OMBlog

Driving IT Reform: An Update

Tackling the information technology gap  between the public and private sectors is one of most effective ways we can make government work more effectively and efficiently for the American people. IT has been at the center of the private sector’s productivity gains, but for too long Federal IT projects have run over budget, behind schedule, or failed to deliver what on their promise. That’s why fixing IT is a cornerstone of the President’s Accountable Government initiative.

This effort began in earnest  this summer when we undertook a three-part strategy to reform how the federal government purchases and uses IT – cutting waste and saving money.

First, Chief Information Officer Vivek Kundra launched detailed reviews of the highest priority IT projects across the Federal Government; these are critically important IT modernization projects that have not yet delivered. Since then, we’ve held dozens of TechStat review sessions, resulting in faster deliverables, terminations of projects that didn’t work, and most importantly turned around projects that were in trouble.

Second, since far too many financial system modernization projects were running behind schedule and over budget, we halted all new work on those projects pending review and approval by OMB. Across the government, over 30 financial systems projects, with budgets totaling $20 billion, were affected by this policy.  

Our review of 20 agencies’ projects is now complete, and I am proud to report that we have taken steps to save $1.6 billion on these projects.
 
Through our reviews, we determined that half the projects were basically on track. Of the half that were not, we took the following actions:

• At two agencies – the Department of Housing and Urban Development and the Environmental Protection Agency  -- we pulled forward meaningful functionality, resulting in almost $230 million in budget reductions.

• At two agencies – the Department of Veterans Affairs and the Small Business Administration –  we canceled their projects as a result of the review, resulting in over $500 million in budget reductions.

• At three agencies – the Departments of Homeland Security, Justice, and Health and Human Services, we are moving forward with plans to decrease the scope of and improve their financial system projects, resulting in reduced costs and a greater focus on critical business needs.  This revaluation of these projects resulted in over $680 million in budget reductions. 

• An additional $200 million in budget reductions was identified in various agencies, with more to come.

While this is great progress toward getting these IT systems online and working for the American people, we also recognize that it’s better to get them right from the get-go. 

Third, we were tasked with developing a new strategy to fundamentally change how the federal government purchases and uses IT, which I discussed in a speech to the Northern Virginia Technology Council today: 

• Aligning the Budget and Acquisition Process with the Technology Cycle. Between increasing budget flexibility and speeding up acquisitions, we’re going to eliminate the structural disconnect between the government’s process and the technology cycle. To start, we’ll work with Congress to identify a dozen pilot projects where we can develop a framework for increased budget flexibility and greater oversight.

• Strengthening Program Management. We’re creating a formal career track for professional program managers and we’ll only green light IT projects with effective program management teams hardwired into the agency’s organizational structure.

• Streamlining Governance and Increase Accountability. We’re going to revamp the Investment Review Boards along the TechStat model – bringing senior executives to the table armed with the right information and expertise to provide meaningful oversight and drive interventions and decision making on specific projects.

• Increasing Engagement with the IT Community. We’ll be launching a “myth busters” campaign to promote greater engagement with industry and remove barriers to communication that are hurting our productivity. We’ll also develop mechanisms for sharing best practices and solutions between agencies and IT community on a regular basis.

• Adopt Light Technologies and Shared Solutions. We are reducing our data center footprint by 40 percent by 2015 and shifting the agency default approach to IT to a cloud-first policy as part of the 2012 budget process.  Consolidating more than 2,000 government data centers will save money, increase security and improve performance.

Changing how we invest the $80 billion we spend each year on IT and making sure what we buy is helping us deliver better results at a cheaper price is a big challenge. But the hard work of many people throughout the agencies shows that it can be done, and we will work with our colleagues across the government and partners in the tech and business communities to build on these successes in the months to come.

And the Top SAVER is...

Over 57,000 of you have spoken, and the winner of the 2010 SAVE Award is Trudy Givens of Portage, Wisconsin.

Trudy is a 19-year veteran of the US Bureau of Prisons, working now as a Business Administrator in the Federal Correctional Institution in Oxford, Wisconsin. Over the course of her career, Trudy noticed that copies from the Federal Register -- the federal government’s official daily publication for rules, proposed rules, and notices of Federal agencies and organizations, as well as executive orders and other presidential documents-- were delivered to her workplace several times per week, but employees rarely referenced the documents. The Federal Register was made available online years ago, and most members of the interested public reference that online version now. Trudy thought that in keeping with the President’s spirit of cutting out waste and going green, the government should end the printing and mailing of thousands of Federal Registers to employees.

