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By Nick Wakeman

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Nick Wakeman

Why stop at 26 high-risk projects?

As I’ve been thinking about what the Office of Management and Budget’s high-risk list means, a couple thoughts keep coming to mind.

First, I tend to believe OMB and Vivek Kundra when he says that the list is not a “hit list” of projects that are in danger of being canceled. Even if you cancel the contract, the need is still there, so work still needs to be done.

Second. I’ve been looking at the criteria the CIO Council laid out for determining a high-risk project:

    • Significant cost or schedule problems. 
    • Missed performance targets or objectives. 
    • Frequent “re-baselines.” 
    • Lack of executive sponsorship or leadership.

Let’s think about those for a second. Maybe I’m cynical, but don’t most government contracts run into one or more of those problems?

Maybe I’m overstating my case by saying “most” but it is a lot more than 26 that’s for sure.

So my question is: Why did OMB stop at 26 projects?

I’ll offer one theory – please, chime in with others – these projects are the low-hanging fruit. OMB and the agencies involved already know what they need to do to fix, cancel or replace these projects.

Part 2 of my theory is that these projects are the test cases of how to pressure agencies and how to pressure contractors into righting the other troubled programs out there.

Each agency should be doing what the Veteran Affairs Department did a year ago when it set the standard by putting 45 IT projects on hold. Moves like that will get people's attention.

Contractors would be well-served to get out ahead of the curve, if its not too late. Use the July 28 OMB memo as a guide and evaluate your projects because as agencies work on their 2012 budget submissions they are going to be doing the same thing. You should already be preparing answers to the tough questions and public scrutiny to come.

On a side note, we’ve heard some complaints about OMB’s data being out of date and incorrect. That’s an interesting point, but does that really detract from the point they are making or the action that needs to be taken?

Posted by Nick Wakeman on Aug 25, 2010 at 9:44 AM

Reader Comments

Fri, Aug 27, 2010 Paul sherman

As I read the article, see the comments and see the IT projects gone sour in my own agency (VA), I'm reminded of an article in InfoWorld from 8/16/04 addressing IT 'myths'. In the article, myth 5 was 'Most IT Projects Fail'. Ephraim Schwartz, the author, referred to a Standish Group report that had plotted IT project success rate vs. cost. By the time cost had hit $10M, project success rate was at 2%. From what I've seen, that finding still seems valid.

Fri, Aug 27, 2010 Jonathan Madnick

The OMB criteria for selection tell us that risks have become issues and that the project has gone off track already. It would be more appropriate to refer to them as "high-issue" projects, not "high-risk" projects. Certainly these projects should be scrutinized, but if OMB is looking for "high-risk" projects, it should assess risk of new projects and projects that have not yet developed issues. And I wonder how many of these 26 projects were reviewed in a related Independent Verification & Validation (IV&V).

Fri, Aug 27, 2010

It's really simple folks: many of the large SI's (2-3 in particular) business models are based on ECPs and change orders so they bid low and execute high. It would be good for OMB to identify the companies associated with the 26 programs and look for patterns. What was bid, what was executed? My company has had great success with COTS and ERP becuase we focus on, and communicate, what the project is actually going to cost (win or lose) and then execute to those numbers. When you put the customer first, instead of company revenue, you keep clients for life and eventually get the revenue and profits.

Thu, Aug 26, 2010

Congress implemented the Clinger Cohen Act, which gave CIOs specific responsibility to establish goals for improving the efficiency and
effectiveness of agency operations and, as appropriate, the delivery of services to the public through the effective use of information technology. Since CIOs weren't really IT acquisition experts, that resposibility got diffused between teh CIOs and the people buying and developing IT products. Instead of correcting the root causes and taking down that bureacracy, the DCMO was established by Congress in the FY 2008 National Defense Authorization Act to lead and integrate enterprise-wide performance improvement and business operations. Since IT is at the heart of most business process reengineering, add that layer to review and monitor and influence IT program execution. So between the normal acquisition manager's role, engineering and technical reviews, gate reviews, milestone reviews, DONCIO reviews, DCMO reviews, and now OMB reviews we won't have to worry about too many IT programs going bad. Much like Japanes produce inspections, enterprise IT programs will sour in the review process and die early deaths. The more IT execution authority and accountability is diluted and diffused, the less likely anything will get done. Would be nice to see a little BPR in all the oversight and review of IT instead of more new tiers of anxious reviewers and the associated non-productive workload without cutting out the previous oversight that got us all these risky IT programs.

Thu, Aug 26, 2010 M Reston

This initiative does not get at the heart of the problem. I offer these observations from both near and far: 1) The government is in charge of all these programs so it is bogus to blame contractors for more than one contract cycle. 2) The government, like industry, spends far too much on COTS then odifying it. These days customization is really a better way to go - again. COTS are oversold, too expensive and too difficult to hammer into what you really need. 3) The government has got to get serious about Federal Enterprise Architecture and stop buidling the same thing for every agency at least once and often many times in parallel. For example, there is no need for every agency to develop its own acquisition systems. Acquisition is something they all do, but it is basically the same for all of them. So why reinvent the wheel?

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