[Federal Register Volume 65, Number 239 (Tuesday, December 12, 2000)]
[Notices]
[Pages 77677-77687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31507]
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OFFICE OF MANAGEMENT AND BUDGET
Management of Federal Information Resources
AGENCY: Office of Management and Budget, Executive Office of the
President.
ACTION: Revision of OMB Circular No. A-130, Transmittal No. 4.
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SUMMARY: The Office of Management and Budget issues a revision to
Circular No. A-130, ``Management of Federal Information Resources,'' to
implement provisions of the Clinger-Cohen Act (also known as
``Information Technology Management Reform Act of 1996'') and for other
purposes. The revision modifies sections of the Circular concerning
information systems and information technology management to follow
more closely provisions of the Clinger-Cohen Act and OMB Circular A-11.
These sections involve the acquisition, use, and disposal of
information technology as a capital asset by the Federal government to
improve the productivity, efficiency, and effectiveness of Federal
programs.
OMB has issued previous guidance regarding the Clinger-Cohen Act
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implementation, including OMB Memoranda M-96-20, ``Implementation of
the Information Technology Management Reform Act of 1996;'' M-97-02,
``Funding Information Systems Investments;'' M-97-09, ``Interagency
Support for Information Technology;'' M-97-15, ``Local
Telecommunications Services Policy;'' and M-97-16, ``Information
Technology Architectures.'' As a convenience to readers, these
Memoranda are rescinded and their content incorporated into this
Circular.
This revision also incorporates the content of three other OMB
Memoranda. The guidance in Memorandum M-98-09, on the handbook
requirement of the 1996 Electronic FOIA Amendments, has been
incorporated into Appendix IV. The guidance on ``Implementing the
Government Paperwork Elimination Act'' (OMB Memorandum M-00-10) has
been inserted in Appendix II, and the principles on ``Incorporating and
Funding Security in Information Systems Investments'' (OMB Memorandum
M-00-07) have been incorporated into Section 8b(4). Appendix IV has
been expanded to reflect these changes. With its incorporation into the
Circular, Memoranda M-98-09 is rescinded.
OMB intends to review this Circular in 2001 for other revisions
including Information Policy, Security and Privacy. At that time, we
will review the Circular generally and update it to reflect plain
language principles.
EFFECTIVE DATE: November 28, 2000.
ADDRESSES: You can find a full recompiled version of Circular A-130,
including the changes made here along with the existing sections that
have not changed on the Internet at the OMB web site, http://www.whitehouse.gov/OMB/circulars/index.html and at the CIO Council home
page at http://cio.gov. You can also obtain a copy of OMB Circular No.
A-11, including the supplement to Part 3, ``The Programming Guide,'' at
the OMB web site and the CIO Council web site, or by calling the Budget
Review and Concepts Division at OMB at 202-395-3172.
FOR FURTHER INFORMATION CONTACT: Tony Frater, Information Policy and
Technology Branch, Office of Information and Regulatory Affairs, Office
of Management and Budget, Room 10236, New Executive Office Building,
Washington, D.C. 20503. Telephone: (202) 395-3785.
SUPPLEMENTARY INFORMATION:
Background
The Clinger-Cohen Act (also known as ``Information Technology
Management Reform Act of 1996'') (Pub. L. 104-106, Division E, codified
at 40 U.S.C. Chapter 25) grants to the Director of the Office of
Management and Budget (OMB) authority to oversee the acquisition, use,
and disposal of information technology by the Federal government, so as
to improve the productivity, efficiency, and effectiveness of Federal
programs. It supplements the information resources management (IRM)
policies contained in the Paperwork Reduction Act (PRA) (44 U.S.C.
Chapter 35) by establishing a comprehensive approach to improving the
acquisition and management of agency information systems through work
process redesign, and by linking planning and investment strategies to
the budget process.
The Clinger-Cohen Act establishes clear accountability for IRM
activities by creating agency Chief Information Officers (CIOs) with
the authority and management responsibility necessary to advise agency
heads on budget, program, and implementation issues concerning
information technology. Among other responsibilities, CIOs oversee the
design, development, and implementation of information systems. CIOs
also monitor and evaluate system performance and advise agency heads
whether to modify or terminate those systems. The Clinger-Cohen Act
directs agencies to work together towards the common goal of using
information technology to improve the productivity, effectiveness, and
efficiency of Federal programs and to promote an interoperable, secure,
and shared government-wide information resources infrastructure.
OMB Circular No. A-130, ``Management of Federal Information
Resources,'' contains the policy framework for the management of
Federal information resources. OMB last revised Circular A-130 on
February 20, 1996 (61 FR 6428). To provide agencies with additional
guidance on implementing the Clinger-Cohen Act, and for other purposes,
OMB on April 13, 2000 (65 FR 19933) requested public comment on a
proposed revision to this Circular. In addition to publishing the
proposed revision in the Federal Register, OMB posted it on its public
web site and sent copies of the proposal directly to Federal agencies.
Comments on the Proposed Revision to Circular A-130
In response to the request for public comment, OMB received
specific comments from thirty four organizations and individuals.
Federal agencies submitted the majority of comments, but non-profit
organizations and concerned citizens also responded. Most comments
proposed changes in clarity and detail. Where these comments added
clarity and did not conflict with the substance of the provision in
question, OMB incorporated them. Several organizations suggested
changes to parts of the Circular that are not within the scope of this
update of the Circular. OMB intends to review Circular No. A-130 for
other revisions in 2001.
We describe below the principal substantive issues raised in the
comments and our responses to them.
1. Comments Regarding the IT Capital Plan
A number of agencies wanted greater clarification regarding the
distinction between the Information Technology (IT) Capital Plan and
the Information Resources Management (IRM) Strategic Plan. We have
updated the section outlining the IT Capital Plan and the IRM Strategic
Plans. The new section describes in much greater detail, and in so
doing clarifies, the different objectives of the two plans: The IT
Capital Plan is operational in nature while the IRM Strategic Plan is a
long range planning document.
The IRM Strategic Plan is the agency's IT vision or roadmap that
will align its information resources with its business strategies and
investment decisions. As an example, the IRM Strategic Plan might
include the mission of the agency, key business processes, IT
challenges, and guiding principles.
Conversely, the IT Capital Plan provides the justification for
individual assets. A sample IT Capital Plan would include: the business
case, expected benefits and costs, schedule, return on investment
analysis, performance measures to evaluate the effectiveness of the
investment, an examination of the alternative solutions, an acquisition
strategy, and a discussion of how that system comports with IT security
and privacy guidance.
The Government Performance and Results Act requires agencies to
develop and submit to OMB agency Strategic Plans. Each agency submits
this information annually along with its Performance Plans, as part of
its budget submission to OMB. IRM Strategic Plans should support the
Agency Strategic Plans, describing how information resources will help
accomplish agency missions and ensuring that IRM decisions are
integrated with organizational planning, budget, financial management,
procurement, human resources management, and program decisions. The IT
Capital Plan, on the other hand, supports the goals and missions
identified in the IRM Strategic Plan, is an operational
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document, and is updated twice yearly. The IT Capital Plan is largely
comprised of existing documents that accompany the agency budget
submission, as updated to reflect the Presidential budget request to
Congress. The updated IT Capital Plan becomes the implementation plan
for the budget year.