Vote Now: The President's 2010 SAVE Award Finalists

President Obama and this Administration have taken steady steps to change the way business is done in Washington and make government more effective and efficient for the American people – for today and for years to come. That’s what is driving our Accountable Government Initiative  and all its parts from our effort to stop huge cost overruns in IT projects  to getting rid of unneeded federal properties  and bringing more competition to contracting.

One of the most important changes that the President has brought to Washington is the belief that the best ideas usually come from outside of Washington.  That’s why he launched the first ever SAVE Award last year to get ideas from federal employees on the frontlines to make government work smarter for the American people and to make sure taxpayer dollars are spent wisely. And it’s why we are now asking the American people to help us select this year’s winner.

As they did for the first award, federal employees across America and stationed around the globe answered in droves the President’s call for ideas on how to cut waste, save money, and boost performance.
More than 18,000 ideas were submitted this year, and federal employees weighed in with more than 164,000 votes to help the Administration identify promising ideas to save. Our budget team then went through the ideas to see what we were already in the process of fixing, what needed a closer look, and which where worthy of being our four finalists.

Today, we’re announcing our Final Four -- and asking you to weigh in and vote for your favorite idea on www.SAVEAward.gov.

The winner will get to present his or her idea directly to President Obama at the White House. Others will be sent to the responsible agencies for potential action. Last year, 20 SAVE Award ideas made their way directly into the President’s 2011 Budget, and others helped identify cost-savings across an array of areas.
Most importantly, the idea that each employee has both the ability and responsibility for making every taxpayer dollar count is becoming part of the culture in the federal government – not just each year with the SAVE Award, but all year round.

Here are the 2010 finalists:

Stop the Express Delivery of Empty Containers. Marjorie Cook from Gobles, Michigan is a food inspector in USDA’s Food Safety and Inspection Service (FSIS). FSIS inspectors ship 125,000 samples to labs each year using “Express Next Day” service. Those labs use the same costly shipping method to send empty containers back. As Marjorie put it, “We could save a bundle by having those boxes shipped back through regular ground service.”

Require Mine Operators to Submit Reports Online. Thomas Koenning of Littleton, Colorado works in the Mine Safety and Health Administration’s Information Technology Center. Currently, mine operators are mailed paper forms in order to report quarterly data. Koenning suggests requiring mine operators to make these reports online to save money on costly form production and postage, reduce input errors, and decrease the time it takes to analyze this data which is important to MSHA’s efforts to protect the safety of America’s mine workers.

Post Public Notice of Seized Property Online, Not in Newspapers.  Paul Behe is a Paralegal Specialist for the Department of Homeland Security in Cleveland, Ohio. He suggests advertising property seized by Customs and Border Protection – such as counterfeit watches and purses – online instead of in newspapers. As Paul notes, “In addition to the immense cost reduction for the ads, DHS would be able to save the cost of storage for the seized items that are at the contractors, awaiting adjudication.”

End the Mailing of Thousands of Federal Registers to Government Employees. Trudy Givens from Portage, Wisconsin works for the Bureau of Prisons. The Federal Register is currently mailed to her workplace and nearly 10,000 Federal employees every workday.  Most of the interested public now accesses the Federal Register online. While statute requires that hard copies be available, allowing recipients to opt-in for hard copy delivery could yield savings associated with printing and postage. When a similar “opt-in” (with fee) option was offered to the public, the number of hard copies mailed was reduced from roughly 25,000 to 500 recipients. 

Make no mistake: the SAVE Award will not balance the budget. But cutting waste and restoring accountability for taxpayer dollars is important if the budget is in surplus or in deficit. Pick your favorite from the list, and spread the word to all your family, friends, and colleagues to make their voices heard and help us pick this year’s SAVE Award winner.

Real Update on Real Property

As I’ve written about before, as part of the President’s Accountable Government Initiative, we are taking aggressive steps to save taxpayer dollars while making government work better, harder and more efficiently for the American people.

That’s why on June 10, 2010, President Obama issued a Presidential Memorandum titled “Disposing of Unneeded Federal Real Estate” directing agencies to accelerate efforts to remove excess and surplus property for a savings of $8 billion by the end of FY 2012. And as part of the President’s FY 2012 budget process, we are working closely with Federal agencies to achieve that goal.

