Audio and transcript: Kundra on high risk IT projects

The following is a recording of a August 23, 2010 press call provided by the Office of Management and Budget. Read a transcript of the call below. (Download the transcript as a .pdf file here.)

Related Article: High-risk agency IT projects fear the reaper

EOP: Media Advisory Conference Call

SPEAKERS

PRESENTATION

Moderator: Please go ahead.

M. Reilly: Hello, thanks so much for joining today. This is Meg Reilly at OMB. This is the call on the high priority IT project. This call is on the record and being recorded. I'm going to hand it over right now to Federal CIO, Vivek Kundra, who's going to open it up. We're also joined today by Matthew Perry, CIO at the Office of Personnel Management; Bernard Mazer, CIO of Department of Interior; and Vance Hitch, CIO, Department of Justice. So first, we're going to turn it over to Vivek. I'll mention that the list of projects is now posted at ITdashboard.gov. There's no embargo on this information.

V. Kundra: Thanks, Meg. Good morning, everyone. Today we're announcing 26 high priority projects across the federal government that have the potential for faster, smarter implementation. This list was established in coordination with the leaders at these agencies who are all invested in the success of their high priority programs. The programs we've identified are mission critical. We believe that their objective remains as important as ever. As such, we want to speed and simplify the execution of these programs.

This isn't about killing projects. It's about making them work better and faster. It's about getting more from taxpayer dollars. This is just one step in a much broader administration wide effort to make government work better and close the information technology gap that exists between the public and private sector. These IT efforts are a great example of that coordinated administration wide approach we're taking to fundamentally change the way government does business and get more out of taxpayer dollars.

What I'd like to talk about are three discreet things: number one, the process we went through to identify these projects; number two, the profile of these projects; and number three, next steps. Let me begin with a process. We worked collaboratively with the agencies from August 2nd to August 18th meeting with 27 CIO council agencies to review projects. These were selected based on the risk, the cost, the schedule, data from the IT dashboard, but more importantly, the deliberate process, the discussions we had with CIOs, with program managers across the federal government.

Second, in terms of the profile of these projects, there are approximately $30 billion in life cycle costs. These are 26 projects across 15 agencies that are mission critical projects and they range from the lowest life cycle cost project at $64 million to the highest at $7.5 billion. At an average, they are over five years old.

In terms of next steps, agencies are already working on improvement plans, which are going to go through TechStat accountability sessions as part of this fiscal year 2012 budget. The outcomes we expect are to make sure that these projects are scoped properly, so that they're delivering functionality sooner. That they are focused on critical functionality with customer engagement to make sure that we're achieving the mission objectives and through this process, we're going to be able to drive greater transparency across the federal government and scale best practices as we learn and as we drive this project to success.

With that, what I'd like to do is start off by turning it over to Matt Perry, who is the CIO at OPM to talk about OPM's project on this list and then we'll go Bernie, who is the CIO at the Department of Interior and finally to Vance Hitch, who's the CIO at Department of Justice. So with that, Matt.

M. Perry: Again, this is Matt Perry. As Vivek stated, we've been working with Hay and the staff here at OMB to evaluate all the programs at OPM and determine jointly that the retirement modernization was our high priority project for further examination as we go through this process.

The reason why we picked that project is the retirement modernization has met with many challenges over the last 23 years with four different attempts to modernize at a life cycle cost of $136 million. This is a highly paper-based project that we're trying to modernize. It has many complex business rules as it impacts on people's retirements as we go through this process. And the other side of that is as we're facing the transparency goals of this administration, we want to get the information out of the black box and how we calculate the retirement benefits awarded to a person and make those all visible.

Those are the challenges that we're facing. We are starting our implementation plan and have a series of actions that we will be taking to improve this project because it is a very valuable project for the federal government and for our government employees.

V. Kundra: Thanks, Matt. Let me turn it over now to Bernie.

B. Mazer: Good morning. This is Bernie Mazer, the CIO for the Department of the Interior. I'd like to talk briefly about our infrastructure investments that we spend. We spend approximately $500 million a year on common infrastructure activies. However, with the Department of Interior, there's department infrastructure activities are distributed across various bureaus and offices, so, it's hard to realize the affects and the benefits of what we consider common utility activies.

Starting from last year with the advent of the federal government IT dashboard and the TechStat sessions and then the memorandum of the June and July encouraging us to work on a better focus for the execution of these projects, we were moving into a good partnership with a straight line of sight between CIO, our political leadership within the Department of the Interior and OMB.

