The Information Technology
Management Reform Act (ITMRA) of 1995 (40 USC 1401 et. seg.) directs
the Office of Management and Budget to establish clear and concise
direction regarding investments in major information systems,
and to enforce that direction through the budget process. Accordingly,
the decision criteria set out below are established with respect
to the evaluation of major information system investments proposed
for funding in the FY 1998 President's budget.
The most effective
long-term investment strategy is guided by a multiyear plan. The
plan is a roadmap for getting from "where we are today. to
"where we want to be" -- achieving the strategic mission
goals of the organization in the framework of the Government Performance
and Results Act (GPRA). Thus the first four decision criteria
relate specifically to capital planning. The fifth criterion establishes
the critical link between planning and implementation --
information architecture -- which aligns technology with mission
goals. Under the ITMRA, the Chief Information Officer is responsible
for that architecture. The last three criteria establish risk
management principles to assure a high level of confidence that
the proposed investment will succeed.
Policy
Investments in major
information systems proposed for funding in the President's budget
should:
1. support
core/priority mission functions that need to be performed by the
Federal government;
2. be undertaken
by the requesting agency because no alternative private sector
or governmental source can efficiently support the function;
3. support work
processes that have been simplified or otherwise redesigned
to reduce costs, improve effectiveness, and make maximum use
of commercial, off-the-shelf technology;
4. demonstrate a
projected return on the investment that is clearly equal to
or better than alternative uses of available public resources.
Return may include: improved mission performance in accordance
with GPRA measures; reduced cost; increased quality, speed,
or flexibility; and increased customer and employee satisfaction.
Return should be adjusted for such risk factors as the project's
technical complexity, the agency's management capacity, the
likelihood of cost overruns, and the consequences of under-
or non-performance
5. be consistent
with Federal, agency, and bureau information architectures which:
integrate agency work processes and information flows with technology
to achieve the agency's strategic goals; reflect the agency's
technology vision and year 2000 compliance plan; and specify
standards that enable information exchange and resource sharing,
while retaining flexibility in the choice of suppliers and in
the design of local work processes;
6. reduce risk by:
avoiding or isolating custom-designed components to minimize
the potential adverse consequences on the overall project; using
fully tested pilots, simulations, or prototype implementations
before going to production; establishing clear measures and
accountability for project progress; and, securing substantial
involvement and buy-in throughout the project from the program
officials who will use the system;
7. be implemented
in phased, successive chunks as narrow in scope and brief in
duration as practicable, each of which solves a specific part
of an overall mission problem and delivers a measurable net
benefit independent of future chunks; and,
8. employ an acquisition
strategy that appropriately allocates risk between government
and contractor, effectively uses competition, ties contract
payments to accomplishments, and takes maximum advantage of
commercial technology.
As a general presumption,
OMB will recommend new or continued funding only for those major
system investments that satisfy these criteria. Funding for those
systems will be recommended on a phased basis. (For more information
on phases, see the discussion of "economically and programmatically
separable" modules, in OMB Circular A11, Part 3, "Planning,
Budgeting and Acquisition of Fixed Assets," July 1996.)
A "major information
system" is a system that requires special management attention
because of its importance to an agency mission; its high development
operating, or maintenance costs; or its significant role in the
administration of agency programs, finances, property, or other
resources. Large infrastructure investments (e.g., major purchases
of personal computers or local area network improvements) should
also be evaluated against these criteria.
OMB recognizes that
many agencies are in the middle of ongoing projects initiated
prior to enactment of the ITMRA, and may not be able immediately
to satisfy the criteria. For those systems that do not satisfy
the criteria, OMB will consider requests to use FY 1997 and 1998
funds to support the redesign of work processes, the evaluation
of investment alternatives, the development of information architectures,
and the use and evaluation of prototypes.
Action Requested
The policies in this
memorandum apply to all agencies. The 28 major agencies listed
in Section 3 of Executive Order No. 13011, "Federal Information
Technology," should provide, by November 12, 1996, a statement
listing the major information systems investments for which new
or continued funding is requested in the agency's FY 1998 budget,
and an evaluation of the extent to which each investment satisfies
the decision criteria. For national security systems as defined
in Section 10 of the Executive order, only the list need be provided.
OMB will work with the agencies to ensure that national security
systems satisfy the criteria to the extent practicable.
Because OMB considers
this information essential to agencies' long-term success, OMB
will use this information both in preparing the FY 1998 President's
budget and, in conjunction with cost, schedule, and performance
data, as apportionments are made. Agencies are encouraged to work
with their OMB representative to arrive at a mutually satisfactory
process, format, and timetable for providing the requested information.