2. Comments on the Relationship Between the Agency Enterprise
Architecture and the Agency Capital Planning and Investment Control
Process
Several agencies wanted further elaboration on how the Enterprise
Architecture (EA) and the capital planning and investment control
(CPIC) process should work together. To address these comments, we
include information on the EA within the body of Section 8b and
elaborate on its relationship with the capital planning and investment
control process. In doing so, information contained in the proposed
Appendix II regarding the EA (April 13, 2000 (65 FR 19933)) has been
incorporated into Section 8b(2). Appendix II is now dedicated to
information on implementing the Government Paperwork Elimination Act.
We also add a discussion that describes how the EA documents
linkages between mission needs, information sources and content, and
information technology capabilities. The EA should inform the CPIC
process by defining the technologies and information critical to
operating an agency's business, and by creating a roadmap which enables
the agency to transition from its current to its targeted state. The EA
helps the agency respond to changing business needs, and ensures that
potential solutions support the agency's targeted state. A proposed IT
solution that does not comply with the EA should not be considered as a
possible investment, and should not enter the CPIC process. The CPIC
process helps select, control and evaluate investments that conform
with the EA.
For example, during the select stage of capital planning an agency
identifies and investigates different potential solutions for an
investment. An agency then selects the option with the best business
case. If any of these alternatives does not conform with the EA, the
agency should drop it from consideration.
Another example might include an agency considering a new financial
management system. The new system will require users to have a certain
computing environment in order to operate the proposed system. During
the select stage of capital planning, the agency should review the EA
to determine if that proposed system design is appropriate for all of
the necessary users in the organization. Users in field offices, for
example, may not have the computing resources to use the system. The
agency must consider the costs of upgrading these users' computing
resources in the evaluation of this alternative. If the system is
selected, the agency must incorporate, into the EA, its impact on
business processes, data, security, etc.
There were also comments regarding how the Federal Enterprise
Architecture (FEA) framework relates to the agency Enterprise
Architecture. The Chief Information Officers Council created and
currently maintains the FEA. We discuss the FEA in Appendix IV;
agencies should address the Federal framework when developing the
agency-specific EA. Collaboration among agencies who share a common
business function promotes information sharing and is critical for the
creation of a responsive, customer-focused electronic government.
3. Comments on the Threshold for a Major Information System
A few agencies wanted OMB to create a dollar threshold for major
information systems. We did not adopt this recommendation.
Since 1985, OMB has included in Circular A-130 a definition for
what is a ``major information system'' (50 FR 52730, 52735; December
24, 1985.) Since its revision in 1994, the Circular has defined ``major
information system'' as follows: ``an information system that requires
special management attention because of its importance to an agency
mission; its high development, operating, or maintenance costs; or its
significant role in the administration of agency programs, finances,
property, or other resources'' (59 FR 37906, 37909; July 25, 1994). As
this definition indicates, whether an information system qualifies as
``major'' depends on the particular circumstances of that system and
its context within the agency's operations. Therefore, an information
system that is ``major'' for one agency may not necessarily be
``major'' for another agency. This determination is to be made by the
respective agency, and this determination necessarily involves an
exercise of judgment.
Because there is significant variance among agency information
technology budgets, we think it is inadvisable to establish a uniform,
one-size-fits-all dollar threshold across all agencies, and therefore
we have not done so.
4. Comments on Data Quality Concerns
A few organizations inquired about the quality of Federal data.
Ensuring the quality of the information that the Federal Government
disseminates to the public is very important. Federal agencies must
take seriously their responsibility to ensure the quality of their
data. OMB works with the agencies to ensure the quality of Federally
disseminated information in several ways, including the review of
collections of information under the Paperwork Reduction Act (to ensure
that collections ``maximize usefulness''), statistical coordination and
review, and the establishment in this Circular of general policies for
information dissemination. The current Analysis of Key Sections in
Appendix IV stresses the importance of data quality protections. OMB
intends to review data quality policies in 2001 and to issue new
guidance as appropriate.
5. Comments on Computer Security
Several agencies inquired about changes regarding computer security
and privacy. OMB Memorandum M-00-07 ``Incorporating and Funding
Security in Information Systems Investments'' (February 28, 2000) is
incorporated into Section 8b(3).
Of special note, Title X, Subtitle G, ``Government Information
Security Reform'' of the FY 2001 Defense Authorization Act (Pub. L.
106-398), was enacted during the final stages of revision to this
Circular. In order to include these reforms, and other important
computer security modifications, we plan more substantive changes when
we revise Circular A-130 in 2001. During the upcoming revision process,
we will take into consideration the comments that we have received on
computer security.
6. Comments on Information Dissemination and Information Resources
Management
One organization suggested we add to Section 9 ``Assignment of
Responsibilities'' a provision to reflect Section 5403 of the Clinger
Cohen Act (40 U.S.C. 1503). Section 5403 requires agencies, in the
designing of IT systems for disseminating information to the public, to
reasonably ensure that an index of information disseminated by the
system is included in the directory, created by the Superintendent of
Documents pursuant to 44 U.S.C. 4101. OMB has included a new Section
9a(14) to reiterate Section 5403.
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One organization expressed concern that language in Appendix IV
(Sections 8a(5) and 8a(6)) describing agency requirements for the
Government Information Locator Services (GILS) could lead to agency
non-compliance with those requirements. OMB expects all agencies to
comply with the information dissemination provisions of the PRA and of
the E-FOIA Amendments to the Freedom of Information Act. In this
regard, in accordance with the PRA (44 U.S.C. 3511) and the FOIA (5
U.S.C. 552(g)), each agency must develop and make available to the
public (including through the Government Information Locator Service)
an inventory that includes the agency's major information systems.
In addition, with respect to the ``information resources
management'' responsibilities of each agency under the PRA (44 U.S.C.
3506(b)), OMB continues to believe that an agency needs to focus its
management attention on its ``major'' information systems. For this
reason, an agency's management of its information resources is best
improved by having the agency maintain an inventory of its
``information resources'' that includes those major information systems
(rather than all of the agency's information systems).
In sum, in addition to reflecting the passage of the E-FOIA
Amendments, the revisions to Section 9 also clarify the agency
obligations under the PRA and FOIA. These revisions reiterate that each
agency must maintain and disseminate an inventory of its major
information systems (these systems may be electronic or paper--the
Circular's definition of ``major information systems'' is format
neutral). The revisions also clarify that, under the ``information
resources management'' responsibilities in Section 3506(b)(4) of the
PRA, each agency needs to maintain an inventory of its other
``information resources'' (such as personnel and funding) at the level
of detail that the agency's managers believe is most appropriate for
use in the agency's management of its information resources.
Because this revised Circular A-130 is not being reprinted here in
its entirety, changes from the previous version are provided below. A
copy of the recompiled Circular (consisting of the February 1996
Circular and the amendments in this notice) is available on OMB's web
site (see ADDRESSES above).
Section 3. Authorities. This section is amended to cite and to
incorporate changes necessitated by the Clinger-Cohen Act, the
Government Performance and Results Act (GPRA), and Executive Order
13011.