An example within our infrastructure that might be highlighted is the aspect of email. We have an issue within email where we have, in effect, a complex array of 12 separate systems owned and operated by different bureaus and offices. And as a result, it's oftentimes difficult to have a single directory of department users and we're subject to issues of undelivered mail and frequent confusion of that. Working with OMB and with concerted efforts of our improved project management and all that, we hope to move to a single solution.

V. Kundra: Great, thanks, Bernie. And now I'm going to turn it over finally to Vance.

V. Hitch: Good morning. This is Van Hitch. As the Chief Information Officer of the Department of Justice, I fully support Vivek's focus on value IT cost effective delivery. One of the programs that is being highlighted on the OBM list is Sentinel, which is an FBI program. It's the investigative case management system.

This program is a highly complex program involving significant business process reengineering of the overall process. It is four phases, two of which have already been delivered. However, cost and schedule delays were experienced in the second phase. So the FBI has temporarily halted the project in terms of delivery of phases three and four to review how best to proceed and to incorporate lessons learned from the first two sessions.

So, as we proceed, we look forward to working with Vivek and the TechStat process on some potential solutions, which might include things like dividing the program into small discreet elements and the delivery of a newly tested functionality to the agents in the field every quarter.

V. Kundra: Great, thanks, Vance. With that, we'll be happy to take any questions you may have.

Moderator: Our first question comes from the line of Goffen Nigesh with the Hill Newspaper. Please go ahead.

G. Nigesh: Hello, Goffen Nigesh with the Hill Newspaper. When you discuss the process for making these decisions, you mentioned that this is based on the data in the IT dashboard and consultation to agencies. Several groups, including Government Accountability Office have raised questions about the accuracy of the information on the IT dashboard, particularly that it tends to perhaps downplay the cost and schedule issues faced by some projects. Can you explain perhaps how the data on the dashboard, which is largely positive seems a little bit at odds with the announcement that you're putting halt to this large number of projects?

V. Kundra: Sure, number one, I would challenge your underlying assumption that we're halting, because I want to be very, very clear here. This is not about halting all these projects. These are mission critical projects. Number two, absolutely, I've talked about it and we've said multiple times that there are challenges in terms of the data sometimes that's presented on the IT dashboard. And agencies over the last one year have been working very, very hard to fundamentally reengineer their back end processes to make sure that the data on the IT dashboard is accurate as possible.

These projects were not selected just based on the IT dashboard. That was one of the data points. Where the real conversations happened here is when we sat together from August 2nd to August 18th with 27 CIO council agencies and these one-on-one meetings that personally sat down with those CIOs, their program managers, people managing these projects and we had a deliberative discussion and we used multiple sources of data, whether that data be historic GAO reports, historic IG reports, whether we were looking at the experience based on the CIOs and information that they brought to the table. We moved forward with a deep analysis. As a matter of fact, as part of this process, we got a lot of input from Congress, too, with Congressional input in terms of the some of the projects that Congress felt were important to the mission. And they're interested in making sure that we were focused on those projects.

But the key here again is the IT dashboard is an evolutionary process. And we're going to iterate and improve data quality over time. Frankly, launching it has allowed us to get a lot of input from the American people, the GAO, Congress in terms of how we can take this the next level.

Moderator: Our next question comes from the line of Peter Barnes with Fox Business Network. Please go ahead.

P. Barnes: Thanks again for this call. Could you tell us what today's announcement will mean for the companies, for the contractors?

V. Kundra: I can't speak specifically what it will mean for the companies. But I can say is part of what we need to do is, we need to end a culture in Washington where we continue to throw good money after bad money. To give you an example, at the Veterans Administration, the VA in 1998 spent $250 million on an IT project. This was their financial modernization project, which was killed in 2004. Again, it was launched in 2005 and after spending millions of dollars, it was killed again last month.

What we can't continue to is continue to spend taxpayers' hard earned money on projects that, frankly, are not properly scoped, where we don't have clear deliverables identified or we don't have explicit sponsorship from agency leaders. I think as we go through this process as part of the 2012 budget process, what we're going to want to make sure is that we have very, very clear deliverables and that agencies can make sure that they can execute and deliver on the mission critical needs of those agencies.

Moderator: Our next question comes from the line of Aliya Sternstein with NextGov. Please go ahead.

A. Sternstein: First correct if I'm wrong, but it sounds like since these are mission critical projects, you don't plan on killing any of them in the 2012 budget. My question is do you plan to significantly cut funding for any of these projects? Is it possible? I realize you may not know yet, but is it possible you may significantly cut funding for some of these projects in the 2012 budget?

V. Kundra: That's a process that's underway right now as OMB works closely with agencies to make sure that the objectives set forth and the milestones that are planned are realistic and that agencies can actually deliver. Where it doesn't make sense in terms of how we're spending money, absolutely; what we're not going to do is continue to spend money because a project was budgeted and there's funding there.

