Subject: Reclamation Information Technology (IT) Investment Management Framework
Purpose: The Framework establishes a Reclamation-wide capital planning and investment control process for identifying, selecting, controlling, and evaluating IT investment options that support mission and business needs in the most effective and efficient manner.
Authority: Clinger-Cohen Act of 1996 (Information Technology Management Reform Act and National Defense Authorization Act for Fiscal Year 1996); OMB Circular A-11, Preparation, Submission and Execution of the Budget (Revised 07/16/2004); OMB Circular A-130, Management of Federal Information Resources; Office of the Secretary Order 3244 - Standardization of Information Technology Functions and Establishment of Funding Authorities; and the Department of the Interior Departmental Manual, (Part 375 Chapter 7, and Part 376 Chapter 4) and the Department of Interior Information Technology Capital Planning and Investment Control Guide (CPIC Guide).
Contact: IT Policy and Security Division, D-2220
1. Introduction. The Clinger-Cohen Act of 1996 was enacted to reform government IT investment processes and to establish a comprehensive framework for planning, budgeting, procuring, and managing IT through well-defined performance and results-based investment management practices. It further required agencies to have a well-disciplined and integrated capital programming process to monitor IT investments and improve project outcomes over time. This included processes for selecting, controlling, and evaluating IT investments; enterprise architecture management; and IT workforce management.
To support this legislation, the Office of Management and Budget (OMB) established various circulars and instructions to focus agency efforts on improving their IT investment management practices. OMB Circulars A-130 and A-11 require agencies to establish a disciplined capital planning and investment control (CPIC) process for IT portfolio analysis; investment and risk management; performance-based acquisition management; and the cost-effective life-cycle management of IT resources. The Department of the Interior also established policies and directives to further ensure compliance with legislation and OMB requirements aimed at improving IT investment management practices, including guidance for a CPIC process. This Directives and Standards (D&S) document describes Reclamation’s CPIC process and IT investment management requirements with regard to these requirements.
2. Goals. The goal of this D&S is to define Reclamation’s IT investment management principles and practices as part of a well-disciplined CPIC process that addresses requirements mandated by the Clinger-Cohen Act and the Department, as well as best practices prescribed by the Government Accountability Office’s Information Technology Investment Management Framework.
3. Scope. This D&S applies to all IT and telecommunications assets owned and/or administered by Reclamation, including specialized systems (e.g., Supervisory Control and Data Acquisition [SCADA ] systems, Geographic Information Systems [GIS ], etc.).
A. Director, Program, Budget and Liaison Group isReclamation’s Capital Planning Executive and has responsibility for the overall capital asset budgeting process including IT and construction.
B. Chief Information Officer (CIO) has responsibility for the IT capital planning program in Reclamation and for integrating the IT CPIC process with the IT management program, which includes IT strategic planning, IT security, enterprise architecture, telecommunications, IT portfolio management, records and/or information management, and IT performance management.
C. System Executive Owners are responsible and accountable for ensuring IT systems and resources are designed, acquired, developed, operated, and managed in accordance with the IT management program policies, directives and standards, and guidelines and in support of Reclamation missions. System Executive Owners also are responsible for keeping the CIO adequately informed of management issues, security matters, accreditation issues, investment decisions, life-cycle and acquisition decisions, performance issues, and accomplishments for IT systems. This responsibility resides with Directors and may be delegated no more than one level down (Deputy or Assistant Director).
D.Reclamation Division Chiefs, Area Managers, and System Business Owners/Functional Sponsors are responsible for supporting the design, development, acquisition, operation, security, and maintenance of IT systems supporting business processes or functions. They also are responsible for effectively managing supporting resources (funding and personnel) essential to the development, operation, security, investment management, and maintenance of IT systems.
E. Investment Review Board or Chief Information Officer Council (CIOC) is responsible for providing advice and support to the CIO in fulfilling his or her responsibilities including reviewing and approving IT investments in accordance with OMB and Departmental guidance and in support of Reclamation’s mission and business needs; monitoring IT projects or investment performance; evaluating and comparing project costs, schedules, and risks based upon established criteria; and establishing recommendations on individual IT investments and corrective actions for underperforming IT projects or investments.
F. Project (Investment) Managers are responsible for the management of the IT investment or project, including the coordination of project activities or tasks, achieving project performance goals, and ensuring stakeholder and user involvement and satisfaction with the initiative. Project activities or tasks include the development and updating of capital asset plans (Exhibit 300s) through integrated project teams comprised of appropriate contracting personnel, budgeting staff, program specialists, and enterprise architecture personnel.
