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                                                       Calendar No. 364
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-179
======================================================================



INFORMATION TECHNOLOGY (IT) INVESTMENT OVERSIGHT ENHANCEMENT AND WASTE 
                         PREVENTION ACT OF 2009

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 920

TO AMEND SECTION 11317 OF TITLE 40, UNITED STATES CODE, TO IMPROVE THE 
 TRANSPARENCY OF THE STATUS OF INFORMATION TECHNOLOGY INVESTMENTS, TO 
REQUIRE GREATER ACCOUNTABILITY FOR COST OVERRUNS ON FEDERAL INFORMATION 
   TECHNOLOGY INVESTMENT PROJECTS, TO IMPROVE THE PROCESSES AGENCIES 
   IMPLEMENT TO MANAGE INFORMATION TECHNOLOGY INVESTMENTS, TO REWARD 
    EXCELLENCE IN INFORMATION TECHNOLOGY ACQUISITION, AND FOR OTHER 
                                PURPOSES




                  May 5, 2010.--Ordered to be printed


        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
JON TESTER, Montana                  LINDSEY GRAHAM, South Carolina
ROLAND W. BURRIS, Illinois
EDWARD E. KAUFMAN, Delaware

                  Michael L. Alexander, Staff Director
                     Kevin J. Landy, Chief Counsel
              Adam R. Sedgewick, Professional Staff Member
  Eric S. Hopkins, Professional Staff Member, Subcommittee on Federal 
  Financial Management, Government Information, Federal Services, and 
                         International Security
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                    Lisa M. Nieman, Minority Counsel
R. Justin Stevens, Minority Professional Staff Member, Subcommittee on 
Federal Financial Management, Government Information, Federal Services, 
                       and International Security
                  Trina Driessnack Tyrer, Chief Clerk



                            C O N T E N T S

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for Legislation..............................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact.................................12
 VI. Congressional Budget Office Cost Estimate.......................13
VII. Changes in Existing Laws, as Reported...........................14






                                                       Calendar No. 364
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-179

======================================================================



 
INFORMATION TECHNOLOGY (IT) INVESTMENT OVERSIGHT ENHANCEMENT AND WASTE 
                         PREVENTION ACT OF 2009

                                _______
                                

                  May 5, 2010.--Ordered to be printed

                                _______
                                

Mr. Lieberman, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 920]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 920) to amend 
section 11317 of title 40, United States Code, to improve the 
transparency of the status of information technology 
investments, to require greater accountability for cost 
overruns on Federal information technology investment projects, 
to improve the processes agencies implement to manage 
information technology investments, to reward excellence in 
information technology acquisition, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill do pass.

                         I. Purpose and Summary

    S. 920 seeks to improve the federal government's management 
of its information technology projects and investments. As it 
stands now, the federal government spends more than $40 billion 
annually on major IT investments, with the Government 
Accountability Office estimating that nearly one-half of the 
investments are poorly planned, poorly managed, or both.\1\
---------------------------------------------------------------------------
    \1\GAO-08-1051T Information Technology: OMB and Agncies Need to 
Improve Planning, Management, and Oversight of Projects Totaling 
Billions of Dollars.
---------------------------------------------------------------------------
    To address these problems, this bill would establish an 
improved process for agencies to manage and monitor progress of 
large IT investments. It would require agencies to take 
specific steps to show sufficient planning and oversight before 
there is a significant investment in money; measure whether the 
investment is achieving expected cost, schedule, and 
performance targets; report to the Office of Management and 
Budget and to Congress if a project is experiencing significant 
problems; and terminate investments that fail to meet cost, 
schedule, and performance targets.

              II. Background and Need for the Legislation

    Since 2006, the Committee's Subcommittee on Federal 
Financial Management, Government Information, Federal Services, 
and International Security has held several hearings on the 
federal government's information technology acquisition 
planning and management. These hearings, along with a number of 
Government Accountability Office (GAO) reports, have shown that 
it is difficult for stakeholders to stay informed of major 
Federal IT investments, which total billions of dollars each 
year. For instance, many agencies fail to define why an 
investment is needed, provide incomplete and inaccurate 
planning documents for the investment, and insufficiently 
manage investments according to established standards and best 
practices. In addition, many project managers lack the 
resources and knowledge necessary to effectively plan and 
manage complex IT investments.
    This bill would establish reporting requirements to inform 
agency senior managers, OMB, and Congress when an investment is 
facing critical problems that could negatively impact the 
success of the project. Furthermore, the legislation is 
intended to give agencies help in properly planning and 
managing projects, so that they can correct unanticipated 
problems before a project fails.
    An example of the type of project that would have cost less 
and produced better results had this bill's provisions been in 
law is the Census Bureau's investment in automating the 2010 
Decennial Census. Automation of the 2010 Decennial Census was a 
major acquisition project that required the purchase and 
management of systems, equipment (including handheld 
computers), and infrastructure for field staff to use in 
collecting data for the 2010 Census. The Census Bureau 
initially estimated it would cost $600 million for the 
technology necessary to automate the project. However, the 
automation project had to be significantly changed after 
project managers realized the investment was not proceeding as 
planned and would not meet its goals for cost and performance.
    In 2007, the Census Bureau determined that it would not be 
feasible to use the handheld computers in the non-response 
follow-up (NRFU) portion of the 2010 Decennial Census, its 
largest field operation, and that it would accordingly need to 
revert to a paper-based system. The Bureau estimated that 
reverting to a paper-based NRFU, but still using handheld 
computers for address canvassing (which determines residences 
to receive the Census questionnaire), would result in a cost 
increase of the life-cycle cost of the 2010 Decennial Census of 
between $2.2 billion and $3 billion in addition to the 
previously reported estimate of $11.5 billion. Further, the 
automation contract itself was renegotiated in the fall of 2008 
and is now expected to total around $790 million nearly one-
third more than the original estimate. Despite this increase in 
contract cost, the Bureau has reverted to a paper-based NRFU 
and will be conducting some of the automation in-house, such as 
the help desk, support, and some software development. Moving 
these functions in-house is expected to cost the Bureau $97 
million.
    Had the IT Investment Oversight Enhancement and Waste 
Prevention Act of 2009 been enacted prior to the 2010 Decennial 
Census automation contract, the project would have been 
considered a core IT investment at the Census Bureau, and the 
project would have undergone an independent cost estimate for 
the full lifecycle of the project. Then, quarterly reports on 
the project's cost, schedule, and performance would have been 
required. With these additional planning and monitoring steps 
in place, the Bureau likely would have identified these cost 
and performance problems in time to prevent some of the 
failures. These mistakes likely led to the need to pay an 
additional $1 billion dollars to revert the 2010 Decennial 
Census process to a paper-based system that will limit the use 
of the handheld computers, reduce the accuracy of the Decennial 
Census, and unnecessarily waste taxpayer money.\2\
---------------------------------------------------------------------------
    \2\Testimony before the United States House of Representatives 
Committee on Oversight and Government Reform April 9, 2008. ``Progress 
on the development of the Field Data Collection automation program and 
the Decennial Response Integration System.'' Accessed December 10, 2009 
at http://oversight.house.gov/images/stories/documents/
20081219175944.pdft.
---------------------------------------------------------------------------
    GAO found that one of the major contributing factors to 
federal IT investment failures is that agencies continually 
change the originally planned price tag and delivery date for 
IT investments, which essentially masks overall cost, schedule, 
and performance problems.\3\ Under S. 920, agencies will have 
to measure progress from the original cost, schedule, and 
performance baselines to avoid situations where senior managers 
and Congress are limited in their ability to fully examine the 
life cycle cost of an investment.
---------------------------------------------------------------------------
    \3\Information Technology: Agencies Need to Establish Comprehensive 
Policies to Address Changes to Projects' Cost, Schedule, and 
Performance Goals, GAO-08-925 (Washington, D.C.: July 2008).
---------------------------------------------------------------------------
    The bill also requires each agency, in coordination with 
OMB, to identify and report to Congress what it considers to be 
its core IT investments. Core IT investments are defined as 
investments that are a high-dollar value relative to the rest 
of the IT investments undertaken by that agency, critical to 
the successful mission of the agency, and/or incorporate 
technologies that may be unproven or not fully developed. Once 
core IT investment projects are identified, agencies must 
report annually to Congress on the projects' primary business 
case and key functional requirements. The bill also requires 
the agency head to review the primary business case and core 
functionality requirements quarterly and notify Congress of any 
changes within 14 days of the end of each quarter. The agency 
head must also provide an interim report notifying Congress of 
how the changes will affect the cost and ultimate effectiveness 
of the investment.
    The bill creates two reporting thresholds that the 
Committee believes will help inform Congress about major IT 
investments that are experiencing serious problems. To do this, 
the bill uses the earned value management system (EVM)\4\ 
developed by the American National Standards Institute, and 
used throughout the industry to manage IT investments. An EVM 
system is an index that takes into account cost, schedule, and 
performance of an IT project. In S. 920, an investment is 
considered to have crossed reporting thresholds if it: (1) 
``significantly deviates'' from the original EVM baseline by 20 
percent, or (2) ``grossly deviates'' from the original EVM 
baseline by 40 percent. If an investment significantly 
deviates, then the agency head will have to report to Congress 
and GAO, providing information such as the date the deviation 
determination was made, the amount of the cost increases and 
the extent of schedule delays, as well as changes in the 
project's requirements and reasonable alternatives to the 
investment. If a project grossly deviates, the agency will have 
to provide a more detailed report to Congress and GAO, conduct 
specific project analyses, develop a new baseline for the 
project, and designate the project as a core IT investment.
---------------------------------------------------------------------------
    \4\Earned Value Management Systems (ANSI/EIA 748-B), Copyright  
(2007), Information Technology Association of America. All Rights 
Reserved. Reprinted by Permission.
---------------------------------------------------------------------------

                        III. Legislative History

    Senator Carper introduced S. 920 on April 28, 2009. The 
bill was read twice and referred to the Committee on Homeland 
Security and Governmental Affairs. Chairman Lieberman, Ranking 
Minority Member Collins and Senator Voinovich cosponsored S. 
920.
    The Subcommittee on Federal Financial Management, 
Government Information, Federal Services, and International 
Security held a hearing on April 28, 2009, titled, ``Government 
2.0: Transitioning America into the 21st Century and a Digital 
Future.'' The Committee received testimony from the Honorable 
Vivek Kundra, Administrator, Office of Electronic Government 
and Information Technology and Federal Chief Information 
Officer; David Powner, Director, Information Technology Issues, 
U.S. Government Accountability Office; The Honorable Karen 
Evans, former Administrator for Electronic Government and 
Information Technology (OMB); and Phillip Bond, President and 
Chief Executive Officer of TechAmerica. The witnesses focused 
their testimony on the need for agencies to be more transparent 
with their investments in order to better manage cost, 
schedule, and performance. In addition, the witnesses agreed 
that agencies need to better implement the principles of Earned 
Value Management in order to reduce the risk of cost overruns 
and schedule delays.
    The Committee considered S. 920 on May 20, 2009, adopted 
the Carper substitute amendment, and ordered the bill reported 
favorably, both by unanimous consent. Members present for 
consideration of both the substitute amendment and the bill 
were Chairman Lieberman; Senators, Akaka, Carper, Pryor, 
McCaskill, and Burris; Ranking Minority Member Collins; and 
Senators Coburn, and Voinovich.

