Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue
Gao ID: GAO-11-635T May 25, 2011This testimony discusses our first annual report to Congress responding to the statutory requirement that GAO identify federal programs, agencies, offices, and initiatives--either within departments or governmentwide--that have duplicative goals or activities. This work can help inform government policymakers as they address the rapidly building fiscal pressures facing our national government. Our simulations of the federal government's fiscal outlook show continually increasing levels of debt that are unsustainable over time, absent changes in the federal government's current fiscal policies. Since the end of the recent recession, the gross domestic product has grown slowly, and unemployment has remained at a high level. While the economy is still recovering and in need of careful attention, widespread agreement exists on the need to look not only at the near term but also at steps that begin to change the long-term fiscal path as soon as possible. With the passage of time, the window to address the fiscal challenge narrows and the magnitude of the required changes grows. This testimony is based on our March 2011 report and provides an overview of federal programs or functional areas where unnecessary duplication, overlap, or fragmentation exists and where there are other opportunities for potential cost savings or enhanced revenues. In that report, we identified 81 areas for consideration--34 areas of potential duplication, overlap, or fragmentation and 47 additional areas describing other opportunities for agencies or Congress to consider taking action that could either reduce the cost of government operations or enhance revenue collections for the Treasury. The 81 areas span a range of federal government missions such as agriculture, defense, economic development, energy, general government, health, homeland security, international affairs, and social services. Within and across these missions, the report touches on hundreds of federal programs, affecting virtually all major federal departments and agencies. The testimony highlights (1) some examples from our March report; (2) needed improvements in the federal government's management and investment in information technology (IT); and (3) opportunities for achieving significant cost savings through improvements in government contracting.
A few examples of duplication: (1) Teacher quality programs: In fiscal year 2009, the federal government spent over $4 billion specifically to improve the quality of our nation's 3 million teachers through numerous programs across the government. Federal efforts to improve teacher quality have led to the creation and expansion of a variety of programs across the federal government, however, there is no governmentwide strategy to minimize fragmentation, overlap, or duplication among these many programs. (2) Military health system: The Department of Defense's (DOD) Military Health System (MHS) costs have more than doubled from $19 billion in fiscal year 2001 to $49 billion in 2010 and are expected to increase to over $62 billion by 2015. The responsibilities and authorities for the MHS are distributed among several organizations within DOD with no central command authority or single entity accountable for minimizing costs and achieving efficiencies. Under the MHS's current command structure, the Office of the Assistant Secretary of Defense for Health Affairs, the Army, the Navy, and the Air Force each has its own headquarters and associated support functions. (3) Employment and training programs: In fiscal year 2009, 47 federally funded employment and training programs spent about $18 billion to provide services, such as job search and job counseling, to program participants. Most of these programs are administered by the Departments of Labor, Education, and Health and Human Services (HHS). Forty-four of the 47 programs we identified, including those with broader missions such as multipurpose block grants, overlap with at least one other program in that they provide at least one similar service to a similar population. (4) Surface transportation: The Department of Transportation (DOT) currently administers scores of surface transportation programs costing over $58 billion annually. The current federal approach to surface transportation was established in 1956 to build the Interstate Highway System, but has not evolved to reflect current national priorities and concerns. Over the years, in response to changing transportation, environmental, and societal goals, federal surface transportation programs grew in number and complexity to encompass broader goals, more programs, and a variety of program approaches and grant structures. (5) DOD-VA Electronic Health Record Systems: Although they have identified many common health care business needs, DOD and the Department of Veterans Affairs (VA) have spent large sums of money to develop and operate separate electronic health record systems that each department relies on to create and manage patient health information. The federal government's expenditures on IT could be reduced by, among other things, consolidating federal data centers, improving investment management and oversight, and using enterprise architectures as a tool for organizational transformation. Each year the federal government spends billions of dollars on IT investments; federal spending on IT has risen to an estimated $79 billion for fiscal year 2011. In recent years, as federal agencies modernized their operations, put more of their services online, and increased their information security profiles they have demanded more computing power and data storage resources. The federal government spent about $535 billion in fiscal year 2010 acquiring the goods and services agencies need to carry out their missions. Areas where improvements could be made to realize significant savings: (1) minimizing unnecessary duplication among interagency contracts, (2) achieving more competition in the award of contracts, (3) using award fees more appropriately to promote improved contractor performance, and (4) leveraging the government's vast buying power through expanded use of strategic sourcing.
GAO-11-635T, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue
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United States Government Accountability Office:
GAO:
Testimony:
Before the Senate Committee on Homeland Security and Governmental
Affairs:
For Release on Delivery:
Expected at 2:30 p.m. EDT:
Thursday, May 25, 2011:
Opportunities to Reduce Potential Duplication in Government Programs,
Save Tax Dollars, and Enhance Revenue:
Statement of Gene L. Dodaro:
Comptroller General of the United States:
GAO-11-635T:
Mr. Chairman, Ranking Member Collins, and Members of the Committee:
We appreciate the opportunity to discuss our first annual report to
Congress responding to the statutory requirement that GAO identify
federal programs, agencies, offices, and initiatives--either within
departments or governmentwide--that have duplicative goals or
activities.[Footnote 1] This work can help inform government
policymakers as they address the rapidly building fiscal pressures
facing our national government. Our simulations of the federal
government's fiscal outlook show continually increasing levels of debt
that are unsustainable over time, absent changes in the federal
government's current fiscal policies.[Footnote 2] Since the end of the
recent recession, the gross domestic product has grown slowly, and
unemployment has remained at a high level. While the economy is still
recovering and in need of careful attention, widespread agreement
exists on the need to look not only at the near term but also at steps
that begin to change the long-term fiscal path as soon as possible
without slowing the recovery. With the passage of time, the window to
address the fiscal challenge narrows and the magnitude of the required
changes grows.
My testimony today is based on our March 2011 report and provides an
overview of federal programs or functional areas where unnecessary
duplication, overlap, or fragmentation exists and where there are
other opportunities for potential cost savings or enhanced revenues.
[Footnote 3] In that report, we identified 81 areas for consideration--
34 areas of potential duplication, overlap, or fragmentation (see
appendix I) and 47 additional areas describing other opportunities for
agencies or Congress to consider taking action that could either
reduce the cost of government operations or enhance revenue
collections for the Treasury (see appendix II). The 81 areas we
identified span a range of federal government missions such as
agriculture, defense, economic development, energy, general
government, health, homeland security, international affairs, and
social services. Within and across these missions, the report touches
on hundreds of federal programs, affecting virtually all major federal
departments and agencies. My testimony today highlights (1) some key
examples from our March report; (2) needed improvements in the federal
government's management and investment in information technology (IT);
and (3) opportunities for achieving significant cost savings through
improvements in government contracting.
The issues raised in the report were drawn from our prior and ongoing
work. This statement is based substantially upon our March report,
[Footnote 4] which was conducted in accordance with generally accepted
government auditing standards or with GAO's quality assurance
framework, as appropriate.
Overlap and Fragmentation Can Indicate Unnecessary Duplication:
Overlap and fragmentation among government programs or activities can
be harbingers of unnecessary duplication. Reducing or eliminating
duplication, overlap, or fragmentation could potentially save billions
of tax dollars annually and help agencies provide more efficient and
effective services. These actions, however, will require some
difficult decisions and sustained attention by the administration and
Congress. Many of the issues we identified concern activities that are
contained within single departments or agencies. In those cases,
agency officials can generally achieve cost savings or other benefits
by implementing existing GAO recommendations or by undertaking new
actions suggested in our March report. However, a number of issues we
have identified span multiple organizations and therefore may require
higher-level attention by the executive branch, enhanced congressional
oversight, or legislative action.[Footnote 5]
A few examples from our March report follow.