5. CPIC Procedures.
A. Pre-Selection. OMB requires compliance with the requirements of the CPIC process to obtain approval for IT investments or projects through the budgeting process. The full cost of and risks associated with each IT investment, through the entire life‑cycle of the investment, must be analyzed before funding is requested or approved for the project year. A thorough analysis must be provided for all viable alternatives, including consideration of outsourcing to other agencies or the private sector. This information should be documented in a preliminary capital asset plan (Business Decision Document and the related Mission Needs Statement) for a new IT investment. The preliminary capital asset plan also must be reviewed and approved by a business owner/functional sponsor and program or regional director within Reclamation. Final review and approval of the IT investment proposal and preliminary capital asset plan resides with the CIO. The CIO, in consultation with other leadership and budgeting teams, will make the final determination on whether the initial IT investment will be made as part of an integrated decision-making process.
B. Selection. To make sound strategic decisions about IT investments and ensure that ongoing IT investments are in line with Reclamation mission and business objectives, capital asset plans and other project management documents will be reviewed by the CIO. This includes any new and/or significant IT enhancement or modernization investments for existing IT systems. The review will include an assessment of the risks, costs, technical options, technical complexity, and expected and actual benefits of the IT investment as part of a screening and ranking process or the CPIC process. The CIO will prioritize IT investments as deemed appropriate, coordinate with appropriate Reclamation leadership and budgeting teams as required and forward IT investment (major and non-major) recommendations to the Department and OMB as part of the annual budget process (Exhibit 53).
C. Control. DOI requires capital asset plans for all approved IT investments or projects. The plans must clearly identify responsible project team members and managers as well as baseline cost and performance metrics for the project. Any potential or ongoing performance issues or problems associated with the IT investments must be reported to business owners/functional sponsors, executive owners, and the CIO. Quarterly, project managers will be responsible for updating the CIO on cost, schedule, and performance metrics associated with major IT investments and identifying any variances based on earned value data and/or operational analyses. Project managers also are responsible for developing corrective action plans to address potential or ongoing problems related to the IT investment and obtaining CIO approval for corrective measures and continuing with the IT investment or project.
D. Evaluate. As part of the evaluation process, IT investment business owners and executive owners/directors are responsible for assessing the status of major IT investments on a quarterly basis. Both major and non-major IT investments will be evaluated on at least an annual basis by the CIO as part of Reclamation’s overall IT portfolio management process to determine whether such investments adequately support mission and/or business objectives, duplicate existing investments or IT projects, and sufficiently contribute or enhance technical and functional capabilities and/or other efficiencies within the organization. The CIO will review all IT investments as part of this process and may recommend continuing, delaying, or terminating/rejecting IT projects based on cost, schedule, or performance results and variances. The Department’s IRB and CIO will further review, validate, and approve major IT investments as part of the Department-wide IT CPIC process and budgeting cycle.
E. Steady-State. OMB requires that all major IT investments in steady-state must be reviewed at least annually to document the continued effectiveness in supporting mission requirements. Operational analysis for major steady-state investments will be updated on a quarterly basis by business/functional sponsors, executive owners, and project managers. Project managers are responsible for providing this information to the CIO for review. Any potential or ongoing problems and corrective actions associated with steady-state IT investments, as well as any significant system changes will be reported to the CIO. The CIO may recommend changes in and the termination of costly or ineffective steady-state investments and reject significant changes to IT investments in steady-state upon review.
F. Project Management. IT investments or capital assets must be managed throughout all phases of the project life-cycle. The project (investment) manager (with support of the Integrated Project Team) is responsible for developing the capital asset plan or business case for the IT investment or proposal, completing required project management documents and plans, developing cost/benefit analyses on IT alternatives or options, and ensuring the accomplishment of IT project milestones and objectives as defined in project documents, plans, and the approved business case. Project documents, plans, and the business case must clearly define the costs, risks, schedules, and performance goals of the IT investment.
G. Reporting Requirements. The CPIC process requires the completion of capital asset plans or exhibit 300s for major and non-major IT investments. Capital asset plans must be developed using the format and instructions established by the OMB in Circular A-11, Part 3 and Departmental guidance. Capital asset plans also must clearly delineate executive ownership and project management responsibilities to ensure the achievement of project milestones and performance objectives for the IT investment. A Capital Planning web site has been established to assist project managers and teams with these tasks and provides templates for completing capital asset plans or business cases as required by the OMB and Department. These plans or documents will be reviewed as prescribed by this D&S.