Section 5. Background. A discussion of the basic principles and
goals of the Clinger-Cohen Act is added.
Section 6. Definitions. The terms ``Chief Information Officers
Council'' and ``Information Technology Resources Board'' are introduced
to reflect the interagency support structures established by Executive
Order 13011. The terms ``executive agency'' and ``national security
system'' are introduced to reflect the definitions found in the
Clinger-Cohen Act. The term ``information technology'' is amended to
reflect definitional changes made by the Clinger-Cohen Act, and is
supplemented by the limiting term ``national security system'' to
clearly identify those systems to which the Circular applies. The term
``capital planning and investment control process'' is introduced to
assist agencies in the reporting requirements of the Clinger-Cohen Act.
Section 7. Basic Considerations and Assumptions. The existing basic
considerations and assumptions are supplemented with a modified
subsection (i) and new subsection (r) to reflect the relevant goals and
purposes of the Clinger-Cohen Act and Executive Order 13011.
Section 8b. Policy. Information Systems and Information Technology
Management. This section is substantially revised to implement the
policies of the Clinger-Cohen Act and the principles of Executive Order
13011. Previous subsections (8b(1)-8b(5)) have been merged and revised
to integrate requirements under Clinger-Cohen Act, the Government
Performance and Results Act (Public Law 103-62), and revisions to OMB
Circular A-11.
Section 9a, All Federal Agencies, is changed to reflect the new
Chief Information Officer (CIO) position created by the Clinger-Cohen
Act, and reflects developments since the Circular was last revised in
February 1996.
Section 9b, Section 9c, Section 9e, Section 9h, are revised to
reflect responsibilities described in the Clinger-Cohen Act and
Executive Order 13011.
Accordingly, OMB revises Circular A-130 as set forth below, and
rescinds OMB Memoranda M-96-20, M-97-02, M-97-09, M-97-15, M-97-16, and
M-98-09.
Jacob J. Lew,
Director.
1. Section 3, ``Authorities,'' is revised to read as follows:
3. Authorities: OMB issues this Circular pursuant to the
Paperwork Reduction Act (PRA) of 1980, as amended by the Paperwork
Reduction Act of 1995 (44 U.S.C. Chapter 35); the Clinger-Cohen Act
(also known as ``Information Technology Management Reform Act of
1996'') (Pub. L. 104-106, Division E); the Privacy Act, as amended
(5 U.S.C. 552a); the Chief Financial Officers Act (31 U.S.C. 3512 et
seq.); the Federal Property and Administrative Services Act, as
amended (40 U.S.C. 487); the Computer Security Act of 1987 (Pub. L.
100-235); the Budget and Accounting Act, as amended (31 U.S.C.
Chapter 11); the Government Performance and Results Act of
1993(GPRA); the Office of Federal Procurement Policy Act (41 U.S.C.
Chapter 7); the Government Paperwork Elimination Act of 1998 (Pub.
L. 105-277, Title XVII), Executive Order No. 12046 of March 27,
1978; Executive Order No. 12472 of April 3, 1984; and Executive
Order No. 13011 of July 17, 1996.
2. Section 5, ``Background,'' is revised to read as follows:
5. Background: The Clinger-Cohen Act supplements the information
resources management policies contained in the PRA by establishing a
comprehensive approach for executive agencies to improve the
acquisition and management of their information resources, by:
1. Focusing information resource planning to support their
strategic missions;
2. Implementing a capital planning and investment control
process that links to budget formulation and execution; and
3. Rethinking and restructuring the way they do their work
before investing in information systems.
The PRA establishes a broad mandate for agencies to perform
their information resources management activities in an efficient,
effective, and economical manner. To assist agencies in an
integrated approach to information resources management, the PRA
requires that the Director of OMB develop and implement uniform and
consistent information resources management policies; oversee the
development and promote the use of information management
principles, standards, and guidelines; evaluate agency information
resources management practices in order to determine their adequacy
and efficiency; and determine compliance of such practices with the
policies, principles, standards, and guidelines promulgated by the
Director.
3. Section 6, ``Definitions,'' is amended by adding five new
definitions (c,d,f,t, and v, below); revising the definition of
``information technology''; and redesignating the remaining definitions
accordingly:
c. The term ``capital planning and investment control process''
means a management process for ongoing identification, selection,
control, and evaluation of investments in information resources. The
process links budget formulation and execution, and is focused on
agency missions and achieving specific program outcomes.
d. The term ``Chief Information Officers Council'' (CIO Council)
means the Council
[[Page 77681]]
established in Section 3 of Executive Order 13011.
f. The term ``executive agency'' has the meaning defined in
section 4(1) of the Office of Federal Procurement Policy Act (41
U.S.C. 403(1)).
s. The term ``information technology'' means any equipment or
interconnected system or subsystem of equipment, that is used in the
automatic acquisition, storage, manipulation, management, movement,
control, display, switching, interchange, transmission, or reception
of data or information by an executive agency. For purposes of the
preceding sentence, equipment is used by an executive agency if the
equipment is used by the executive agency directly or is used by a
contractor under a contract with the executive agency which (i)
requires the use of such equipment, or (ii) requires the use, to a
significant extent, of such equipment in the performance of a
service or the furnishing of a product. The term ``information
technology'' includes computers, ancillary equipment, software,
firmware and similar procedures, services (including support
services), and related resources. The term ``information
technology'' does not include any equipment that is acquired by a
Federal contractor incidental to a Federal contract. The term
``information technology'' does not include national security
systems as defined in the Clinger-Cohen Act of 1996 (40 U.S.C.
1452).
t. The term ``Information Technology Resources Board''
(Resources Board) means the board established by Section 5 of
Executive Order 13011.
v. The term ``national security system'' means any
telecommunications or information system operated by the United
States Government, the function, operation, or use of which (1)
involves intelligence activities; (2) involves cryptologic
activities related to national security; (3) involves command and
control of military forces; (4) involves equipment that is an
integral part of a weapon or weapons system; or (5) is critical to
the direct fulfillment of military or intelligence missions, but
excluding any system that is to be administrative and business
applications (including payroll, finance, logistics, and personnel
management applications). The policies and procedures established in
this Circular will apply to national security systems in a manner
consistent with the applicability and related limitations regarding
such systems set out in Section 5141 of the Clinger-Cohen Act (Pub.
L. 104-106, 40 U.S.C. 1451). Applicability of Clinger-Cohen Act to
national security systems shall include budget document preparation
requirements set forth in OMB Circular A-11. The resultant budget
document may be classified in accordance with the provisions of
Executive Order 12958.
4. Section 7, ``Basic Considerations and Assumptions,'' is amended
by revising Section 7i, and by adding Section 7r, as follows:
i. Strategic planning improves the operation of government
programs. The agency strategic plan will shape the redesign of work
processes and guide the development and maintenance of an Enterprise
Architecture and a capital planning and investment control process.
This management approach promotes the appropriate application of
Federal information resources.
r. The Chief Information Officers Council and the Information
Technology Resources Board will help in the development and
operation of interagency and interoperable shared information
resources to support the performance of government missions.
