At Least $10B in Federal IT Contracts at Risk of Failing, GAO Finds

At least $10 billion worth of federal IT contracts could fail, according to a new Government Accountability Office report, the Washington Post's "On I.T." reports.

Last week, David Powner, GAO's IT management director, discussed the report's findings at a Senate Subcommittee on the Efficiency and Effectiveness of Federal Programs hearing.


The report comes as the federal government works to recover from the troubled rollout of the federal health insurance exchange, (Ravindranath, "On I.T.," Washington Post, 6/15).

In response to's troubled launch, Reps. Anna Eshoo (D-Calif.) and Gerry Connolly (D-Va.) earlier this year introduced a bill (HR 1232) to overhaul the federal government's IT procurement process.

Technology analysts have attributed the federally operated health insurance exchange website's glitches in part to the government's tendency to buy outdated, costly and bug-ridden technology.

The U.S. government spends more than $80 billion annually on IT services, but the systems usually take years to build and experience rocky launches.

Analysts say the problem is exacerbated by a shortage of technical staff in government agencies, forcing them to outsource jobs to contractors that succeed in procurement but fail to stay on the "cutting edge" of creating user-friendly websites (iHealthBeat, 1/29).

Report Findings

According to the GAO report, CIOs at federal agencies reported that 183 of the federal government's 759 major IT investments were at medium to high risk of failing before completion.

However, that figure could be even higher as GAO found that federal agencies are underreporting potential problems or removing or adjusting IT investments that previously were part of a public scorecard, "On I.T." reports.

Although federal agencies are required to publicly report on the progress of IT programs, Powner said there was a "troubling trend toward decreased transparency."

In addition, some federal agencies reported successful IT projects even when problems were arising.

For example, HHS rated major IT projects -- including the launch of -- as low risk until March 2013 when it suddenly increased the projects' statuses to moderately high risk or high risk.


In written testimony, Powner said, "Information technology should enable government to better serve the American people. However, despite spending hundreds of billions on IT since 2000, the federal government has experienced failed IT projects and has achieved little of the productivity improvements that private industry has realized from IT" ("On I.T.," Washington Post, 6/15).

Most of the federal agencies agreed with the report's findings and recommendations or did not have any comments (GAO report, 6/10).

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