cohen Act in 1996 to further expand the
responsibilities of OMB and the agencies under the Paperwork Reduction
Act.3 In particular, the act requires agency heads, acting through agency
chief information officers (CIO), to, among other things, better link
their IT planning and investment decisions to program missions and goals
and to implement and enforce IT management policies, procedures,
standards, and guidelines. OMB is required by the Clinger-Cohen Act to
establish processes to analyze, track, and evaluate the risks and results
of

3

44 U.S.C. S: 3504(a)(1)(B)(vi)(OMB); 44 U.S.C. S: 3506(h)(5) (agencies).

    Prior Review on Governmentwide IT Investment Management Has Identified
    Weaknesses

major capital investments in information systems made by executive
agencies. OMB is also required to report to Congress on the net program
performance benefits achieved as a result of major capital investments in
information systems that are made by executive agencies.4

OMB is aided in its responsibilities by the Chief Information Officers
Council as described by the E-Government Act of 2002.5 The council is
designated the principal interagency forum for improving agency practices
related to the design, acquisition, development, modernization, use,
operation, sharing, and performance of federal government information
resources. Among the specific functions of the CIO Council are the
development of recommendations for the Director of OMB on government
information resources management policies and requirements and the sharing
of experiences, ideas, best practices, and innovative approaches related
to information resources management.

Only by effectively and efficiently managing their IT resources through a
robust investment management process can agencies gain opportunities to
make better allocation decisions among many investment alternatives and
further leverage their investments. However, the federal government faces
enduring IT challenges in this area. For example, in January 2004 we
reported on mixed results of federal agencies' use of IT investment
management practices.6 Specifically, we reported that although most of the
agencies had IT investment boards responsible for defining and
implementing the agencies' IT investment management processes, no agency
had fully implemented practices for monitoring the progress of its
investments. Executive-level oversight of project-level management
activities provides organizations with increased assurance that each
investment will achieve the desired cost, benefit, and schedule results.
Accordingly, we made several recommendations to agencies to improve their
practices.

4

These requirements are specifically described in the Clinger-Cohen Act, 40
U.S.C. S: 11302 (c).

5

44 U.S.C. S: 3603.

6

GAO, Information Technology Management: Governmentwide Strategic Planning,
Performance Measurement, and Investment Management Can Be Further
Improved, GAO-04-49 (Washington, D.C.: Jan. 12, 2004).

Page 6 GAO-06-647 High Risk IT Projects

    OMB's Management Watch List Intended to Correct Project Weaknesses and
    Business Case Deficiencies

In carrying out its responsibilities to assist the President in overseeing
the preparation of the federal budget, OMB reported in the President's
fiscal year 2004 budget that there were 771 IT investment projects on what
was called the At-Risk List (later referred to as the Management Watch
List). This list included mission-critical projects that did not
successfully demonstrate sufficient potential for success based on the
agency Capital Asset Plan and Business Case, also known as the exhibit
300, or did not adequately address IT security. To identify projects for
inclusion on the Management Watch List, OMB used scoring criteria
contained in OMB Circular A-117 that the agency established for evaluating
the justifications for funding that federal agencies submitted for major
investments8 and for ensuring that agency planning and management of
capital assets is consistent with OMB policy and guidance. This evaluation
is carried out as part of OMB's responsibility to help ensure that
investments of public resources are justified and that public resources
are wisely invested.

In presenting the fiscal year 2005 budget, OMB reported that there were
621 major projects on the Management Watch List, consisting of
missioncritical projects that needed to improve performance measures,
project management, and IT security. OMB staff described this assessment
as again being based on evaluations of the exhibit 300s that agencies
submitted to justify project funding. Agencies were required to
successfully correct identified project weaknesses and business case
deficiencies; otherwise, they risked OMB's placing limits on their
spending.

In April 2005,9 we reported on OMB's development of its Management Watch
List. We concluded that OMB's scoring of the exhibit 300s

7

These scoring criteria are presented in Office of Management and Budget
Circular A-11, Part 7, Planning, Budgeting, Acquisition, and Management of
Capital Assets (June 2005). The criteria consist of 10 categories,
including acquisition strategy, project management, enterprise
architecture, alternative analysis, risk management, performance goals,
security and privacy, performance-based management system (including the
earned value management system), life-cycle costs formulation, and support
for the President's Management Agenda. A total composite score of all the
categories is also derived.

8

OMB Circular A-11 defines a major IT investment as an investment that
requires special management attention because of its importance to an
agency's mission or because it is an integral part of the agency's
enterprise architecture, has significant program or policy implications,
has high executive visibility, or is defined as major by the agency's
capital planning and investment control process.

9GAO-05-276.

addressed many critical IT management areas and promoted the improvement
of investments. However, because OMB did not compile a single aggregate
list10 and had not developed a structured, consistent process for deciding
how to follow up on corrective actions being taken by the agencies, the
agency missed the opportunity to use its scoring process more effectively
to identify management issues that transcended individual agencies, to
prioritize follow-up actions, and to ensure that highpriority deficiencies
were addressed. To take advantage of this potential benefit, we
recommended that OMB compile a single aggregate list and use the list as
the basis for selecting projects for follow up and for tracking follow-up
activities by developing specific criteria for prioritizing the IT
projects included on the list.

OMB has continued to report on its Management Watch List in the most
recent President's budget request. Table 1 shows the budget information
for projects on the Management Watch List for fiscal years 2004, 2005,
2006, and 2007.

  Table 1: Management Watch List Budget for Fiscal Years 2004, 2005, 2006, and
                                      2007

      Percentage of IT budget for budget for Management Management Watch List
      Watch List Fiscal years (in billions) Total IT budget projects projects

                    Fiscal year 2004 budget $59.0 $20.9 35%

                    Fiscal year 2005 budget $60.0 $22.0 37%

                    Fiscal year 2006 budget $65.0 $15.0 23%

Fiscal year 2007 budget request $64.0 $9.9 15%

                       Source: GAO analysis of OMB data.

According to OMB management, individual analysts were responsible for
evaluating projects and determining which projects met the criteria to be
on the Management Watch List for their assigned agencies. To derive the
total number of projects on the list that were reported for fiscal year
2005, OMB polled the individual analysts and compiled the numbers. OMB
staff said that they did not aggregate these projects into a single list
describing projects and their weaknesses. According to these officials,
they did not construct a single list of projects meeting their Watch List
criteria because they did not see such an activity as necessary in
performing OMB's predominant mission: to assist in overseeing the
preparation of the federal budget and to supervise agency budget
administration.

Table 2 shows the number of projects on the Management Watch List for
fiscal years 2004, 2005, 2006, and 2007.

Table 2: Number of Projects on Management Watch List for Fiscal Years
2004, 2005, 2006, and 2007

Total IT Fiscal year projects

    Percentage of Management projects on Watch List Management projects Watch
                                                                         List

                         Fiscal year 2004 1400 771 55%

                         Fiscal year 2005 1200 621 52%

                         Fiscal year 2006 1087 342 31%

Fiscal year 2007 (proposed) 857 263 31%

                       Source: GAO analysis of OMB data.

OMB's August 2005 To continue improving IT project planning and execution,
OMB issued a memorandum in August 2005 to all federal chief information
officers,

    Memorandum on

Improving Performance of directing them to begin taking steps to identify
IT projects that are high risk and to report quarterly on their
performance. As originally defined in

High Risk IT Projects OMB Circular A-11 and subsequently reiterated in the
August 2005 memorandum, high risk projects are those that require special
attention from oversight authorities and the highest levels of agency
management because of one or more of the following four reasons:

     o The agency has not consistently demonstrated the ability to manage
       complex projects.
     o The project has exceptionally high development, operating, or
       maintenance costs, either in absolute terms or as a percentage of the
       agency's total IT portfolio.
     o The project is being undertaken to correct recognized deficiencies in
       the adequate performance of an essential mission program or function
       of the agency, a component of the agency, or another organization.
     o Delay or failure of the project would introduce for the first time
       unacceptable or inadequate performance or failure of an essential
       mission function of the agency, a component of the agency, or another
       organization.

As directed in the memorandum, by August 15, 2005, agencies in
collaboration with OMB were required to initially identify their high risk
IT projects using these criteria. In addition, OMB subsequently provided
additional instructions through e-mails to agencies. Through these
instructions, OMB directed agencies to declare all e-government and line
of business (LOB) initiatives managed by their agency11 as high risk. In
addition, the instructions specified that partner agencies12 consider
investments associated with migrations to an e-government or LOB
initiative as high risk until they have completed migration or OMB
determines they should no longer be designated as high risk.

For the identified high risk projects, beginning September 15, 2005, and
quarterly thereafter, CIOs were to assess, confirm, and document projects'
performance. Specifically, agencies were required to determine, for each
of their high risk projects, whether the project was meeting one or more
of four performance evaluation criteria: (1) establishing baselines with
clear cost, schedule, and performance goals; (2) maintaining the project's
cost and schedule variances within 10 percent; (3) assigning a qualified
project manager; and (4) avoiding duplication by leveraging inter-agency
and governmentwide investments. If a high risk project meets these four
performance evaluation criteria, agencies are instructed to document this
using a standard template provided by OMB and provide this template to
oversight authorities (e.g., OMB, agency inspectors general, agency
management, and GAO) on request.

If any of the identified high risk projects have performance shortfalls,
meaning that the project did not meet one or more of the four performance
evaluation criteria, agencies are required to document the information on
these projects on the standard template and provide it to OMB along with
copies to the agency inspector general. For each of these projects,
agencies must specify, using the template, (1) the specific

11

In 2001, under the leadership of OMB, a team known as the E-Government
Task Force identified a set of high-profile initiatives to lead the
federal government's drive toward egovernment transformation. These
initiatives-now numbering 25-cover a wide spectrum of government
activities, ranging from centralizing various types of government
information on the Web to eliminating redundant, nonintegrated business
operations and systems. For additional details on these e-government
initiatives see GAO, Electronic Government: Federal Agencies Have Made
Progress Implementing the E-Government Act of 2002, GAO-05-12 (Washington,
D.C: Dec. 10, 2004).

12

For each initiative, OMB designated a specific agency to be the
initiative's "managing partner," responsible for leading the initiative,
and assigned other federal agencies as "partners" in carrying out the
initiative.

  Federal Agencies Identified 226 Projects as High Risk

performance shortfalls, (2) the specific cause of the shortfall, (3) a
plan of action and milestones actions needed to correct each shortfall,
and (4) the amount and source of additional funding needed to improve
performance.

In response to OMB's August 2005 memorandum, as of March 2006, the 24 CFO
agencies identified 226 IT projects as high risk, totaling about $6.4
billion and representing about 10 percent of the President's total IT
budget request for fiscal year 2007. According to the agencies, these
projects were identified as such mainly because of one or more of the four
reasons provided in OMB's memorandum. About 70 percent of the projects
identified were reported as high risk because their delay or failure would
impact the agency's essential business functions. Moreover, about 35
percent of the high risk projects-or 79 investments, totaling about $2.2
billion in fiscal year 2007 planned funding, were reported as having
performance shortfalls primarily because of cost and schedule variances
exceeding 10 percent.

    High Risk Projects Identified Total About $6.4 Billion for Fiscal Year 2007

As of March 2006, the 24 CFO agencies identified 226 IT investments as
high risk. Collectively, five agencies-the Small Business Administration,
National Aeronautics and Space Administration, Office of Personnel
Management, and the Departments of Veterans Affairs and Homeland
Security-identified about 100 of these projects.13

According to the President's most recent budget, about $6.4 billion has
been requested for fiscal year 2007 by the 24 CFO agencies for the 226
high risk projects. Five of these agencies-the Departments of Defense,
Homeland Security, Transportation, Veterans Affairs, and Justice, account
for about 70 percent of the total high risk budget, totaling about $4.5
billion. Table 3 shows the number of high risk projects and associated
funding reported by each of the 24 CFO agencies.

13

Among these five agencies, many of their projects were either e-government
or line of business initiatives.

Page 11 GAO-06-647 High Risk IT Projects

     Table 3: Number of High Risk Projects and Funding by Department/Agency

       Number of high risk Total high risk projects (as of FY2007 request (in
                                      Department/agency March 2006) millions)

                      Department of Agriculture 12 $133.5

                         Department of Commerce 4 183.0

                         Department of Defense 6 782.2

                        Department of Education 12 157.1

                          Department of Energy 5 82.2

Department of Health and Human Services 9 458.0

                    Department of Homeland Security 17 910.7

Department of Housing and Urban Development 3 18.0

                         Department of Interior 3 67.4

                         Department of Justice 9 503.3

                           Department of Labor 8 62.3

                           Department of State 5 43.8

                    Department of Transportation 13 1,385.6

                         Department of Treasury 8 266.9

                    Department of Veterans Affairs 33 871.7

                     Environmental Protection Agency 6 46.6

                     General Services Administration 9 97.4

National Aeronautics and Space Administration 16 55.1

                       National Science Foundation 1 2.5

                      Nuclear Regulatory Commission 4 1.7

                    Office of Personnel Management 15 116.7

                     Small Business Administration 21 15.2

                     Social Security Administration 6 106.8

U.S. Agency for International Development 1 11.4

                               Total 226 $6,379.1

  Source: GAO analysis of agencies' March 2006 high risk performance reports.

Most Projects Reported as Agencies reported 195 of the 226 projects as
meeting one or more of the High Risk Because Their reasons defined by OMB.
Specifically, more than half of the agencies Delay or Failure Could
reported that their IT projects were identified as high risk because delay

or failure of the project would result in inadequate performance or
failure Impact Mission of an essential mission function. About one fourth
of the projects were Performance determined to be high risk because of
high development, operating, or

maintenance costs. In addition, three agencies identified 11 projects as

high risk because of the inability to manage complex projects. Table 4

summarizes the OMB reasons for high risk designations.