5. Section 8b is revised to read as follows:
b. How Will Agencies Manage Information Systems and Information
Technology?
(1) How will agencies use capital planning and investment
control process?
Agencies must establish and maintain a capital planning and
investment control process that links mission needs, information,
and information technology in an effective and efficient manner. The
process will guide both strategic and operational IRM, IT planning,
and the Enterprise Architecture by integrating the agency's IRM
plans, strategic and performance plans prepared pursuant to the
Government Performance and Results Act of 1993, financial management
plans prepared pursuant to the Chief Financial Officer Act of 1990
(31 U.S.C. 902a5), acquisition under the Federal Acquisition
Streamlining Act of 1994, and the agency's budget formulation and
execution processes. The capital planning and investment control
process includes all stages of capital programming, including
planning, budgeting, procurement, management, and assessment.
As outlined below, the capital planning and investment control
process has three components: selection, control, and evaluation.
The process must be iterative, with inputs coming from all of the
agency plans and the outputs feeding into the budget and investment
control processes. The goal is to link resources to results (for
further guidance on Capital Planning refer to OMB Circular A-11).
The agency's capital planning and investment control process must
build from the agency's current Enterprise Architecture (EA) and its
transition from current architecture to target architecture. The
Capital Planning and Investment Control processes must be
documented, and provided to OMB consistent with the budget process.
The Enterprise Architecture must be documented and provided to OMB
as significant changes are incorporated.
(a) What plans are associated with the capital planning and
investment control process?
In the capital planning and investment control process, there
are two separate and distinct plans that address IRM and IT planning
requirements for the agency. The IRM Strategic Plan is strategic in
nature and addresses all information resources management of the
agency. Agencies must develop and maintain the agency Information
Resource Management Strategic Plan (IRM) as required by 44 U.S.C.
3506(b)(2). IRM Strategic Plans should support the agency Strategic
Plan required in OMB Circular A-11, provide a description of how
information resources management activities help accomplish agency
missions, and ensure that IRM decisions are integrated with
organizational planning, budget, procurement, financial management,
human resources management, and program decisions.
The IT Capital Plan is operational in nature, supports the goals
and missions identified in the IRM Strategic Plan, is a living
document, and must be updated twice yearly. This IT Capital Plan is
the implementation plan for the budget year. The IT Capital Plan
should also reflect the goals of the agency's Annual Performance
Plan, the agency's Government Paperwork Elimination Act (GPEA) Plan,
the agency's EA, and agency's business planning processes. The IT
Capital Plan must be submitted annually to OMB with the agency
budget submission annually. The IT Capital Plan must include the
following components:
(i) A component, derived from the agency's capital planning and
investment control process under OMB Circular A-11, Section 300 and
the OMB Capital Programming Guide, that specifically includes all IT
Capital Asset Plans for major information systems or projects. This
component must also demonstrate how the agency manages its other IT
investments, as required by the Clinger-Cohen Act.
(ii) A component that addresses two other sections of OMB
Circular A-11:a section for Information on Financial Management,
including the Report on Financial Management Activities and the
Agency's Financial Management Plan, and a section entitled
Information Technology, including the Agency IT Investment
Portfolio.
(iii) A component, derived from the agency's capital planning
and investment control process, that demonstrates the criteria it
will use to select the investments into the portfolio, how it will
control and manage the investments, and how it will evaluate the
investments based on planned performance versus actual
accomplishments.
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(iv) A component that includes a summary of the security plan
from the agency's five-year plan as required by the PRA and Appendix
III of this Circular. The plan must demonstrate that IT projects and
the EA include security controls for components, applications, and
systems that are consistent with the agency's Enterprise
Architecture; include a plan to manage risk; protect privacy and
confidentiality; and explain any planned or actual variance from
National Institute of Standards and Technology (NIST) security
guidance.
(b) What must an agency do as part of the selection component of
the capital planning process?
It must:
(i) Evaluate each investment in information resources to
determine whether the investment will support core mission functions
that must be performed by the Federal government;
(ii) Ensure that decisions to improve existing information
systems or develop new information systems are initiated only when
no alternative private sector or governmental source can efficiently
meet the need;
(iii) Support work processes that it has simplified or otherwise
redesigned to reduce costs, improve effectiveness, and make maximum
use of commercial, off-the-shelf technology;
(iv) Reduce risk by avoiding or isolating custom designed
components, using components that can be fully tested or prototyped
prior to production, and ensuring involvement and support of users;
(v) Demonstrate a projected return on the investment that is
clearly equal to or better than alternative uses of available public
resources. The return may include improved mission performance in
accordance with GPRA measures, reduced cost, increased quality,
speed, or flexibility; as well as increased customer and employee
satisfaction. The return should reflect such risk factors as the
project's technical complexity, the agency's management capacity,
the likelihood of cost overruns, and the consequences of under- or
non-performance. Return on investment should, where appropriate,
reflect actual returns observed through pilot projects and
prototypes;
(vi) Prepare and update a benefit-cost analysis (BCA) for each
information system throughout its life cycle. A BCA will provide a
level of detail proportionate to the size of the investment, rely on
systematic measures of mission performance, and be consistent with
the methodology described in OMB Circular No. A-94, ``Guidelines and
Discount Rates for Benefit-Cost Analysis of Federal Programs'';
(vii) Prepare and maintain a portfolio of major information
systems that monitors investments and prevents redundancy of
existing or shared IT capabilities. The portfolio will provide
information demonstrating the impact of alternative IT investment
strategies and funding levels, identify opportunities for sharing
resources, and consider the agency's inventory of information
resources;
(viii) Ensure consistency with Federal, agency, and bureau
Enterprise architectures, demonstrating such consistency through
compliance with agency business requirements and standards, as well
as identification of milestones, as defined in the EA;
(ix) Ensure that improvements to existing information systems
and the development of planned information systems do not
unnecessarily duplicate IT capabilities within the same agency, from
other agencies, or from the private sector;
(x) Ensure that the selected system or process maximizes the
usefulness of information, minimizes the burden on the public, and
preserves the appropriate integrity, usability, availability, and
confidentiality of information throughout the life cycle of the
information, as determined in accordance with the PRA and the
Federal Records Act. This portion must specifically address the
planning and budgeting for the information collection burden imposed
on the public as defined by 5 CFR 1320;
(xi) Establish oversight mechanisms, consistent with Appendix
III of this Circular, to evaluate systematically and ensure the
continuing security, interoperability, and availability of systems
and their data;
(xii) Ensure that Federal information system requirements do not
unnecessarily restrict the prerogatives of state, local and tribal
governments;
(xiii) Ensure that the selected system or process facilitates
accessibility under the Rehabilitation Act of 1973, as amended.
(c) What must an agency do as part of the control component of
the capital planning process?