* Teacher quality programs: In fiscal year 2009, the federal
government spent over $4 billion specifically to improve the quality
of our nation's 3 million teachers through numerous programs across
the government. Federal efforts to improve teacher quality have led to
the creation and expansion of a variety of programs across the federal
government, however, there is no governmentwide strategy to minimize
fragmentation, overlap, or duplication among these many programs.
Specifically, we identified 82 distinct programs designed to help
improve teacher quality, either as a primary purpose or as an
allowable activity, administered across 10 federal agencies. The
proliferation of programs has resulted in fragmentation that can
frustrate agency efforts to administer programs in a comprehensive
manner, limit the ability to determine which programs are most cost
effective, and ultimately increase program costs.
Department of Education (Education) officials believe that federal
programs have failed to make significant progress in helping states
close achievement gaps between schools serving students from different
socioeconomic backgrounds, because in part, federal programs that
focus on teaching and learning of specific subjects are too fragmented
to help state and district officials strengthen instruction and
increase student achievement in a comprehensive manner. Education has
established working groups to help develop more effective
collaboration across Education offices, and has reached out to other
agencies to develop a framework for sharing information on some
teacher quality activities, but it has noted that coordination efforts
do not always prove useful and cannot fully eliminate barriers to
program alignment.
Congress could help eliminate some of these barriers through
legislation, particularly through the pending reauthorization of the
Elementary and Secondary Education Act of 1965 and other key education
bills. Specifically, to minimize any wasteful fragmentation and
overlap among teacher quality programs, Congress may choose either to
eliminate programs that are too small to evaluate cost effectively or
to combine programs serving similar target groups into a larger
program. Education has proposed combining 38 programs into 11 programs
in its reauthorization proposal, which could allow the agency to
dedicate a higher portion of its administrative resources to
monitoring programs for results and providing technical assistance.
* Military health system: The Department of Defense's (DOD) Military
Health System (MHS) costs have more than doubled from $19 billion in
fiscal year 2001 to $49 billion in 2010 and are expected to increase
to over $62 billion by 2015. The responsibilities and authorities for
the MHS are distributed among several organizations within DOD with no
central command authority or single entity accountable for minimizing
costs and achieving efficiencies. Under the MHS's current command
structure, the Office of the Assistant Secretary of Defense for Health
Affairs, the Army, the Navy, and the Air Force each has its own
headquarters and associated support functions.
DOD has taken limited actions to date to consolidate certain common
administrative, management, and clinical functions within its MHS. To
reduce duplication in its command structure and eliminate redundant
processes that add to growing defense health care costs, DOD could
take action to further assess alternatives for restructuring the
governance structure of the military health system. In 2006, if DOD
and the services had chosen to implement one of the reorganization
alternatives studied by a DOD working group, a May 2006 report by the
Center for Naval Analyses showed that DOD could have achieved
significant savings. Our adjustment of those savings from 2005 into
2010 dollars indicates those savings could range from $281 million to
$460 million annually, depending on the alternative chosen and the
numbers of military, civilian, and contractor positions eliminated.
The Under Secretary of Defense for Personnel and Readiness has
recently established a new position to oversee DOD's military
healthcare reform efforts.
* Employment and training programs: In fiscal year 2009, 47 federally
funded employment and training programs spent about $18 billion to
provide services, such as job search and job counseling, to program
participants. Most of these programs are administered by the
Departments of Labor, Education, and Health and Human Services (HHS).
Forty-four of the 47 programs we identified, including those with
broader missions such as multipurpose block grants, overlap with at
least one other program in that they provide at least one similar
service to a similar population. As we reported in January 2011,
nearly all 47 programs track multiple outcome measures, but only 5
programs have had an impact study completed since 2004 to assess
whether outcomes resulted from the program and not some other cause.
We examined potential duplication among three selected large programs--
HHS's Temporary Assistance for Needy Families (TANF) and the
Department of Labor's Employment Service, and Workforce Investment Act
(WIA) Adult programs--and found they provide some of the same services
to the same population through separate administrative structures.
Colocating services and consolidating administrative structures may
increase efficiencies and reduce costs, but implementation can be
challenging. Some states have colocated TANF employment and training
services in one-stop centers where Employment Service and WIA Adult
services are provided. An obstacle to further progress in achieving
greater administrative efficiencies is that little information is
available about the strategies and results of such initiatives. In
addition, little is known about the incentives that states and
localities have to undertake such initiatives and whether additional
incentives are needed.
To facilitate further progress by states and localities in increasing
administrative efficiencies in employment and training programs, we
recommended in 2011 that the Secretaries of Labor and HHS work
together to develop and disseminate information that could inform such
efforts. As part of this effort, Labor and HHS should examine the
incentives for states and localities to undertake such initiatives
and, as warranted, identify options for increasing such incentives.
Labor and HHS agreed they should develop and disseminate this
information. HHS noted that it does not have the legal authority to
mandate increased TANF-WIA coordination or create incentives for such
efforts. As part of its proposed changes to the Workforce Investment
Act, the Administration proposes consolidating nine programs into
three. In addition, the budget proposal would transfer the Senior
Community Service Employment Program from Labor to HHS. Sustained
oversight by Congress could also help ensure progress is realized.
* Surface transportation: The Department of Transportation (DOT)
currently administers scores of surface transportation programs
costing over $58 billion annually. The current federal approach to
surface transportation was established in 1956 to build the Interstate
Highway System, but has not evolved to reflect current national
priorities and concerns. Over the years, in response to changing
transportation, environmental, and societal goals, federal surface
transportation programs grew in number and complexity to encompass
broader goals, more programs, and a variety of program approaches and
grant structures. This variety of approaches and structures did not
result from a specific rationale or plan, but rather an agglomeration
of policies and programs established over half a century without a
well-defined overall vision of the national interest and federal role
in our surface transportation system. This has resulted in a
fragmented approach as five DOT agencies with 6,000 employees
administer over 100 separate surface transportation programs with
separate funding streams for highways, transit, rail, and safety
functions. This fragmented approach impedes effective decision making
and limits the ability of decision makers to devise comprehensive
solutions to complex challenges.
A fundamental re-examination and reform of the nation's surface
transportation policies is needed. Since 2004, we have made several
recommendations and matters for congressional consideration to address
the need for a more goal-oriented approach to surface transportation,
introduce greater performance and accountability for results, and
break down modal stovepipes. The President's fiscal year 2012 budget
proposes to consolidate 55 highway programs into 5 core programs.
Congressional reauthorization of surface transportation programs
presents an opportunity to address our recommendations and matters for
congressional consideration that have not been implemented in large
part because the current multiyear authorization for surface
transportation programs expired in 2009, and existing programs have
been funded since then through temporary extensions.
* DOD-VA Electronic Health Record Systems: Although they have
identified many common health care business needs, DOD and the
Department of Veterans Affairs (VA) have spent large sums of money to
develop and operate separate electronic health record systems that
each department relies on to create and manage patient health
information. Moreover, the results of a 2008 study conducted for the
departments found that over 97 percent of functional requirements for
an inpatient electronic health record system are common to both
departments. Nevertheless, the departments have each begun
multimillion dollar modernizations of their electronic health record
systems. Specifically, DOD has obligated approximately $2 billion over
the 13-year life of its Armed Forces Health Longitudinal Technology
Application and requested $302 million in fiscal 2011 year funds for a
new system. For its part, VA reported spending almost $600 million
from 2001 to 2007 on eight projects as part of its Veterans Health
Information Systems and Technology Architecture modernization. In
April 2008, VA estimated an $11 billion total cost to complete the
modernization by 2018. Reduced duplication in this area could save
system development and operation costs while supporting higher-quality
health care for service members and veterans.