        Table 4: Reasons for High Risk Designation by Department/Agency

                                    Reasonsa

       The agency has The project has The project was The projects' delay not
     consistently exceptionally high addressing deficiencies or failure would
         demonstrated the development, in the agencies' ability to impact the
           agencies' ability to manage operating, or perform mission critical
      essential business Department/agency complex projects maintenance costs
                                                business functions functionsb

                       Department of Agriculture 6 2 1 3

                         Department of Commerce 0 3 0 4

                         Department of Defense 0 6 6 6

                        Department of Education 0 3 5 9

                          Department of Energy 0 2 1 3

Department of Health and Human Services 0 5 4 8

Department of Homeland Security 0 0 0 3

Department of Housing and Urban Development 0 0 2 0

                         Department of Interior 0 1 1 3

                         Department of Justice 0 4 6 1

                          Department of Labor 1 3 0 6

                          Department of State 0 1 1 4

                      Department of Transportation 0 4 0 4

                         Department of Treasury 4 4 3 4

                    Department of Veterans Affairs 0 3 1 31

Environmental Protection Agency 00 0 6

                    General Services Administration 0 2 0 6

National Aeronautics and Space Administration 0 2 2 14

                      National Science Foundation 0 0 0 1

                                   Reasons a
                                                      The project         The 
                     The agency has The project has           was   projects' 
                                                                        delay 
                   not consistently   exceptionally    addressing  or failure 
                                               high  deficiencies       would 
                   demonstrated the    development, in the        impact the  
                                                    agencies'     agencies'   
                                                    ability to    
                       ability to   operating, or   perform       essential   
                       manage       maintenance     mission       business    
                       complex      costs           critical      functionsb  
                       projects                     business      
Department/agency                                functions     
Nuclear Regulatory             0               0             0           4 
Commission                                                     
Office of Personnel                                            
Management                     0            1                1          14 
Small Business                 0            2                0          19 
Administration                                                 
Social Security                0            3                0           1 
Administration                                                 
U.S. Agency for                                                
International                                                  
Development                    0          0                  1           0 
Totals                        11          51                35         154 

    Agencies Identified 79 Projects with Performance Shortfalls

Source: GAO analysis based on agency information.

a

In selected cases, departments or agencies identified more than one reason
for the designated high risk projects.

b

According to OMB staff, projects identified as high risk per OMB's
additional instructions on egovernment or lines of business initiatives
met this reason.

A total of 31 projects were identified as high risk using rationale other
than OMB's four criteria. In these cases, agencies reasons included that
the business cases had weaknesses or approved baselines were not
established.

Agencies identified about 35 percent of the high risk projects as having
performance shortfalls. Specifically, for the last reporting quarter-March
2006-agencies identified 79 investments, totaling about $2.2 billion in
fiscal year 2007 planned funding, as having performance shortfalls. The
most frequent reason provided for the shortfalls was cost and schedule
variances exceeding 10 percent. By contrast, only two projects were
reported by agencies as having an overlapping or duplicative IT
investment.

Since September 2005, the number of projects with performance shortfalls
has increased-from 58 projects in September 2005 to 67 projects in
December 2005 to the 79 in March 2006. For the September and December 2005
and March 2006 reporting periods, figure 1 illustrates that agencies have
reported that most of the weaknesses were in cost and schedule variances
not within 10 percent and that there was an increase in projects that do
not have clear baseline information on cost, schedule, and performance
goals.

Figure 1: Reported Data for Projects with Performance Shortfalls

Percentage 30

25

20

15

10

5

0

Unclear baselinesCost and schedule Project manager Duplication variance
exceedingnot qualified 10 percent

      Performance shortfalls

September 2005

December 2005

March 2006 Source: GAO analysis of 24 CFO agencies' September and December
2005 and March 2006 high risk reports.

Figure 2 illustrates the number of agency high risk projects with and
without shortfalls as of March 2006. The majority of the agencies reported
that their high risk projects did not have performance shortfalls in any
of the four areas identified by OMB. In addition, six agencies-the
departments of Commerce, Energy, Housing and Urban Development, and Labor,
and the National Aeronautics and Space Administration and the National
Science Foundation-reported that none of their high risk projects
experienced any performance shortfalls.

Figure 2: Number of Agencies High Risk Projects with and without
Performance Shortfalls (as of March 2006)

Number of projects35

30 25 20 15 10 5

DASU

                                 DefEducatione

                                       y

                   SHHSDHInteriorHUDticesJutateLaborSASGASNA

                                       F

                                    NRC OPM

                                      BAS

                                     SSA D

e

                                    tation y

                                       A

                                       VA

                                      sen

c

                                    gEnerSN

                                      ursa

                                       EP

                                      AISU

Commer

                                     porsn

                                       e

                                       Tr

                                       a

                                       Tr

        Agency

Projects with no performance shortfalls

Projects with performance shortfallsSource: GAO analysis of 24 CFO
agencies' March 2006 high risk reports.

For the identification of all high risk projects by agency including
funding, reasons for the high risk designation, specific performance
shortfalls, and planned improvement efforts, see appendix III.

Although agencies, with OMB's assistance, generally identified their high
risk projects by evaluating their IT portfolio against the four criteria
specified by OMB, the criteria were not always consistently applied. In
addition, OMB did not define a process for updating the list. To oversee
high risk projects, agencies reported having investment management
practices in place; however, we have previously reported on agencies'
maturing investment management processes and have made several
recommendations to improve them. OMB staff perform their oversight of high
risk projects by reviewing the quarterly performance reports, but they do
not have a single aggregate list to analyze projects and for tracking
progress on a governmentwide basis. Unless they address the issues

  Processes Exist to Identify and Oversee High Risk Projects, but Opportunities
  Exist to Improve These Processes

regarding the identification, update, and oversight of high risk projects,
OMB and agencies could be missing opportunities to perform these
activities more effectively.

High Risk Projects Identified Primarily Using OMB's Criteria, but the Criteria Not Always

Agencies primarily used the criteria defined in OMB's
August 2005 memorandum in determining the
initial list of high risk projects; however, 
criteria were not always consistently applied. Specifically, most
agencies reported that officials from the Office of the CIO compared the
 criteria against their current portfolio to determine
which projects met Consistently Applied OMB's definition. They then
submitted the list to OMB for review.

According to OMB and agency officials, after the submission of the initial

list, examiners at OMB worked with individual agencies to identify or

remove projects as appropriate. According to most agencies, the final list

was then approved by their CIO.

However, OMB's criteria for identifying high risk projects were not always
consistently applied.

     o In several cases, agencies did not use OMB's criteria to identify high
       risk projects. As previously discussed, some agencies reported using
       other reasons to identify a total of 31 high risk projects. For
       example, the Department of Homeland Security reported investments that
       were high risk because they had weaknesses associated with their
       business cases based on the evaluation by OMB. The Department of
       Transportation reported projects as high risk because two did not have
       approved baselines, and four had incomplete or poor earned value
       management14 (EVM) assessments.
     o Regarding the first criterion for high risk designation-the agency has
       not demonstrated the ability to manage complex projects-only three
       agencies reported having projects meeting this criterion. This appears
       to be somewhat low, considering that we and others have previously
       reported on weaknesses in numerous agencies' ability to manage complex
       projects. For example, we have reported in our high risk series on
       major programs and operations that need urgent attention and
       transformation in order to

14

EVM 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. OMB requires agencies to
use EVM as part of their performance-based management system for any
investment under development or with system improvements under way.

Page 17 GAO-06-647 High Risk IT Projects

ensure that our federal government functions in the most economical,
efficient, and effective manner possible.15 Specifically, the Department
of Defense's efforts to modernize its business systems have been hampered
because of weaknesses in practices for (1) developing and using an
enterprise architecture, (2) instituting effective investment management
processes, and (3) establishing and implementing effective systems
acquisition processes. We concluded that the Department of Defense, as a
whole, remains far from where it needs to be to effectively and
efficiently manage an undertaking with the size, complexity, and
significance of its departmentwide business systems modernization. We also
reported that, after almost 25 years and $41 billion, efforts to modernize
the air traffic control program of the Federal Aviation Administration,
the Department of Transportation's largest component, are far from
complete and that projects continue to face challenges in meeting cost,
schedule, and performance expectations.16 However, neither the Department
of Defense nor the Department of Transportation identified any projects as
being high risk because of their inability to manage complex projects.

o  While agencies have reported a significant number of IT projects as
high risk, we identified other projects on which we have reported and
testified that appear to meet one or more of OMB's criteria for high risk
designation including high development or operating costs and recognized
deficiencies in adequate performance but were not identified as high risk.
Examples we have recently reported include the following projects:

o  The Decennial Response Integration System of the Census Bureau is
intended to integrate paper, Internet, and telephone responses. Its high
development and operating costs are expected to make up a large portion of
the $1.8 billion program to develop, test, and implement decennial census
systems. In March 2006,17 we testified that the component agency has
established baseline requirements for the acquisition, but the bureau has
not yet validated the requirements or implemented a process for managing
them. We concluded that, until these and other basic contract management
activities are fully implemented, this project faced increased risks that
the system would experience cost overruns, schedule delays, and
performance shortfalls.

15GAO, High-Risk Series: An Update , GAO-05-207 (Washington, D.C., Jan.
2005).

16 GAO-05-207.

GAO, Census Bureau: Important Activities for Improving Management of Key
2010 Decennial Acquisitions Remain to be Done, GAO-06-444T (Washington,
D.C.: Mar. 1, 2006).

Page 18 GAO-06-647 High Risk IT Projects

     o The National Polar-Orbiting Operational Environmental Satellite
       System-an initiative managed by the Departments of Commerce and
       Defense and the National Aeronautics and Space Administration-is to
       converge two satellite programs into a single satellite program
       capable of satisfying both civilian and military requirements. In
       November 2005,18 we reported that the system was a troubled program
       because of technical problems on critical sensors, escalating costs,
       poor management at multiple levels, and the lack of a decision on how
       to proceed with the program. Over the last several years, this system
       has experienced continual cost increases to about $10 billion and
       schedule delays, requiring difficult decisions about the program's
       direction and capabilities. More recently, we testified19 that the
       program is still in trouble and that its future direction is not yet
       known. While the program office has corrective actions under way, we
       concluded that, as the project continues, it will be critical to
       ensure that the management issues of the past are not repeated.
     o The Rescue 21 project is a planned coastal communications system of
       the Department of Homeland Security. We recently reported20 that
       inadequacies in several areas contributed to Rescue 21 cost overruns
       and schedule delays. These inadequacies occurred in requirements
       management, project monitoring, risk management, contractor cost and
       schedule estimation and delivery, and executive level oversight.
       Accordingly, the estimated total acquisition cost has increased from
       $250 million in 1999 to $710.5 million in 2005, and the timeline for
       achieving full operating capability has been extended from 2006 to
       2011.

For the projects we identified as appearing to meet OMB's criteria for
high risk, the responsible agencies reported that they did not consider
these investments to be high risk projects for reasons such as (1) the
project was not a major investment; (2) agency management is experienced
in overseeing projects; or (3) the project did not have weaknesses in its

18

GAO, Polar-Orbiting Operational Environmental Satellites: Technical
Problems, Cost Increases, and Schedule Delays Trigger Need for Difficult
Trade-Off Decisions, GAO-06-249T (Washington, D.C.: Nov. 16, 2005).

19GAO, Polar-Orbiting Operational Environmental Satellites: Cost Increases
Trigger Review and Place Program's Direction on Hold, GAO-06-573T
(Washington, D.C.: Mar. 30, 2006).

20

GAO, United States Coast Guard: Improvements Needed in Management and
Oversight of Rescue System Acquisition, GAO-06-632 (Washington, D.C.: May
31, 2006).

    Process for Updating High Risk Projects Is Not Defined

business case. In particular, one agency stated that their list does not
include all high risk projects, it includes only those that are the
highest priority of the high risk investments. However, none of the
reasons provided are associated with OMB's high risk definition.

While OMB staff acknowledged that the process for identifying high risk
projects might not catch all projects meeting the criteria, they stated
that they have other mechanisms for determining the performance of all IT
projects, including high risk projects, such as the review of earned value
management data. Nevertheless, without consistent application of the high
risk criteria, OMB and executives cannot have the assurance that all
projects that require special attention have been identified.

OMB's guidance does not define a process for updating high risk projects
that have been identified including identifying new projects and removing
current ones. In the absence of such guidance, agencies use different
procedures, for example, for removing projects from the list.
Specifically, some agencies reported removing projects from the list if
they no longer meet OMB's criteria and other agencies reported removing a
project if it

(1) is completed or moves into operations; (2) has become compliant with
its cost and schedule baseline goals; (3) is no longer considered a major
IT investment; (4) becomes on track and maintains this status within
specific cost, schedule and performance for a minimum of two quarters; or
(5) addresses major weaknesses such as earned value management
requirements.

While OMB staff acknowledge that there is no defined process for updating
the set of projects, they stated that agencies are in constant
communication with individual analysts at OMB through e-mails, phone
calls, or meetings to identify new high risk projects if they meet the
definition or remove old ones if they no longer meet the criteria.
Nevertheless, without guidance for updating high risk projects on a
continuing basis, OMB and agency executives cannot be assured they have
identified the appropriate projects that should be designated as high
risk.

    OMB and Agencies Can Further Improve Oversight of High Risk Projects

All 24 CFO agencies reported having procedures for overseeing high risk
projects. While some agencies reported using their current investment
management processes for specific oversight, other agencies established
additional oversight procedures. For example, one agency developed and
documented specific procedures for sending a quarterly data call to the
program offices that have high risk investments. The program office then

Page 20 GAO-06-647 High Risk IT Projects

completes a template capturing current performance information and sends
it to the Office of the CIO for review and feedback. The CIO office
forwards it to OMB, as required. In contrast, some other agencies reported
that these projects are managed as part of their current investment review
process-requiring the investment review board to perform control reviews
along with other investments.

While procedures for overseeing high risk projects are positive steps, we
have previously reported that agencies generally have weaknesses in
project oversight. In particular, we reported that agencies did not always
have important mechanisms in place for agencywide investment management
boards to effectively control investments, including decision-making rules
for project oversight, early warning mechanisms, and/or requirements that
corrective actions for underperforming projects be agreed upon and
tracked.21 To remedy these weaknesses, we have made several
recommendations to improve processes for effective oversight, many of
which remain open. Until agencies establish the practices needed to
effectively manage IT investments including those that are high risk, OMB,
agency executives, and Congress cannot be assured that investments are
being properly managed.