It must:
(i) Institute performance measures and management processes that
monitor actual performance compared to expected results. Agencies
must use a performance based management system that provides timely
information regarding the progress of an information technology
investment. The system must also measure progress towards milestones
in an independently verifiable basis, in terms of cost, capability
of the investment to meet specified requirements, timeliness, and
quality;
(ii) Establish oversight mechanisms that require periodic review
of information systems to determine how mission requirements might
have changed, and whether the information system continues to
fulfill ongoing and anticipated mission requirements. These
mechanisms must also require information regarding the future levels
of performance, interoperability, and maintenance necessary to
ensure the information system meets mission requirements cost
effectively;
(iii) Ensure that major information systems proceed in a timely
fashion towards agreed-upon milestones in an information system life
cycle. Information systems must also continue to deliver intended
benefits to the agency and customers, meet user requirements, and
identify and offer security protections;
(iv) Prepare and update a strategy that identifies and mitigates
risks associated with each information system;
(iv) Ensure that financial management systems conform to the
requirements of OMB Circular No. A-127, ``Financial Management
Systems;''
(v) Provide for the appropriate management and disposition of
records in accordance with the Federal Records Act.
(vi) Ensure that agency EA procedures are being followed. This
includes ensuring that EA milestones are reached and documentation
is updated as needed.
(d) What must an agency do as part of the evaluation component
of the capital planning process?
It must:
(i) Conduct post-implementation reviews of information systems
and information resource management processes to validate estimated
benefits and costs, and document effective management practices for
broader use;
(ii) Evaluate systems to ensure positive return on investment
and decide whether continuation, modification, or termination of the
systems is necessary to meet agency mission requirements.
(iii) Document lessons learned from the post-implementation
reviews. Redesign oversight mechanisms and performance levels to
incorporate acquired knowledge.
(iv) Re-assess an investment's business case, technical
compliance, and compliance against the EA.
(v) Update the EA and IT capital planning processes as needed.
(2) The Enterprise Architecture
[[Page 77683]]
Agencies must document and submit their initial EA to OMB.
Agencies must submit updates when significant changes to the
Enterprise Architecture occur.
(a) What is the Enterprise Architecture?
An EA is the explicit description and documentation of the
current and desired relationships among business and management
processes and information technology. It describes the ``current
architecture'' and ``target architecture'' to include the rules and
standards and systems life cycle information to optimize and
maintain the environment which the agency wishes to create and
maintain by managing its IT portfolio. The EA must also provide a
strategy that will enable the agency to support its current state
and also act as the roadmap for transition to its target
environment. These transition processes will include an agency's
capital planning and investment control processes, agency EA
planning processes, and agency systems life cycle methodologies. The
EA will define principles and goals and set direction on such issues
as the promotion of interoperability, open systems, public access,
compliance with GPEA, end user satisfaction, and IT security. The
agency must support the EA with a complete inventory of agency
information resources, including personnel, equipment, and funds
devoted to information resources management and information
technology, at an appropriate level of detail. Agencies must
implement the EA consistent with following principles:
(i) Develop information systems that facilitate
interoperability, application portability, and scalability of
electronic applications across networks of heterogeneous hardware,
software, and telecommunications platforms;
(ii) Meet information technology needs through cost effective
intra-agency and interagency sharing, before acquiring new
information technology resources; and
(iii) Establish a level of security for all information systems
that is commensurate to the risk and magnitude of the harm resulting
from the loss, misuse, unauthorized access to, or modification of
the information stored or flowing through these systems.
(b) How do agencies create and maintain the EA?
As part of the EA effort, agencies must use or create an
Enterprise Architecture Framework. The Framework must document
linkages between mission needs, information content, and information
technology capabilities. The Framework must also guide both
strategic and operational IRM planning.
Once a framework is established, an agency must create the EA.
In the creation of an EA, agencies must identify and document:
(i) Business Processes--Agencies must identify the work
performed to support its mission, vision and performance goals.
Agencies must also document change agents, such as legislation or
new technologies that will drive changes in the EA.
(ii) Information Flow and Relationships--Agencies must analyze
the information utilized by the agency in its business processes,
identifying the information used and the movement of the
information. These information flows indicate where the information
is needed and how the information is shared to support mission
functions.
(iii) Applications--Agencies must identify, define, and organize
the activities that capture, manipulate, and manage the business
information to support business processes. The EA also describes the
logical dependencies and relationships among business activities.
(iv) Data Descriptions and Relationships--Agencies must identify
how data is created, maintained, accessed, and used. At a high
level, agencies must define the data and describe the relationships
among data elements used in the agency's information systems.
(v) Technology Infrastructure--Agencies must describe and
identify the functional characteristics, capabilities, and
interconnections of the hardware, software, and telecommunications.
(c) What are the Technical Reference Model and Standards
Profile?
The EA must also include a Technical Reference Model (TRM) and
Standards Profile.
(i) The TRM identifies and describes the information services
(such as database, communications, intranet, etc.) used throughout
the agency.
(ii) The Standards Profile defines the set of IT standards that
support the services articulated in the TRM. Agencies are expected
to adopt standards necessary to support the entire EA, which must be
enforced consistently throughout the agency.
(iii) As part of the Standards Profile, agencies must create a
Security Standards Profile that is specific to the security services
specified in the EA and covers such services as identification,
authentication, and non-repudiation; audit trail creation and
analysis; access controls; cryptography management; virus
protection; fraud prevention; detection and mitigation; and
intrusion prevention and detection.
(3) How Will Agencies Ensure Security in Information Systems?
Agencies must incorporate security into the architecture of
their information and systems to ensure that security supports
agency business operations and that plans to fund and manage
security are built into life-cycle budgets for information systems.
(a) To support more effective agency implementation of both
agency computer security and critical infrastructure protection
programs, agencies must implement the following:
(i) Prioritize key systems (including those that are most
critical to agency operations);
(ii) Apply OMB policies and, for non-national security
applications, NIST guidance to achieve adequate security
commensurate with the level of risk and magnitude of harm;
(b) Agencies must make security's role explicit in information
technology investments and capital programming. Investments in the
development of new or the continued operation of existing
information systems, both general support systems and major
applications must:
(i) Demonstrate that the security controls for components,
applications, and systems are consistent with, and an integral part
of, the EA of the agency;
(ii) Demonstrate that the costs of security controls are
understood and are explicitly incorporated into the life-cycle
planning of the overall system in a manner consistent with OMB
guidance for capital programming;
(iii) Incorporate a security plan that complies with Appendix
III of this Circular and in a manner that is consistent with NIST
guidance on security planning;
(iv) Demonstrate specific methods used to ensure that risks and
the potential for loss are understood and continually assessed, that
steps are taken to maintain risk at an acceptable level, and that
procedures are in place to ensure that controls are implemented
effectively and remain effective over time;
(v) Demonstrate specific methods used to ensure that the
security controls are commensurate with the risk and magnitude of
harm that may result from the loss, misuse, or unauthorized access
to or modification of the system itself or the information it
manages;
(vi) Identify additional security controls that are necessary to
minimize risk to and potential loss from those systems that promote
or permit public access, other externally accessible systems, and
those systems that are interconnected with systems over which
[[Page 77684]]
program officials have little or no control;
(vii) Deploy effective security controls and authentication
tools consistent with the protection of privacy, such as public-key
based digital signatures, for those systems that promote or permit
public access;
(viii) Ensure that the handling of personal information is
consistent with relevant government-wide and agency policies;
(ix) Describe each occasion the agency decides to employ
standards and guidance that are more stringent than those
promulgated by NIST to ensure the use of risk-based cost-effective
security controls for non-national security applications;
(c) OMB will consider for new or continued funding only those
system investments that satisfy these criteria. New information
technology investments must demonstrate that existing agency systems
also meet these criteria in order to qualify for funding.