The departments' distinct modernization efforts are due in part to
barriers they face to jointly addressing their common health care
system needs. These barriers stem from weaknesses in key IT management
areas such as strategic planning and investment management. Our recent
work identified several actions that the Secretaries of Defense and
Veterans Affairs could take to overcome these barriers, including
revising the departments' joint strategic plan, further developing the
departments' joint health architecture, and defining and implementing
a process for identifying and selecting joint IT investments to meet
the departments' common health care business needs. In March 2011, the
Secretaries committed their respective departments to pursue joint
development and acquisition of integrated electronic health records
capabilities.
We found that duplication and overlap occur for a variety of reasons.
First, programs have been added incrementally over time to respond to
new needs and challenges, without a strategy to minimize duplication,
overlap, and fragmentation among them. Also, agencies often lack
information on the effectiveness of programs; such information could
help decision makers prioritize resources among programs. Lastly,
there are not always interagency mechanisms or strategies in place to
coordinate programs that address crosscutting issues, which can lead
to potentially duplicative, overlapping and fragmented efforts. The
recently enacted GPRA Modernization Act of 2010, which updates the
almost two-decades-old Government Performance and Results Act, may
help address some of these issues. The act establishes a new framework
aimed at taking a more crosscutting and integrated approach to
focusing on results and improving government performance. It requires
the Office of Management and Budget (OMB), in coordination with
agencies, to develop--every 4 years--long-term, outcome-oriented goals
for a limited number of crosscutting policy areas. As a result, the
act could also help inform reexamination or restructuring efforts and
lead to more efficient and economical service delivery in overlapping
program areas. The crosscutting planning and reporting requirements in
the act could lead to the development of performance information in
areas that are currently incomplete.
Expenditures on Information Technology Could Be Reduced by
Consolidating Federal Data Centers, Improving Investment Management
and Oversight, and Using Enterprise Architectures:
The federal government's expenditures on IT could be reduced by, among
other things, consolidating federal data centers, improving investment
management and oversight, and using enterprise architectures as a tool
for organizational transformation. Each year the federal government
spends billions of dollars on IT investments; federal spending on IT
has risen to an estimated $79 billion for fiscal year 2011. The
federal government's demand for IT is increasing. In recent years, as
federal agencies modernized their operations, put more of their
services online, and increased their information security profiles
they have demanded more computing power and data storage resources.
While it may meet individual agency needs, this growth has raised
concerns about duplicative investments and underutilized computing
resources across the government.
Consolidating Federal Data Centers Provides Opportunity to Improve
Government Efficiency:
Over time, the federal government's increasing demand for more IT has
led to a dramatic rise in the number of federal data centers.[Footnote
6] According to OMB, the number of federal data centers grew from 432
in 1998 to more than 2,000 in July 2010. These data centers often
house similar types of equipment and provide similar processing and
storage capabilities. These factors have led to concerns about the
costs associated with the provision of redundant capabilities, the
underutilization of resources, and the significant consumption of
energy.
In 2010, the Federal Chief Information Officer (CIO) reported that
operating and maintaining redundant infrastructure investments was
costly, inefficient, and unsustainable, and had a significant impact
on energy consumption. While the total annual federal spending
associated with these data centers has not been determined, the
Federal CIO has found that operating data centers is a significant
cost to the federal government, including costs for hardware,
software, real estate, and cooling costs. For example, according to
the Environmental Protection Agency, the electricity cost to operate
federal servers and data centers across the government is about $450
million annually. According to the Department of Energy, data center
spaces can consume 100 to 200 times as much electricity as standard
office spaces.
In February 2010, OMB and the Federal CIO announced the Federal Data
Center Consolidation Initiative and OMB outlined four high-level goals:
* Promote the use of Green IT[Footnote 7] by reducing the overall
energy and real estate footprint of government data centers.
* Reduce the cost of data center hardware, software, and operations.
* Increase the overall IT security posture of the government.
* Shift IT investments to more efficient computing platforms and
technologies.
As part of this initiative, OMB directed federal agencies to prepare
an inventory of their data center assets and a plan for consolidating
these assets by August 30, 2010, and to begin implementing them in
fiscal year 2011. In October 2010, OMB reported that all of the
agencies had submitted their plans. OMB plans to monitor agencies'
progress through annual reports and has established a goal of closing
800 of the data centers by 2015. More recently, in April 2011, OMB
announced plans to close 137 data centers by the end of the year.
Data center consolidation makes sense economically and as a way to
achieve more efficient IT operations, but challenges exist. For
example, agencies face challenges in ensuring the accuracy of their
inventories and plans, providing upfront funding for the consolidation
effort long before any cost savings accrue, establishing and
implementing shared standards (for storage, systems, security, etc.),
establishing reimbursement mechanisms to fund the centralized
operations, overcoming cultural resistance to such major
organizational changes, and maintaining current operations during the
transition to consolidated operations. Mitigating these and other
challenges will require commitment from the agencies and continued
oversight by OMB and the Federal CIO.
Moving forward, it will be important for individual agencies to move
quickly to correct any missing items in their plans, establish sound
baselines so that progress and efficiencies can be measured, begin
their consolidation efforts, track their progress, and report to OMB
on their progress over time. As OMB works with agencies to establish
consolidation goals and monitors progress against those goals, it will
be important to maintain strong oversight of the agencies' efforts,
and look for consolidation opportunities across agencies. Doing so
will more fully address unnecessary overlap and duplication and could
achieve further operational improvements, efficiencies, and financial
benefits.
As part of their individual consolidation plans, each federal
department and agency was expected to estimate cost savings over time.
In ongoing work, we reviewed 24 agencies' consolidation plans. In
these plans, 14 agencies reported expected savings totaling about $700
million between fiscal years 2011 and 2015; however, actual savings
may be even higher because most of these agencies' estimates were
incomplete. For example, 11 agencies included expected energy savings
and reductions in building operating costs, but did not include
savings from other sources such as equipment reductions. Four other
agencies did not expect to accrue any net savings by 2015 and six
agencies did not provide estimated cost savings.
Although some agencies reported that it was too soon to fully estimate
cost savings because they are just beginning to plan to consolidate
and other agencies noted that near-term savings were offset by
consolidation costs, the opportunity for long-term savings is
significant. In October 2010, a council of chief executive officers
representing technical industry companies estimated that the federal
government could save $150 billion to $200 billion over the next
decade, primarily through data center and server consolidation.
[Footnote 8]
At your request, we are currently reviewing the Federal Data Center
Consolidation Initiative as well as federal agencies' efforts to
develop and implement consolidation plans. We expect to issue a report
in July 2011.
OMB's IT Dashboard Can Further Help Identify Opportunities to Invest
More Efficiently in Information Technology:
Given the importance of transparency, oversight, and management of the
government's IT investments, in June 2009, OMB established a public
Web site, referred to as the IT Dashboard, that provides detailed
information on about 800 investments at 27 federal agencies, including
ratings of their performance against cost and schedule targets. The
public dissemination of this information is intended to allow OMB;
other oversight bodies, including Congress; and the general public to
hold agencies accountable for results and performance. Since our March
report, we completed additional work and reported that by establishing
the IT Dashboard, OMB has drawn additional attention to more than 300
troubled IT investments at federal agencies, totaling $20 billion,
which is an improvement from the previously used oversight mechanisms.
[Footnote 9] The Federal CIO recognized that the Dashboard has
increased the accountability of agency CIOs and established much-
needed visibility into investment performance.