OMB's oversight of high risk projects, in turn, entails reviewing the
performance reports on a quarterly basis. Specifically, according to OMB
staff, individual analysts review the quarterly performance reports of
projects with shortfalls to determine how well the projects are
progressing and whether the actions described in the planned improvement
efforts are adequate. These officials also stated that the OMB analysts
review the quarterly reports for completeness and consistency with other
performance data already received on IT projects. This includes quarterly
e-Gov Scorecards,22 earned value management data, and the exhibit 300. For
projects without shortfalls, officials stated that while the memorandum
does not direct agencies to submit these reports, agencies communicate the
status of these projects to the appropriate officials. According to OMB,
the reporting requirement for high risk projects

21GAO-04-49.

The quarterly e-Gov Scorecards are reports that use a red/yellow/green
scoring system to illustrate the results of OMB's evaluation of agencies'
implementation of e-government criteria in the President's Management
Agenda. The scores are determined in quarterly reviews, where OMB
evaluates agency progress toward agreed-upon goals along several
dimensions, and provides input to the quarterly reporting on the
President's Management Agenda.

  High Risk and Management Watch List Projects Identified Using Different
  Criteria

enhances oversight by capturing all key elements in a single report and
providing oversight authorities and agency management early indicators of
any problems or shortfalls since the reporting is conducted on a quarterly
basis.

However, OMB does not maintain a single aggregate list of high risk
projects. OMB staff told us they do not construct a single list because
they did not see such an activity as necessary in achieving the intent of
the guidance-to improve project planning and execution. Consistent with
our Management Watch List observations and recommendations,23 we believe
that by not having a single list, OMB is not fully exploiting the
opportunity to use the quarterly reports as a tool for analyzing high risk
projects on a governmentwide basis and for tracking governmentwide
progress. It is limiting its ability to identify and report on the full
set of IT investments across the federal government that require special
oversight and greater agency management attention.

The high risk projects and Management Watch List projects are identified
using different sets of criteria. In addition, while the identification of
high risk projects centers on an agency's oversight of the project's
performance, the Management Watch List focuses more on a project's
planning.

As discussed previously, the high risk list consists of projects
identified by the agencies with the assistance of OMB, using specific
criteria established by OMB, including memorandum M-05-23. As discussed
previously, these projects are reported quarterly by the agencies to OMB
on a template focusing on each project's performance in four specified
areas24 and noted shortfalls. The agencies are also to report planned
corrective actions addressing the shortfalls.

On the other hand, OMB determines projects to be included on its
Management Watch List based on an evaluation of exhibit 300 business cases
that agencies submit for major projects as part of the budget development
process. This evaluation is part of OMB's responsibility for

23GAO-05-276.

24

As discussed earlier, these four areas are (1) baseline with clear goals,
(2) cost and schedule variance within 10 percent, (3) qualified project
manager, and (4) avoiding duplication.

Page 22 GAO-06-647 High Risk IT Projects

                                  Conclusions

helping to ensure that investments of public resources are justified and
that public resources are wisely invested. Each exhibit 300 is assigned a
score in 10 different categories, the results of which determine whether
an individual project (or investment) warrants being included on the
Management Watch List. This may result in OMB's asking the agency to
submit a remediation plan to address the weaknesses identified in the
agency's business case.

While the criteria for identifying the Management Watch List projects and
high risk projects differ, Management Watch List projects can also be high
risk. For example, of the 226 total number of high risk projects, agencies
identified 37 of these projects as being on OMB's Management Watch List,25
with 19 of these projects having performance shortfalls. According to OMB
staff, identifying and addressing poorly planned projects as part of the
Management Watch List process could result in fewer projects with
performance shortfalls over time. Nevertheless, both types of projects
require close attention because of their importance in supporting critical
functions and the likelihood that performance problems associated with
them could potentially result in billions of taxpayers' dollars being
wasted if they are not detected early.

OMB and agencies' efforts to identify 226 high risk projects are important
steps in helping focus management attention on critically important IT
projects. Although many projects were appropriately identified as high
risk initiatives consistent with OMB's guidance, OMB's criteria were not
always consistently applied. As a result, projects that appear to be high
risk were not always identified as such. Further, because OMB has not
provided guidance on how the initial set of high risk projects list should
be updated, agencies do not have a consistent process for doing so.

Agencies and OMB have both taken actions to ensure oversight of the high
risk projects. Specifically, agencies are using existing oversight
procedures or ones they have specifically established for the high risk
projects and OMB is reviewing quarterly reports. However, weaknesses
remain: agencies need to implement specific recommendations we have
previously made to improve their practices for overseeing projects.
Finally, OMB has not developed a single aggregate list of high risk
projects

25

Two of the 24 agencies did not identify how many of their high risk
projects were also on the Management Watch List.

Page 23 GAO-06-647 High Risk IT Projects

to track progress, perform governmentwide analysis, and report the results
to Congress.

While the criteria for high risk projects and those on the Management
Watch List differ, both types of projects support critical business
functions and could experience performance problems that could become
costly to address if they are not detected early. Given this, the
Management Watch List projects and the high risk projects both require
continued attention.

In order for OMB to take advantage of the potential benefits of using the

  Recommendations for

quarterly performance reports as a tool for identifying and overseeing
high Executive Action risk projects on a governmentwide basis, we are
recommending that the

Director of OMB take the following three actions:

     o Direct federal agency CIOs to ensure that they are consistently
       applying the criteria defined by OMB.
     o Establish a structured, consistent process to update the initial list
       of high risk projects on a regular basis, including identifying new
       projects and removing previous ones to ensure the list is current and
       complete.
     o Develop a single aggregate list of high risk projects and their
       deficiencies and use that list to report to Congress progress made in
       correcting high risk problems, actions under way, and further actions
       that may be needed. OMB could consider using the information we have
       developed in appendix III as a starting point for developing this
       single list. In implementing these recommendations, OMB should
       consider working with the CIO Council to help ensure governmentwide
       acceptance of these actions.

Because we have outstanding recommendations aimed at (1) improving
agencies' investment management practices26 and (2) using the Management
Watch List as a tool for analyzing, setting priorities, and following up
on IT projects,27 we are not making any new recommendations in this report
regarding these issues.

26GAO-04-49. 27 GAO-05-276.

Page 24 GAO-06-647 High Risk IT Projects

  Agency Comments and Our Evaluation

OMB's Administrator for the E-Government and Information Technology
provided written comments on a draft of this report (reprinted in app.
II). In these comments, OMB stated that it appreciated our careful review
of OMB's process for identifying and overseeing high risk projects.
However, the agency disagreed with our recommendations and made other
observations.

In its comments, OMB stated that it is concerned about our interpretation
of the goals and intent of the high risk process in comparison to GAO's
high risk list. Our intent is not to confuse the goals and intent of the
two efforts. Nevertheless, as noted in our report, some major programs and
operations have been placed on our high risk list because of weaknesses in
key agency management practices, and this is consistent with OMB's first
criterion for high risk designation-the agency has not demonstrated the
ability to manage complex projects.

In its comments, OMB also observed that the policy for identifying and
overseeing high risk projects is separate and apart from OMB's Management
Watch List and presents oversight authorities with information that
differs in focus, timing, and expected results. While we agree with OMB
that the two policies are different and acknowledge this in our report, we
also noted in the report that Management Watch List projects can also be
high risk. We believe projects from both lists warrant close attention
because of their importance in supporting critical functions and the
likelihood that performance problems associated with them could
potentially result in billion of taxpayers' dollars being wasted if they
are not detected early.

Regarding our recommendations to direct agencies to consistently apply the
criteria for designating projects as high risk and to establish a
structured, consistent process to update the initial list of high risk
projects, OMB stated that the process and criteria for designating
projects as high risk are clear and that some flexibility in the
application of the criteria is essential. While some flexibility in the
application of the criteria may be appropriate, we believe these criteria
should be applied more consistently so that projects that clearly appear
to meet them, such as those we mention in the report, are identified.

OMB also disagreed with our recommendation to develop a single aggregate
list of projects and their deficiencies to perform adequate oversight and
management. As noted in the report, we believe that, by not having this
list, OMB is not fully exploiting the opportunity to use the agencies'
quarterly reports as a tool for analyzing high risk projects on a
governmentwide basis and for tracking governmentwide progress. In
addition, OMB is limiting its ability to identify and report on the full
set of IT investments across the federal government that requires special
oversight and greater agency management attention.

As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days from
the date of this letter. At that time, we will send copies to other
interested congressional committees, the Director of the Office of
Management and Budget, and other interested parties. Copies will also be
made available at no charge on our Web site at www.gao.gov.

If you have any questions on matters discussed in this report, please
contact me at (202) 512-9286 or at [email protected] . Contact points for
our Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix IV.

Sincerely yours,

               Director, Information Technology Management Issues

Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) provide a summary of high risk projects that
identifies by agency the number of high risk projects, their proposed
budget for fiscal year 2007, agency reasons for the high risk designation,
and reported performance shortfalls; (2) determine how high risk projects
were identified and updated and what processes and procedures have been
established to effectively oversee them; and (3) determine the
relationship between the high risk list and OMB's Management Watch List.

We conducted our work at OMB and the 24 chief financial officer (CFO)
agencies in Washington, D.C. The 24 agencies are the departments of
Agriculture, Commerce, Defense, Education, Energy, Health and Human
Services, Homeland Security, Housing and Urban Development, the Interior,
Justice, Labor, State, Transportation, the Treasury, and Veterans Affairs;
and the Environmental Protection Agency, General Services Administration,
National Aeronautics and Space Administration, National Science
Foundation, Nuclear Regulatory Commission, Office of Personnel Management,
Small Business Administration, Social Security Administration, and U.S.
Agency for International Development.

To address the first objective, we requested and reviewed documentation
that identifies, for each agency, the number of high risk projects, their
proposed budget for fiscal year 2007, agency reasons for the high risk
designation, and reported performance shortfalls. In particular, we
reviewed agency performance reports on high risk projects for September
and December 2005 and March 2006 that identified high risk projects and
planned improvement efforts, if any. We did not independently verify the
information contained in these performance reports. However, we asked all
24 CFO agencies to confirm the data in appendix III regarding their high
risk projects. Furthermore, we obtained the funding information for all
high risk projects for fiscal years 2005, 2006, and 2007 from the Report
on IT Spending for the Federal Government, Exhibit 53. We did not verify
these data.

To address the second objective, we used a structured data collection
instrument to better understand the 24 CFO agencies' processes and
procedures for identifying and overseeing high risk projects. All 24
agencies responded to our structured questionnaire. We did not verify the
accuracy of the agencies' responses; however, we reviewed supporting
documentation that selected agencies provided to validate their responses.
We contacted agency officials when necessary for follow-up information. We
then analyzed the agencies' responses.

Appendix I: Objectives, Scope, and Methodology

Moreover, we identified and reviewed prior GAO reports on projects with
weaknesses that met OMB's high risk definition. Finally, to gain insight
into OMB's processes and procedures to oversee the high risk list, we
reviewed related policy guidance, including its Memorandum on Improving IT
Project Planning and Execution (M-05-23, dated August 4, 2005), and the
Clinger-Cohen Act. We also interviewed OMB staff including the chief of
the Information Technology and Policy Branch.

To address the third objective, we interviewed OMB staff who are
responsible for developing and monitoring the high risk list and
Management Watch List, including the chief of the Information Technology
and Policy Branch. In addition, we reviewed our prior work on OMB's
Management Watch List, (GAO-05-276), to better understand the processes
for placing projects on the Management Watch List and following up on
their corrective actions. Finally, we requested information from the 24
CFO agencies on which of their high risk projects were also on the
Management Watch List. Two of the 24 agencies did not identify how many of
their high risk projects were also on the Management Watch List.

We conducted our work in Washington, D.C., from October 2005 through May
2006 in accordance with generally accepted government auditing standards.

Appendix II: Comments from the Office of Management and Budget

Appendix III: Summary of High Risk IT Projects by Department or Agency

                    Page 31 GAO-06-647 High Risk IT Projects

Table 5: Summary of High Risk Projects for the Department of Agriculture
                        FY2005    FY2006      FY2007 Reasons for               Planned        
            Investment actuals enacted   request (in high risk    Performance  improvement    
                       (in     (in                                             
Investment name type  millions)  millions) millions) designationa shortfall    efforts        
National Animal major       $7.5      $7.8      $4.9 C            No           N/A            
                                                                  performance  
Identification                                                    shortfall    
System                                                                         
Financial       major        0.0       0.0      52.7 B            No           N/A            
                                                                  performance  
Management                                                        shortfall    
Modernization                                                                  
Initiative                                                                     
Financial         major         1.1      0.9     1.3 A            No           N/Ab           
                                                                  performance  
Management                                                        shortfall    
Systems                                                                        
Corporate      major         5.3       4.4       5.0 A            No           N/Ab           
Insurance                                                         performance  
Information                                                       shortfall    
Systems                                                                        
Infrastructure major         N/A       11.0      9.2 A            No           N/Ab           
                                                                  performance  
Modernization,                                                    shortfall    
Support, and                                                                   
Training                                                                       
Strategic     major             2.1      3.8     3.8 A            No           N/Ab           
Data                                                              performance  
Analysis                                                          shortfall    
Emerging      major             0.6      1.0     2.7 A            No           N/A            
                                                                  performance  
Information                                                       shortfall    
Technology                                                                     
Architecture                                                                   
Common Information  major       0.0      0.0     0.0 A            Unclear      Component      
Management System                                                 baselines,   agency has 20  
                                                                  schedule     people         
                                                                               currently      
                                                                  variance not enrolled in    
                                                                  within 10    project        
                                                                  percent,     
                                                                  and          management     
                                                                  qualified    
                                                                  project      training and   
                                                                  manager      
                                                                  is not in    revising       
                                                                  place.       
                                                                               business case. 
                                                                               The investment 
                                                                               has been       
                                                                               elevated to    
                                                                               the            
                                                                               Undersecretary 
                                                                               level to       
                                                                               address        
                                                                               management     
                                                                               issues.        
                                                                               Action date:   
                                                                               ongoing        

                      FY2005    FY2006    FY2007 Reasons for              Planned
        Investment actuals   enacted   request   high risk    Performance improvement
                   (in       (in       (in                                
Investment   type  millions) millions) millions) designationa shortfall  efforts
name                                                                     
Modernize    major      $0.0      $2.2     $16.6 B            Unclear    Revising
and                                                                      
Innovate the                                                  baselines, business case
Delivery                                                                 
of                                                            schedule             and
Agricultural                                                                addressing
Systems                                                       variance   project
                                                              not        
                                                              within 10     management 
                                                              percent,      
                                                              and qualified issues.    
                                                              project       Action     
                                                              manager is    date:      
                                                              not in place. ongoing    
ConnectHR    major      12.2      36.5      28.0 D            Duplication   Component  
                                                              with          
                                                              other investments agency
                                                              has        
                                                                                signed
                                                                        agreements for
                                                                         conversion to
                                                                            enterprise
                                                                        human resource
                                                                          integration.
                                                                          Action date:
                                                                               9/30/06
Human        major       4.5       9.8       8.3 D            No           N/A
Resources                                                     performance  
LOB: Service                                                  shortfall    
Center                                                                     
Human        major       2.5       4.6       1.0 D            No           N/A
Resources                                                     performance  
LOB:                                                          shortfall    
ePayroll                                                                   
migration                                                     

Source: OMB FY2007 Exhibit 53 and Department of Agriculture documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

b

While USDA officials reported that there are no specific performance
shortfalls in these investments, they stated that, due to poor project
management, these business cases have been consistently weak and that they
are continuing to try and remediate the weaknesses in the documentation.