(4) How Will Agencies Acquire Information Technology?
Agencies must:
(a) Make use of adequate competition, allocate risk between
government and contractor, and maximize return on investment when
acquiring information technology;
(b) Structure major information systems into useful segments
with a narrow scope and brief duration. This should reduce risk,
promote flexibility and interoperability, increase accountability,
and better match mission need with current technology and market
conditions;
(c) Acquire off-the-shelf software from commercial sources,
unless the cost effectiveness of developing custom software is clear
and has been documented through pilot projects or prototypes; and
(d) Ensure accessibility of acquired information technology
pursuant to the Rehabilitation Act of 1973, as amended (Pub. L. 105-
220, 29 U.S.C. 794d).
6. Section 9a is revised to read as follows:
a. All Federal Agencies. The head of each agency must:
1. Have primary responsibility for managing agency information
resources;
2. Ensure that the agency implements appropriately all of the
information policies, principles, standards, guidelines, rules, and
regulations prescribed by OMB;
3. Appoint a Chief Information Officer, as required by 44 U.S.C.
3506(a), who must report directly to the agency head to carry out
the responsibilities of the agencies listed in the Paperwork
Reduction Act (44 U.S.C. 3506), the Clinger Cohen Act (40 U.S.C.
1425(b) & (c)), as well as Executive Order 13011. The head of the
agency must consult with the Director of OMB prior to appointing a
Chief Information Officer, and will advise the Director on matters
regarding the authority, responsibilities, and organizational
resources of the Chief Information Officer. For purposes of this
paragraph, military departments and the Office of the Secretary of
Defense may each appoint one official. The Chief Information Officer
must, among other things:
(a) Be an active participant during all agency strategic
management activities, including the development, implementation,
and maintenance of agency strategic and operational plans;
(b) Advise the agency head on information resource implications
of strategic planning decisions;
(c) Advise the agency head on the design, development, and
implementation of information resources.
(i) Monitor and evaluate the performance of information resource
investments through a capital planning and investment control
process, and advise the agency head on whether to continue, modify,
or terminate a program or project;
(ii) Advise the agency head on budgetary implications of
information resource decisions; and
(d) Be an active participant throughout the annual agency budget
process in establishing investment priorities for agency information
resources;
4. Direct the Chief Information Officer to monitor agency
compliance with the policies, procedures, and guidance in this
Circular. Acting as an ombudsman, the Chief Information Officer must
consider alleged instances of agency failure to comply with this
Circular, and recommend or take appropriate corrective action. The
Chief Information Officer will report instances of alleged failure
and their resolution annually to the Director of OMB, by February
1st of each year.
5. Develop internal agency information policies and procedures
and oversee, evaluate, and otherwise periodically review agency
information resources management activities for conformity with the
policies set forth in this Circular;
6. Develop agency policies and procedures that provide for
timely acquisition of required information technology;
7. Maintain the following, as required by the Paperwork
Reduction Act (44 U.S.C. 3506(b)(4) and 3511) and the Freedom of
Information Act (5 U.S.C. 552(g)): an inventory of the agency's
major information systems, holdings, and dissemination products; an
agency information locator service; a description of the agency's
major information and record locator systems; an inventory of the
agency's other information resources, such as personnel and funding
(at the level of detail that the agency determines is most
appropriate for its use in managing the agency's information
resources); and a handbook for persons to obtain public information
from the agency pursuant to these Acts.
8. Implement and enforce applicable records management policies
and procedures, including requirements for archiving information
maintained in electronic format, particularly in the planning,
design and operation of information systems.
9. Identify to the Director of OMB any statutory, regulatory,
and other impediments to efficient management of Federal information
resources, and recommend to the Director legislation, policies,
procedures, and other guidance to improve such management;
10. Assist OMB in the performance of its functions under the
PRA, including making services, personnel, and facilities available
to OMB for this purpose to the extent practicable;
11. Ensure that the agency:
(a) cooperates with other agencies in the use of information
technology to improve the productivity, effectiveness, and
efficiency of Federal programs;
(b) promotes a coordinated, interoperable, secure, and shared
government wide infrastructure that is provided and supported by a
diversity of private sector suppliers; and
(c) develops a well-trained corps of information resource
professionals.
12. Use the guidance provided in OMB Circular A-11, ``Planning,
Budgeting, and Acquisition of Fixed Assets,'' to promote effective
and efficient capital planning within the organization;
13. Ensure that the agency provides budget data pertaining to
information resources to OMB, consistent with the requirements of
OMB Circular A-11,
14. Ensure, to the extent reasonable, that in the design of
information systems with the purpose of disseminating information to
the public, an index of information disseminated by the system will
be included in the directory created by the Superintendent of
Documents pursuant to 41 U.S.C. 4101. (Nothing in this paragraph
authorizes the dissemination of
[[Page 77685]]
information to the public unless otherwise authorized.)
15. Permit, to the extent practicable, the use of one agency's
contract by another agency or the award of multi-agency contracts,
provided the action is within the scope of the contract and
consistent with OMB guidance; and
16. As designated by the Director of OMB, act as executive agent
for the government-wide acquisition of information technology.
7. Section 9b is revised to read as follows:
b. Department of State. The Secretary of State must:
1. Advise the Director of OMB on the development of United
States positions and policies on international information policy
and technology issues affecting Federal government activities and
the development of international information technology standards;
and
2. Be responsible for liaison, consultation, and negotiation
with foreign governments and intergovernmental organizations on all
matters related to information resources management, including
federal information technology. The Secretary must also ensure, in
consultation with the Secretary of Commerce, that the United States
is represented in the development of international standards and
recommendations affecting information technology. These
responsibilities may also require the Secretary to consult, as
appropriate, with affected domestic agencies, organizations, and
other members of the public.
8. Section 9c is amended by revising subparagraph 1, to read as
follows:
c. Department of Commerce. The Secretary of Commerce must:
1. Develop and issue Federal Information Processing Standards
and guidelines necessary to ensure the efficient and effective
acquisition, management, security, and use of information
technology, while taking into consideration the recommendations of
the agencies and the CIO Council;
9. Section 9e is revised to read as follows:
e. General Services Administration. The Administrator of General
Services must:
1. Continue to manage the FTS2001 program and coordinate the
follow-up to that program, on behalf of and with the advice of
agencies;
2. Develop, maintain, and disseminate for the use of the Federal
community (as requested by OMB or the agencies) recommended methods
and strategies for the development and acquisition of information
technology;
3. Conduct and manage outreach programs in cooperation with
agency managers;
4. Be a liaison on information resources management (including
Federal information technology) with State and local governments.
GSA must also be a liaison with non-governmental international
organizations, subject to prior consultation with the Secretary of
State to ensure consistency with the overall United States foreign
policy objectives;
5. Support the activities of the Secretary of State for liaison,
consultation, and negotiation with intergovernmental organizations
on information resource management matters;
6. Provide support and assistance to the CIO Council and the
Information Technology Resources Board.