                    IV. Section-by-Section Analysis


Section 1. Short title

    Section 1 designates the name of the Act as the 
``Information Technology Investment Oversight Enhancement and 
Waste Prevention Act of 2009.''

Section 2. Findings

    Section 2 states Congress' findings with respect to Federal 
IT investments, including that agencies have struggled with 
high risk and complex IT investments and that Congress has 
historically been caught off-guard by IT investments that 
seemed like they were on budget, but ended up costing taxpayers 
hundreds of millions of dollars more than expected. The 
findings also state Congress' belief that OMB can help better 
inform Congress and the American taxpayers of the true costs 
and status of IT investments through mechanisms that provide 
real time project management information and force agencies to 
improve the accuracy and reliability of project management 
information.

Section 3. Real-time transparency of IT investment projects

    Section 3 requires the Office of Management and Budget to 
establish and maintain a website that will provide accurate 
information on the status of all major IT investments. The 
website, also known as a ``dashboard,'' will show current and 
projected future cost, schedule, and performance information. 
OMB and federal agencies can use the website to cost-
effectively satisfy the reporting requirements established in 
the bill. Congress can also use the website to track progress 
of major IT investments and identify when those investments may 
be falling behind the cost, schedule, and performance 
expectations of the project. It is the intent of the Committee 
that, based on the successful implementation of the website, 
OMB should expand the website to include information on other 
major capital investments including, but not limited to, 
weapons acquisitions, satellites, construction projects, and 
environmental cleanup.

Section 4. IT Investments projects

            Subsection 4(a) Significant and Gross Deviations
    Section 4(a) amends Section 11317 of Title 40, United 
States Code. The section-by-section analysis (subsections a 
through f) below refers to the new Section 11317, as amended by 
this bill.
                Subsection (a) Definitions
    Paragraph (a)(1) defines the term ``agency head'' as the 
person within the agency primarily responsible for the 
information technology investment.
    Paragraph (a)(2) defines the ``ANSI EIA 748 B standard'' by 
cross referencing a standard jointly established by the 
American National Standards Institute and the Electronic 
Industries Alliance. That standard lays out several best 
practice guidelines that government project managers should 
follow if an investment is to be delivered within an acceptable 
cost and schedule. For example, the standard requires that 
project managers break investments into smaller, more 
manageable deliverables, and then, as the project progresses, 
measure whether the investment is meeting the expected 
deliverables. The standard is seen by project management 
experts as one of the most effective ways to manage risk and 
reduce cost and schedule overruns.
    Paragraph (a)(3) identifies the congressional committees to 
which the bill directs reports required under it.
    Paragraph (a)(4) states that the Chief Information Officer 
(CIO) at the Department level agency is primarily responsible 
for the IT project under review.
    Paragraph (a)(5) defines ``core IT investment project'' as 
an IT investment project that the CIO, with approval of the 
agency head, designates as such. The designation criteria, 
further detailed in paragraph (b), include: the project's 
criticality to the mission, high-dollar value, use of unproven 
technologies and/or risk of a significant negative impact to 
the agency if the project fails, relative to the other major IT 
investments in the agency. The CIO and agency head are the 
individuals most intimately familiar with the various IT 
projects and mission of the agency, so they are in the best 
position to determine which projects are most critical and 
risky to their agency. Thus, the CIO and agency head are tasked 
with the responsibility to identity these projects.
    Paragraph (a)(6) states that the term ``Director'' refers 
to the Director of the Office of Management and Budget.
    Paragraph (a)(7) defines the term ``Earned Value 
Management'' (EVM) as the cost, schedule, and performance data 
used to determine a project's status. The EVM for each agency's 
projects must be developed in accordance with the ANSI EIA-748 
B standard, defined above.
    Paragraph (a)(8) defines the term ``grossly deviated'' as a 
variance of 40 percent or more from the original cost and 
schedule expectations. This means that if any major IT 
investment project's EVM cost, schedule, or performance 
indicators deviate 40 percent or more from its original 
baseline, the project will be considered to have grossly 
deviated, thereby triggering the remedial actions set forth in 
section (e)(3).
    Paragraph (a)(9) defines the term ``independent government 
cost estimate'' to mean an examination conducted by a third 
party not involved in the project and who provides a neutral 
and nonbiased analysis of the IT investment. The independent 
government cost estimate is intended to ensure that the agency 
and the contractor take proper steps to plan, acquire, and 
implement the investment appropriately.
    Paragraph (a)(10) defines an ``IT investment project'' as 
an investment that requires special management attention, 
requires significant agency resources, is responsible for 
obligating over $500,000 annually, or has significant program 
or policy implications. This definition is consistent with 
OMB's definition of a major IT investment. However, it is the 
intent of the Committee that OMB shall develop a consistent and 
uniform government-wide definition of information technology 
that applies to investments that significantly incorporate 
information technology hardware and software such as satellites 
and weapons systems.
    Paragraph (a)(11) defines the term ``life cycle cost'' to 
mean the total cost of an IT investment, which encompasses 
planning, research and development, modernization, enhancement, 
operation, and maintenance.
    Paragraph (a)(12) defines the ``original baseline'' as the 
agreed upon cost, schedule, and performance parameters of an IT 
investment. The original baseline, also known as a performance 
measurement baseline or PMB should be developed at the 
beginning of the project, using EVM standards and approved by 
OMB. This original baseline shall be used through the course of 
the project, unless there is a gross deviation. Following a 
gross deviation, a new EVM baseline (also known as a 
rebaseline) must be established, as required for remedial 
action in section (e)(3). This new EVM baseline will, once 
established after a gross deviation, be considered an original 
baseline.
    Paragraph (a)(13) defines ``significantly deviated'' as an 
EVM variance that is at least 20 percent from the original 
baseline. This means that if any major IT investment project's 
EVM cost, schedule, or performance indicators deviate 20 
percent or more from its original baseline, the project will be 
considered to have significantly deviated, thereby triggering 
the remedial actions set forth in section (d)(2).
                Subsection (b). Core IT Investment Projects Designation
    Subsection (b) requires the CIO, with approval from the 
agency head, to designate those IT investment projects that are 
most critical to the agency's mission as ``core IT investment 
projects.'' The designation may be based on whether the IT 
investment represents a higher dollar value relative to the 
rest of the portfolio, is critical to the successful mission of 
the agency, incorporates unproven or undeveloped technology, or 
whether the project would have a significant negative impact on 
the successful completion of the agency mission if the project 
experienced significant cost, schedule, or performance 
deviations.
                Subsection (c). Cost, Schedule, and Performance Reports
    Subsection (c) designates the reporting requirements for 
agencies on all IT investments. The bill requires that the 
project manager for the investment must submit, within 14 
calendar days after each fiscal quarter, a descriptive report 
to the CIO. This report should include the current cost, 
schedule, and performance for all projects under the project 
manager's supervision; a description of the original cost, 
schedule, and performance benchmarks for the investment; any 
variance in the cost, schedule, or performance of the 
investment since the commencement of the project; and a 
declaration of any known, expected, or anticipated changes to 
the original or current baseline description. However, if a 
project manager determines that an IT investment has deviated 
according to definitions established in paragraph (a)(8) and 
paragraph (a)(13) before the end of the fiscal quarter, then 
the project manager must within 14 days of the determination 
submit a descriptive report including the same information to 
the CIO.
                Subsection (d). Determination of Significant Deviation
    Subsection (d) requires CIOs to report to Congress any 
major IT investments which have ``significantly deviated,'' as 
defined in paragraph (a)(13). A CIO makes this determination 
based on a report from the project manager as described in 
subsection (c). Upon the significant deviation determination, 
the CIO must notify the agency head and issue a report to 
Congress and GAO, which includes the date the CIO determined 
the project deviated; the amount of the cost increase and 
schedule delay for delivery; any change in requirements from 
the original contract; the reason for the differences between 
the project manager's, contractor's, and any independent 
analysis estimated cost for the investment; the reasons why the 
investment has deviated from cost, schedule or performance 
benchmarks; and a summary of the plan of action to correct the 
deviation. The agency head must submit this report to Congress 
and GAO within 21 calendar days after the determination of a 
significant deviation.
                Subsection (e). Determination of Gross Deviation
    Subsection (e) requires CIOs to submit a report described 
in subsection (c) to Congress upon the project manager's 
determination that the IT investment has grossly deviated, as 
defined in paragraph (a)(8). If the project has not been 
previously reported as grossly deviated then the agency head 
must submit a report to Congress that includes the date the CIO 
determined the investment had grossly deviated; whether the 
project was previously reported as significantly deviated under 
subsection (d) or grossly deviated under this subsection; 
incorporation of all previous reports to Congress on the 
investment by reference; updated information as required under 
subsection (d); and a comprehensive plan of action to remedy 
the gross deviation with milestones to control future cost, 
schedule, and performance deviations in the future. In 
addition, the agency head must submit to Congress a report that 
describes the primary business case and key functional 
requirements of the investment; any portions of the investment 
that may be feasibly procured under a fixed-price contract; a 
certification by the agency head that all technical 
requirements have been reviewed and are aligned with the 
primary business case; a description of any changes to the 
primary business case or functional requirements since the 
project's inception; and an independent cost estimate by an 
entity approved by OMB. The agency must also submit to Congress 
an analysis of the business goals that the project was 
originally designed to address; an analysis of what project 
deliverables remain to be completed to achieve the business 
goals defined; the three most cost-effective alternative 
approaches to achieve the business goals defined; a cost-
benefit analysis that compares the three most cost-effective 
alternative approaches with the current investment; and a cost-
benefit analysis of termination of the project without choosing 
any of the three alternative approaches; a new cost, schedule, 
and performance baseline that is consistent with the 
independent government cost estimate; and a designation by the 
agency that the project is considered a core IT investment 
under subsection (b).
    The agency head must report the information required under 
this subsection to Congress within 45 calendar days after the 
end of the fiscal quarter or interim determination and ensure 
the completion of the remedial actions as reported by the 
agency within 180 calendar days. If the agency head fails to 
complete the remedial action within 180 calendar days, then 
additional funds may not be spent on the investment.
    The bill allows an exception to the reporting and analyses 
requirements, which states that the CIO, in coordination with 
the agency head and OMB Director, may forgo completion of any 
element of a report or analysis if it is determined that those 
elements are not relevant to the understanding of the 
difficulties facing the project or further continuation of the 
project in a timely and cost-efficient manner. If the CIO 
chooses to forgo such reporting or analysis, the CIO must 
explain to Congress the basis for the CIO's decision to exclude 
any element of the report or analysis not provided. The purpose 
of allowing for such an exception is so that if an element of 
the reporting or analyses required under this section does not 
pertain to the IT investment project that has deviated and/or 
whose inclusion would not be beneficial in bringing the project 
back on track, the agency does not have to conduct work to 
provide irrelevant information to Congress. The requirement 
that the CIO must provide the basis for not including any 
omitted element is intended to ensure that the CIO can 
sufficiently explain why the information would not be 
pertinent.
                Subsection (f). Additional Requirements for Core IT 
                    Investment Project Reports
    Subsection (f) outlines additional planning requirements 
for those IT projects designated as core IT investments by the 
agency head. First, this section requires that an IT project 
identified as grossly deviated under subsection (e) must be 
designated as a core IT project, as defined under subsection 
(b) in the next budget submission. In addition, those IT 
investments that are listed as core IT investments must be 
tracked by the agency head on a quarterly basis. The bill would 
require the agency head to notify Congress within 14 days 
following the end of the fiscal quarter if there are any 
changes to the primary business case or key functional 
requirements and explain the changes and impact the changes 
will have on the cost and ultimate effectiveness of the 
project. Further, if the CIO determines the core IT investment 
would have deviated as defined under subsection (a) without a 
change in the primary business case or key functional 
requirements, then the agency head must fulfill and submit the 
requirements under subsection (d) or subsection (e) depending 
on the deviation.
            Subsection 4(b). Inclusion in the Budget Submitted to 
                    Congress
    Subsection 4(b) requires agencies to include the reports 
designated under subsection (f) of Section 11317 of Title 40, 
as amended by this bill, in their annual budget submissions to 
Congress.
            Subsection 4(c). Improvement of Information Technology 
                    Acquisition and Development
    Section 4(c) amends Section 11319 of Title 40, United 
States Code. The section-by-section analysis below refers to 
the new Section 11319, as amended by this bill.
                Subsection (a). Purpose
    Subsection (a) explains the purposes of the section. The 
purposes are that agencies will meaningfully examine current 
internal processes used to plan, manage, and deliver IT 
investments and consistently improve delivery of superior IT 
products and services on time and within budget.
                Subsection (b). OMB Guidance
    Subsection (b) requires OMB to develop and oversee the 
implementation of guidance established under this section 
within 180 calendar days of enactment of this bill. It is the 
intent of the Committee that OMB will, to the extent possible, 
ensure agency programs are consistent government wide, but will 
allow agencies enough flexibility to tailor programs to ensure 
success.
                Subsection (c). Establishment of Program
    Subsection (c) requires each CIO, upon approval of the 
agency head, to establish a program to improve IT processes 
within 120 calendar days of enactment.
                Subsection (d). Program Requirements
    Subsection (d) specifies the requirements of the program 
mandated by subsection (c). The Committee expects that if 
agencies have not already done so, they will establish and 
continually update a documented process for IT acquisition 
planning, requirements development and management, project 
management and oversight, earned-value management, and risk 
management. Further, this subsection requires agencies to 
develop metrics that can be monitored in near real-time through 
an easy to understand ``dashboard,'' consistent with the goals 
of Section 3 of this bill, appropriate for project management 
and that appropriately monitor the process and development 
status of IT investments, and achievement of stated program and 
investment outcomes. In addition, the subsection recognizes 
that there is a government-wide workforce shortage of key 
personnel required to manage highly complex IT investments. 
Therefore, the subsection requires agencies to develop a 
process to ensure that key program personnel have the 
appropriate level of experience, training, and education from 
an institute recognized by the Director of OMB. Lastly, the 
subsection requires that agencies develop an appropriate and 
effective process for CIOs to intervene and stop funding of an 
IT investment if the project is at risk of not achieving its 
major milestones. It is the expectation of the Committee that 
agencies will give CIOs clear and direct authority to intervene 
or stop funding at any point in the process of planning, 
managing, and delivering an IT investment.
                Subsection (e). Annual Report to OMB
    Subsection (e) requires agency heads to submit an annual 
report to OMB. The report must include, among other elements, a 
detailed summary of the program's accomplishments, the status 
of implementation, and the metrics used to determine the 
program's success.
                Subsection (f). Annual Report to Congress
    Subsection (f) establishes reporting requirements for OMB 
and Congress to ensure agencies are appropriately and 
efficiently implementing subsection (d).