Table 6: Summary of High Risk Projects for the Department of Commerce
                                     FY2005    FY2006    FY2007 Reasons for              Planned     
                    Investment  actuals (in enacted    request  high risk    Performance improvement 
                                            (in          (in                             
Investment name     type          millions) millions) millions) designationa shortfall   efforts     
Master Address     major       $81.2        $79.6    $73.7      B, D                  No N/A         
                                                                             performance 
File/Topologically                                                           shortfall   
Integrated                                                                               
Geographic                                                                               
Encoding and                                                                             
Referencing                                                                              
Enhancements                                                                             
Advanced Weather      major    49.5       46.8     50.3         B, D                  No N/A         
                                                                             performance 
Interactive                                                                  shortfall   
Processing System                                                                        
Field Data         major      5.5        35.5      59.0         B, D                  No N/A         
                                                                             performance 
Collection                                                                   shortfall   
Automation                                                                               
e-Travel     IT migration    0.0        0.2     0.0             D            No          N/A         
             investment                                                      performance 
                                                                             shortfallb  
portion of a                                                                             
larger asset                                                                             

Source: OMB FY2007 Exhibit 53 and Department of Commerce documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

b

According to agency officials, this initiative is on hold.

      Table 7: Summary of High Risk Projects for the Department of Defense

                    Page 34 GAO-06-647 High Risk IT Projects

                           FY2005     FY2006    FY2007 Reasons for                   
           Investment   actuals   enacted    request   high risk         Performance Planned      
Investment type         (in       (in        (in       designationa      shortfall   improvement  
name                    millions) millions)  millions)                               efforts      
Joint      major           $131.0     $191.7     $10.7 B, C, D                       Defense      
Tactical                                                                             Acquisition  
Radio                                                                                Executive    
System-                                                                  Cost and    established  
Cluster 1                                                                schedule    a Joint      
                                                                         variances   Program      
                                                                         not within  Executive    
                                                                         10          Officer with 
                                                                         percent     acquisition  
                                                                                     authority    
                                                                                     across all   
                                                                                     product      
                                                                                     lines in 2nd 
                                                                                     quarter      
                                                                                     fiscal year  
                                                                                     2005. This   
                                                                                     officer      
                                                                                     commissioned 
                                                                                     an           
                                                                                     independent  
                                                                                     assessment   
                                                                                     of           
                                                                                     program      
                                                                                     cost,        
                                                                                     schedule,    
                                                                                     and          
                                                                                     performance, 
                                                                                     and          
                                                                                     technical    
                                                                                     maturity in  
                                                                                     spring 2005. 
                                                                                     The Defense  
                                                                                     Acquisition  
                                                                                     Executive    
                                                                                     last         
                                                                                     reviewed     
                                                                                     progress on  
                                                                                     the          
                                                                                     project's    
                                                                                     planning on  
                                                                                     November 22, 
Defense Integrated major        68.0     104.1    51.4  B, C, D  Cost and         2005. On
Military Human                                                   schedule         December 1,
Resources System                                                 variances not    2005, Deputy
                                                                 within 10        Secretary of
                                                                 percent          Defense
                                                                                  determined
                                                                                  project is a
                                                                                  viable solution
                                                                                  for Army
                                                                                  personnel and
                                                                                  pay and
                                                                                  transferred the
                                                                                  program to the
                                                                                  new Business
                                                                                  Transformation
                                                                                  Agency.
                                                                                        Air Force
                                                                                       assessment
                                                                                  will be briefed
                                                                                  to the
                                                                                  Defense
                                                                                  Business
                                                                                  Systems
                                                                                  Management
                                                                                  Committee on
                                                                                  March
                                                                                  23, 2006. The
                                                                                  Navy assessment
                                                                                  will start
                                                                                  March 13, 2006,
                                                                                  followed by the
                                                                                  Marine Corps in
                                                                                  fiscal year
                                                                                  2007.
                                                                                  Completion date
                                                                                  is to be
                                                                                  determined.

                       FY2005    FY2006    FY2007 Reasons for              Planned     
                      actuals   enacted   request high risk    Performance improvement 
Investment name           (in       (in       (in designationa shortfall   efforts     
Investment type     millions) millions) millions)                          
Expeditionary major     $54.0     $80.5    $212.4 B, C, D      Schedule    Systems     
Combat                                                         variance    Integrator  
Support                                                        not within  Source      
System                                                         10 percent  Selection   
                                                                           under way.  
                                                                           Program     
                                                                           will        
                                                                           realign     
                                                                           schedule    
                                                                           subsequent  
                                                                           to systems  
                                                                           integrator  
                                                                           contract    
                                                                           award in    
                                                                           June 2006.  
Global Combat Support System- 141.2     219.8     B, C, D No performance shortfall
Army major 182.9 Logistics    111.2     109.5     N/Ab B, C, D Unclear baselines An
Modernization Program major                       Army 3-star level review was
65.6                                              conducted on February 1, 2006, and
                                                  the Office of the Secretary of
                                                  Defense, Networks and Information
                                                  Integration, Overarching Integrated
                                                  Product Team was briefed on February
                                                  2, 2006. The program office will
                                                  undergo another Overarching
                                                  Integrated Product Team review in
                                                  June 2006 and will submit for Office
                                                  of the Secretary of Defense approval
                                                  a baseline that includes metrics for
                                                  cost, schedule, and performance.

Navy        major 66.0 115.4 178.4 B, C,   Cost and    The prime contract  
Enterprise                           D                 
Resource                                   schedule    was fully defined   
Planning                                               on                  
                                            variances not    January 2, 2006. 
                                                                          The 
                                              within 10               program 
                                                                 rebaselining 
                                               percent    is planned to be    
                                                             completed in the 
                                                                          3rd 
                                                            quarter of fiscal 
                                                                         year 
                                                          2006.               

Source: OMB FY2007 Exhibit 53 and Department of Defense documents.

a

Reasons for high risk designation include: A=The agency has not
consistently demonstrated the ability to manage complex projects.

Page 35 GAO-06-647 High Risk IT Projects

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

b

This program is undergoing predevelopment activity and awaiting approval
to begin development. Program to be restructured to fit within budget.

     Table 8: Summary of High Risk Projects for the Department of Education

                    Page 36 GAO-06-647 High Risk IT Projects

                            FY2005      FY2006      FY2007 Reasons for        
Investment                                              high risk          
Investment          actuals (in enacted (in request (in Performance        
                                                           Planned            
name type            millions)    millions)  millions)  designationa       
                                                           shortfall          
                                                           improvement        
                                                           efforts            
Advance (Aid major        $92.9      $145.1       $95.9 B Cost and The use 
                                                           of earned          
Delivery)                                                   schedule value 
                                                                   management 
                                                                variances not 
                                                              techniques will 
                                                                      closely 
                                                            within 10 monitor 
                                                                the project's 
                                                                      percent 
                                                              development and 
                                                                   production 
                                                                    schedule. 
                                                             Project schedule 
                                                           agreed to by upper 
                                                                  management, 
                                                                   constantly 
                                                                    overseen. 
                                                                 Action date: 
                                                                      6/15/06 
Common major               33.9        31.3        28.1 B, D No N/A        
Services for                                               performance     
Borrowers                                                   shortfall      
Data Strategy major         2.2         3.0         5.0 B, D No N/A        
                                                              performance     
                                                               shortfall      
E-Joint effort              0.7         2.8         0.3 D Project The      
                                                           project manager    
Authentication for                                           manager is is 
more                                                          attending IT 
                                                                      project 
              than one                                        not yet manager 
                                                                certification 
                agency                                     qualified program. 
                                                                 Action date: 
                                                                      6/15/06 
                                                           C Cost and         
ID Access major             1.2         1.5         0.5 Rebaseline the     
                                                           cost               
Control                                                       schedule and 
                                                               schedule based 
System                                                   variances not on  
                                                                changing      
                                                                    within 10 
                                                                requirements. 
                                                               percent Action 
                                                                date: 6/15/06 

                             FY2005    FY2006    FY2007 Reasons for  
Investment     Investment  actuals   enacted  request   high risk    Performance Planned         
                             (in       (in    (in                                
name           type       millions) millions) millions) designationa shortfall   improvement     
                                                                                 efforts         
Education      major           $6.4      $6.7      $6.7 C            No          N/A             
Resource                                                             performance 
Information                                                          shortfall   
Center                                                                           
Education      major           14.7       5.7       5.4 C, D         Cost and    The project     
                                                                                 manager         
Data                                                                 schedule    is serving in a 
Exchange                                                             variances   temporary       
                                                                     not         capacity as     
Network                                                              within 10   the office is   
                                                                                 going           
                                                                     percent and through         
                                                                     project     reorganization. 
                                                                     manager is  Action date:    
                                                                     not         6/15/06         
                                                                     qualified.  
Financial      major            8.5      12.3       5.4 D            No          N/A             
Management                                                           performance 
Support                                                              shortfall   
System                                                                           
Grants         major            2.7       2.3       2.8 C, D         Project     The project     
                                                                                 manager         
Administration                                                       manager is  is attending IT 
                                                                                 project         
and Payment                                                          not         manager         
                                                                     qualified.  certification   
System                                                                           program.        
                                                                                 Action date:    
                                                                                 6/15/06         
G5-Grants      major            0.6       2.5       3.3 D            Cost and    The project     
                                                                                 manager         
Management                                                           schedule    is scheduled to 
Re-Design                                                            variances   complete IT     
                                                                     not         project         
                                                                     within 10   manager         
                                                                                 certification   
                                                                     percent and program.        
                                                                     project     Action date:    
                                                                     manager is  6/15/06         
                                                                     not         
                                                                     qualified.  
Migrant        major            0.8       3.8       2.5 C, D         Project     The project     
                                                                                 manager         
Student                                                              manager is  is attending IT 
                                                                                 project         
Information                                                          not         manager         
                                                                     qualified.  certification   
Exchange                                                                         program.        
                                                                                 Action date:    
                                                                                 6/15/06         
Travel         major            0.5       1.9       1.2 D            No          N/A             
Management                                                           performance 
System                                                               shortfall   

Source: OMB FY2007 Exhibit 53 and Department of Education documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 9: Summary of High Risk Projects for the Department of Energy
                               FY2005 FY2006  FY2007  Reasons for              Planned
             Investment actuals enacted    request    high risk            Performance
                        (in     (in        (in                             improvement
Investment     type     millions) millions) millions) designationa shortfall   efforts 
name                                                                           
EE State       major         $1.8      $1.8      $1.7 D            No          N/A     
Grants                                                                         
Administration                                                     performance 
                                                                   shortfall   
Integrated          major      34.1       29.8   27.2 D            No          N/A     
Management                                                         performance 
Navigation System                                                  shortfall   
Advanced Simulation major       0.0       0.0    25.0 B            No          N/A     
and Computing                                                      performance 
Future                                                                         
Platform                                                           shortfall   
Integrated Cyber    major      10.4       23.5   25.0 B, C         No          N/A     
Security Initiative                                                performance 
                                                                   shortfall   
Integrated         major          3.3       3.3   3.3 D            No          N/A     
Security                                                                       
System                                                             performance 
                                                                   shortfall   

Source: OMB FY2007 Exhibit 53 and Department of Energy documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

 Table 10: Summary of High Risk Projects for the Department of Health and Human
                                    Services

FY2005 FY2006 FY2007 Reasons for Planned Investment actuals (in enacted
(in request (in high risk Performance improvement Investment name type
millions) millions) millions) designationa shortfall efforts

CDC Public Health major $50.0 Information Network: BioSense

$49.5 $47.5 B, C, D No N/A performance shortfall

CMS Healthcare major 99.4 Integrated General Ledger Accounting System

149.9 139.4 B, C, D No N/A performance shortfall

CMS MMA Title I major 108.5 114.9 103.7 B, D No            N/A             
and II                                       performance   
applications                                 shortfall     
HHS Unified     major 62.5  57.9   64.0 B,   No            N/A             
Financial                               C, D performance   
Management                                   shortfall     
System                                                     
IHS Resource    major 47.1  45.3   54.6 D    Unclear       Baseline        
and Patient                                  baselines and revision is     
Management                                   project       completed and   
System                                       manager is    will be         
                                                not           submitted to    
                                                qualified.    the agency      
                                                              Investment      
                                                              Review Board    
                                                              for             
                                                              review/approval 
                                                              3/14/06.        
                                                              Project manager 
                                                              has completed 2 
                                                              courses of a 7  
                                                              course master's 
                                                              certification   
                                                              program.        