7. Manage the Information Technology Fund in accordance with the
Federal Property and Administrative Services Act, as amended;
10. Section 9h is amended by removing subparagraph (10),
redesignating subparagraphs (11) and (12) as (10) and (11), and adding
the following new subparagraphs:
h. Office of Management and Budget. The Director of the Office
of Management and Budget will:
12. Evaluate agency information resources management practices
and programs and, as part of the budget process, oversee agency
capital planning and investment control processes to analyze, track,
and evaluate the risks and results of major capital investments in
information systems;
13. Notify an agency if OMB believes that a major information
system project requires outside assistance;
14. Provide guidance on the implementation of the Clinger-Cohen
Act and on the management of information resources to the executive
agencies, to the CIO Council and to the Information Technology
Resources Board; and
15. Designate one or more heads of executive agencies as
executive agent for government-wide acquisitions of information
technology.
11. Appendix II to Circular A-130, which was formerly reserved, now
incorporates OMB's guidance on the Government Paperwork Elimination Act
(OMB Memorandum M-00-10; April 25, 2000); published at 65 FR 25508-
25521 (May 2, 2000).
In addition to referencing 65 FR 25508-25521, readers may also
find a full text of the GPEA guidance on the Internet at the OMB web
site, http://www.whitehouse.gov/OMB/memoranda/index.html and at the
CIO Council home page at http://cio.gov.
12. Appendix IV of Circular A-130, is amended by revising section 1
and 2, and by adding supplemental discussions regarding Section
8(a)(5), 8(b), 9(a)(3), and 9(a)(4) of the Circular to section 3 of the
appendix, to read as follows:
1. Purpose
The purpose of this Appendix is to provide a general context and
explanation for the contents of the key Sections of the Circular.
2. Background
The Clinger-Cohen Act (also known as ``Information Technology
Management Reform Act of 1996'' (Pub. L. 104-106, Division E,
codified at 40 U.S.C. Chapter 25) grants to the Director of the
Office of Management and Budget (OMB) various authorities for
overseeing the acquisition, use, and disposal of information
technology by the Federal government, so as to improve the
productivity, efficiency, and effectiveness of Federal programs. It
supplements the information resources management (IRM) policies
contained in the Paperwork Reduction Act (PRA) (44 U.S.C. Chapter
35).
The Paperwork Reduction Act (PRA) of 1980, Public Law 96-511, as
amended by the Paperwork Reduction Act of 1995, Public Law 104-13,
codified at Chapter 35 of Title 44 of the United States Code,
establishes a broad mandate for agencies to perform their
information activities in an efficient, effective, and economical
manner. Section 3504 authorizes the Director of OMB to develop and
implement uniform and consistent information resources management
policies; oversee the development and promote the use of information
management principles, standards, and guidelines; evaluate agency
information management practices in order to determine their
adequacy and efficiency; and determine compliance of such practices
with the policies, principles, standards, and guidelines promulgated
by the Director.
The Circular implements OMB authority under the PRA with respect
to Section 3504(b), general information resources management policy,
Section 3504(d), information dissemination, Section 3504(f), records
management, Section 3504(g), privacy and security, and Section
3504(h), information technology. The Circular also implements
certain provisions of the Privacy Act of 1974 (5 U.S.C. 552a); the
Government Paperwork Elimination Act. (Pub. L. 105-277, Title XVII);
the Chief Financial Officers Act (31 U.S.C. 3512 et seq.); Sections
111 and 206 of the Federal Property and Administrative Services Act
of 1949, as amended (40 U.S.C. 759 and 487, respectively); the
Computer Security Act (40 U.S.C. 759 note); the Budget and
Accounting Act of 1921 (31 U.S.C. 1 et seq.); and Executive Order
No. 12046 of March 27, 1978, and Executive Order No. 12472 of April
3, 1984, Assignment of National Security and Emergency
Telecommunications Functions. The Circular complements 5 CFR Part
1320, Controlling Paperwork Burden on the Public, which implements
other Sections of the PRA dealing with controlling the reporting and
recordkeeping burden placed on the public.
3. Analysis
Sections 8a(5) and 8a(6). Information Dissemination Policy.
Section 8a(5). As described in Section 11 of the ``Electronic
Freedom of Information Act Amendments of 1996'' (Pub. L. 104-231), 5
U.S.C. 552(g), an agency must place its index and description of
major information and record locator systems in its reference
material or guide. We expect that this index and description would
include an agency's Government Information Locator Service (GILS)
presence as well as any other major information and record locator
systems the agency has identified.
[[Page 77686]]
In addition, each agency should prepare a handbook that
describes in one place the various ways by which a person can obtain
public information from the agency, as well as the types and
categories of information available. In preparing the handbook, each
agency should review the dissemination policies contained in this
Circular. The handbook should be in plain English and user-friendly.
Where applicable, it should indicate that the public is encouraged
to access information electronically via the agency's home page or
to search in its reading room, and that the public may also submit a
request to the agency under the Freedom of Information Act. ``Types
and categories'' of available information will vary from agency to
agency, and agencies should describe their information resources in
whatever manner seems most appropriate.
Although the law does not require that the handbook be available
on-line, OMB encourages agencies to do so as a matter of policy. The
handbook should include the following elements:
1. The location of reading rooms within the agency and within
its major field offices, as well as a brief description of the types
and categories of information available.
2. The location of the agency's World Wide Web home page.
3. A reference to the agency's FOIA regulations and how to get a
copy.
4. A reference to the agency's FOIA annual report and how to get
a copy.
5. The location of the agency's GILS page.
6. A brief description of the types and categories of
information generally available from the agency.
In addition, if there is an on-line version, it should have
electronic links to these elements wherever they exist.
Every agency has a responsibility to inform the public within
the context of its mission. This responsibility requires that
agencies distribute information at the agency's initiative, rather
than merely responding when the public requests information.
Section 8b. Information Systems and Information Technology
Management
Section 8b(1). Capital Planning and Investment Control
What Is the Capital Planning and Investment Control Process?
The capital planning and investment control process is a
systematic approach to managing the risks and returns of IT
investments. The process has three phases: select, control and
evaluate. The process covers all stages of capital programming,
including planning, budgeting and procurement. For additional
information describing capital planning, please consult Circular A-
11.
What Will Happen if I Don't Maintain an IT Capital Plan?
The IT Capital Plan is the document that demonstrates to the
agency Investment Review Board and to OMB officials, that a project
deserves Federal funds. If the agency does not provide this
information, merits of the project can not be determined.
As Part of the Agency IT Capital Plan, Do I Need To Report on Both
Development, Modernization and Enhancement (DME) as Well as Steady
State Investments?
Yes. Additional information is provided in Part 3 of OMB
Circular No. A-11, ``Planning, Budgeting, and Acquisition of Capital
Assets.''
As Part of the Portfolio View of the Agency IT Capital Plan, Do I Only
Need To Report on Major Investments?
In accordance with the Clinger-Cohen Act and Circular A-11,
agencies are required to manage all investments. They must also
provide OMB with individual IT Capital Plans for major projects, as
well as significant projects at the request of OMB.