In a series of IT Dashboard reviews completed in July 2010 and March
2011,[Footnote 10] we reported that OMB's Dashboard had increased
transparency and oversight, but that improvements were needed for the
Dashboard to more fully realize its potential as a management and cost-
savings tool. Specifically, in reviews of selected investments from 10
agencies, we found that the Dashboard ratings were not always
consistent with agency cost and schedule performance data. For
example, the Dashboard rating for a Department of Homeland Security
investment reported significant cost variances for 3 months in 2010;
however, our analysis showed lesser variances for the same months. In
another case, a Department of Justice investment on the Dashboard
reported that it has been less than 30 days behind schedule from July
2009 through January 2010. Investment data that we examined, however,
showed that the investment was behind schedule by 30 days to almost 90
days from September to December 2009. A primary reason for the data
inaccuracies in the Dashboard's ratings was that while the Dashboard
was intended to represent near real-time performance information, the
cost and schedule ratings did not take into consideration current
performance. In these reports, we made a number of recommendations to
OMB and federal agencies to improve the accuracy of Dashboard ratings.
Agencies agreed with these recommendations, while OMB agreed with all
but one. Specifically, OMB disagreed with the recommendation to change
how it reflects current investment performance in its ratings because
Dashboard data are updated on a monthly basis. However, we maintained
that current investment performance may not always be as apparent as
it should be; while data are updated monthly, ratings include
historical data, which can mask more recent performance.
OMB officials indicated they had relied on the Dashboard as a
management tool, including using investment trend data to identify and
address performance issues and to select investments for a TechStat
session--a review of selected IT investments between OMB and agency
leadership that is led by the Federal CIO. According to OMB, as of
December 2010, 58 TechStat sessions had been held with federal
agencies. Additionally, OMB officials stated that as a result of these
sessions, 11 investments have been reduced in scope, and 4 have been
canceled.
According to the Federal CIO, use of the Dashboard as a management and
oversight tool has already resulted in a $3 billion budget reduction.
OMB's planned improvements to the Dashboard, along with full
implementation of our recommendations and the possible identification
of duplicative investments have the potential to result in further
significant savings. Additional opportunities for potential cost
savings exist with the use of the Dashboard by executive branch
agencies to identify and make decisions about poorly performing
investments, as well as its continued use by congressional committees
to support critical oversight efforts.
Enterprise Architectures Are Key Mechanisms for Identifying Potential
Overlap and Duplication:
An enterprise architecture is a modernization blueprint that is used
by organizations to describe their current state and a desired future
state and to leverage IT to transform business and mission operations.
Historically, federal agencies have struggled with operational
environments characterized by a lack of integration among business
operations and the IT resources that support them. A key to
successfully leveraging IT for organizational transformation is having
and using an enterprise architecture as an authoritative frame of
reference against which to assess and decide how individual system
investments are defined, designed, acquired, and developed. The
development, implementation, and maintenance of architectures are
widely recognized as hallmarks of successful public and private
organizations, and their use is required by the Clinger-Cohen Act of
1996 and OMB.
Our experience has shown that attempting to modernize (and maintain)
IT environments without an architecture to guide and constrain
investments results in organizational operations and supporting
technology infrastructures and systems that are duplicative, poorly
integrated, unnecessarily costly to maintain and interface, and unable
to respond quickly to shifting environmental factors. For example, we
have conducted reviews of enterprise architecture management at
federal agencies, such as the Department of Homeland Security and the
Federal Bureau of Investigation (FBI), as well as reviews of critical
agency functional areas, such as DOD financial management, logistics
management, combat identification, and business systems modernization.
In addition, as discussed earlier, we have reviewed the DOD and VA's
joint health architecture efforts, which are intended to guide
identification and development of common health IT solutions.
These reviews have continued to identify the absence of complete and
enforced enterprise architectures, which in turn has led to agency
business operations, systems, and data that are duplicative,
incompatible, and not integrated. These conditions have either
prevented agencies from sharing data or forced them to depend on
expensive, custom-developed system interfaces to do so. For example,
we previously reported that IT had been a long-standing problem for
the FBI, with nonintegrated applications, residing on different
servers, each of which had its own unique databases and did not share
information with other applications or with other government agencies.
As a result, these deficiencies served to significantly hamper the
FBI's ability to share important and time-sensitive information
internally and externally with other intelligence and law enforcement
agencies.
In 2006, we reported that the state of enterprise architecture
development and implementation varied considerably across departments
and agencies, with some having more mature architecture programs than
others. However, overall, most departments and agencies were not where
they needed to be, particularly with regard to their approaches for
assessing each investment's alignment with the enterprise architecture
and measuring and reporting on enterprise architecture results and
outcomes. In our prior work, most departments and agencies reported
they expect to realize benefits from their respective enterprise
architecture programs, such as improved alignment between their
business operations and the IT that supports these operations and
consolidation of their IT infrastructure environments, which can
reduce the costs of operating and maintaining duplicative
capabilities, sometime in the future. What this suggests is that the
real value in the federal government from developing and using
enterprise architectures remains largely unrealized.
Our recently issued seven-stage enterprise architecture management
maturity framework recognizes that a key to realizing this potential
is effectively managing department and agency enterprise architecture
programs. However, knowing whether benefits and results are in fact
being achieved requires having associated measures and metrics. In
this regard, it is important for agencies to satisfy the core element
associated with measuring and reporting enterprise architecture
results and outcomes. Examples of results and outcomes to be measured
include costs avoided through eliminating duplicative investments or
by reusing common services and applications and improved mission
performance through re-engineered business processes and modernized
supporting systems.
Our work has shown that over 50 percent of the departments and
agencies assessed had yet to fully satisfy this element. On the other
hand, some have reported they are addressing this element and have
realized significant financial benefits. For example, the Department
of the Interior has demonstrated that it is using its enterprise
architecture to modernize agency IT operations and avoid costs through
enterprise software license agreements and hardware procurement
consolidation. These architecture-based decisions have resulted in
reported financial benefits of at least $80 million. This means that
the departments and agencies can demonstrate achievement of expected
benefits, including costs avoided through eliminating duplicative
investments, if enterprise architecture results and outcomes are
measured and reported. We have work under way to determine the extent
to which federal departments and agencies are realizing value from
their use of enterprise architectures.
To advance the state of enterprise architecture development and use in
the federal government, senior leadership in the departments and
agencies need to demonstrate their commitment to this organizational
transformation tool, as well as ensure that the kind of management
controls embodied in our framework are in place and functioning.
Collectively, the majority of the departments' and agencies'
architecture efforts can still be viewed as a work in progress with
much remaining to be accomplished before the federal government as a
whole fully realizes their transformational value. Moving beyond this
status will require most departments and agencies to overcome
significant obstacles and challenges, such as organizational
parochialism and cultural resistance, inadequate funding, and the lack
of top management understanding and skilled staff. One key to doing so
continues to be sustained organizational leadership. As our work has
demonstrated, without such organizational leadership, the benefits of
enterprise architecture will not be fully realized. OMB can play a
critical role by continuing to oversee the development and use of
enterprise architecture efforts, including measuring and reporting
enterprise architecture results and outcomes across the federal
government.
Improving Federal Contracting Could Save Billions:
The federal government spent about $535 billion in fiscal year 2010
acquiring the goods and services agencies need to carry out their
missions. Our March report highlighted four areas where improvements
could be made to realize significant savings. These are: (1)
minimizing unnecessary duplication among interagency contracts, (2)
achieving more competition in the award of contracts, (3) using award
fees more appropriately to promote improved contractor performance,
and (4) leveraging the government's vast buying power through expanded
use of strategic sourcing.