NIH OD Electronic Research    major 44.9 42.1 43.4 B, C No performance N/A 
Administration                                          shortfall      
Federal Health Architecture-  major 2.2  2.3   3.4 D    No performance N/A 
Managing Partner                                        shortfall      
Grants.gov-Find and Apply     major 1.9  0.8   1.9 D    No performance N/A 
                                                           shortfall      

                         FY2005    FY2006    FY2007 Reasons for              Planned       
           Investment actuals   enacted   request   high risk    Performance improvement   
Investment type       (in       (in       (in       designationa shortfall   efforts       
name                  millions) millions) millions)                          
HHS Human    Joint         $0.1      $0.1      $0.1 D            Unclear     Governance    
             effort                                                          
Resources  for more                                              baselines   issues remain 
Line of                                                                      
Business   than one                                                          unclear.      
(LOB)      agency                                                            Specifically, 
                                                                             it is         
                                                                             imperative    
                                                                             that a        
                                                                             financing     
                                                                             strategy be   
                                                                             in place and  
                                                                             that          
                                                                             migrations be 
                                                                             adequately    
                                                                             funded before 
                                                                             the           
                                                                             Shared        
                                                                             Service       
                                                                             Centers start 
                                                                             servicing new 
                                                                             customers.    

Source: OMB FY2007 Exhibit 53 and Department of Health and Human Services
documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 11: Summary of High Risk Projects for the Department of Homeland Security

                    Page 41 GAO-06-647 High Risk IT Projects

                           FY2005       FY2006       FY2007 Reasons for              Planned        
             Investment   actuals      enacted      request high risk    Performance improvement    
Investment   type             (in (inmillions) (inmillions) designationa shortfall   efforts        
name                    millions)                                                    
United       major         $341.0    $341.0       $407.4    E Weaknesses No          N/A            
States                                                      in business  performance 
Visitor and                                                 case         shortfall   
Immigrant                                                                            
Status                                                                               
Indicator                                                                            
Technology                                                                           
SBInet       major           84.7     38.5            139.3 E Weaknesses             Project        
                                                            in business  Project is  manager        
                                                            case         in initial  enrolled in    
                                                                         phase;      training to    
                                                                         therefore,  achieve level  
                                                                         baselines   III            
                                                                         have not    certification. 
                                                                         been        
                                                                         approved    
                                                                         and earned  
                                                                         value       
                                                                         management                 
                                                                         is not yet                 
                                                                         required.                  
                                                                         Program     
eNEMIS       major           14.0     13.9             14.0              manager is  
                                                                         not         
                                                            E Weaknesses qualified.  Corrective
                                                            in business  Unclear     actions not
                                                            case         baselines   reported.
Disaster    major               14.2       10.9        10.3 E Weaknesses Program    Certification
Management                                                  in business  manager is application to
                                                            case         not        be submitted to
                                                                         qualified. DHS by 1/31/06.
Homeland    major                    9.0   20.5        22.8 E Weaknesses Unclear    Conducting
Security                                                    in business  baselines  internal
Information                                                 case         and        Investment
Network                                                                  program    Review Board
                                                                         manager is making "within
                                                                         not        threshold
                                                                         qualified. adjustments" to
                                                                                    key work
                                                                                    breakdown
                                                                                    structure by
                                                                                    6/1/06 and
                                                                                    assign a fully
                                                                                    qualified
                                                                                    project manager
                                                                                    by 3/15/06.
National    major               12.6       12.6        12.6 E Weaknesses Unclear    Appropriate
Asset Data                                                  in business  baselines  resources have
Base                                                        case         and        been contacted
                                                                         program    to complete the
                                                                         manager is approval of the
                                                                         not        baseline
                                                                         qualified. documentation
                                                                                    and project
                                                                                    manager
                                                                                    certification
                                                                                    by 5/24/06.

                    Page 42 GAO-06-647 High Risk IT Projects

                             FY2005     FY2006    FY2007 Reasons for  
                Investment  actuals enacted    request   high risk    Performance Planned
                                (in (in        (in                    
Investment name    type    millions) millions) millions) designationa shortfall       improvement
                                                                                          efforts
Priority           major      $116.6    $118.2    $120.3 E            Unclear     Submit baseline
Telecommunications                                                    baselines,  documents by
Service                                                  Weaknesses   project     3/1/06 and
                                                         in business  manager is  project manager
                                                         case         not         certification
                                                                      qualified,  by 2/15/06 to
                                                                                  prepare for the
                                                                      and         Investment
                                                                                  Review
                                                                      duplication Board briefing
                                                                      exists        scheduled for
                                                                                         4/26/06.
                                                                      between    
                                                                      other      
                                                                      investments.
Information        major            0.0    0.0       0.0 D            No           N/A            
Systems                                                                            
Security LOB                                                          performance  
                                                                      shortfallb   
                                                                                   Create         
SAFECOM            non-IT           8.5    0.0       0.0 D, E         Cost and     detailed       
                                                                                   project        
                                                         Weakness in  schedule     plans to       
                                                         the area of  variances    satisfy earned 
                                                         performance  not within   value          
                                                         goals.       10 percent   management     
                                                                                   criteria.      
                                                                                   Action date:   
                                                                                   10/1/05        
Alien Flight       major            9.1   10.0      10.0 E            Cost and     Briefing to    
Student                                                                            the            
Program                                                               schedule     component      
                                                                      variances    agency's       
                                                         Weaknesses   not within   administrator  
                                                         in business  10           on need for    
                                                         case                      funding.       
                                                                      percent      Action date:   
                                                                                   4/14/06        
Hazmat Threat      major       10.1       28.1      27.8 E            Program      Project        
                                                                                   manager has    
Assessment Program                                       Weaknesses   manager is   developed and  
                                                         in business  not          is             
                                                         case         qualified.   implementing a 
                                                                                   training plan  
                                                                                   to achieve     
                                                                                   certification. 
                                                                             Action date: 7/31/07
Registered         major       15.0       23.0      35.1 E            Program     Training plan
Traveler                                                                          in place
                                                                      manager is  and program
                                                                      not         office is
                                                         Weaknesses   qualified.  looking to
                                                         in business              backfill
                                                         case                     position.
                                                                            Action date: 12/30/06
Transportation     major            5.0   10.0      20.0 E            Unclear      Revised        
                                                                                   deployment     
Worker                                                                baselines    schedule is    
Identification                                           Weaknesses   and schedule contingent on  
Credentialing                                            in business  variance not completing the 
                                                         case         within 10    investment     
                                                                                   review         
                                                                                   process.       
                                                                      percent      Action date:   
                                                                                   fiscal year    
                                                                                2006, 3rd quarter
Secure Flightc     IT          44.9       94.3      54.7 E            Unclear           Currently
                   program                                                           rebaselining
                                                         Weaknesses   baselines  program
                                                         in business             Action date:
                                                                                 3/25/06
                                                         case         

                              FY2005    FY2006    FY2007 Reasons for                  
                Investment actuals   enacted   request   high risk        Performance Planned       
                type       (in       (in       (in       designationa     shortfall   improvement   
Investment name            millions) millions) millions)                              efforts       
Crew Vettingc   major              c         c         c E Weaknesses in              Component     
                                                         business case                agency        
                                                                                      officials are 
                                                                                      giving        
                                                                                      technical     
                                                                                      assistance to 
                                                                                      develop and   
                                                                                      present an    
                                                                                      approved      
                                                                                      baseline to   
                                                                                      DHS by        
                                                                                      3/15/06 and   
                                                                                      project       
                                                                                      manager       
                                                                                      certification 
                                                                                      to be         
                                                                                      granted April 
                                                                                      2006.         
                                                                                      Corrective    
Nationwide      major           24.0      27.3      19.1 E                Unclear     actions not   
Automatic                                                Weaknesses  baselines     reported.
Identification                                           in business               
System                                                   case                      
eMerge2              major         49.0     17.8    17.3 D           Project       Since current
                                                                                   project
                                                                      manager is   manager is
                                                                                   acting,
                                                                     not qualified DHS will hire an
                                                                                   individual with
                                                                                   appropriate
                                                                                   certification
                                                                                   level.

Source: OMB FY2007 Exhibit 53 and Department of Homeland Security
documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project exceptionally high development, operating, or maintenance
costs, either in absolute terms or as a percentage of the agency's total
IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

b

According to agency officials, this investment is in the initial concept
phase and therefore has not been approved or funded.

According to agency officials, since Secure Flight and Crew Vetting were
considered as one investment in the fiscal year 2007 budget submission,
the 2005 actuals, 2006 enacted and 2007 request are the same for both
projects. They will be separate investments in fiscal year 2008.

Table 12: Summary of High Risk Projects for the Department of Housing and Urban Development
                            FY2005    FY2006    FY2007                          Planned     
Investment    Investment actuals   enacted    request  Reasons for Performance  improvement 
                         (in       (in          (in    high                     
              type       millions) millions) millions) risk        shortfall    efforts     
name                                                   designation              
                                                       a                        
FHA           major          $11.8     $11.9      $6.8 C           No           N/A         
                                                                   performance  
Subsidiary                                                         shortfall    
Ledger                                                                          
HUD         major                4.4      4.7      9.0 C         No performance N/A         
Integrated                                                        shortfall     
Financial                                                                       
Management                                                                      
Project                                                                         
Enterprise   major               4.5      2.6      2.2 E            No          N/A         
                                                                    performance 
Income                                                 Supports the shortfall   
Verification                                           presidential             
                                                       initiative               
                                                                  for a citizen 
                                                              centered, results 
                                                               oriented, market 
                                                              based government. 

Source: OMB FY2007 Exhibit 53 and Department of Housing and Urban
Development documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 13: Summary of High Risk Projects for the Department of Interior
                         FY2005    FY2006    FY2007 Reasons for  
Investment Investment actuals   enacted   request   high risk    Performance     Planned 
                      (in       (in       (in                                improvement 
name       type       millions) millions) millions) designationa shortfall   efforts     

Recreation major $0.3 $5.7 $11.0 D     No performance N/A                  
One-Stop                               shortfall      
Geospatial major 9.1  6.2    3.7 D     No performance N/A                  
One-Stop                               shortfall      
Financial  major 50.2 49.7  52.7 B, C, Schedule       New contract was     
Business                         D     variance not   awarded that         
Management                             within 10      includes requirement 
System                                 percent        for contractor to    
                                                         use an ANSI Standard 
                                                         748-compliant EVMS.  
                                                         An Integrated        
                                                         Baseline Review is   
                                                         under                
                                                         way and will be      
                                                         completed by March   
                                                         31, 2006. Project    
                                                         will request DOI     
                                                         Investment Review    
                                                         Board approval of    
                                                         new baseline in      
                                                         April.               

Source: OMB FY2007 Exhibit 53 and Department of Interior documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 14: Summary of High Risk Projects for the Department of Justice
                             FY2005    FY2006    FY2007 Reasons for  
Investment     Investment actuals   enacted   request   high risk    Performance Planned      
                          (in       (in       (in                                improvement  
name           type       millions) millions) millions) designationa shortfall   efforts      
Integrated     Joint         $159.0     $89.7    $180.0 B                     No N/A          
               effort                                                performance 
Wireless       for more                                              shortfall   
Network        than one                                                          
agency                                                                           
Unified    major                 66.0      82.1   118.0 B, C                  No N/A          
                                                                     performance 
Financial                                                            shortfall   
Management                                                                       
System                                                                           
Litigation major                    2.5      6.5   13.2 C                     No N/A          
                                                                     performance 
Case                                                                 shortfall   
Management                                                                       
System                                                                           
Grants.gov   major                  0.6       0.5   0.8 D                     No N/A          
                                                                     performance 
(managing                                                            shortfall   
partner)                                                                         
Sentinel major                      4.3  197.6    100.0 B, C                  No N/A          
                                                                     performance 
                                                                     shortfall   
Next          major              14.1       60.0   57.4 B                     No N/A          
                                                                     performance 
Generation                                                           shortfall   
IAFIS                                                                            
Law                  major       28.3       15.9   24.6 C            Unclear     The planned  
                                                                                 contract     
Enforcement                                                          baselines   award of the 
                                                                                 development  
National                                                                         contract is  
                                                                                 January      
                                                                                 2007.        
Data                                                                             The          
                                                                                 ANSI/EIA-748 
Exchange                                                                         compliance   
                                                                                 will occur   
                                                                                 in           
                                                                                 April 2007.  
                                                                                 Action date: 
                                                                                 1/22/07      
Regional  major                     5.0       5.0   5.0 C                     No N/A          
                                                                     performance 
Data                                                                 shortfall   
Exchange                                                                         
Terrorist   major                   3.2       3.9   4.3 C                     No N/A          
                                                                     performance 
Screening                                                            shortfall   
Database                                                                         
Upgrade                                                                          

Source: OMB FY2007 Exhibit 53 and Department of Justice documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

      Table 15: Summary of High Risk Projects for the Department of Labor

FY2005 FY2006 FY2007

actuals enacted request Planned Investment Investment (in (in (in Reasons
for high risk Performance improvement name type millions) millions)
millions) designationa shortfall efforts

New Core major $9.9 $6.2 $14.0 B, D No performance N/A Financial shortfall
Management System

GovBenefits major 5.5 4.5 4.5 D No performance N/A shortfall

EFAST major 19.2 21.9 19.9 B No performance N/A shortfall

EFAST2 major 0.0 0.0 17.8 B No performance N/A shortfallb

Technical non-major 0.4 0.2 0.0 D No performance N/A Information shortfall
Retrieval System

E-Grants major 2.0 0.6 1.2 A, D No performance N/A shortfall

Enterprise HR major 0.9 2.0 4.3 D No performance N/A Integration shortfall

E-Travel non-major 1.4 0.6 0.6 D No performance N/A shortfall

Source: OMB FY2007 Exhibit 53 and Department of Labor documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

b

According to agency officials, this investment is not an active program.

