The FISMA Focus IPD

Editor’s Note:  The issue of IT costs is crucial to both fiscal and cyber security.  Because meaningful, accurate IT cost estimates that comply with the requirements of the Data Quality Act are essential to both the public and private sectors, FISMA Focus expects to be focusing increasing attention on the analysis of this issue.

The GAO Report to the Ranking Member of the Senate Committee on Homeland Security and Governmental Affairs, “Information Technology Cost Estimation: Agencies Need to Address Significant Weaknesses in Policies and Practices,” is attached here.

Why GAO Did This Study

The federal government plans to spend at least $75 billion on information technology (IT) investments in fiscal year 2012. The size of this investment highlights the importance of reliably estimating the costs of IT acquisitions. A reliable cost estimate is critical to the success of any IT program, providing the basis for informed decision making and realistic budget formation. Without the ability to generate such estimates, programs risk missing their cost, schedule, and performance targets.

What GAO Found

•  While the eight agencies GAO reviewed—the Departments of Agriculture, Commerce, Defense, Homeland Security, Justice, Labor, and Veterans Affairs, and the Environmental Protection Agency—varied in the extent to which their cost-estimating policies and procedures addressed best practices, most had significant weaknesses.

• The 16 major acquisition programs had developed cost estimates and were using them, in part, to support program and budget decisions. However, all but 1 of the estimates were not fully reliable—meaning that they did not fully reflect all four characteristics of a reliable cost estimate identified in the GAO cost-estimating guide: comprehensive, well-documented, accurate, and credible (see figure).