Federal agencies have detailed plans to cut excess property costs and implement cost cutting measures. To date, Federal agencies have identified $1.7 billion of the $3 billion in non-defense savings opportunities that the President has required us to achieve by the end of FY 2012. And we are off to a good start in converting these opportunities to bottom line savings for taxpayers. For instance, we are selling buildings such as one office building in Omaha, Nebraska for $1.3 million, one in Springfield, Massachusetts for $2.5 million, and one in Bethesda, Maryland for $12.4 million.

The Department of Defense is also on track to achieve the $5 billion in real property cost savings through the Base Realignment and Closure (BRAC) process in the same time period.

While there is still work to be done, we are pleased with the progress made thus far and we are working with the agencies to identify further opportunities for cost reductions.

As the country’s largest property owner and energy user, it is critical that we remain vigilant about our operating costs. By selling buildings, reducing maintenance costs, cutting energy costs, consolidating and re-aligning existing space and reducing leases, we are saving taxpayer dollars and making government work better for everyone.

Keeping a Close Eye on Recovery Act Dollars

From the beginning, the President and Vice President have demanded an unprecedented level of accountability and transparency from recipients of Recovery Act funds.  Tens of thousands of recipients are required to report in every quarter on how exactly they are putting their Recovery Act contract, grant or loan to work -- and those reports are posted in full public view on Recovery.gov.  You can see them for yourself HERE.  This is a pioneering transparency effort and, while there may have been some initial skepticism that it could be pulled off, last quarter nearly 100 percent of recipients required to report did so.  This unprecedented level of disclosure has been lauded by government watchdogs and transparency groups as a significant achievement for open government.

Now, it would be easy to rest on this accomplishment of near 100 percent participation, but frankly, we’re not satisfied -- we believe that everyone that is required to share with the public how they are putting Recovery dollars to work should be doing so.  That’s why Federal agencies have been charged with aggressively pursuing the .5 percent of cases where recipients have failed to file. 

But each case is a little bit different --  and that’s why agencies have been empowered to pursue them with action ranging from an initial warning letter to withholding or rescinding of funds and even litigation, if it becomes necessary.  Here is how it breaks down:

• Of the 74,244 prime recipients required to file last quarter, just 352 failed to file a report last quarter -- that’s 99.5 percent participation. 

• Of the 352 who failed to file, 89 percent of them -- or 312 -- were first-time non-reporters.  Often one-time non-filers have technical problems reporting, so the relevant agency contacts them with a warning letter that also offers the necessary technical or other assistance.  Other cases of first-time non-reporting have been as simple as internal company or organization miscommunication or personnel changes.  In the vast majority of these cases, the recipient simply resolves their internal technical or staffing issue and files the next quarter.

• Of the remaining 40 non-reporters, 32 failed to comply twice, 4 failed to comply three times, and 4 failed to comply four times.  Each of these cases is aggressively pursued by the relevant agency with punitive action ranging from withholding or rescinding funds to litigation, if necessary.  You can take a look at the action being taken in each of these 40 cases HERE . We take these cases seriously, but overall, they represent .1 percent of Recovery Act recipients and involve less than .001 percent of total Recovery Act funding.

Changing the way business is done in Washington doesn’t happen overnight -- we are constantly working to improve transparency processes and help recipients of Recovery Act funds adjust to meet our high standards.  But we agree with government watchdogs that the unprecedented level of transparency provided with the Recovery Act over the last year-and-a-half has been a meaningful step in the right direction.

Cutting Costs in Financial Systems

FDA on Track

Accountable, effective government took another significant step forward recently. The Food and Drug Administration (FDA) cut the ribbon on its FDA-TRACK management system, advancing the President’s Accountable Government Initiative and Open Government Initiative.  The acronym that FDA chose to name its management approach, TRACK, nicely conveys of the pillars of the Obama Administration’s approach to modernizing government. TRACK stands for Transparency, Results, Accountability, Credibility, and Knowledge-Sharing. 

With the full scale launch of FDA-TRACK, the Food and Drug Administration is moving down the path we want all Federal agencies to follow. Agency senior leaders, in this case FDA Commissioner Hamburg and Deputy Commissioner Sharfstein, are driving performance gains on  agency priorities and expecting agency managers, FDA Center Directors and others, to do the same – not just for agency priorities, but also for each Center’s and program’s priorities.  FDA has already launched a pilot of FDA-TRACK and made progress on a number of fronts. It has, for example, increased the number of employees trained in the Incident Command System (ICS), improving the agency’s response to emergencies; developed a new risk-based approach for evaluating the safety, effectiveness, and quality of new animal drugs; and begun reducing vacancy rates on critical advisory councils. Deputy Commissioner Sharfstein runs regular data-driven reviews with each organizational unit and for key initiatives to keep FDA managers driving progress on priorities and reducing risks. These reviews are informed by data analysis that identifies problems and understands their causes, complemented by benchmarking comparisons and evaluations. And FDA is sharing FDA-TRACK information openly with the public on its website.