Section 5. Major Automated Information System Programs

                Subsection 5(a). Definitions
    Subparagraph 5(a)(1) amends the section heading of Section 
2445a of title 10 of the U.S. Code to read ``Section 2445a. 
Definitions.''
    Subparagraph 5(a)(2) and Subparagraph 5(a)(3) make 
technical corrections to Title 10 of the U.S. Code that 
harmonize, to the extent possible, the definitions and 
requirements established by S. 920 for civilian agencies with 
those requirements under Title 10 of the U.S. Code for the 
Department of Defense. These subparagraphs also ensure that the 
CIO continues to be the Department lead for overseeing IT 
investments, avoiding duplicative efforts, preventing 
capability gaps, and ensuring that older and newer systems are 
compatible and interoperable.
    For example, Subparagraphs 5(a)(3) requires the Department 
of Defense to track IT investments with an appropriate EVM 
project management system that shows accurate and reliable 
cost, schedule, and performance information. If DOD finds that 
investments deviate by 15 to 25 percent from the established 
baseline based on the EVM system, then DOD will be required to 
include information on troubled projects similar to civilian 
agencies as required under section 4.
                Subsection 5(b). Cost, Schedule, and Performance 
                    Information
    Subsection 5(b) mirrors subsection 4 and enhances current 
Title 10 significant and critical change planning and reporting 
requirements for the Department of Defense to make them 
consistent with requirements S. 920 establishes for civilian 
agencies.

Section 6. IT SWAT

    Subsection 6(a) establishes the purpose of the IT SWAT 
(Significant Waste Avoidance Team) as providing a resource to 
assist agencies in avoiding deviations as defined in subsection 
4(a) of the bill.
    Subsection 6(b) directs the E-Government Administrator to 
establish the IT SWAT within 180 calendar days after the 
enactment of the act to carry out subsection 4(a). The 
individuals on the IT SWAT shall be highly trained and 
experienced program managers who are trained to the Senior/
Expert level according to the Federal Acquisition Certification 
for Program and Project Managers, or who have comparable 
education, certification, training, and experience to 
successfully manage high-risk IT investment projects. The OMB 
Director will determine the number of individuals who serve on 
each IT SWAT.
    Subsection 6(c) requires OMB to identify consultants 
outside of government who have expert knowledge in IT program 
and risk management. If OMB decides that a team of IT experts 
is needed, OMB can hire on a limited-time basis consultants 
from the private sector. However, the number of consultants 
that are hired from the private sector cannot equal more than 
20 percent of any IT SWAT. The remaining 80 percent of the IT 
SWAT members must be federal government employees. Further, 
consultants that have an established relationship with an 
organization that is under review may not participate in the 
assessment. This subsection gives the E-Government 
Administrator the ability to enter into competitively bid 
contracts with one or more qualified consultants.
    Subsection 6(d) requires the E-Government Administrator to 
determine whether an IT investment may deviate as defined in 
Section 4 of the bill. If a project is reasonably suspected to 
deviate in the future or lacks information that will allow the 
E-Government Administrator to accurately assess the investment, 
then the section directs OMB to recommend the assignment of one 
or more members from the IT SWAT to assess the project. The 
costs for the assessment would be paid for by the IT investment 
project being assessed. The E-Government Administrator shall 
monitor the progress being made by the IT SWAT.
    Subsection 6(e) requires the E-Government Administrator to 
recommend that the agency head take steps to reduce and avoid 
any deviations in cost, schedule, and performance if potential 
problems are found during the assessment under subsection 6(d). 
The E-Government Administrator can recommend that the agency 
provide training or mentoring to improve the qualifications of 
the program manager; replace the program manager or other 
staff; supplement the program manager with highly qualified 
federal government employees or independent contractors; 
terminate the IT investment; or hire an independent contractor 
to report directly to senior management and the E-Government 
Administrator.
    Subsection 6(f) allows the OMB E-Government Administrator 
to reprogram amounts within an agency to pay for an assessment 
under subsection 6(d) and to notify the Congressional 
committees on appropriations of any such reprogramming.
    Subsection 6(g) requires the Director of OMB to include in 
the annual E-Government report a detailed summary of the 
composition and activities of the IT SWAT, including the number 
and qualifications of individuals on the IT SWAT; a description 
of the IT investment projects that the IT SWAT assessed and 
worked on during the previous fiscal year; the major issues 
that necessitated the involvement of the IT SWAT and whether 
the issues were resolved; whether or not issues were resolved 
and any plans the agency head has to resolve these issues; a 
breakdown of the sources and amounts OMB and federal agencies 
spent to support the activities of the IT SWAT; and a 
determination of whether the IT SWAT was effective in reducing 
the number of IT investment projects that deviate as defined in 
Section 4.