Improved Data on Interagency Contracting Needed to Minimize
Duplication and Better Leverage the Government's Buying Power:
Interagency contracting is a process by which one agency either uses
another agency's contract directly or obtains contracting support
services from another agency. In recent years, interagency and
agencywide contracting accounts for more than $50 billion in
procurement spending annually. Agencies have created numerous
interagency and agencywide contracts using existing statutes, the
Federal Acquisition Regulation, and agency-specific policies. With the
proliferation of these contracts, however, there is a risk of
unintended duplication and inefficiency. Billions of taxpayer dollars
flow through interagency and agencywide contracts, but the federal
government does not have a clear, comprehensive view of which agencies
use these contracts and whether they are being used in an efficient
and effective manner. Without this information, agencies may be
unaware of existing contract options that could meet their needs and
may be awarding new contracts when use of an existing contract would
suffice. The government, therefore, might be missing opportunities to
better leverage its vast buying power.
Government contracting officials and representatives of vendors have
expressed concerns about potential duplication among the interagency
and agencywide contracts across government, which they said can result
in increased procurement costs, redundant buying capacity, and an
increased workload for the acquisition workforce. Some vendors stated
they offer similar products and services on multiple contracts and
that the effort required to be on multiple contracts results in extra
costs to the vendor, which they pass to the government through
increased prices. Some vendors stated that the additional cost of
being on multiple contracts ranged from $10,000 to $1,000,000 per
contract due to increased bid and proposal and administrative costs.
We identified two overriding factors that hamper the government's
ability to realize the strategic value of using interagency and
agencywide contracts: (1) the absence of consistent governmentwide
policy on the creation, use, and costs of awarding and administering
some contracts; and (2) long-standing problems with the quality of
information on interagency and agencywide contracts in the federal
procurement data system. In April 2010, we recommended that OMB, which
has governmentwide procurement policy responsibilities, establish a
policy framework for establishing some types of interagency contracts
and agencywide contracts, including a requirement to conduct a sound
business case. We also recommended that OMB take steps to improve the
data on interagency contracts including updating existing data on
interagency and agencywide contracts, ensuring that departments and
agencies accurately record these data, and assessing the feasibility
of creating and maintaining a centralized database of interagency and
agencywide contracts. OMB agreed with our recommendations.
In December 2010, the Federal Acquisition Regulation was amended to
require that agencies prepare business cases for some multiagency
contracts. This business case analysis also requires that agencies
evaluate the cost of awarding and managing the contract and compare
this cost to the likely fees that would be incurred if the agency used
an existing contract or sought out acquisition assistance. In
addition, OMB is developing additional business case guidance that
will require agencies to prepare business cases describing the
expected need for any new multiagency or agencywide contract, the
value added by its creation, and the agency's suitability to serve as
an executive agent. OMB also reports that it has a new effort under
way to improve contract information in the Federal Procurement Data
System-Next Generation, the current federal government database for
information and data on all federal contracts. OMB also is discussing
options for creating a clearinghouse of existing interagency and
agencywide contracts. Requiring business case analyses for new
multiagency and agencywide contracts and ensuring agencies have access
to up-to-date and accurate data on the available contracts will
promote the efficient use of interagency and agencywide contracting.
Until such controls to address the issue of duplication are fully
implemented, the government will continue to miss opportunities to
take advantage of the government's buying power through more efficient
and more strategic contracting.
Promoting Competition for Federal Contracts Can Produce Savings:
Competition is a cornerstone of the federal acquisition system and a
critical tool for achieving the best possible return on contract
spending. Competitive contracts can save money, improve contractor
performance, and promote accountability for results. Federal agencies
generally are required to award contracts competitively, but a
substantial amount of federal money is being obligated on
noncompetitive contracts annually. Federal agencies obligated
approximately $170 billion on noncompetitive contracts in fiscal year
2009 alone. While there has been some fluctuation over the years, the
percentage of obligations under noncompetitive contracts recently has
been in the range of 31 percent to over 35 percent. Although some
agency decisions to forego competition may be justified, we found that
when federal agencies decide to open their contracts to competition,
they frequently realize savings. For example, we found in 2006 that
the Army had awarded noncompetitive contracts for security guards, but
later spent 25 percent less for the same services when the contracts
were competed.
Our work also shows that agencies do not always use a competitive
process when establishing or using blanket purchase agreements under
the General Services Administration's schedules program. Agencies have
frequently entered into blanket purchase agreements with just one
vendor, even though multiple vendors could satisfy agency needs. And
even when agencies entered into blanket purchase agreements with
multiple vendors, we found that agencies have not always held
subsequent competitions among those vendors for orders under the
blanket purchase agreements, even though such competitions at the
ordering level are required.
OMB has provided guidance for agencies to promote competition in
contracting, and improve the effectiveness of their competition
practices. In July 2009, OMB called for agencies to reduce obligations
under new contract actions that are awarded using high-risk
contracting authorities by 10 percent in fiscal year 2010. These high-
risk contracts include, among other considerations, those that are
awarded noncompetitively and those that are structured as competitive
but for which only one offer is received. We are currently reviewing
the agencies' savings plans to identify steps taken toward that goal.
By more consistently promoting competition in contracts, federal
agencies would have greater opportunities to take advantage of the
effectiveness of the marketplace and potentially achieve billions of
dollars in cost savings.
Adherence to New Guidance on Award Fee Contracts Could Improve
Agencies' Use of Award Fees and Produce Savings:
Several major agencies spent over $300 billion from fiscal year 2004
through fiscal year 2008 on contracts that included monetary
incentives known as award fees. The purpose of these incentives is to
motivate enhanced contractor performance. In 2005, however, we found
that DOD paid billions of dollars in award fees regardless of
acquisition outcomes. In 2007, we found significant disconnects
between program results and fees paid at the National Aeronautics and
Space Administration. In 2009, we reported that five agencies[Footnote
11] had paid more than $6 billion in award fees, but were not
consistently following award fee guidance and did not have methods for
evaluating the effectiveness of an award fee as a tool for improving
contractor performance. We identified three primary issues related to
the use of award fees that, if addressed, could improve the use of
these incentives and produce savings. Specifically, (1) award fees are
not always linked to acquisition outcomes, (2) award fee payments are
made despite unsatisfactory contract performance, and (3) contractors
have been permitted to earn previously unearned award fees in
subsequent evaluation periods, a practice known as "rollover," where
unearned award fees are transferred from one evaluation period to a
subsequent period, thus allowing contractors additional opportunities
to earn previously unearned fees.
Although required by OMB guidance since 2007, we reported in 2009 that
award fees were not always linked to acquisition outcomes. But when
efforts are made to do so, savings can be achieved. For example, the
Joint Strike Fighter program created metrics for areas such as
software performance, warfighter capability, and cost control that
were previously assessed using less-defined criteria. By using metrics
to assess performance, the Joint Strike Fighter program paid an
estimated $29 million less in fees in the 2 years since the policy
changed than it might have when applying the former criteria.
OMB's 2007 guidance directed agencies to ensure that no award fee
should be paid for performance that does not meet contract
requirements or is judged to be unsatisfactory. We reported in 2009
that programs across the agencies reviewed used evaluation tools that
could allow contractors to earn award fees without performing at a
level that is acceptable to the government under the terms of the
contract. For example, a Department of Energy research contract
allowed the contractor to earn up to 84 percent of the award fee for
performance that was defined as not meeting expectations. In addition,
we found two HHS contracts, including a contract for Medicare claims
processing, in which it was possible for the contractor to receive at
least 49 percent of the award fee for unsatisfactory performance. By
contrast, some programs within DOD have prohibited award fee payments
for unsatisfactory performance. For example, we found that the Air
Force saved $10 million on a contract for a satellite program by not
paying an award fee to a contractor with unsatisfactory performance.