      Table 16: Summary of High Risk Projects for the Department of State

                       FY2005     FY2006    FY2007                             
                       actuals    enacted   request   Reasons for              Planned         
Investment Investment  (in        (in       (in       high risk    Performance improvement     
name       type        millions)  millions) millions) designationa shortfall   efforts         
State      major            $32.1     $39.7      $3.9 B, C, D      Schedule    On October 17,  
Messaging                                                          variance    2005, the Under 
and                                                                not within  Secretary for   
Archive                                                            10 percent  Management      
Retrieval                                                                      signed a task   
Toolset                                                                        order           
                                                                               authorizing the 
                                                                               initiation of a 
                                                                               detailed        
                                                                               contingency     
                                                                               planning effort 
                                                                               for this        
                                                                               investment. A   
                                                                               report on this  
                                                                               planning effort 
                                                                               was submitted   
                                                                               by the Chief    
                                                                               Information     
                                                                               Officer to      
the Under Secretary for Management on February 13, 2006. Joint Financial Management System
major 7.9 16.2 13.2 E Interagency No performance shortfall N/A
                                                                               OMB and the     
e-Travel         Joint effort    0.1      0.0     0.0 D          Cost variance General         
                                                                               Services        
                 for more than                               not within 10     Administration, 
                 one agency                                  percent           the managing    
                                                                               partner of this 
                                                                               e-government    
                                                                               initiative,     
                                                                               have been       
                                                                               consistently    
                                                                               apprised of the 
                                                                               problems with   
                                                                               the vendor's    
                                                                               software and    
                                                                               the efforts     
                                                                               the Department  
                                                                               of State has    
                                                                               made to help    
                                                                               the vendor      
                                                                               design the      
                                                                               needed          
                                                                               functionality.  
                                                                               The             
                                                                               international   
                                                                               version of the  
                                                                               software is     
                                                                               scheduled to be 
                                                                               released by the 
                                                                               vendor near the 
                                                                               end of fiscal   
                                                                               year 2006.      
                                                                               Department of   
                                                                               State           
                                                                               anticipates a   
                                                                               significant     
                                                                               amount of       
                                                                               testing prior   
                                                                               to using the    
                                                                               international   
                                                                               capabilities of 
                                                                               this software   
                                                                               in a production 
                                                                               environment. As 
                                                                               a result, this  
                                                                               will push the   
                                                                               first overseas  
                                                                               pilot into      
                                                                               fiscal year     
                                                                               2007.           

                        FY2005    FY2006    FY2007                             
                        actuals   enacted   request   Reasons for              Planned        
Investment   Investment (in       (in       (in       high risk    Performance improvement    
name         type       millions) millions) millions) designationa shortfall   efforts        
Consolidated major           $5.5      $5.5      $1.5 D            Schedule    The National   
American                                                           variance    Finance Center 
Payroll                                                            not within  is assessing   
System and                                                         10 percent  the impact of  
Interagency                                                                    system         
e-Payroll                                                                      modifications  
Migration                                                                      to meet the    
                                                                               Department of  
                                                                               State's        
                                                                               payroll        
                                                                               processing     
                                                                               requirements.  
                                                                               System         
                                                                               development    
                                                                               efforts by the 
                                                                               National       
                                                                               Finance Center 
                                                                               will determine 
                                                                               the            
                                                                               implementation 
                                                                               schedule for   
                                                                               the agency and 
                                                                               the center's   
                                                                               migration      
                                                                               activities and 
                                                                               overall costs  
                                                                               for both       
                                                                               agencies.      
                                                                               The National   
                                                                               Finance Center 
                                                                               has            
                                                                               committed to   
                                                                               providing a    
                                                                               written cost   
                                                                               estimate by    
                                                                               March 17,      
                                                                               2006.          

Integrated  major       23.0     24.0    25.2   D           No         N/A 
Personnel                                                 performance 
Management                                               shortfall    
System                                                                

Source: OMB FY2007 Exhibit 53 and Department of State documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The projects is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

  Table 17: Summary of High Risk Projects for the Department of Transportation

FY2005 FY2006 FY2007 actuals enacted request Planned Investment (in (in
(in Reasons for high risk Performance improvement Investment name type
millions) millions) millions) designationa shortfall efforts

Advanced Technologies major $106.6 $91.7 $82.2 E No N/A and Oceanic
Incomplete EVM performance Procedures assessment, behind shortfall

schedule

En Route Automation major 261.6 330.1 376.2 B, D No N/A Modernization
performance shortfall

Wide Area major 122.6 117.4 133.1 B, E No N/A Augmentation System
Incomplete EVM performance assessment and shortfall historically behind
schedule and/or over cost

Terminal Automation major 0.0 19.8 32.1 D No N/A Mod. & Rep. performance
shortfall

Terminal Radar major 93.0 Digitizing, Replacement, and Establishment

69.7 77.4 E No N/A

Poor EVM quality performance shortfall

Automated Weather major 27.4 25.8 27.3 E No N/A Observation Poor EVM
quality performance System/Automated shortfall Surface Observing System

FAA major 143.3 232.5 246.0 B, E Schedule Corrective Telecommunications
Poor EVM quality, out variance not actions taken to Infrastructure of
variance within 10 put the program

percent back on track to meet fiscal year 2007 target date for full
implementation.

Next Generation Vhf major 29.5 34.1 26.9 E Schedule Program Air/Ground Out
of variance variance not rebaselined in Communications within 10 December
2005 (Segment 1) percent and corrective

actions taken

that bring it

within variance

limits.

Traffic Flow major 48.2 92.6 106.5 E No N/A Management-

Out of variance performance

Modernization shortfall

                   FY2005 FY2006  FY2007
                  actuals enacted request                             Planned     
         Investment (in   (in    (in          Reasons for Performance improvement 
                                                high risk             
Investment    type       millions) millions) designationa shortfall   efforts     
name                     millions)                                    
Standard      major   $132.9 $119.5   $86.6  B, D, E      No          N/A         
Terminal                                                              
Automation                                   Poor EVM     performance 
Replacement                                  quality      shortfall   
System                                                                
Consolidated  major     65.7  63.6      50.3 D            No          N/A         
Financial                                                             
Management                                                performance 
                                                          shortfall   
System-Wide   major     7.9     13.9   24.0  E            Investment  Requires a  
Information                                   No approved Review      baseline    
Management                                      baselines Board has   Action      
                                                          not         date:       
                                                          baselined   6/2006      
                                                          this        
                                                          project.    
Automatic     major     7.9    22.0   117.0  E            Investment  Requires a  
Dependent                                                             
Surveillance-                                 No approved Review      baseline    
Broadcast                                       baselines Board has   Action      
                                                          not         date:       
                                                          baselined   6/2006      
                                                          this        
                                                          project.    

Source: OMB FY2007 Exhibit 53 and Department of Transportation documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 18: Summary of High Risk Projects for the Department of Treasury
                              FY2005     FY2006  FY2007   
                             actuals  enacted    request  Reasons for  
Investment     Investment        (in        (in       (in high risk    Performance Planned        
                                                                                   improvement    
name          type         millions) millions)  millions) designationa shortfall   efforts        
BSA Direct    major             $9.6       $7.2      $3.4 D            No          N/A            
                                                                       performance 
                                                                       shortfall   
Customer        major               105.9  113.8   120.5  A, B, C      No          N/A            
                                                                       performance 
Account Data                                                           shortfall   
Engine                                                                             
Filing and major                         0.2  32.6   20.0 A, B, C      No          N/A            
                                                                       performance 
Payment                                                                shortfall   
Compliance                                                                         
(Blended)                                                                          
HR Connect     major                    23.6  24.0   23.9 D            No          N/A            
                                                                       performance 
                                                                       shortfall   
Integrated        major                  9.4  18.5   18.5 A, B         Cost        The            
                                                                       variance    development,   
Financial                                                              not within  modernization, 
                                                                       10          
System/CORE                                                            percent     enhancement    
                                                                                   costs are      
Financial                                                                          expected to    
                                                                                   fall within    
System                                                                             tolerance as a 
                                                                                   result of      
                                                                                   closeout costs 
                                                                                   being          
                                                                                   reported.      
Modernized         major                69.2  67.7   55.4 A, B, C      No          N/A            
                                                                       performance 
e-File                                                                 shortfall   
Oracle Federal     major                 2.9   3.3    4.0 D            No          N/A            
                                                                       performance 
Financial                                                              shortfall   
Systems                                                                            
Treasury     major                       3.5  16.2   21.2 D            Schedule    The corrective 
                                                                                   action for     
Foreign                                                                variance    the schedule   
                                                                       not         variance is    
Intelligence                                                           within 10   being handled  
                                                                                   as part of     
Network                                                                            the            
                                                                       percent     restructuring  
                                                                                   and re         
                                                                                   planning       
                                                                                   activity in    
                                                                                   1st            
                                                                                   quarter fiscal 
                                                                                   year 2006.     

Source: OMB FY2007 Exhibit 53 and Department of Treasury documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

                    Page 53 GAO-06-647 High Risk IT Projects

Table 19: Summary of High Risk Projects for the Department of Veterans Affairs
                              FY2005    FY2006  FY2007   
                             actuals   enacted  request  Reasons for  
Investment    Investment         (in       (in       (in high risk    Performance Planned     
                                                                                  improvement 
name         type          millions) millions) millions) designationa shortfall   efforts     
Health Admin major              $9.7     $13.3     $11.3 D            No          N/A         
                                                                      performance 
Center                                                                shortfall   
IT Operations-                                                                    
2007                                                                              
                                                                          Unclear This        
Fee Basis        major           8.6           7.6   0.0 D             baselines, project is  
                                                                                  being       
Replacement-                                                          and cost    terminated. 
                                                                      and         
2007                                                                  schedule    
                                                                      variances   
                                                                      not         
                                                                      within 10   
                                                                      percent     
VistA Legacy-     major             437.7  451.9  460.3  B            No          N/A         
                                                                      performance 
2007                                                                  shortfall   
VistA Imaging-    major              79.7  67.6     51.6 D                Unclear A new       
                                                                       baselines, performance 
2007                                                                  and cost    measurement 
                                                                      and         baseline    
                                                                                  with        
                                                                      schedule    associated  
                                                                                  cost and    
                                                                      variances   schedule    
                                                                      not         variances   
                                                                                  will        
                                                                      within 10   be          
                                                                      percent     submitted   
                                                                                  for OMB     
                                                                                  approval.   
Scheduling      major                  18.7  12.8   12.9 D                Unclear A new       
                                                                       baselines, performance 
Replacement                                                           and cost    measurement 
                                                                      and         baseline    
Project-2007                                                          schedule    with        
                                                                                  associated  
                                                                                  cost and    
                                                                      variances   schedule    
                                                                      not         variances   
                                                                                  will        
                                                                      within 10   be          
                                                                      percent     submitted   
                                                                                  for OMB     
                                                                                  approval.   
Health Data major                      40.3  24.2   26.8 D                Unclear A new       
                                                                       baselines, performance 
Repository-                                                           and cost    measurement 
                                                                      and         baseline    
2007                                                                  schedule    with        
                                                                                  associated  
                                                                                  cost and    
                                                                      variances   schedule    
                                                                      not         variances   
                                                                                  will        
                                                                      within 10   be          
                                                                      percent     submitted   
                                                                                  for OMB     
                                                                                  approval.   
Enrollment     major                   12.9  14.9   11.8 D                Unclear A new       
                                                                       baselines, performance 
(Includes                                                             and cost    measurement 
                                                                      and         baseline    
Income                                                                schedule    with        
                                                                                  associated  
                                                                                  cost and    
                                                                      variances   schedule    
Verification)-                                                        not         variances   
                                                                                  will        
2007                                                                  within 10   be          
                                                                      percent     submitted   
                                                                                  for OMB     
                                                                                  approval.   
VistA         major              5.2          3.3   18.4 D                Unclear A new       
                                                                       baselines, performance 
Laboratory IS                                                         and cost    measurement 
                                                                      and         baseline    
System Re                                                             schedule    with        
                                                                                  associated  
                                                                                  cost and    
engineering-                                                          variances   schedule    
                                                                      not         variances   
                                                                                  will        
2007                                                                  within 10   be          
                                                                      percent     submitted   
                                                                                  for OMB     
                                                                                  approval.   