Section 7. Awards for Personnel for Excellence in the Acquisition of 
        Information System and Information Technology

    Subsection 7(a) requires the Director of the Office of 
Personnel Management to develop policy and guidance for 
agencies to recognize excellent performance by federal 
government employees or teams of federal government employees 
in acquisition of IT systems.
    Subsection 7(b) requires that any award program developed 
under subsection 7(a) should use, to the extent practical, 
objective outcome performance measures and include procedures 
for individuals to be nominated and evaluated.
    Subsection 7(c) allows the Director of the Office of 
Personnel Management and Director of Office of Management and 
Budget to develop guidance policy to provide rewards for 
federal government employees who receive recognition under 
subsection 7(b).

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirement of paragraph 11(b)(1) of rule 
XXVI of the Standing Rules of the Senate the Committee has 
considered the regulatory impact of this bill. CBO states that 
there are no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and no costs on 
State, local, or tribal governments. The legislation contains 
no other regulatory impact.

             VI. Congressional Budget Office Cost Estimate

                                                     June 26, 2009.
Hon. Joseph I. Lieberman, Chairman,
Committee on Homeland Security and Governmental Affairs, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 920, the Information 
Technology (IT) Investment Oversight Enhancement and Waste 
Prevention Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 920--Information Technology (IT) Investment Oversight Enhancement 
        and Waste Prevention Act of 2009

    S. 920 would amend federal law regarding the oversight of 
project plans for information technology (IT) systems. The 
legislation would require chief information officers to 
identify critical IT projects and would subject each IT project 
to additional reporting, planning, and monitoring requirements, 
including corrective actions for projects that fail to meet 
applicable standards. In addition, the legislation would 
establish a group of information technology experts, 
administered by the Office of Management and Budget (OMB), to 
respond to problems with IT projects. Finally, S. 920 would 
authorize agencies to provide awards (including cash) to 
federal employees for excellence in IT acquisition, subject to 
the availability of appropriated funds.
    CBO estimates that implementing S. 920 would cost about $30 
million per year, or $150 million over the 2010-2014 period, 
primarily for the additional reporting requirements, subject to 
the availability of appropriated funds. The bill would have no 
effect on direct spending or revenues.
    Most of the provisions of S. 920 would expand the current 
practices of the federal government. Under the Clinger-Cohen 
Act of 1996, agencies are required to analyze, track, and 
evaluate the risks and results of major capital investments in 
IT systems. To accomplish this, OMB uses a Management Watch 
List to monitor and plan agencies' IT investments. OMB also 
evaluates each agency's capability to manage its investments.
    Based on information from OMB and various agencies, CBO 
expects that complying with the reporting provisions of S. 920 
would increase the administrative expenses of most federal 
agencies, but because of the large number of agencies and 
computer systems involved, we cannot precisely estimate the 
likely total costs. According to the Government Accountability 
Office (GAO), about $71 billion will be spent on IT projects by 
the federal government in 2009. In addition, GAO has reported 
that OMB and federal agencies have identified more than 400 IT 
projects--costing $25.2 billion in 2008--as being poorly 
planned, poorly performing, or both. CBO expects that the 
legislation would require additional quarterly status reports 
and detailed corrective action plans for a significant number 
of those troubled IT projects. We estimate that implementing 
the bill would increase the cost of such projects by a total of 
$25 million a year over the 2010-2014 period.
    Reporting costs over the 2010-2014 period would generally 
come from agencies' salary and expense budgets. In addition, 
there could be additional costs to implement and deploy the IT 
response group and to provide for awards to IT employees. Those 
costs also would be subject to the availability of appropriated 
funds, and we estimate that they would total around $5 million 
a year, depending on the number of employees deployed or 
awarded.
    S. 920 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was approved by Peter H. Fontaine, 
Assistant Director for Budget Analysis.

               VII. Changes in Existing Laws, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the following changes in existing 
law made by the bill, as reported, are shown as follows: 
(existing law proposed to be omitted is enclosed in [black 
brackets], new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

UNITED STATES CODE

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TITLE 10--ARMED

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Subtitle A--General Military Law

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PART IV--SERVICE SUPPLY, AND PROCUREMENT

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CHAPTER 144A--MAJOR AUTOMATED INFORMATION SYSTEM PROGRAMS

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Sec. 2445a. Definitions

    (a) Major Automated Information System Program.--In this 
chapter [10 USCS Sec. Sec. 2445a et seq.], the term ``major 
automated information system program'' means a Department of 
Defense program for the acquisition of an automated information 
system (either as a product or a service) if--
          (1) the program is designated by the Secretary of 
        Defense, or a designee of the Secretary, as a major 
        automated information system program; [or]
          (2) the dollar value of the program is estimated to 
        exceed--
                  (A) $32,000,000 in fiscal year 2000 constant 
                dollars for all program costs in a single 
                fiscal year;
                  (B) $126,000,000 in fiscal year 2000 constant 
                dollars for all program acquisition costs for 
                the entire program; or
                  (C) $378,000,000 in fiscal year 2000 constant 
                dollars for the total life-cycle costs of the 
                program (including operation and maintenance 
                costs)[.]; or
          (3) the Chief Information Officer, with the approval 
        of the Secretary of Defense, determines that the 
        program--
                  (A) delivers a capability critical to the 
                successful completion of the mission of the 
                Department of Defense, or a portion of such 
                mission;
                  (B) incorporates unproven or previously 
                undeveloped technology to meet primary program 
                technical requirements; or
                  (C) would have a significant negative impact 
                on the successful completion of the mission of 
                the Department of Defense if the program 
                experienced significant cost, schedule, or 
                performance deviations.
    (b) Adjustment.--The Secretary of Defense may adjust the 
amounts (and base fiscal year) set forth in subsection (a) on 
the basis of Department of Defense escalation rates. An 
adjustment under this subsection shall be effective after the 
Secretary transmits a written notification of the adjustment to 
the congressional defense committees.
    (c) Increments.--In the event any increment of a major 
automated information system program separately meets the 
requirements for treatment as a major automated information 
system program, the provisions of this chapter [10 USCS 
Sec. Sec. 2445a et seq.] shall apply to such increment as well 
as to the overall major automated information system program of 
which such increment is a part.
    (d) Other Major Information Technology Investment 
Program.--In this chapter, the term ``other major information 
technology investment program'' means the following:
          (1) An investment that is designated by the Secretary 
        of Defense, or a designee of the Secretary, as a ``pre-
        Major Automated Information System'' or ``pre-MAIS'' 
        program.
          (2) Any other investment in automated information 
        system products or services that is expected to exceed 
        the thresholds established in subsection (a), as 
        adjusted under subsection (b), but is not considered to 
        be a major automated information system program because 
        a formal acquisition decision has not yet been made 
        with respect to such investment.
    (e) Definitions.--In this chapter:
          (1) Chief information officer.--The term ``Chief 
        Information Officer'' means the Chief Information 
        Officer of the Department of Defense, designated under 
        section 3506(a)(2) of title 44.
          (2) Earned value management.--The term ``Earned Value 
        Management'' means the cost, performance, and schedule 
        data used to determine the status of a major automated 
        information system program that has been developed in 
        accordance with the ANSI EIA-748-B Standard.
          (3) Independent government cost assessment.--The term 
        ``independent government cost assessment'' means a 
        pragmatic and neutral analysis, assessment, and 
        quantification of all costs and risks associated with a 
        major automated information system program developed 
        and submitted by the Director of Independent Cost 
        Assessment.

Sec. 2445b. Cost, schedule, and performance information

    (a) Submittal of Cost, Schedule, and Performance 
Information.--The Secretary of Defense shall submit to 
[Congress] the Office of Management and Budget, the Government 
Accountability Office, the Committee on Homeland Security and 
Governmental Affairs of the Senate, and the Committee on 
Oversight and Government Reform of the House of Representatives 
each calendar year, not later than 45 days after the President 
submits to Congress the budget for a fiscal year under section 
1105 of title 31 [31 USCS Sec. 1105], budget justification 
documents regarding cost, schedule, and performance for each 
major automated information system program and each other major 
information technology investment program for which funds are 
requested by the President in the budget.
    (b) Elements Regarding Major Automated Information System 
Programs.--The documents submitted under subsection (a) with 
respect to a major automated information system program shall 
include detailed and summarized information with respect to the 
automated information system to be acquired under the program, 
and shall specifically include each of the following:
          (1) The development schedule, including major 
        milestones.
          (2) The implementation schedule, including estimates 
        of milestone dates, initial operational capability, and 
        full operational capability.
          (3) Estimates of development costs and full life-
        cycle costs.
          (4) A summary of key performance parameters.
          (5) A description of the primary business case and 
        key functional requirements for the program, including 
        an analysis of alternatives.
          (6) An identification and description of any portions 
        of the program that have technical requirements of 
        sufficient clarity that such portions may be feasibly 
        procured under firm, fixed-price contracts.
          (7) An independent government cost assessment for the 
        project provided by the Director of Independent Cost 
        Assessment.
          (8) Certification by the Chief Information Officer 
        that all technical and business requirements have been 
        reviewed and validated to ensure alignment with the 
        reported business case.
          (9) Any changes to the primary business case or key 
        functional requirements which have occurred since the 
        inception of the program.
    (c) Baseline.--
          (1) For purposes of this chapter [10 USCS 
        Sec. Sec. 2445a et seq.], the initial submittal [to 
        Congress] of the documents required by subsection (a) 
        with respect to a major automated information system 
        program shall constitute the original estimate or 
        information originally submitted on such program for 
        purposes of the reports and determinations on program 
        changes in section 2445c of this title.
          (2) An adjustment or revision of the original 
        estimate or information originally submitted on a 
        program may be treated as the original estimate or 
        information originally submitted on the program if the 
        adjustment or revision is the result of a critical 
        change in the program covered by section 2445c(d) of 
        this title [10 USCS Sec. 2445c(d)].
          (3) In the event of an adjustment or revision to the 
        original estimate or information originally submitted 
        on a program under paragraph (2), the Secretary of 
        Defense shall include in the next budget justification 
        documents submitted under subsection (a) after such 
        adjustment or revision a notification to the Office of 
        Management and Budget, the Government Accountability 
        Office, the Committee on Armed Services of the Senate, 
        the Committee on Armed Services of the House of 
        Representatives, the Committee on Homeland Security and 
        Governmental Affairs of the Senate, and the Committee 
        on Oversight and Government Reform of the House of 
        Representatives [the congressional defense committees] 
        of such adjustment or revision, together with the 
        reasons for such adjustment or revision.
    (d) Elements Regarding Other Major Information Technology 
Investment Programs.--With respect to each other major 
information technology investment program, the information 
required by subsection (a) may be provided in the format that 
is most appropriate to the current status of the program.