FDA-TRACK builds on lessons of “Stat” and similar performance management systems that have been deployed by various governments to drive down crime rates, prison disruption, hospital wait times, overtime costs, and other problems and to drive up health, children’s well-being, and education outcomes. FDA-TRACK’s constructive, data-rich performance review epitomizes our commitment to learn from experience and use objective evidence to identify and build on what works, while fixing or tossing what does not. 

FDA’s launch of FDA-TRACK is exciting, as is its commitment to open, accountable, performance-improving government. It is a great example of changes happening across the Administration that will improve the way government works, and government’s impact on outcomes, for years to come.

Best Practices from the Best Companies

The President has long believed that some of the best ideas come from outside Washington – especially when it comes to reforming Washington. That’s why he launched the SAVE Award, a chance for federal workers across the country to offer their best ideas about how to cut costs and improve performance, and it’s why he convened the White House Forum on Modernizing Government in January. There, we welcomed 50 CEO’s from many different sectors and sized businesses to hear their thoughts about how we can take the best practices of the private sector on increasing efficiency and effectiveness and apply them to the federal government.

Since then, we have taken some of the best ideas and put them into practice.

First, we’re making good progress in our efforts to improve the results of large-scale IT projects across the Federal Government. Consistent with the advice from many Forum participants, we’re intervening in high-risk projects while at the same time undertaking a structural review of our IT procurement and management practices. On the high-risk front, we are pulling together cross-functional leaders at the earliest signs of trouble to take corrective actions either to get projects back on track or terminate them as quickly as possible.

And, inspired by the best practices Forum participants shared with us regarding project scope and duration, we are taking aggressive action on financial system modernization projects in particular, as these types of projects have been plagued by persistent problems. On June 28, we halted all financial system modernization projects across the Federal Government. Agencies now are working to meaningfully reduce the size, cost, and complexity of each project. Agencies are closely examining options to terminate, defer, or significantly reset the scope of their projects. These actions will reduce project costs by hundreds of millions of dollars and will increase the likelihood of success. For example, the Department of Veterans Affairs recently terminated a financial system project after determining it was unlikely to succeed, saving $300 million.

In addition to large scale IT project management, our Forum discussions focused on customer service, and we’re making progress on this front as well. We have launched a multi-agency project to review customer service standards and the metrics used to track performance against those standards. We will make this information available to the public both to set customer expectations and to encourage effective performance management and oversight.

We also are reviewing organizational obstacles that get in the way of the type of customer service best practices that surfaced during the Forum. For example, in most agencies, website and call center teams currently are run as separate operations with very little interaction, which is contrary to the practice of the best performing private sector organizations. We also are working to overcome the regulatory and logistical constraints on agency efforts to capture and act on customer satisfaction and feedback. We’ve already issued new guidance to enable agencies to use social media and web analytics to better connect with citizens and will have more to announce in the months ahead.

Finally, we are working to keep the dialogue going between private and public sector managers. Not only are many Deputy Secretaries (agency COOs) in contact with their private sector counterparts, but this spring, the President issued an Executive Order creating the President’s Management Advisory Board to provide the President and the President's Management Council advice on the implementation of business best practices to improve Federal Government management and operations. We will be announcing Board members and holding our first meeting later this year, and we look forward to it serving as a lasting resource for bringing private sector expertise into government operations.

Overall, while there are key differences between the government and the private sector, there is much we can learn from high-performing private sector organizations – and this Administration is committed to doing just that. 

Time is Running out to SAVE

As many of you know, on July 8, President Obama launched the second annual SAVE Award contest, a chance for federal workers to submit their best ideas about how to cut waste and improve government performance. To date, the response has been impressive, with 11,000 ideas submitted in just over a week. A new feature of this year’s contest is that federal employees also have the opportunity to vote and comment upon their fellow workers’ ideas, and already more than 95,000 votes have been cast -- yet another sign of how federal workers are getting into the saving act.