                    Page 54 GAO-06-647 High Risk IT Projects

                             FY2005    FY2006 FY2007    
                            actuals   enacted  request  Reasons for  
Investment     Investment       (in       (in       (in high risk    Performance Planned     
                                                                                 improvement 
name           type       millions) millions) millions) designationa shortfall   efforts     
HealtheVet     major          $45.7     $42.9     $71.6 D                Unclear A new       
                                                                      baselines, performance 
VistA-2007                                                           and cost    measurement 
                                                                     and         baseline    
                                                                                 with        
                                                                     schedule    associated  
                                                                                 cost and    
                                                                     variances   schedule    
                                                                     not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
MyHealtheVet-  major           21.4      13.1      16.6 B, C, D          Unclear A new       
                                                                      baselines, performance 
2007                                                                 and cost    measurement 
                                                                     and         baseline    
                                                                                 with        
                                                                     schedule    associated  
                                                                                 cost and    
                                                                     variances   schedule    
                                                                     not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
Medical and    major           20.4      23.1      23.0 D                Unclear A new       
                                                                      baselines, performance 
Prosthetic                                                           and cost    measurement 
                                                                     and         baseline    
                                                                                 with        
Research-                                                            schedule    associated  
                                                                                 cost and    
                                                                     variances   schedule    
2007                                                                 not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
Decision       major           19.3      19.3      19.5 D            No          N/A         
                                                                     performance 
Support System                                                       shortfall   
Legacy-2007                                                                      
Allocation     major            4.8       2.9       2.9 D            No          N/A         
                                                                     performance 
Resource                                                             shortfall   
Center-2007                                                                      
Patient        major           36.7       9.4       0.0 B                Unclear A new       
                                                                      baselines, performance 
Financial                                                            and cost    measurement 
                                                                     and         baseline    
                                                                                 with        
Services                                                             schedule    associated  
                                                                                 cost and    
                                                                     variances   schedule    
System-2007                                                          not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
                                                                         Unclear This        
Decision       major            2.5       0.5       0.0 D             baselines, project is  
                                                                                 being       
Support System                                                       and cost    terminated. 
                                                                     and         
Modernization-                                                       schedule    
2007                                                                 variances   
                                                                     not         
                                                                     within 10   
                                                                     percent     
Pharmacy Re    major           17.8      16.0      16.9 D                Unclear A new       
                                                                      baselines, performance 
Engineering                                                          and cost    measurement 
and                                                                  and         baseline    
IT Support-                                                          schedule    with        
                                                                                 associated  
                                                                                 cost and    
2007                                                                 variances   schedule    
                                                                     not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
Payroll/HR     major           12.3      14.1      14.2 D            No          N/A         
                                                                     performance 
Systems-2007                                                         shortfall   
Financial      major           13.9      16.0      16.1 D            No          N/A         
                                                                     performance 
Management                                                           shortfall   
System-2007                                                                      

                    Page 55 GAO-06-647 High Risk IT Projects

                             FY2005    FY2006 FY2007    
                            actuals   enacted  request  Reasons for  
Investment     Investment       (in       (in       (in high risk    Performance Planned     
                                                                                 improvement 
name           type       millions) millions) millions) designationa shortfall   efforts     
e-Payroll-2007 IT              $6.1      $5.5      $7.1 D                Unclear A new       
               migration                                              baselines, performance 
               investment                                            and cost    measurement 
                                                                     and         baseline    
               portion of                                                        with        
               a                                                     schedule    associated  
                                                                                 cost and    
               larger                                                variances   schedule    
               asset                                                 not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
VA wide e      major            2.4       4.2       3.6 D                Unclear A new       
                                                                      baselines, performance 
Travel                                                               and cost    measurement 
                                                                     and         baseline    
                                                                                 with        
Solution-2007                                                        schedule    associated  
                                                                                 cost and    
                                                                     variances   schedule    
                                                                     not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
VA-Learning    major            1.9       0.9       5.4 D                Unclear A new       
                                                                      baselines, performance 
Management                                                           and cost    measurement 
                                                                     and         baseline    
System-2007                                                          schedule    with        
                                                                                 associated  
                                                                                 cost and    
                                                                     variances   schedule    
                                                                     not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
Federal Health major            4.6       4.8       4.9 D            No          N/A         
                                                                     performance 
Information                                                          shortfall   
Exchange-                                                                        
2007                                                                             
BDN            major           20.8      21.8      21.8 D                Unclear A new       
                                                                      baselines, operational 
Maintenance                                                          and cost    baseline    
                                                                     and         with        
                                                                                 associated  
and                                                                  schedule    cost and    
                                                                                 schedule    
Operations-                                                          variances   variances   
                                                                     not         will be     
2007                                                                 within 10   submitted   
                                                                     percent     for OMB     
                                                                                 approval.   
                                                                         Unclear An          
BIRLS/VADS-    major            2.7       2.5       2.5 D             baselines, operational 
                                                                                 baseline    
2007                                                                 and cost    with        
                                                                     and         associated  
                                                                                 cost and    
                                                                                 schedule    
                                                                     schedule    variances   
                                                                                 will        
                                                                     variances   be          
                                                                     not         submitted   
                                                                                 for OMB     
                                                                     within 10   approval.   
                                                                     percent     
C&P            major           54.4      17.9      15.8 D               Schedule No planned  
                                                                        variance improvement 
Maintenance                                                          not within  efforts     
                                                                     10          reported.   
and Operations                                                       percent     
(non-BDN)-                                                                       
2007                                                                             
                                                                         Unclear An          
Education      major            1.1       7.4       1.8 D             baselines, operational 
                                                                                 baseline    
Maintenance                                                          and cost    with        
                                                                     and         associated  
                                                                                 cost and    
                                                                                 schedule    
and Operations                                                       schedule    variances   
                                                                                 will        
(non-BDN)-                                                           variances   be          
                                                                     not         submitted   
                                                                                 for OMB     
2007                                                                 within 10   approval.   
                                                                     percent     

                             FY2005    FY2006 FY2007    
                            actuals   enacted  request  Reasons for  
Investment     Investment       (in       (in       (in high risk    Performance Planned     
                                                                                 improvement 
name           type       millions) millions) millions) designationa shortfall   efforts     
Insurance      major           $8.5      $7.3      $7.9 D            No          N/A         
                                                                     performance 
System                                                               shortfall   
Maintenance                                                                      
and                                                                              
Operations-                                                                      
2007                                                                             
Loan Guaranty  major            9.1      10.3      10.0 D                Unclear A new       
                                                                      baselines, operational 
Maintenance                                                          and cost    baseline    
                                                                     and         with        
                                                                                 associated  
and                                                                  schedule    cost and    
                                                                                 schedule    
Operations-                                                          variances   variances   
                                                                     not         will be     
2007                                                                 within 10   submitted   
                                                                     percent     for OMB     
                                                                                 approval.   
                                                                         Unclear An          
Program        major           10.9       9.8       9.5 D             baselines, operational 
                                                                                 baseline    
Integrity/Data                                                       and cost    with        
                                                                     and         associated  
                                                                                 cost and    
Management-                                                          schedule    schedule    
                                                                                 variances   
                                                                                 will        
2007                                                                 variances   be          
                                                                     not         submitted   
                                                                                 for OMB     
                                                                     within 10   approval.   
                                                                     percent     
The Education  major            1.8       3.3       3.2 D                Unclear A new       
                                                                      baselines, performance 
Expert                                                               and cost    measurement 
                                                                     and         baseline    
System-2007                                                          schedule    with        
                                                                                 associated  
                                                                                 cost and    
                                                                     variances   schedule    
                                                                     not         variances   
                                                                                 will        
                                                                     within 10   be          
                                                                     percent     submitted   
                                                                                 for OMB     
                                                                                 approval.   
                                                                         Unclear An          
VR&E           major            5.4       2.7       2.7 D             baselines, operational 
                                                                                 baseline    
Maintenance                                                          and cost    with        
                                                                     and         associated  
                                                                                 cost and    
                                                                                 schedule    
and Operations                                                       schedule    variances   
                                                                                 will        
(non-BDN)-                                                           variances   be          
                                                                     not         submitted   
                                                                                 for OMB     
2007                                                                 within 10   approval.   
                                                                     percent     
Burial         major            1.0       1.0       1.0 D            No          N/A         
                                                                     performance 
Operations                                                           shortfall   
Support                                                                          
System-2007                                                                      
Automated      major            0.6       0.7       0.6 D            No          N/A         
                                                                     performance 
Monument                                                             shortfall   
Application                                                                      
System-2007                                                                      

Source: OMB FY2007 Exhibit 53 and Department of Veterans Affairs
documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 20: Summary of High Risk Projects for the Environmental Protection Agency

FY2005 FY2006 FY2007

actuals enacted request Reasons for Investment Investment (in (in (in high
risk Performance Planned improvement name type millions) millions)
millions) designationa shortfall efforts

PeoplePlus- major $3.9 $2.6 $2.9 D No performance N/A HR shortfall

e-Rulemaking major 10.7 1.2 1.8 D Cost variance not A rebaseline will be
within 10 percent requested and monitored by operational analysis rather
than earned value management until development funds are reauthorized.

EZ-Hire non-major 0.6 0.4 0.4 D No performance N/A shortfall

Financial major 19.5 28.2 37.0 D No performance N/A Replacement shortfall
System

Integrated major 2.3 3.0 3.0 D No performance N/A Contracts shortfall
Management System

Integrated major 2.4 1.6 1.5 D No performance N/A Grants shortfall
Management System

Source: OMB FY2007 Exhibit 53 and Environmental Protection Agency
documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 21: Summary of High Risk Projects for the General Services Administration
                            FY2005    FY2006    FY2007 Reasons for  
Investment    Investment actuals   enacted    request  high risk    Performance Planned     
                         (in       (in          (in                             
name        type         millions) millions) millions) designationa shortfall   improvement 
                                                                                efforts     
CHRIS       major             $5.7      $7.2      $6.3 D                     No N/A         
                                                                    performance 
                                                                    shortfall   
eAuthentication major             2.1        2.3   3.1 D                     No N/A         
                                                                    performance 
                                                                    shortfall   
Enterprise        major        12.5       17.4    18.4 E                     No N/A         
                                                                    performance 
Customer                                               This is a    shortfall   
Relationship                                           large                    
Management System                                      project in               
                                                       the initial              
                                                       stage.                   
eTravel           major        10.2       9.9      9.1 D                     No N/A         
                                                                    performance 
                                                                    shortfall   
Federal Asset        major        2.8     2.4      1.8 D                     No N/A         
                                                                    performance 
Sales Program                                                       shortfall   
FMLoB                major       28.9     39.9    40.1 B                     No N/A         
                                                                    performance 
COE/Pegasys                                                         shortfall   
GSA Preferred        non-major   10.6     18.0     3.0 B            Unclear     Based on    
                                                                                the results 
                                                                    baselines,  of an       
                                                                    cost,       independent 
                                                                        and     assessment, 
                                                                     schedule   GSA         
                                                                     variances  has         
                                                                        not     determined  
                                                                                that        
                                                                                this        
                                                                    within 10   investment  
                                                                                is not      
                                                                    percent and meeting the 
                                                                                current     
                                                                        project and future  
                                                                        manager business    
                                                                    is not      objectives. 
                                                                    qualified.  As a        
                                                                                result, GSA 
                                                                                is          
                                                                                terminating 
                                                                                this        
                                                                                investment. 
                                                                                GSA has     
                                                                                initiated a 
                                                                                data        
                                                                                migration   
                                                                                initiative  
                                                                                that will   
                                                                                enable      
                                                                                migration   
                                                                                of          
                                                                                the two     
                                                                                regions to  
                                                                                the         
                                                                                legacy      
                                                                                system.     
                                                                                Will        
                                                                                provide     
                                                                                quarterly   
                                                                                updates on  
                                                                                progress    
                                                                                of          
                                                                                migration   
                                                                                activity.   
                                                                                Action      
                                                                                date:       
                                                                                fiscal      
                                                                                year 2007,  
                                                                                4th         

                          FY2005    FY2006    FY2007 Reasons for              
Investment  Investment actuals   enacted   request   high risk    Performance Planned       
name        type       (in       (in       (in       designationa shortfall   improvement   
                       millions) millions) millions)                          efforts       
Integrated  major           $9.4      $4.3      $3.9 D            Cost        Update task   
Acquisition                                                       variance    planned start 
Environment                                                       not within  and end dates 
                                                                  10 percent  on protest    
                                                                  and project resolution    
                                                                  manager is  and project   
                                                                  not         manager will  
                                                                  qualified.  continue      
                                                                              required      
                                                                              training to   
                                                                              meet CIO      
                                                                              program       
                                                                              manager       
                                                                              certification 
                                                                              criteria.     
                                                                              Action date:  
                                                                              fiscal        
                                                                              year 2006,    
                                                                              4th           
                                                                              quarter       

USA Services major 11.3 11.5 11.7 D No performance N/A shortfall

Source: OMB FY2007 Exhibit 53 and General Services Administration
documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

 Table 22: Summary of High Risk Projects for the National Aeronautics and Space
                                 Administration

FY2005 FY2006 FY2007 Planned Investment actuals (in enacted (in request
(in Reasons for high Performance improvement Investment name type
millions) millions) millions) risk designationa shortfall efforts

E-Rulemaking Joint effort for $0.2 more than one agency

$0.4 $0.3 D No N/A performance shortfall

Business Gateway Joint effort for 0.0 more than one agency

0.1 0.1 D No N/A performance shortfall

Geospatial One-Joint effort for 0.2 Stop more than one

agency

0.3 0.0 D No N/A performance shortfall

Grants.Gov Joint effort for 0.5 more than one agency

0.5 0.5 D No N/A performance shortfall

                           FY2005    FY2006  FY2007                           Planned
             Investment   actuals enacted   request   Reasons for Performance 
                              (in (in       (in              high improvement 
Investment name  type   millions) millions) millions) risk        shortfall   efforts 
                                                      designation             
                                                      a                       
                 Joint                                                                
E-Training       effort      $1.0      $0.0      $0.0 D           No          N/A
                 for                                                          
                 more                                             performance 
                 than                                                         
                 one                                                          
                 agency                                           shortfall   
                 Joint                                                                
Recruitment One  effort       0.0       0.0       0.0 D           No          N/A
                 for                                                          
Stop             more                                             performance 
                 than                                                         
                 one                                                          
                 agency                                           shortfall   
                 Joint                                                                
E-Payroll        effort       1.0       0.0       0.0 D           No          N/A
                 for                                                          
                 more                                             performance 
                 than                                                         
                 one                                                          
                 agency                                           shortfall   
                 Joint                                                                
E-Travel         effort       0.2       0.5       0.0 D           No          N/A
                 for                                                          
                 more                                             performance 
                 than                                                         
                 one                                                          
                 agency                                           shortfall   
                 Joint                                                                
Integrated       effort       1.8       1.3       1.4 D           No          N/A
                 for                                                          
Acquisition      more                                             performance 
                 than                                                         
                 one                                                          
Environment      agency                                           shortfall   
                 Joint                                                                
E-Records        effort       0.0       0.0       0.0 D           No          N/A
                 for                                                          
Management       more                                             performance 
                 than                                                         
                 one                                                          
                 agency                                           shortfall   
                 Joint                                                                
E-Authentication effort       0.4       0.5       0.6 D           No          N/A
                 for                                                          
                 more                                             performance 
                 than                                                         
                 one                                                          
                 agency                                           shortfall   
                 Joint                                                                
Financial        effort       0.1       0.1       0.1 D           No          N/A
                 for                                                          
Management Line  more                                             performance 
                 than                                                         
                 one                                                          
of Business      agency                                           shortfall   
                 Joint                                                                
Human Resource   effort       0.0       0.0       0.1 D           No          N/A
                 for                                                          
Management       more                                             performance 
                 than                                                         
                 one                                                          
Lines of         agency                                           shortfall   
Business                                                                      
                 Joint                                                                
Information      effort       0.0       0.0       0.0 D           No          N/A
                 for                                                          
Systems Security more                                             performance 
                 than                                                         
                 one                                                          
Line of Business agency                                           shortfall   
Core Financial   major       38.3      87.3      37.9 B, C        No          N/A     
                                                                  performance 
                                                                  shortfall   
Contract         major       16.6      37.4      14.1 B, C        No          N/A     
Management                                                        performance 
Module                                                            shortfall   