Sec. 2445c. Reports: quarterly reports; reports on program changes

    (a) Quarterly Reports by Program Managers.--The program 
manager of a major automated information system program or 
other major information technology investment program shall, on 
a quarterly basis, submit to the senior Department of Defense 
official responsible for the program a written report 
[identifying] that--
          (1) identifies any variance in the projected 
        development schedule, implementation schedule, life-
        cycle costs, or key performance parameters for the 
        major automated information system or information 
        technology investment to be acquired under the program 
        from such information as originally submitted [to 
        Congress] under section 2445b of this title [10 USCS 
        Sec. 2445b];[.]
          (2) describes the cost, schedule, and performance of 
        all programs under the program manager's supervision;
          (3) provides the original and current program cost, 
        schedule, and performance benchmarks for each program 
        under the program manager's supervision;
          (4) for each program under the program manager's 
        supervision, any known, expected, or anticipated 
        changes to program schedule milestones or program 
        performance benchmarks included as part of the original 
        or current baseline description.
    (b) Senior Officials Responsible for Programs.--For 
purposes of this section, the senior Department of Defense 
official responsible for a major automated information system 
program or other major information technology investment 
program is--
          (1) in the case of an automated information system or 
        information technology investment to be acquired for a 
        military department, the senior acquisition executive 
        for the military department; or
          (2) in the case of any other automated information 
        system or information technology investment to be 
        acquired for the Department of Defense or any component 
        of the Department of Defense, the Under Secretary of 
        Defense for Acquisition, Technology, and Logistics.
    (c) Report on Significant Changes in Program.--
          (1) In general.--If, based on a quarterly report 
        submitted by the program manager of a major automated 
        information system program pursuant to subsection (a), 
        the senior Department of Defense official responsible 
        for the program makes a determination described in 
        paragraph (2), the official shall, not later than 45 
        days after receiving such report, notify [the 
        congressional defense committees] the Office of 
        Management and Budget, the Government Accountability 
        Office, the Committee on Armed Services of the Senate, 
        the Committee on Armed Services of the House of 
        Representatives, the Committee on Homeland Security and 
        Governmental Affairs of the Senate, and the Committee 
        on Oversight and Government Reform of the House of 
        Representatives in writing of such determination.
          (2) Covered determination.--A determination described 
        in this paragraph with respect to a major automated 
        information system program is a determination that--
                  (A) there has been a schedule change that 
                will cause a delay of more than six months but 
                less than a year in any program schedule 
                milestone or significant event from the 
                schedule originally submitted [to Congress] 
                under paragraph (1) or (2) of section 2445b(b) 
                of this title [10 USCS Sec. 2445b(b)];
                  (B) the estimated program development cost or 
                full life-cycle cost for the program has 
                increased by at least 15 percent, but less than 
                25 percent, over the original estimate 
                submitted [to Congress] under paragraph (3) of 
                section 2445b(b) of this title [10 USCS 
                Sec. 2445b(b)]; [or]
                  (C) there has been a significant, adverse 
                change in the expected performance of the major 
                automated information system to be acquired 
                under the program from the parameters 
                originally submitted [to Congress] under 
                paragraph (4) of section 2445b(b) of this title 
                [10 USCS Sec. 2445b(b)]; or [.]
                  (D) the Earned Value Management of the 
                program has changed by at least 15 percent, but 
                less than 25 percent.
          (3) Notification requirements.--The notification 
        required under paragraph (1) shall include--
                  (A) the date on which the determination 
                described in paragraph (2) was made;
                  (B) the amount of the cost increases and the 
                extent of the schedule delays with respect to 
                such program;
                  (C) any requirements that--
                          (i) were added subsequent to the 
                        original contract; or
                          (ii) were part of the original 
                        contract, but were changed by deferment 
                        or deletion from the original schedule, 
                        or were otherwise no longer included in 
                        the contract;
                  (D) an explanation of the differences 
                between--
                          (i) the estimate at completion 
                        between the program manager, any 
                        contract, and any independent analysis 
                        and
                          (ii) the original budget at 
                        completion;
                  (E) a statement of the reasons underlying the 
                program's significant changes; and
                  (F) a summary of the plan of action to remedy 
                the significant changes.
          (4) Alternative significant changes determination.--
        If the program manager determines, subsequent to a 
        change in the primary business case or key functional 
        requirements, that without such change the program 
        would undergo significant changes--
                  (A) the program manager shall notify the 
                Secretary of Defense of the significant 
                changes; and
                  (B) the Secretary of Defense shall notify the 
                congressional defense committees in accordance 
                with the requirements of this subsection.
    (d) Report on Critical Changes in Program.--
          (1) In general.--If, based on a quarterly report 
        submitted by the program manager of a major automated 
        information system program or other major information 
        technology investment program pursuant to subsection 
        (a), the senior Department of Defense official 
        responsible for the program makes a determination 
        described in paragraph (2), the official shall, not 
        later than 60 days after receiving such report--
                  (A) carry out an evaluation of the program 
                under subsection (e); and
                  (B) submit, through the Secretary of Defense, 
                to [the congressional defense committees] the 
                Office of Management and Budget, the Government 
                Accountability Office, the Committee on Armed 
                Services of the Senate, the Committee on Armed 
                Services of the House of Representatives, the 
                Committee on Homeland Security and Governmental 
                Affairs of the Senate, and the Committee on 
                Oversight and Government Reform of the House of 
                Representatives a report meeting the 
                requirements of subsection (f).
          (2) Covered determination.--A determination described 
        in this paragraph with respect to a major automated 
        information system program or other major information 
        technology investment program is a determination that--
                  (A) the automated information system or 
                information technology investment failed to 
                achieve initial operational capability within 
                five years after funds were first obligated for 
                the program;
                  (B) there has been a schedule change that 
                will cause a delay of one year or more in any 
                program schedule milestone or significant event 
                from the schedule originally submitted [to 
                Congress] under paragraph (1) or (2) of section 
                2445b(b) of this title [10 USCS Sec. 2445b(b)] 
                or section 2445b(d) of this title [10 USCS 
                Sec. 2445b(d)], as applicable;
                  (C) the estimated program development cost or 
                full life-cycle cost for the program has 
                increased by 25 percent or more over the 
                original estimate submitted [to Congress] under 
                paragraph (3) of section 2445b(b) of this title 
                [10 USCS Sec. 2445b(b)] or section 2445b(d) of 
                this title [10 USCS Sec. 2445b(d)], as 
                applicable [; or]
                  (D) there has been a change in the expected 
                performance of the major automated information 
                system or major information technology 
                investment to be acquired under the program 
                that will undermine the ability of the system 
                to perform the functions anticipated at the 
                time information on the program was originally 
                submitted [to Congress] under section 2445b(b) 
                of this title [10 USCS Sec. 2445b(b)] or 
                section 2445b(d) of this title [10 USCS 
                Sec. 2445b(d)], as applicable; or [.]
                (E) the Earned Value Management of the program 
                has changed by at least 25 percent.
          (3) Alternative Critical Changes Determination.--If 
        the program manager determines, subsequent to a change 
        in the primary business case or key functional 
        requirements, that without such change the program 
        would undergo critical changes--
                  (A) the program manager shall notify the 
                Secretary of Defense of the critical changes; 
                and
                  (B) the Secretary of Defense shall fulfill 
                the requirements described in subparagraphs (A) 
                and (B) of paragraph (1).
    (e) Program Evaluation.--The evaluation of a major 
automated information system program or other major information 
technology investment program conducted under this subsection 
for purposes of subsection (d)(1)(A) shall include an 
assessment of--
          (1) the projected schedule and an independent 
        government cost assessment provided by the Director of 
        Independent Cost Assessment [cost and schedule] for 
        completing the program if current requirements are not 
        modified;
          (2) the projected schedule and an independent 
        government cost assessment provided by the Director of 
        Independent Cost Assessment [cost and schedule ]for 
        completing the program based on reasonable modification 
        of such requirements; and
          (3) the rough order of magnitude of the cost and 
        schedule for any reasonable alternative system or 
        capability.
    (f) Report on Critical Program Changes.--A report on a 
major automated information system program or other major 
information technology investment program conducted under this 
subsection for purposes of subsection (d)(1)(B) shall include--
[include a written certification]
          (1) a written certification (with supporting 
        explanation) stating that--
                  (A) [(1)] the automated information system or 
                information technology investment to be 
                acquired under the program is essential to the 
                national security or to the efficient 
                management of the Department of Defense;
                  (B) [(2)] there is no alternative to the 
                system or information technology investment 
                which will provide equal or greater capability 
                at less cost;
                  (C) [(3)] the new estimates of the costs, 
                schedule, and performance parameters with 
                respect to the program and system or 
                information technology investment, as 
                applicable, have been determined, with the 
                concurrence of the Director of Cost Assessment 
                and Program Evaluation, to be reasonable; and
                  (D) [(4)] the management structure for the 
                program is adequate to manage and control 
                program costs; and [.]
                  (E) all technical and business requirements 
                have been reviewed and validated to ensure 
                alignment with the reported business case; and
          (2) a description of--
                  (A) the primary business case and key 
                functional requirements for the program, 
                including an analysis of alternatives;
                  (B) any portions of the program that have 
                technical requirements of sufficient clarity 
                that such portions may be feasibly procured 
                under firm, fixed-price type contract; and
                  (C) any changes to the primary business case 
                or key functional requirements which have 
                occurred since the inception of the program.
    (g) Prohibition on Obligation of Funds.--
          (1) If the determination of a critical change to a 
        program is made by the senior Department official 
        responsible for the program under subsection (d)(2) and 
        a report is not submitted to Congress within the 60-day 
        period provided by subsection (d)(1), appropriated 
        funds may not be obligated for any major contract under 
        the program.
          (2) The prohibition on the obligation of funds for a 
        program under paragraph (1) shall cease to apply on the 
        date on which Congress has received a report in 
        compliance with the requirements of subsection (d)(2).