H. IT Capital Asset Inventory (IT Portfolio or Exhibit 53). Reclamation’s IT portfolio will be maintained to readily identify all IT investments, assets, and supporting components. The IT inventory is important because it documents IT investments within the portfolio and supports the alignment of IT investments with mission and business goals and objectives. Reclamation’s IT Portfolio is maintained as a component of eCPIC (the Department’s automated capital planning system, and DEAR (the Department’s Enterprise Architecture Repository) and provides for the ongoing integration of the following: Federal Enterprise Architecture, Interior Enterprise Architecture, Reclamation Enterprise Architecture, Capital Planning and Investment Control initiatives, Activity-Based Costing, IT Security, and IT Project Management.
Project Managers are responsible for ensuring that capital asset plans or business cases comply with Interior and Reclamation Enterprise Architecture (EA) requirements and using the resources of the Office of the CIO to ensure compliance and alignment with existing and future architecture, security, and/or modernization plans. All approved IT investments must be included in Reclamation’s IT portfolio and the DEAR.
A. Capital Planning and Investment Control (CPIC). CPIC is a structured, integrated approach to manage IT investments; ensure that IT investments align with the missions of an organization; support business needs while minimizing the risks and maximizing returns on IT investments throughout the life-cycle of projects; and report on the performance and health of IT investments to appropriate oversight boards and/or organizations, including the Congress, OMB, and the Department. In short, the CPIC process supports the ongoing identification, selection, control, and evaluation of IT investment options and decisions.
B. CPIC Phases. The Department’s CPIC process includes five phases: Pre-Select; Select; Control; Evaluate; and Steady-State. Each phase is designed to provide a disciplined approach for IT capital planning and investment control.
C. Exhibit 300s. An Exhibit 300 is also known as a capital asset plan and serves as the business case for major IT investments. The capital asset plan or business case provides a high-level description of the project as well as funding requirements, performance goals and measures, project management capabilities, analyses of alternatives, project risks, acquisition strategies, enterprise architecture alignments, and security requirements for the IT investment. Non-major IT investments also require an Exhibit 300 but the document may contain less detail and project-related information.
D. Exhibit 53. The Exhibit 53 summarizes federal agency IT spending on all major and non-major IT investments, and is provided to OMB annually as part of the budgeting process.
E. Information Technology. The equipment, interconnected system or subsystem of equipment used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or communication of information by an organization. The term includes computers, networks, ancillary equipment, software, firmware, services (including support services), and relatedresources.
F. Integrated Project Team (IPT). A multi-disciplinary team led by a project manager responsible and accountable for the planning, budgeting, procurement, and life-cycle management of the IT investment to achieve cost, schedule, and performance goals. Team skills include: budgetary, financial, capital planning, procurement, contracting, value management, program expertise, and staff resource management skills.
G. Investment Review Board (IRB). The CIOC, which serves as the IRB, is responsible and accountable forassisting the Chief Information Officer in managing and monitoring Reclamation’s ITinvestment process, including the pre-selection, selection, control, evaluation, and steady-state phases of the CPIC process. The Reclamation IRB also is responsible for providing Reclamation’s CIO with recommendations on the IT investment portfolio, IT management practices, and IT strategies that best support mission and business processes and functions.
H. Life Cycle Costs. The overall estimated cost for a particular program alternative, initiative, or system over the time period corresponding to its life. This includes direct and indirect costs, any periodic or continuing costs for operation and maintenance, and eventual retirement or replacement costs, as deemed appropriate.
I. Major IT Investment (Acquisitions, Projects, Applications or Systems). “Major IT Investment,” in the capital planning context, refers to IT acquisitions, projects, applications or systems that:
(1) require special management attention because of mission importance;
(2) have or are projected to have high life-cycle costs (more than $35 million in total life cycle costs);
(3) have high operating or maintenance costs (more than $5 million annually);
(4) are of a high security status;
(5) provide or are expected to provide high-returns;
(6) play a significant role in the administration of agency programs, finances, property or other investments relative to the budget; and/or,
(7) are classified as financial systems, with costs of $500,000 or more per year.
J. Non-Major IT Investment. “Non-Major IT Investment,” in the capital planning context, refers to IT acquisitions, projects, applications, or systems that do not meet the definition of a major IT investment. All non-major IT investments must be reported individually on the Exhibit 53 provided to OMB as part of the budgeting process.
K. Project Management. Project management is the application of knowledge, skills, tools, and techniques to meet life cycle and project requirements. This includes such knowledge areas and project activities as project planning, scope management, cost management, schedule management, performance management, quality management, human resource management, procurement (acquisition) management, and risk and organizational management.