On June 28, the Obama administration issued directives mandating a comprehensive review of all federal information technology (IT) projects that are “high risk” and placed a freeze on all financial systems modernization projects.

Office of Management and Budget Director Peter R. Orszag announced three major steps designed to address persistent cost overruns and delayed delivery of IT systems.

1. First, executive departments and agencies were ordered to stop issuing new task orders or procurements for all financial system modernization projects pending review and approval by OMB of new, more streamlined project plans. According to OMB, there are approximately 30 financial systems projects that are affected by this policy. The total cost expended on these projects is anticipated to be $20 billion over the life of these projects, with an approximate annual spend of $3 billion.
2. Second, the Federal Chief Information Officer (CIO) Vivek Kundra will undertake detailed reviews of the highest risk IT projects across the federal government. Agencies will be required to present improvement plans to the CIO for projects that are behind schedule or over budget. Where serious problems continue to exist, there will be adjustments to Fiscal Year 2012 agency budgets.
3. OMB’s Deputy Director for Management Jeff Zients will develop recommendations, within 120 days, for improving the federal government’s overall IT procurement and management practices.

Politico.com reported this week that one of the projects that will receive a high level of scrutiny by OMB is the National Archives and Records Administration’s (NARA) Electronic Records Archive (ERA) . Since 2001, NARA has been working to develop an electronic records archive to preserve and provide access to massive volumes and all types of electronic records. However, the project has experienced repeated delays and cost overruns. According to a Government Accountability Office (GAO) report issued on June 11, 2010, “Without ensuring adequate oversight and establishing specific plans to complete ERA, it is increasingly unlikely that NARA will deliver the completed ERA system by 2012 with the originally envisioned capabilities.”