DOD guidance on award fees since 2006 has been that the practice of
rollover should be limited to exceptional circumstances to avoid
compromising the integrity of the award fee process. We found that
based on contracts reviewed in 2005, DOD rolled over an average of 51
percent of the total unearned fees. For example, the contractor for
the F-22 Raptor received over 90 percent of the award fee, including
fees paid in subsequent evaluation periods, even though the program's
cost and schedule targets had to be revised 14 times. By later
limiting rollover, we estimated in 2009 that DOD would save over $450
million on eight programs from April 2006 through October 2010.
Recent changes to the Federal Acquisition Regulation in 2010 have
prohibited the practices of rollover of unearned award fees and
awarding fees to contractors that have performed unsatisfactorily.
Some agencies are updating and disseminating guidance that could
increase the pace and success rate of implementing these new
regulations. Further, agencies such as DOD are increasing the
likelihood that award fees would be better linked to acquisition
outcomes by implementing key practices, like a peer review process
that examines the plan for administering award fees. However,
sustained progress in the use of award fees will require that
contracting agencies adhere to the recent changes to the Federal
Acquisition Regulation. Enhanced oversight by OMB and Congress is
warranted to ensure successful implementation.
Applying Strategic Sourcing Best Practices throughout the Federal
Procurement System Could Produce Significant Savings:
Since 2002, spending on federal contracts has more than doubled to
about $540 billion in 2009, consuming a significant share of agencies'
discretionary budgets. Because procurement at federal departments and
agencies generally is decentralized, the federal government is not
fully leveraging its aggregate buying power to obtain the most
advantageous terms and conditions for its procurements. In the private
sector, however, an approach called strategic sourcing has been used
since the 1980s to reduce procurement costs at companies with large
supplier bases and high procurement costs. We reported that to reduce
costs, improve productivity, and more effectively procure products and
services, many companies have adopted a strategic sourcing approach--
centralizing and reorganizing their procurement operations to get the
best value for the company as a whole. The federal government could do
the same and realize significant savings as a result.
Since 2005, OMB has encouraged agencies to coordinate their buys
through Federal Strategic Sourcing Initiative (FSSI) interagency
procurement vehicles awarded by the General Services Administration.
In addition, some agencies have awarded agencywide (also referred to
as enterprisewide) contracts under strategic sourcing programs within
an individual federal department or agency. In July 2010, OMB's
congressional testimony on the status of improvements to federal
acquisition cited examples of what progress is being achieved under
agency strategic sourcing efforts. Under the FSSI effort for example,
a team of agencies selected office products in late 2009 as a
promising strategic sourcing opportunity to combine buying power for
about $250 million in requirements. This office products initiative is
expected to reduce costs at these agencies by as much as 20 percent,
for a total savings of almost $200 million over the next 4 years.
Further, an agencywide initiative at the Department of Homeland
Security--which accounted for $14.3 billion in contract spending in
2009--is expected to save $87 million during the next 6 years for a
standardized suite of discounted desktop operating systems, e-mail,
and office automation products.
These results demonstrate the potential to achieve significant savings
through the use of strategic sourcing approaches. The starting point
for such efforts, however, is having good data on current spending,
but in April 2010 we reported that OMB and agencies cannot be sure the
government is fully leveraging its buying power because of the absence
of comprehensive, reliable data to effectively manage and oversee an
important segment of total procurement spending: interagency and
agencywide contracts. Acquisition leaders across the government need
to more fully embrace the strategic sourcing initiative beginning with
collecting, maintaining, and analyzing data on current procurement
spending. Then, agencies have to conduct assessments of acquisition
and supply chain functions to initiate enterprisewide transformations.
In conclusion Mr. Chairman, Ranking Member Collins, and Members of the
Committee, careful, thoughtful actions will be needed to address many
of the issues discussed in our March report, particularly those
involving potential duplication, overlap, and fragmentation among
federal programs and activities. These are difficult issues to address
because they may require agencies and Congress to re-examine within
and across various mission areas the fundamental structure, operation,
funding, and performance of a number of long-standing federal programs
or activities with entrenched constituencies. Continued oversight by
OMB and Congress will be critical to ensuring that unnecessary
duplication, overlap, and fragmentation are addressed.
As the nation rises to meet the current fiscal challenges, we will
continue to assist Congress and federal agencies in identifying
actions needed to reduce duplication, overlap, and fragmentation;
achieve cost savings; and enhance revenues. As part of current
planning for our future annual reports, we are continuing to look at
additional federal programs and activities to identify further
instances of duplication, overlap, and fragmentation as well as other
opportunities to reduce the cost of government operations and increase
revenues to the government. We will be using an approach to ensure
governmentwide coverage through our efforts by the time we issue of
our third report in fiscal year 2013. We plan to expand our work to
more comprehensively examine areas where a mix of federal approaches
is used, such as tax expenditures, direct spending, and federal loan
programs. Likewise, we will continue to monitor developments in the
areas we have already identified. Issues of duplication, overlap, and
fragmentation will also be addressed in our routine audit work during
the year as appropriate and summarized in our annual reports.
Thank you, Mr. Chairman, Ranking Member Collins, and Members of the
Committee. This concludes my prepared statement. I would be pleased to
answer any questions you may have.
For further information on this testimony or our March report, please
contact Janet St. Laurent, Managing Director, Defense Capabilities and
Management, who may be reached at (202) 512-4300, or
StLaurentJ@gao.gov; and Katherine Siggerud, Managing Director,
Physical Infrastructure, who may be reached at (202) 512-2834, or
SiggerudK@gao.gov. Specific questions about information technology
issues may be directed to Joel Willemssen, Managing Director,
Information Technology, who may be reached at (202) 512-6253, or
WillemssenJ@gao.gov. Questions about federal contracting may be
directed to Paul Francis, Managing Director, Acquisition and Sourcing
Management, who may be reached at (202) 512-4841, or FrancisP@gao.gov.
Contact points for our Congressional Relations and Public Affairs
offices may be found on the last page of this statement.
[End of section]
Appendix I: Duplication, Overlap, or Fragmentation Area identified:
Mission: Agriculture:
Area identified:
1. Fragmented food safety system has caused inconsistent oversight,
ineffective coordination, and inefficient use of resources;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: The Department of Agriculture's (USDA) Food
Safety and Inspection Service and the Food and Drug Administration are
the primary food safety agencies, but 15 agencies are involved in some
way.
Mission: Defense:
Area identified:
2. Realigning DOD's military medical command structures and
consolidating common functions could increase efficiency and result in
projected savings ranging from $281 million to $460 million annually;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Department of Defense (DOD), including the
Office of the Assistant Secretary for Health Affairs, the Army, the
Navy, and the Air Force.
Area identified:
3. Opportunities exist for consolidation and increased efficiencies to
maximize response to warfighter urgent needs;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: At least 31 entities within DOD.
Area identified:
4. Opportunities exist to avoid unnecessary redundancies and improve
the coordination of counter-improvised explosive device efforts;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: The services and other components within DOD.
Area identified:
5. Opportunities exist to avoid unnecessary redundancies and maximize
the efficient use of intelligence, surveillance, and reconnaissance
capabilities;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Multiple intelligence organizations within
DOD.
Area identified:
6. A departmentwide acquisition strategy could reduce DOD's risk of
costly duplication in purchasing tactical wheeled vehicles;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: DOD, including Army and Marine Corps.
Area identified:
7. Improved joint oversight of DOD's prepositioning programs for
equipment and supplies may reduce unnecessary duplication;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: DOD including Air Force, Army, and Marine
Corps.
Area identified:
8. DOD business systems modernization: opportunities exist for
optimizing business operations and systems;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: About 2,300 investments across DOD.