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TITLE 31--MONEY AND FINANCE

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Subtitle II--The Budget Process

           *       *       *       *       *       *       *


CHAPTER 11--THE BUDGET AND FISCAL, BUDGET, AND PROGRAM INFORMATION

           *       *       *       *       *       *       *



Sec. 1105. Budget contents and submission to Congress

    (a) On or after the first Monday in January but not later 
than the first Monday in February of each year, the President 
shall submit a budget of the United States Government for the 
following fiscal year. Each budget shall include a budget 
message and summary and supporting information. The President 
shall [include in each budget the following] include in each 
budget--
          (1) information on activities and functions of the 
        Government[.];
          (2) when practicable, information on costs and 
        achievements of Government programs[.];
          (3) other desirable classifications of 
        information[.];
          (4) a reconciliation of the summary information on 
        expenditures with proposed appropriations[.];
          (5) except as provided in subsection (b) of this 
        section, estimated expenditures and proposed 
        appropriations the President decides are necessary to 
        support the Government in the fiscal year for which the 
        budget is submitted and the 4 fiscal years after that 
        year[.];
          (6) estimated receipts of the Government in the 
        fiscal year for which the budget is submitted and the 4 
        fiscal years after that year under--
                  (A) laws in effect when the budget is 
                submitted; and
                  (B) proposals in the budget to increase 
                revenues[.];
          (7) appropriations, expenditures, and receipts of the 
        Government in the prior fiscal year[.];
          (8) estimated expenditures and receipts, and 
        appropriations and proposed appropriations, of the 
        Government for the current fiscal year[.];
          (9) balanced statements of the--
                  (A) condition of the Treasury at the end of 
                the prior fiscal year;
                  (B) estimated condition of the Treasury at 
                the end of the current fiscal year; and
                  (C) estimated condition of the Treasury at 
                the end of the fiscal year for which the budget 
                is submitted if financial proposals in the 
                budget are adopted[.];
          (10) essential information about the debt of the 
        Government[.];
          (11) other financial information the President 
        decides is desirable to explain in practicable detail 
        the financial condition of the Government[.];
          (12) for each proposal in the budget for legislation 
        that would establish or expand a Government activity or 
        function, a table showing--
                  (A) the amount proposed in the budget for 
                appropriation and for expenditure because of 
                the proposal in the fiscal year for which the 
                budget is submitted; and
                  (B) the estimated appropriation required 
                because of the proposal for each of the 4 
                fiscal years after that year that the proposal 
                will be in effect[.];
          (13) an allowance for additional estimated 
        expenditures and proposed appropriations for the fiscal 
        year for which the budget is submitted[.];
          (14) an allowance for unanticipated uncontrollable 
        expenditures for that year[.];
          (15) a separate statement on each of the items 
        referred to in section 301(a)(1)(5) of the 
        Congressional Budget Act of 1974 (2 U.S.C. 
        632(a)(1)(5))[.];
          (16) the level of tax expenditures under existing law 
        in the tax expenditures budget (as defined in section 
        3(a)(3) of the Congressional Budget Act of 1974 (2 
        U.S.C. 622(a)(3)) for the fiscal year for which the 
        budget is submitted, considering projected economic 
        factors and changes in the existing levels based on 
        proposals in the budget[.];
          (17) information on estimates of appropriations for 
        the fiscal year following the fiscal year for which the 
        budget is submitted for grants, contracts, and other 
        payments under each program for which there is an 
        authorization of appropriations for that following 
        fiscal year when the appropriations are authorized to 
        be included in an appropriation law for the fiscal year 
        before the fiscal year in which the appropriation is to 
        be available for obligation[.];
          (18) a comparison of the total amount of budget 
        outlays for the prior fiscal year, estimated in the 
        budget submitted for that year, for each major program 
        having relatively uncontrollable outlays with the total 
        amount of outlays for that program in that year[.];
          (19) a comparison of the total amount of receipts for 
        the prior fiscal year, estimated in the budget 
        submitted for that year, with receipts received in that 
        year, and for each major source of receipts, a 
        comparison of the amount of receipts estimated in that 
        budget with the amount of receipts from that source in 
        that year[.];
          (20) an analysis and explanation of the differences 
        between each amount compared under clauses (18) and 
        (19) of this subsection[.];
          (21) a horizontal budget showing--
                  (A) the programs for meteorology and of the 
                National Climate Program established under 
                section 5 of the National Climate Program Act 
                (15 U.S.C. 2904);
                  (B) specific aspects of the program of, and 
                appropriations for, each agency; and
                  (C) estimated goals and financial 
                requirements[.];
          (22) a statement of budget authority, proposed budget 
        authority, budget outlays, and proposed budget outlays, 
        and descriptive information in terms of--
                  (A) a detailed structure of national needs 
                that refers to the missions and programs of 
                agencies (as defined in section 101 of this 
                title); and
                  (B) the missions and basic programs[.];
          (23) separate appropriation accounts for 
        appropriations under the Occupational Safety and Health 
        Act of 1970 (29 U.S.C. 651 et seq.) and the Federal 
        Mine Safety and Health Act of 1977 (30 U.S.C. 801 et 
        seq.)[.];
          (24) recommendations on the return of Government 
        capital to the Treasury by a mixed-ownership 
        corporation (as defined in section 9101(2) of this 
        title) that the President decides are desirable[.];
          (25) a separate appropriation account for 
        appropriations for each Office of Inspector General of 
        an establishment defined under section 11(2) of the 
        Inspector General Act of 1978[.];
          (26) a separate statement of the amount of 
        appropriations requested for the Office of National 
        Drug Control Policy and each program of the National 
        Drug Control Program[.];
          (27) a separate statement of the amount of 
        appropriations requested for the Office of Federal 
        Financial Management[.];
          (28) beginning with fiscal year 1999, a Federal 
        Government performance plan for the overall budget as 
        provided for under section 1115[.];
          (29) information about the Violent Crime Reduction 
        Trust Fund, including a separate statement of amounts 
        in that Trust Fund[.];
          (30) an analysis displaying, by agency, proposed 
        reductions in full-time equivalent positions compared 
        to the current year's level in order to comply with 
        section 5 of the Federal Workforce Restructuring Act of 
        1994[.];
          (31) a separate statement of the amount of 
        appropriations requested for the Chief Financial 
        Officer in the Executive Office of the President[.];
          (32) a statement of the levels of budget authority 
        and outlays for each program assumed to be extended in 
        the baseline as provided in section 257(b)(2)(A) and 
        for excise taxes assumed to be extended under section 
        257(b)(2)(C) of the Balanced Budget and Emergency 
        Deficit Control Act of 1985[.];
          (33) a separate appropriation account for 
        appropriations for the Inspectors General Criminal 
        Investigator Academy and the Inspectors General 
        Forensic Laboratory of the Department of the 
        Treasury[.];
          (34) with respect to the amount of appropriations 
        requested for use by the Export-Import Bank of the 
        United States, a separate statement of the amount 
        requested for its program budget, the amount requested 
        for its administrative expenses, and of the amount 
        requested for its administrative expenses, the amount 
        requested for technology expenses[.];
    [(33)] (35) (a) * * *
    (h)(1) If there is a medicare funding warning under section 
801(a)(2) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 made in a year, the President shall 
submit to Congress, within the 15-day period beginning on the 
date of the budget submission to Congress under subsection (a) 
for the succeeding year, proposed legislation to respond to 
such warning.
    (2) Paragraph (1) does not apply if, during the year in 
which the warning is made, legislation is enacted which 
eliminates excess general revenue medicare funding (as defined 
in section 801(c) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003) for the 7-fiscal-
year reporting period, as certified by the Board of Trustees of 
each medicare trust fund (as defined in section 801(c)(5) of 
such Act) not later than 30 days after the date of the 
enactment of such legislation[.]; and
          (36) the reports prepared under section 11317(f) of 
        title 40, United States Code, relating to the core IT 
        investment projects of the agency.

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TITLE 40--PUBLIC BUILDINGS, PROPERTY, AND WORKS

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Subtitle III--Information Technology Management