What we want to make sure is that we're being surgical in our approach to make sure that these projects deliver faster and that this project actually creates value for the American people as we focus on execution.

Moderator: And our next question comes from the line of Max Cacas from Federal News Radio in Washington. Please go ahead.

M. Cacas: My question follows up on the last two questions that my colleagues asked. You have these three projects here. I guess there's a list of these other projects that are also going to receive what some might call special triage and maybe a little boost to try to get them going along the guidelines of what you've already laid out. What's going to be the process for the other programs that you identified in the July 28th memo where you say projects which do not meet these criteria will not be continued?

I guess what I hear you saying is that this might happen in the realm of the budget presentation that's going to be coming up for 2012. But could you expand a little bit on what the process will be for other projects that might not have met the criteria from the evaluations that you did over the last several weeks?

V. Kundra: That's a really good way of putting it, which is the special triage here. If you look at the other projects across the federal government, this is a small slice of the broader IT portfolio across the federal government. This does not mean that agency CIOs are not focused on those projects. Agency CIOs across the board are focused on the governance structures on making sure that as part of the 2012 budget process, that all projects are being reviewed. These 26 projects represent the highest priorities and where both OMB and agency CIOs believe that we need to focus our attention on these projects.

Now the ones that are not on this list are going through the similar processes as part of the 2012 budget process. For example, at Department of Interior, they've launched a TechStat culpability session, a fundamental change in terms of how they're managing. What I want to do is turn it over to Bernie really quick to talk about what he's doing on the projects that are not on this list.

B. Mazer: Good morning. As you highlighted and as Vivek noted with these projects, while we have some activities that are identified for, I guess, what's this word now, special triaging, we do have these other activities, which are not for that immediate care. When we were working with OMB on the IT dashboard, there are a list of projects that we highlight from are they doing okay, are they challenged, are they really needing some receipt of extra baseline reviews? And what we're doing within the Department of Interior is, we're approaching this from three separate angles.

One is improved governance. We are emulating the TechStat and we're creating our own iStat within the Department of Interior for examination of projects. We are also looking at the fragmented execution of activities that we do and looking at coalescing them under a more unified approach to how we look at things. And then the third thing that we have with this is that we have top level engagement from our leadership, both career and political on assuring that we are giving a good result and accounting of the money that we spend within technology.

Moderator: Our next question comes from the line of Jonathan Nicholson with VNA. Please go ahead.

J. Nicholson: Two things relatively quickly; one, so are you saying that there's no chance that this funding will be cut off for any of these projects at all?

V. Kundra: If they're not creating value, absolutely. So, what we're saying is that going through the process of looking at how these projects are performing.

If, for example, these projects are not adding value or if there's a game changing approach to how these technologies are deployed, what we're not going to do is continue to throw good money after bad money.

Moderator: Our next question comes from the line of Alice Lipowicz with Federal Computer Week. Please go ahead.

A. Lipowicz: Just to continue with that last comment, Mr. Kundra, you said that you may make that decision if they're not adding value. When would that decision possibly be made? Also on these projects, if you are going to halt them, when would that decision be made. And also, what is the immediate impact of making this list? Are any of these funds suspended? Is any money being suspended at the moment temporarily while you do these reviews? I'm just wondering if there is any immediate impact of projects being on this list. Thank you.

V. Kundra: For example at OPM, the retirement modernization system is essentially halted. It slowed down in terms of spending as we go out there and make sure that it's properly scoped through fiscal year 2012. I want to be very clear here is that the intent when we put this list together here is to make sure that these projects are turned around, that we're implementing faster, that they're creating value.

Because at the end of the day, the United States government needs to modernize its retirement system. At the end of the day the Department of Justice needs to make sure that it has a case management system that works. At the end of the day, the Department of Interior needs to make sure that it has a government-wide platform that enables communications across the board. That is why the focus here is to make sure that these projects are turned around and if these projects can't be turned around, if they don't add value, we will take the appropriate actions. They may be discontinued. But the focus here, though, is to make sure that we're implementing smarter and faster.

M. Reilly: With that, I'm afraid we're out of time. Vivek, I'm going to turn it back to you for some final words.

V. Kundra: I want to just take the opportunity also to thank Senators Carper, Senator Collins and Senator Lieberman for their active engagement and support as we've driven this reform agenda across the federal government to make sure that investment in information technology help us close the productivity gap between the public and private sector and the taxpayer dollars that we're spending on these projects actually create dividends for the American people.

Thank you very much for taking the time to spend with us today.

Moderator: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and you may now disconnect.