Mission: Economic development:
Area identified:
9. The efficiency and effectiveness of fragmented economic development
programs are unclear;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: USDA, Department of Commerce (Commerce),
Housing and Urban Development (HUD), and the Small Business
Administration (SBA); 80 programs involved.
Area identified:
10. The federal approach to surface transportation is fragmented,
lacks clear goals, and is not accountable for results;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Five agencies within the Department of
Transportation (DOT); over 100 programs involved.
Area identified:
11. Fragmented federal efforts to meet water needs in the U.S.-Mexico
border region have resulted in an administrative burden, redundant
activities, and an overall inefficient use of resources;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: USDA, Commerce's Economic Development
Administration, Environmental Protection Agency (EPA), Department of
Health and Human Services' (HHS) Indian Health Service, Department of
the Interior's (Interior) Bureau of Reclamation, HUD, and the U.S.
Army Corps of Engineers.
Mission: Energy:
Area identified:
12. Resolving conflicting requirements could more effectively achieve
federal fleet energy goals;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: A number of agencies, including the
Department of Energy (Energy) and the General Services Administration
(GSA) play a role overseeing the governmentwide requirements.
Area identified:
13. Addressing duplicative federal efforts directed at increasing
domestic ethanol production could reduce revenue losses by up to $5.7
billion annually;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: EPA and the Department of the Treasury.
Mission: General government:
Area identified:
14. Enterprise architectures: key mechanisms for identifying potential
overlap and duplication;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Governmentwide.
Area identified:
15. Consolidating federal data centers provides opportunity to improve
government efficiency and achieve significant cost savings;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Twenty-four federal agencies.
Area identified:
16. Collecting improved data on interagency contracting to minimize
duplication could help the government leverage its vast buying power;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Governmentwide.
Area identified:
17. Periodic reviews could help identify ineffective tax expenditures
and redundancies in related tax and spending programs, potentially
reducing revenue losses by billions of dollars;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Governmentwide.
Mission: Health:
Area identified:
18. Opportunities exist for DOD and VA to jointly modernize their
electronic health record systems;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: DOD and the Department of Veterans Affairs
(VA).
Area identified:
19. VA and DOD need to control drug costs and increase joint
contracting whenever it is cost-effective;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: DOD and VA.
Area identified: HHS needs an overall strategy to better integrate
nationwide public health information systems;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Multiple agencies, led by HHS.
Mission: Homeland security/Law enforcement:
Area identified:
21. Strategic oversight mechanisms could help integrate fragmented
interagency efforts to defend against biological threats;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: USDA, DOD, Department of Homeland Security
(DHS), HHS, Interior, and others; more than two dozen presidentially
appointed individuals with responsibility for biodefense.
Area identified:
22. DHS oversight could help eliminate potential duplicating efforts
of interagency forums in securing the northern border;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur:
DHS and other federal law enforcement partners.
Area identified:
23. The Department of Justice plans actions to reduce overlap in
explosives investigations, but monitoring is needed to ensure
successful implementation;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Department of Justice's Federal Bureau of
Investigation and Bureau of Alcohol, Tobacco, Firearms and Explosives.
Area identified:
24. TSA's security assessments on commercial trucking companies
overlap with those of another agency, but efforts are under way to
address the overlap;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: DHS's Transportation Security Administration
(TSA) and DOT.
Area identified:
25. DHS could streamline mechanisms for sharing security-related
information with public transit agencies to help address overlapping
information;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Three information-sharing mechanisms funded
by DHS and TSA.
Area identified:
26. FEMA needs to improve its oversight of grants and establish a
framework for assessing capabilities to identify gaps and prioritize
investments;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: DHS's Federal Emergency Management Agency
(FEMA); 17 programs involved.
Mission: International affairs:
Area identified:
27. Lack of information sharing could create the potential for
duplication of efforts between U.S. agencies involved in development
efforts in Afghanistan;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Principally DOD and the U.S. Agency for
International Development.
Area identified:
28. Despite restructuring, overlapping roles and functions still exist
at State's Arms Control and Nonproliferation Bureaus;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Two bureaus within the Department of State
(State).
Mission: Social services:
Area identified:
29. Actions needed to reduce administrative overlap among domestic
food assistance programs;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: USDA, DHS, and HHS; 18 programs involved.
Area identified:
30. Better coordination of federal homelessness programs may minimize
fragmentation and overlap;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Seven federal agencies, including Department
of Education (Education), HHS, and HUD; over 20 programs involved.
Area identified:
31. Further steps needed to improve cost-effectiveness and enhance
services for transportation-disadvantaged persons;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: USDA, DOT, Education, Interior, HHS, HUD,
Department of Labor (Labor), and VA; 80 programs involved.
Mission: Training, employment, and education:
Area identified:
32. Multiple employment and training programs: providing information
on colocating services and consolidating administrative structures
could promote efficiencies;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Education, HHS, and Labor, among others;
44 programs involved.
Area identified:
33. Teacher quality: proliferation of programs complicates federal
efforts to invest dollars effectively;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: Ten agencies including DOD, Education,
Energy, National Aeronautics and Space Administration, and the
National Science Foundation; 82 programs involved.
Area identified:
34. Fragmentation of financial literacy efforts makes coordination
essential;
Federal agencies and programs where duplication, overlap, or
fragmentation may occur: More than 20 different agencies; about 56
programs involved.
Source: GAO-11-318SP.
[End of table]
[End of section]
Appendix II: Federal Agencies and Programs Where Cost-Saving or
Revenue-Enhancement Opportunities May Exist:
Missions: Agriculture:
Area identified:
35. Reducing some farm program payments could result in savings from
$800 million over 10 years to up to $5 billion annually;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Department of Agriculture.
Mission: Defense:
Area identified:
36. DOD should assess costs and benefits of overseas military presence
options before committing to costly personnel realignments and
construction plans, thereby possibly saving billions of dollars;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DOD.
Area identified:
37. Total compensation approach is needed to manage significant growth
in military personnel costs;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DOD.
Area identified:
38. Employing best management practices could help DOD save money on
its weapon systems acquisition programs;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DOD.
Area identified:
39. More efficient management could limit future costs of DOD's spare
parts inventory;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DOD, including the military services and Defense
Logistics Agency.
Area identified:
40. More comprehensive and complete cost data can help DOD improve the
cost-effectiveness of sustaining weapon systems;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DOD.
Area identified:
41. Improved corrosion prevention and control practices could help DOD
avoid billions in unnecessary costs over time;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DOD's Office of Corrosion Policy and Oversight.
Mission: Economic development:
Area identified:
42. Revising the essential air service program could improve
efficiency and save over $20 million annually;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Department of Transportation.
Area identified:
43. Improved design and management of the universal service fund as it
expands to support broadband could help avoid cost increases for
consumers;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Federal Communications Commission; four programs
involved.
Area identified:
44. The Corps of Engineers should provide Congress with project-level
information on unobligated balances;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: U.S. Army Corps of Engineers.
Mission: Energy:
Area identified:
45. Improved management of federal oil and gas resources could result
in approximately $1.75 billion over 10 years;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Department of the Interior's Bureau of Land
Management, Bureau of Ocean Energy Management, Regulation and
Enforcement, and Office of Natural Resources Revenue.
Mission: General government:
Area identified:
46. Efforts to address governmentwide improper payments could result
in significant cost savings;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: About 20 federal agencies; over 70 programs
involved.
Area identified:
47. Promoting competition for the over $500 billion in federal
contracts can potentially save billions of dollars over time;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Governmentwide.
Area identified:
48. Applying strategic sourcing best practices throughout the federal
procurement system could save billions of dollars annually;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Governmentwide.