           *       *       *       *       *       *       *


CHAPTER 113--RESPONSIBILITY FOR ACQUISITIONS OF INFORMATION TECHNOLOGY

           *       *       *       *       *       *       *



Subchapter II--Executive Agencies

           *       *       *       *       *       *       *



Sec. 11317. [Significant deviations] Significant and gross deviations

    ``(a) Definitions.--In this subchapter:
          ``(1) Agency head.--The term `Agency Head' means the 
        head of the Federal agency that is primarily 
        responsible for the IT investment project under review.
          ``(2) ANSI eia 748 b Standard.--The term `ANSI--EIA-
        748-B Standard' means the measurement tool jointly 
        developed by the American National Standards Institute 
        and the Electronic Industries Alliance to analyze 
        Earned Value Management systems.
          ``(3) Appropriate congressional committees.--The term 
        `appropriate congressional committees' means--
                  ``(A) the Committee on Homeland Security and 
                Governmental Affairs of the Senate;
                  ``(B) the Committee on Oversight and 
                Government Reform of the House of 
                Representatives;
                  ``(C) the Committee on Appropriations of the 
                Senate;
                  ``(D) the Committee on Appropriations of the 
                House of Representatives; and
                  ``(E) any other relevant congressional 
                committee with jurisdiction over an agency 
                required to take action under this section.
          ``(4) Chief information officer.--The term `Chief 
        Information Officer' means the Chief Information 
        Officer designated under section 3506(a)(2) of title 44 
        of the Federal agency that is primarily responsible for 
        the IT investment project under review.
          ``(5) Core it investment project.--The terms `core IT 
        investment project' and `core project' mean a mission 
        critical IT investment project designated as such by 
        the Chief Information Officer, with approval by the 
        Agency Head under subsection (b).
          ``(6) Director.--The term `Director' means the 
        Director of the Office of Management and Budget.
          ``(7) Earned value management.--The term `Earned 
        Value Management' means the cost, performance, and 
        schedule data used to determine project status and 
        developed in accordance with the ANSI EIA-748-B 
        standard.
          ``(8) Grossly deviated.--The term `grossly deviated' 
        means cost, schedule, or performance variance that is 
        at least 40 percent from the Original Baseline.
          ``(9) Independent government cost estimate.--The term 
        `independent government cost estimate' means a 
        pragmatic and neutral analysis, assessment, and 
        quantification of all costs and risks associated with 
        the acquisition of an IT investment project, which--
                  ``(A) is based on programmatic and technical 
                specifications provided by the office within 
                the agency with primary responsibility for the 
                development, procurement, and delivery of the 
                project;
                  ``(B) is formulated and provided by an entity 
                other than the office within the agency with 
                primary responsibility for the development, 
                procurement, and delivery of the project;
                  ``(C) contains sufficient detail to inform 
                the selection of an Earned Value Management 
                baseline benchmark measure under the ANSI EIA 
                748-B standard; and
                  ``(D) accounts for the full life cycle cost 
                plus associated operations and maintenance 
                expenses over the usable life of the project's 
                deliverables.
          ``(10) IT investment project.--The terms `major IT 
        investment project' and `project' mean an information 
        technology system or information technology 
        acquisition, excluding systems or acquisitions of the 
        Department of Defense, that--
                  (A) requires special management attention 
                because of its importance to the mission or 
                function of the agency, a component of the 
                agency, or another organization;
                  (B) is for financial management and obligates 
                more than $500,000 annually;
                  (C) has significant program or policy 
                implications;
                  (D) has high executive visibility;
                  (E) has high development, operating, or 
                maintenance costs;
                  (F) is funded through other than direct 
                appropriations; or
                  (G) is defined as major by the agency's 
                capital planning and investment control process
          ``(11) Life cycle cost.--The term `life cycle cost' 
        means the total cost of an IT investment project for 
        planning, research and development, modernization, 
        enhancement, operation, and maintenance.
          ``(12) Original baseline.--
                  ``(A) In general.--Except as provided under 
                subparagraph (B), the term `Original Baseline' 
                means the ANSI EIA-748-B Standard-compliant 
                Earned Value Management benchmark established 
                at the commencement of an IT investment 
                project.
                  ``(B) Grossly deviated project.--If an IT 
                investment project grossly deviates from its 
                Original Baseline (as defined in subparagraph 
                (A)), the term `Original Baseline' means the 
                ANSI EIA-748-B Standard-compliant Earned Value 
                Management benchmark established under 
                subsection (e)(3)(C).
          ``(13) Significantly deviated.--The term 
        `significantly deviated' means Earned Value Management 
        variance that is at least 20 percent from the Original 
        Baseline.
    ``(b) Core IT Investment Projects Designation.--Except as 
provided under paragraph (2), each Chief Information Officer, 
with approval by the Agency Head, shall--
          ``(1) identify the major IT investments that are the 
        most critical to the agency; and
          ``(2) any project as a core `IT investment project' 
        or a `core project', upon determining that the project 
        is a mission critical IT investment project that--
                  ``(A) represents a significant high-dollar 
                value relative to the average IT investment 
                project in the agency's portfolio;
                  ``(B) delivers a capability critical to the 
                successful completion of the agency mission, or 
                a portion of such mission;
                  ``(C) incorporates unproven or previously 
                undeveloped technology to meet primary project 
                technical requirements; or
                  ``(D) would have a significant negative 
                impact on the successful completion of the 
                agency mission if the project experienced 
                significant cost, schedule, or performance 
                deviations.
    ``(c) Cost, Schedule, and Performance Reports.--
          ``(1) Quarterly reports.--Not later than 14 days 
        after the end of each fiscal quarter, the project 
        manager for an IT investment project shall submit a 
        written report to the Chief Information Officer that 
        includes, as of the last day of the applicable 
        quarter--
                  ``(A) a description of the cost, schedule, 
                and performance of all projects under the 
                project manager's supervision;
                  ``(B) the original and current project cost, 
                schedule, and performance benchmarks for each 
                project under the project manager's 
                supervision;
                  ``(C) the quarterly and cumulative cost, 
                schedule, and performance variance related to 
                each IT investment project under the project 
                manager's supervision since the commencement of 
                the project;
                  ``(D) for each IT investment project under 
                the project manager's supervision, any known, 
                expected, or anticipated changes to project 
                schedule milestones or project performance 
                benchmarks included as part of the original or 
                current baseline description;
                  ``(E) the current cost, schedule, and 
                performance status of all IT investment 
                projects under supervision that were previously 
                identified as significantly deviated or grossly 
                deviated; and
                  ``(F) any corrective actions taken to address 
                problems discovered under subparagraphs (C) 
                through (E).
          ``(2) Interim reports.--If the project manager for an 
        IT investment project determines that there is 
        reasonable cause to believe that an IT investment 
        project has significantly deviated or grossly deviated 
        since the issuance of the latest quarterly report, the 
        project manager shall submit to the Chief Information 
        Officer, not later than 14 days after such 
        determination, a report on the project that includes, 
        as of the date of the report--
                  ``(A) a description of the original and 
                current program cost, schedule, and performance 
                benchmarks;
                  ``(B) the cost, schedule, or performance 
                variance related to the IT investment project 
                since the commencement of the project;
                  ``(C) any known, expected, or anticipated 
                changes to the project schedule milestones or 
                project performance benchmarks included as part 
                of the original or current baseline 
                description;
                  ``(D) the major reasons underlying the 
                significant or gross deviation of the project; 
                and
                  ``(E) a corrective action plan to correct 
                such deviations.
    ``(d) Determination of Significant Deviation.--
          ``(1) Chief information officer.--Upon receiving a 
        report under subsection (c), the Chief Information 
        Officer shall--
                  ``(A) determine if any IT investment project 
                has significantly deviated; and
                  ``(B) report such determination to the Agency 
                Head.
          ``(2) Congressional notification.--If the Chief 
        Information Officer determines under paragraph (1) that 
        an IT investment project has significantly deviated and 
        the Agency Head has not issued a report to the 
        appropriate congressional committees of a significant 
        deviation for that project under this section since the 
        project was last required to be rebaselined under this 
        section, the Agency Head shall submit a report to the 
        appropriate congressional committees, the Director, and 
        the Government Accountability Office that includes--
                  ``(A) written notification of such 
                determination;
                  ``(B) the date on which such determination 
                was made;
                  ``(C) the amount of the cost increases and 
                the extent of the schedule delays with respect 
                to such project;
                  ``(D) any requirements that--
                          ``(i) were added subsequent to the 
                        original contract; or
                          ``(ii) were originally contracted 
                        for, but were changed by deferment or 
                        deletion from the original schedule, or 
                        were otherwise no longer included in 
                        the requirements contracted for;
                  ``(E) an explanation of the differences 
                between--
                          ``(i) the estimate at completion 
                        between the project manager, any 
                        contractor, and any independent 
                        analysis; and
                          ``(ii) the original budget at 
                        completion;
                  ``(F) a statement of the reasons underlying 
                the project's significant deviation; and
                  ``(G) a summary of the plan of action to 
                remedy the significant deviation.
          ``(3) Deadline.--
                  ``(A) Notification based on quarterly 
                report.--If the determination of significant 
                deviation is based on a report submitted under 
                subsection (b)(1), the Agency Head shall notify 
                Congress and the Director in accordance with 
                paragraph (2) not later than 21 days after the 
                end of the quarter upon which such report is 
                based.
                  ``(B) Notification based on interim report.--
                If the determination of significant deviation 
                is based on a report submitted under subsection 
                (b)(2), the Agency Head shall notify Congress 
                and the Director in accordance with paragraph 
                (2) not later than 21 days after the submission 
                of such report.
                  ``(C) Method of delivery.--Information 
                required under paragraphs (1) and (2) may be 
                provided through the Web site established under 
                section 11302(c)(1) in a manner consistent with 
                guidance from the Office of Management and 
                Budget to satisfy reporting requirements and to 
                reduce paperwork.
    ``(e) Determination of Gross Deviation.--
          ``(1) Chief information officer.--Upon receiving a 
        report under subsection (c), the Chief Information 
        Officer shall--
                  ``(A) determine if any IT investment project 
                has grossly deviated; and
                  ``(B) report any such determination to the 
                Agency Head.
          ``(2) Congressional notification.--If the Chief 
        Information Officer determines under paragraph (1) that 
        an IT investment project has grossly deviated and the 
        Agency Head has not issued a report to the appropriate 
        congressional committees of a gross deviation for that 
        project under this section since the project was last 
        required to be rebaselined under this section, the 
        Agency Head shall submit a report to the appropriate 
        congressional committees, the Director, and the 
        Government Accountability Office that includes--
                  ``(A) written notification of such 
                determination, which states--
                          ``(i) the date on which such 
                        determination was made; and
                          ``(ii) an indication of whether or 
                        not the project has been previously 
                        reported as a significant or gross 
                        deviation by the Chief Information 
                        Officer, and the date of any such 
                        report;
                  ``(B) incorporations by reference of all 
                prior reports to Congress on the project 
                required under this section;
                  ``(C) updated accounts of the items described 
                in subparagraphs (C) through (G) of subsection 
                (d)(2);
                  ``(D) the original estimate at completion for 
                the project manager, any contractor, and any 
                independent analysis;
                  ``(E) a graphical depiction that shows 
                monthly planned expenditures against actual 
                expenditures since the commencement of the 
                project;
                  ``(F) the amount, if any, of incentive or 
                award fees any contractor has received since 
                the commencement of the contract and the 
                reasons for receiving such incentive or award 
                fees;
                  ``(G) the project manager's estimated cost at 
                completion and estimated completion date for 
                the project if current requirements are not 
                modified;
                  ``(H) the project manager's estimated cost at 
                completion and estimated completion date for 
                the project based on reasonable modification of 
                such requirements;
                  ``(I) an explanation of the most significant 
                occurrence contributing to the variance 
                identified, including cost, schedule, and 
                performance variances, and the effect such 
                occurrence will have on future project costs 
                and program schedule;
                  ``(J) a statement regarding previous or 
                anticipated rebaselining or replanning of the 
                project and the names of the individuals 
                responsible for approval;
                  ``(K) the original life cycle cost of the 
                investment and the expected life cycle cost of 
                the investment expressed in constant base year 
                dollars and in current dollars; and
                  ``(L) a comprehensive plan of action to 
                remedy the gross deviation, and milestones 
                established to control future cost, schedule, 
                and performance deviations in the future.
          (3) Method of delivery.--Information required under 
        paragraphs (1) and (2) may be provided through the Web 
        site established under section 11302(c)(1) in a manner 
        consistent with guidance from the Office of Management 
        and Budget to satisfy reporting requirements and to 
        reduce paperwork.
          ``(3) Remedial action.--
                  ``(A) In general.--If the Chief Information 
                Officer determines under paragraph (1) that an 
                IT investment project has grossly deviated, the 
                Agency Head, in consultation with the Chief 
                Information Officer, shall develop and 
                implement a remedial action plan that 
                includes--
                          ``(i) a report that--
                                  ``(I) describes the primary 
                                business case and key 
                                functional requirements for the 
                                project;
                                  ``(II) describes any portions 
                                of the project that have 
                                technical requirements of 
                                sufficient clarity that such 
                                portions may be feasibly 
                                procured under firm, fixed-
                                price contract;
                                  ``(III) includes a 
                                certification by the Agency 
                                Head, after consultation with 
                                the Chief Information Officer, 
                                that all technical requirements 
                                have been reviewed and 
                                validated to ensure alignment 
                                with the reported business 
                                case;
                                  ``(IV) describes any changes 
                                to the primary business case or 
                                key functional requirements 
                                which have occurred since 
                                project inception; and
                                  ``(V) includes an independent 
                                government cost estimate for 
                                the project conducted by an 
                                entity approved by the 
                                Director;
                          ``(ii) an analysis that--
                                  ``(I) describes agency 
                                business goals that the project 
                                was originally designed to 
                                address;
                                  ``(II) includes a gap 
                                analysis of what project 
                                deliverables remain in order 
                                for the agency to accomplish 
                                the business goals referred to 
                                in subclause (I);
                                  ``(III) identifies the 3 most 
                                cost-effective alternative 
                                approaches to the project which 
                                would achieve the business 
                                goals referred to in subclause 
                                (I); and
                                  ``(IV) includes a cost-
                                benefit analysis, which 
                                compares--
                                          ``(aa) the completion 
                                        of the project with the 
                                        completion of each 
                                        alternative approach, 
                                        after factoring in 
                                        future costs associated 
                                        with the termination of 
                                        the project; and
                                          ``(bb) the 
                                        termination of the 
                                        project without pursuit 
                                        of alternatives, after 
                                        factoring in foregone 
                                        benefits; and
                          ``(iii) a new baseline of the project 
                        is established that is consistent with 
                        the independent government cost 
                        estimate required under clause (i)(V); 
                        and
                          ``(iv) the project is designated as a 
                        core IT investment project and 
                        subjected to the requirements under 
                        subsection (f).
                  ``(B) Submission to congress.--The remedial 
                action plan and all corresponding reports, 
                analyses, and actions under this paragraph 
                shall be submitted to the appropriate 
                congressional committees and the Director.
                  ``(C) Reporting and analysis exemptions.--
                          ``(i) In general.--The Chief 
                        Information Officer, in coordination 
                        with the Agency Head and the Director, 
                        may forego the completion of any 
                        element of a report or analysis under 
                        clause (i) or (ii) of subparagraph (A) 
                        if the Chief Information Officer 
                        determines that such element is not 
                        relevant to the understanding of the 
                        difficulties facing the project or 
                        further continuation of the project in 
                        a timely and cost-efficient manner.
                          ``(ii) Identification of reasons.--
                        The Chief Information Officer shall 
                        include the reasons for not including 
                        any element referred to in clause (i) 
                        in the report submitted to Congress 
                        under subparagraph (B).
          ``(4) Deadline and funding contingency.--
                  ``(A) Notification and remedial action based 
                on quarterly report.--
                          ``(i) In general.--If the 
                        determination of gross deviation is 
                        based on a report submitted under 
                        subsection (c)(1), the Agency Head 
                        shall--
                                  ``(I) not later than 45 days 
                                after the end of the quarter 
                                upon which such report is 
                                based, notify the appropriate 
                                congressional committees and 
                                the Director in accordance with 
                                paragraph (2); and
                                  ``(II) not later than 180 
                                days after the end of the 
                                quarter upon which such report 
                                is based, ensure the completion 
                                of remedial action under 
                                paragraph (3).
                          ``(ii) Failure to meet deadlines.--If 
                        the Agency Head fails to meet the 
                        deadlines described in clause (i)(II), 
                        additional funds may not be obligated 
                        to support expenditures associated with 
                        the project until the requirements of 
                        this subsection have been fulfilled.
                  ``(B) Notification and remedial action based 
                on interim report.--
                          ``(i) In general.--If the 
                        determination of gross deviation is 
                        based on a report submitted under 
                        subsection (c)(2), the Agency Head 
                        shall--
                                  ``(I) not later than 45 days 
                                after the submission of such 
                                report, notify the appropriate 
                                congressional committees in 
                                accordance with paragraph (2); 
                                and
                                  ``(II) not later than 180 
                                days after the submission of 
                                such report, ensure the 
                                completion of remedial action 
                                in accordance with paragraph 
                                (3).
                          ``(ii) Failure to meet deadlines.--If 
                        the Agency Head fails to meet the 
                        deadlines described in clause (i)(II), 
                        additional funds may not be obligated 
                        to support expenditures associated with 
                        the project until the requirements of 
                        this subsection have been fulfilled.
    ``(f) Additional Requirements for Core IT Investment 
Project Reports.--
          ``(1) Initial report.--If a report described in 
        subsection (e)(3)(A) has not been submitted for a core 
        IT investment project, the Agency Head, in coordination 
        with the Chief Information Officer and responsible 
        program managers, shall prepare an initial report for 
        inclusion in the first budget submitted to Congress 
        under section 1105(a) of title 31, United States Code, 
        after the designation of a project as a core IT 
        investment project, which includes--
                  ``(A) a description of the primary business 
                case and key functional requirements for the 
                project;
                  ``(B) an identification and description of 
                any portions of the project that have technical 
                requirements of sufficient clarity that such 
                portions may be feasibly procured under firm, 
                fixed-price contracts;
                  ``(C) an independent government cost estimate 
                for the project;
                  ``(D) certification by the Chief Information 
                Officer that all technical requirements have 
                been reviewed and validated to ensure alignment 
                with the reported business case; and
                  ``(E) any changes to the primary business 
                case or key functional requirements which have 
                occurred since project inception.
          ``(2) Quarterly review of business case.--The Agency 
        Head, in coordination with the Chief Information 
        Officer and responsible program managers, shall--
                  ``(A) monitor the primary business case and 
                core functionality requirements reported to 
                Congress and the Director for designated core 
                IT investment projects; and
                  ``(B) if changes to the primary business case 
                or key functional requirements for a core IT 
                investment project occur in any fiscal quarter, 
                submit a report to Congress and the Director 
                not later than 14 days after the end of such 
                quarter that details the changes and describes 
                the impact the changes will have on the cost 
                and ultimate effectiveness of the project.
          ``(3) Alternative significant deviation 
        determination.--If the Chief Information Officer 
        determines, subsequent to a change in the primary 
        business case or key functional requirements, that 
        without such change the project would have 
        significantly deviated--
                  ``(A) the Chief Information Officer shall 
                notify the Agency Head of the significant 
                deviation; and
                  ``(B) the Agency Head shall fulfill the 
                requirements under subsection (d)(2) in 
                accordance with the deadlines under subsection 
                (d)(3).
          ``(4) Alternative gross deviation determination.--If 
        the Chief Information Officer determines, subsequent to 
        a change in the primary business case or key functional 
        requirements, that without such change the project 
        would have grossly deviated--
                  ``(A) the Chief Information Officer shall 
                notify the Agency Head of the gross deviation; 
                and
                  ``(B) the Agency Head shall fulfill the 
                requirements under subsections (e)(2) and 
                (e)(3) in accordance with subsection (e)(4).''