Source: OMB FY2007 Exhibit 53 and National Aeronautics and Space
Administration documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 23: Summary of High Risk Projects for the National Science Foundation
                      FY2005    FY2006    FY2007                 
                      actuals   enacted   request   Reasons for              Planned     
Investment Investment (in       (in       (in       high risk    Performance improvement 
name       type       millions) millions) millions) designationa shortfall   efforts     
E-Human    major           $0.7      $1.6      $2.5 D            No          N/A         
                                                                 performance 
Capital                                                          shortfall   

Source: OMB FY2007 Exhibit 53 and National Science Foundation documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Table 24: Summary of High Risk Projects for the Nuclear Regulatory Commission
                           FY2005    FY2006  FY2007   Reasons for              Planned       
Investment  Investment  actuals   enacted   request    high risk   Performance improvement   
                        (in       (in       (in                                
name        type        millions) millions) millions) designationa shortfall   efforts       
e-Travel     non-major       $0.1      $0.5      $0.3 D                     No N/A           
                                                                   performance 
                                                                   shortfall   
Disaster          Joint effort   N/A     N/A     N/A  D                     No N/A           
                                                                   performance 
Management        for more                                         shortfall   
Information       than one                                                     
System            agency                                                       
Learning          non-major      0.5     0.5     0.5  D            Cost and    Complete      
                                                                               security      
Management                                                         schedule    certification 
                                                                               and           
System                                                             variance    accreditation 
                                                                   not         
                                                                   within 10   process       
                                                                   percent     Action date:  
                                                                               pending       
Electronic  major                0.8        0.7   0.9 D                     No N/A           
                                                                   performance 
Information                                                        shortfall   
Exchange                                                                       

Source: OMB FY2007 Exhibit 53 and Nuclear Regulatory Commission documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project exceptionally high development, operating, or maintenance
costs, either in absolute terms or as a percentage of the agency's total
IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

 Table 25: Summary of High Risk Projects for the Office of Personnel Management

FY2005 actuals FY2006 FY2007 Reasons for Planned (in enacted (in request
(in high risk Performance improvement Investment name Investment type
millions) millions) millions) designationa shortfall efforts

Information Systems Joint effort for $0.0 $0.0 $0.0 D Unclear The Office
of

Security Line of more than one baselines, cost Personnel

Business agency and schedule Management's

variances not project coordinator

within 10 will work with OMB

percent, and staff and

project manager interagency

is not qualified. Information

Systems Security

Line of Business

participants to

clarify

governmentwide

and agency goals.

Once the goals are

clarified, the

baseline cost and

schedule will be

developed. Agency

will assess the

project manager

against the

agency's

qualification

guidelines.

Retirement Systems major 5.4 52.7 43.2 B, C, D Unclear This project is
still

Modernization baselines, and in the planning cost and phase and a schedule
baseline is being variance not developed. within 10 percent

      Financial Joint effort for 0.0 0.1 0.1 D Cost and Corrective actions

Management Line of more than one schedule not reported.

Business agency variance not

within 10

percent

Human Resources major 5.8 8.0 6.7 D No performance N/A Management Line of
shortfall Business

Enterprise Human major 12.8 36.8 36.4 D No performance N/A Resources
shortfall Integration

                         FY2005                                              
                        actuals    FY2006    FY2007 Reasons for              Planned        
                      (in       enacted   request   high risk    Performance improvement    
Investment Investment millions) (in       (in       designationa shortfall   efforts        
name       type                 millions) millions)                          
E-Training major           $3.0      $3.1      $3.1 D            Schedule    The Human      
                                                                 variance    Resources      
                                                                 not         
                                                                 within 10   Management     
                                                                 percent     Line of        
                                                                             Business/Human 
                                                                             Resource       
                                                                             Development    
                                                                             Project        
                                                                             Management     
                                                                             Office will    
                                                                             closely        
                                                                             monitor the    
                                                                             delivery of    
                                                                             activities on  
                                                                             the            
                                                                             enterprise     
                                                                             architecture,  
                                                                             Workforce      
                                                                             Development    
                                                                             Roadmap, and   
                                                                             performance    
                                                                             management     
                                                                             subprojects.   
                                                                             OPM requested  
                                                                             the completion 
                                                                             of remaining   
                                                                             baseline       
                                                                             corrections to 
                                                                                resolve     
                                                                                located     
                                                                             schedule       
                                                                             errors.        

Recruitment One major 6.9 7.6   7.9 D          No           N/A            
Stop/USA Jobs                                  performance  
                                                  shortfall    
E-Clearance     major 6.1 5.4   5.6 D          Cost and     For both the   
                                                  schedule     cost/ and      
                                                               schedule       
                                                  variances    variances, the 
                                                  not within   agency is      
                                                  10 percent.  updating out   
                                                               estimate to    
                                                               complete to    
                                                               reflect a      
                                                               realistic      
                                                               timeline       
                                                               given the      
                                                               current        
                                                               circumstances  
                                                               with           
                                                               external       
                                                               stakeholders.  
Personnel       major 9.9 12.9 13.3            No           N/A            
Investigations                      E          performance  
Processing                          Designated shortfall    
Systems                             by OMB                  

e-Rulemaking    Joint effort for   0.0   0.2    0.2 D   No performance N/A 
                    more than one                            shortfall    
                  agency                                                  

                                           FY2005
                            actuals    FY2006    FY2007 Reasons for                  Planned
                                (in enacted   request   high risk    Performance improvement
                                    (in       (in                                
Investment     Investment millions) millions) millions) designationa shortfall   efforts
name           type                                                              
Fed Asset      Joint           $0.0      $0.0      $0.0 D            No performance   N/A    
Sales          effort for                                                             
               more than                                             shortfall        
               one                                                                    
               agency                                                
Business       Joint            0.0       0.2       0.1 D            No performance   N/A    
Gateway        effort for                                                             
               more than                                             shortfall        
               one                                                                    
               agency                                                
Disaster       Joint            0.0       0.0       0.0 D            No performance N/A
               effort                                                
Management     for more                                              shortfall   
               than one                                              
               agency                                                
E-Travel       IT               0.0       0.0       0.0 D            No performance N/A
               migration                                             
               investment                                            shortfall   
               portion of                                            
               a                                                     
               larger                                                
               asset                                                 
E-             IT               0.0       0.5       0.1 D            No performance N/A
               migration                                             
Authentication investment                                            shortfall   
               portion of                                            
               a                                                     
               larger                                                
               asset                                                 

Source: OMB FY2007 Exhibit 53 and Office of Personnel Management
documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project exceptionally high development, operating, or maintenance
costs, either in absolute terms or as a percentage of the agency's total
IT portfolio.

C=The projects is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

                    Page 66 GAO-06-647 High Risk IT Projects

Table 26: Summary of High Risk Projects for Small Business Administration
                               FY2005    FY2006    FY2007                                      
                              actuals   request   request Reasons for              Planned     
                 Investment       (in       (in       (in high risk    Performance improvement 
Investment name  type       millions) millions) millions) designationa shortfall   efforts
GovBenefits.gov  Joint            N/A       N/A      $0.1 D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
USA Services     Joint            0.0       0.0       0.0 D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
E-Rulemaking     Joint            0.2       0.2       0.2 D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
Federal Asset    Joint            0.0       0.0       0.0 D            No          N/A         
Sales            effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
Geospatial       Joint            0.0       0.0       0.0 D            No          N/A         
One-Stop         effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
Disaster         Joint            0.0       0.0       0.0 D            No          N/A         
Management       effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
Grants.gov       Joint            0.0       0.2       0.1 D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
E-Training       Joint            0.0       0.0       0.0 D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
Recruitment      Joint            N/A       N/A       N/A D            No          N/A         
One-Stop         effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
Enterprise Human Joint            0.0       0.0       0.0 D            No          N/A         
Resources        effort for                                            performance 
Integration      more than                                             shortfall   
                 one agency                                                        
E-Clearance      Joint            N/A       N/A       N/A D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
E-Travel         Joint            0.0       0.3       0.0 D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
E-Authentication Joint            0.4       0.5       0.1 D            No          N/A         
                 effort for                                            performance 
                 more than                                             shortfall   
                 one agency                                                        
Financial        Joint            0.1       0.1       0.1 D            No          N/A         
Management Line  effort for                                            performance 
of Business      more than                                             shortfall   
                 one agency                                                        

                      FY2005    FY2006 FY2007    
                     actuals  request   request  Reasons for  
        Investment       (in       (in       (in high risk    Performance Planned     
                                                                          improvement 
Investment  type   millions) millions) millions) designationa shortfall   efforts     
name                                                                      
Human       Joint                                                         Original    
Resources   effort      $0.0      $0.1      $0.7 D            Project     project     
            for                                                           deliverable 
Management  more                                              manager is  for fiscal  
Line        than                                              not         year 2006   
                                                                          was         
of Business one                                               yet         deferred,   
            agency                                            qualified.  with no     
                                                                          project     
                                                                          manager     
                                                                          required.   
                                                                          New         
                                                                          project     
                                                                          manager is  
                                                                          receiving   
                                                                          training as 
                                                                          part of     
                                                                          Office of   
                                                                          CIO         
                                                                          directed    
                                                                          formal      
                                                                          training    
                                                                          activity.   
WinZip      Joint                                                                     
SmartBUY    effort       N/A       N/A       N/A D            No          N/A
            for                                                           
            more                                              performance 
            than                                                          
            one                                               shortfall   
            agency                                                        
            Joint                                                                     
Grants      effort       0.0       0.0       0.0 D            No          N/A
            for                                                           
Management  more                                              performance 
LOB         than                                                          
            one                                               shortfall   
            agency                                                        
            Joint                                                                     
Integrated  effort       0.0       0.0       0.1 D            No          N/A
            for                                                           
Acquisition more                                              performance 
            than                                                          
Environment one                                               shortfall   
            agency                                                        
Business    Joint                                                                     
Gateway     effort       0.1       0.1       0.1 D            No          N/A
            for                                                           
(e-GOV)     more                                              performance 
            than                                                          
            one                                               shortfall   
            agency                                                        
Business    major        8.9      10.3       7.9 B            No          N/A         
Gateway                                                                   
(Managing                                                     performance 
Partner)b                                                     shortfall   
Disaster    major        5.0       5.6       5.8 B            No          N/A         
Credit                                                                    
Management                                                    performance 
Systemb                                                       shortfall   

Source: OMB FY2007 Exhibit 53 and Small Business Administration documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

b

According to agency officials, the fiscal year 2006 request was enacted
for these investments.

 Table 27: Summary of High Risk Projects for the Social Security Administration

FY2005 FY2006 FY2007

actuals enacted request Reasons for Investment Investment (in (in (in high
risk Performance Planned improvement name type millions) millions)
millions) designationa shortfall efforts

E-Vital major $1.1 $1.0 $0.8 D Cost variance not None, as fixed price
contract within 10 percent cost variances at successful project completion
will be zero

e-Dib major 79.3 22.7 8.4 B No performance N/A shortfall

Disability major 6.2 Process Improvements 35.0 28.5 E No performance N/A

Improve SSA's shortfall Disability Service

Medicare major 99.0 61.4 7.6 E No performance N/A Modernization
Legislation shortfall

IT Operations major 0.4 22.6 28.0 B Cost variance not Contract to be
awarded for Assurance within 10 percent the second data center facility

Action date: pending

Voice over IP major 0.4 41.1 33.5 B No performance N/A shortfall

Source: OMB FY2007 Exhibit 53 and Social Security Administration
documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

 Table 28: Summary of High Risk Projects for the U.S. Agency for International
                                  Development

FY2005 FY2006 FY2007 actuals enacted request Reasons for Investment (in
(in (in high risk Performance Planned improvement Investment name type
millions) millions) millions) designationa shortfall efforts

Joint Acquisition and major & $0.0 & Assistance non-major 10.6 Management
System/Procurement System Improvement Project $6.0 & $11.4 & C Baselines
not yet To collect information

0.0 0.0 established and from various sources at cost and the agency and
the schedule Department of State in variances not order to validate within
10 milestones.

percent. Action date: 6/1/06

Source: OMB FY2007 Exhibit 53 and U.S. Agency for International
Development documents.

a

Reasons for high risk designation include:

A=The agency has not consistently demonstrated the ability to manage
complex projects.

B=The project has exceptionally high development, operating, or
maintenance costs, either in absolute terms or as a percentage of the
agency's total IT portfolio.

C=The project is being undertaken to correct recognized deficiencies in
the adequate performance of an essential mission program or function of
the agency, a component of the agency, or another organization.

D=The projects' delay or failure would introduce for the first time
unacceptable or inadequate performance or failure of an essential mission
function of the agency, a component of the agency, or another
organization. (Note: According to OMB staff, projects identified as high
risk per OMB's additional instructions on e-government or lines of
business initiatives met this reason.)

E=Other.

Appendix IV: GAO Contact and Staff Acknowledgments

David A. Powner, (202) 512-9286, [email protected]

  GAO Contact

In addition to the contact named above, the following people made key
contributions to this report: William G. Barrick, Nancy Glover, Nnaemeka
Okonkwo, Sabine Paul, and Niti Tandon.

(310805)
*** End of document. ***