Area identified:
49. Adherence to new guidance on award fee contracts could improve
agencies' use of award fees and produce savings;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Several agencies, including DOD and the National
Aeronautics and Space Administration.
Area identified:
50. Agencies could realize cost savings of at least $3 billion by
continued disposal of unneeded federal real property;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Governmentwide, including DOD, General Services
Administration (GSA), and Department of Veterans Affairs.
Area identified:
51. Improved cost analyses used for making federal facility ownership
and leasing decisions could save tens of millions of dollars;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Primarily GSA, the central leasing agent for most
agencies.
Area identified:
52. The Office of Management and Budget's IT Dashboard reportedly has
already resulted in $3 billion in savings and can further help
identify opportunities to invest more efficiently in information
technology;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Governmentwide.
Area identified:
53. Increasing electronic filing of individual income tax returns
could reduce IRS's processing costs and increase revenues by hundreds
of millions of dollars;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Department of the Treasury's (Treasury) Internal
Revenue Service (IRS).
Area identified:
54. Using return on investment information to better target IRS
enforcement could reduce the tax gap;
for example, a 1 percent reduction would increase tax revenues by $3
billion;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
55. Better management of tax debt collection may resolve cases faster
with lower IRS costs and increase debt collected;
Federal agencies and programs where cost-saving or revenue--
enhancement options may exist: IRS.
Area identified:
56. Broadening IRS's authority to correct simple tax return errors
could facilitate correct tax payments and help IRS avoid costly,
burdensome audits;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
57. Enhancing mortgage interest information reporting could improve
tax compliance;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
58. More information on the types and uses of canceled debt could help
IRS limit revenue losses on forgiven mortgage debt;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
59. Better information and outreach could help increase revenues by
tens or hundreds of millions of dollars annually by addressing
overstated real estate tax deductions;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
60. Revisions to content and use of Form 1098-T could help IRS enforce
higher education requirements and increase revenues;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
61. Many options could improve the tax compliance of sole proprietors
and begin to reduce their $68 billion portion of the tax gap;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
62. IRS could find additional businesses not filing tax returns by
using third-party data, which show such businesses have billions of
dollars in sales;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
63. Congress and IRS can help S corporations and their shareholders be
more tax compliant, potentially increasing tax revenues by hundreds of
millions of dollars each year;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
64. IRS needs an agencywide approach for addressing tax evasion among
the at least 1 million networks of businesses and related entities;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
65. Opportunities exist to improve the targeting of the $6 billion
research tax credit and reduce forgone revenue;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Treasury and IRS.
Area identified:
66. Converting the new markets tax credit to a grant program may
increase program efficiency and significantly reduce the $3.8 billion
5-year revenue cost of the program;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Treasury.
Area identified:
67. Limiting the tax-exempt status of certain governmental bonds could
yield revenue;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Treasury.
Area identified:
68. Adjusting civil tax penalties for inflation potentially could
increase revenues by tens of millions of dollars per year, not
counting any revenues that may result from maintaining the penalties'
deterrent effect;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
69. IRS may be able to systematically identify nonresident aliens
reporting unallowed tax deductions or credits;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: IRS.
Area identified:
70. Tracking undisbursed balances in expired grant accounts could
facilitate the reallocation of scarce resources or the return of
funding to the Treasury;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Governmentwide.
Mission: Health:
Area identified:
71. Preventing billions in Medicaid improper payments requires
sustained attention and action by CMS;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Department of Health and Human Services' Centers
for Medicare & Medicaid Services (CMS).
Area identified:
72. Federal oversight over Medicaid supplemental payments needs
improvement, which could lead to substantial cost savings;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: CMS.
Area identified:
73. Better targeting of Medicare's claims review could reduce improper
payments;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: CMS.
Area identified:
74. Potential savings in Medicare's payments for health care;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: CMS.
Mission: Homeland security/Law enforcement:
Area identified:
75. DHS's management of acquisitions could be strengthened to reduce
cost overruns and schedule and performance shortfalls;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Department of Homeland Security (DHS).
Area identified:
76. Improvements in managing research and development could help
reduce inefficiencies and costs for homeland security;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DHS.
Area identified:
77. Validation of TSA's behavior-based screening program is needed to
justify funding or expansion;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Transportation Security Administration (TSA).
Area identified:
78. More efficient baggage screening systems could result in about
$470 million in reduced TSA personnel costs over the next 5 years;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: TSA.
Area identified:
79. Clarifying availability of certain customs fee collections could
produce a one-time savings of $640 million;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: DHS's Customs and Border Protection (CBP).
Mission: Income security:
Area identified:
80. Social Security needs data on pensions from noncovered earnings to
better enforce offsets and ensure benefit fairness, resulting in
estimated $2.4-$2.9 billion savings over 10 years;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: Social Security Administration.
Mission: International affairs:
Area identified:
81. Congress could pursue several options to improve collection of
antidumping and countervailing duties;
Federal agencies and programs where cost-saving or revenue-enhancement
options may exist: CBP.
Source: GAO-11-318SP.
[End of table]
[End of section]
Footnotes:
[1] Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712
Note.
[2] GAO, The Federal Government's Long-Term Fiscal Outlook: January
2011 Update, [hyperlink, http://www.gao.gov/products/GAO-11-451SP
(Washington, D.C.: Mar. 18, 2011). Additional information on the
federal fiscal outlook, federal debt, and the outlook for the state
and local government sector is available at [hyperlink,
http://www.gao.gov/special.pubs/longterm].
[3] GAO, Opportunities to Reduce Potential Duplication in Government
Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP
(Washington, D.C.: Mar. 1, 2011). An interactive, Web-based version of
the report is available at [hyperlink,
http://www.gao.gov/ereport/gao-11-318SP].
[4] GAO-11-318SP. Other reports contributing to this statement were
Information Technology: Continued Improvements in Investment Oversight
and Management Can Yield Billions in Savings, [hyperlink,
http://www.gao.gov/products/GAO-11-511T] (Washington, D.C.: Apr.12,
2011); and Information Technology: OMB Has Made Improvements to Its
Dashboard, but Further Work Is Needed by Agencies and OMB to Ensure
Data Accuracy, [hyperlink, http://www.gao.gov/products/GAO-11-262]
(Washington, D.C.: Mar. 15, 2011).
[5] For enumerated lists of programs in each of the nine areas for
which our March 1, 2011 report provided specific numbers of programs
along with funding information where available, see GAO, List of
Selected Federal Programs That Have Similar or Overlapping Objectives,
Provide Similar Services, or Are Fragmented Across Government
Missions, [hyperlink, http://www.gao.gov/products/GAO-11-474R]
(Washington, D.C.: Mar 18, 2011).
[6] OMB defines a data center as a data processing and storage
facility over 500 square feet in size, with strict requirements for
near-constant availability to users.
[7] Green IT refers to environmentally sound computing practices that
can include a variety of efforts, such as using energy efficient data
centers, purchasing computers that meet certain environmental
standards, and recycling old or unusable electronics.
[8] The Technology CEO Council, One Trillion Reasons: How Commercial
Best Practices to Maximize Productivity Can Save Taxpayer Money and
Enhance Government Services (Washington, D.C.: October 2010).
[9] [hyperlink, http://www.gao.gov/products/GAO-11-511T].
[10] [hyperlink, http://www.gao.gov/products/GAO-11-262] and GAO,
Information Technology: OMB's Dashboard Has Increased Transparency and
Oversight, but Improvements Needed, [hyperlink,
http://www.gao.gov/products/GAO-10-701] (Washington, D.C.: July 16,
2010).
[11] GAO reviewed the Departments of Defense, Energy, Health and Human
Services, Homeland Security, and the National Aeronautics and Space
Administration.
[End of section]
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