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Sec. 11319. Acquisition and development

    (a) Purpose.--The objective of this section is to 
significantly reduce--
          (1) cost overruns and schedule slippage from the 
        estimates established at the time the program is 
        initially approved;
          (2) the number of requirements and business 
        objectives at the time the program is approved that are 
        not met by the delivered products; and
          (3) the number of critical defects and serious 
        defects in delivered information technology.
    ``(b) Establishment of Programs.--The Director of the 
Office of Management and Budget shall--
          (1) Not later than 180 days after the date of the 
        enactment of this section, prescribe uniformly 
        applicable guidance for agencies to implement the 
        requirements of this section, which shall not include 
        any exemptions to such requirements not specifically 
        authorized under this section; and
          (2) Take any actions that are necessary to ensure 
        that Federal agencies are in compliance with the 
        guidance prescribed pursuant to paragraph (1) not later 
        than 1 year after the date of the enactment of this 
        section.
    (c) Establishment of Program.--Not later than 120 days 
after the enactment of this section, the Agency Head (as 
defined in section 11317(a) of title 40, United States Code) 
shall establish a program to improve the information technology 
(referred to in this section as `IT) process overseen by the 
Chief Information Officer.
    (d) Program Requirements.--Each program established 
pursuant to this section shall include--
          ``(1) a documented process for information technology 
        acquisition planning, requirements development and 
        management, project management and oversight, earned-
        value management, and risk management;
          ``(2) the development of appropriate metrics for 
        performance measurement of--
                  ``(A) processes and development status;
                  ``(B) continuous process improvement; and
                  ``(C) achievement of project outcomes;
          ``(3) a process to ensure that key program personnel 
        have an appropriate level of experience and training 
        and education, at an institution or institutions 
        approved by the Director, in the planning, acquisition, 
        execution, management, and oversight of information 
        technology;
          ``(4) a process to ensure that the applicable 
        department and subcomponents implement and adhere to 
        established processes and requirements relating to the 
        planning, acquisition, execution, management, and 
        oversight of information technology programs and 
        developments; and
          ``(5) a process for the Chief Information Officer to 
        intervene or stop the funding of an IT investment if it 
        is at risk of not achieving major project milestones.
    ``(e) Annual Report to OMB.--Not later than the last day of 
February of each year, the Agency Head shall submit a report to 
Congress that includes--
          ``(1) a detailed summary of the accomplishments of 
        the program established by the Agency Head pursuant to 
        this section;
          ``(2) the status of completeness of implementation of 
        each of the program requirements, and the date each 
        such requirement was deemed to be completed;
          ``(3) the percentage of Federal IT projects covered 
        under the program compared to all of the IT projects of 
        the agency, listed by number of programs and by annual 
        dollars expended;
          ``(4) a detailed breakdown of the sources and uses of 
        the amounts spent by the agency during the previous 
        fiscal year to support the activities of the program;
          ``(5) a copy of any guidance issued under the program 
        and a statement regarding whether each such guidance is 
        mandatory;
          ``(6) the identification of the metrics developed in 
        accordance with subsection (b)(2);
          ``(7) a description of how paragraphs (3) and (4) of 
        subsection (b) have been implemented and any related 
        agency guidance; and
          ``(8) a description of how continuous process 
        improvement has been implemented and the objectives of 
        such guidance.''
    (f) Annual Report to Congress.--The Director of the Office 
of Management and Budget shall provide an annual report to 
Congress on the status and implementation of the program 
established pursuant to this section.