Where Can I Get More Information About Return on Investment (ROI)?
Agencies that would like to learn more about compiling and
demonstrating projected return on investments (ROI) are encouraged
to consult the Federal CIO Council document ``ROI and the Value
Puzzle''. This document may be obtained at the CIO Council's web
page (http://cio.gov).
Why Do Agencies Need To Conduct a Benefit-Cost Analysis?
Benefit-cost analyses provide vital management information on
the most efficient allocation of human, financial, and information
resources to support agency missions. Agencies should conduct a
benefit-cost analysis for each information system to support
management decision making to ensure: (a) Alignment of the planned
information system with the agency's mission needs; (b)
acceptability of information system implementation to users inside
the Government; (c) accessibility to clientele outside the
Government; and (d) realization of projected benefits. When
preparing benefit-cost analyses to support investments in
information technology, agencies should seek to quantify the
improvements in agency performance results through the measurement
of program outputs.
The requirement to conduct a benefit-cost analysis need not
become a burdensome activity for agencies. The level of detail
necessary for such analyses varies greatly and depends on the nature
of the proposed investment. Proposed investments in ``major
information systems'' as defined in this Circular require detailed
and rigorous analysis. This analysis should not merely serve as
budget justification material, but should be part of the ongoing
management oversight process to ensure prudent allocation of scarce
resources. Proposed investments for information systems that are not
considered ``major information systems'' can be analyzed more
informally.
While it is not necessary to create a new benefit-cost analysis
at each stage of the information system life cycle, it is useful to
refresh these analyses with up-to-date information to ensure the
continued viability of an information system prior to and during
implementation. Reasons for updating a benefit-cost analysis may
include such factors as significant changes in projected costs and
benefits, significant changes in information technology
capabilities, major changes in requirements (including legislative
or regulatory changes), or empirical data based on performance
measurement gained through prototype results or pilot experience.
How Will Portfolio Management Aid in the Selection of Investments?
Agencies must also weigh the relative benefits of proposed
investments in information technology across the agency. Given the
fiscal constraints facing the Federal government, agencies should
fund a portfolio of investments across the agency that maximizes
return on investment for the agency as a whole. Agencies should also
emphasize those proposed investments that show the greatest
probability (i.e., display the lowest financial and operational
risk) of achieving anticipated benefits for the organization.
Is There a Preferred Model for Information Life Cycles?
The policy statements in this Circular describe an information
system life cycle. It does not, however, make a definitive statement
that there must be, for example, four versus five phases of a life
cycle because the life cycle varies by the nature of the information
system. Only two phases are common to all information systems--a
beginning and an end.
While each phase of an information system life cycle may have
unique characteristics, the dividing line between the phases may not
always be distinct. For instance, both planning and evaluation must
continue throughout the information system life cycle. In fact,
during any phase, it may be necessary to revisit the previous stages
based on new information or changes in the environment in which the
system is being developed.
Why Are Post-Implementation Reviews Necessary?
Agencies will complete a retrospective evaluation of information
systems once operational to validate projected savings, changes in
practices, and effectiveness in serving stakeholders. These post-
implementation reviews may also serve as the basis for agency-wide
learning about effective management practices.
Section 8b(2). Enterprise Architectures
How Will the EA Guide the Agency?
An EA should guide the agency's management of information
resources for agency-wide information and information technology
needs consistent with Section 8b(2) of this Circular. The EA will
help the agency cope with technology and business change by serving
as a reference for updates to existing and new information systems.
The EA will also assure interoperability of business processes,
data, applications and technology as agencies integrate proposed
information systems projects with one another and with existing
legacy systems.
[[Page 77687]]
Where Can I Get More Information Describing the EA?
Agencies that require additional information on developing or
maintaining an EA are encouraged to consult the Federal CIO Council
document entitled, ``The Federal Enterprise Architecture (FEA)
Framework,'' which is available on the CIO Council's web site
(http://cio.gov). The Architecture Plus web site (http://www.itpolicy.gsa.gov/mke/archplus/archhome.htm) also has a number of
useful documents.
What Is an Open Systems Environment?
An open system should be based on an architecture with published
or documented interface specifications that have been adopted by a
standards settings body.
What Enterprise Architecture Issues Must an Agency Consider That Have
Government-Wide or Multiple Agency Implications?
The CIO Council has begun to address this issue in its ``Federal
Enterprise Architecture Framework (FEAF), Version 1.0,'' and
subsequent versions. The FEAF was created to promote shared
development for common Federal processes, interoperability, and
sharing of information among the agencies of the Federal government
and other governmental entities, as required by the Clinger-Cohen
Act. The FEAF is recommended for use in (1) Federal government-wide
efforts, (2) multi-Federal agency (2 or more agencies) efforts and,
(3) whenever Federal business-areas and substantial Federal
investment are involved with international, state, or local
governments. The Federal Enterprise Architecture Framework, Version
1.0, which is a conceptual model, begins the process of defining a
better documented and coordinated structure for cross-cutting
businesses and technology developments in the government.
Collaboration among agencies who share a common business function
promotes information sharing and is a prerequisite for the creation
of a responsive electronic government.
Where Can I Get More Information on Federal EA Efforts?
Some other examples of ongoing Federal government efforts in
this arena are Treasury Enterprise Architecture Framework (TEAF) and
Command, Control, Communications, Intelligence, Surveillance, and
Reconnaissance (C4ISR).
Section 8b(3) Securing Agency Information Systems
How Should Agencies Incorporate Security Into Management of Information
Resources?
Effective security is an essential element of all information
systems. A process assuring adequate security must be integrated
into the agency's management of information resources. This process
should be a component of the both capital planning process and the
EA. A system's security requirements must be supported by the agency
EA in order for it to be considered during the select phase of the
capital planning process. Agencies will use the control and evaluate
phases of capital planning to ensure these security requirements are
met throughout the system's life cycle. For more information on
computer security please read Appendix III of this Circular.
Ultimately, Who Determines the Acceptable Level of Security for a
System?
Each agency program official must understand the risk to systems
under their control. They are also responsible for determining the
acceptable level of risk, ensuring adequate security is maintained
to support and assist the programs under their control, ensuring
that security controls comport with program needs and appropriately
accommodate operational necessities. In addition, program officials
should work in conjunction with Chief Information Officers and other
appropriate agency officials so that security measures support
agency information architectures.
Section 8b(4) Acquiring Information Technology
What Should Agencies Consider Before Acquiring a COTS Solution?
Commercial-off-the-shelf (COTS) products can provide agencies a
cost effective and efficient solution. However, often COTS products
require customization for seamless use. Therefore agencies must
still thoroughly examine the impact of a COTS product selection. A
lessons-learned guide describing the risks of COTS products has been
published by the Information Technology Resources Board (ITRB). The
guide, entitled ``Assessing the Risks of Commercial-Off-The-Shelf
(COTS) Applications,'' is available on the ITRB web site (http://itrb.gov).
Section 9a(3). Chief Information Officer (CIO).
To Whom Does the CIO Report?
Each agency must appoint a Chief Information Officer, as
required by 44 U.S.C. 3506(a), who will report directly to the
agency's head to carry out the responsibilities of the agency under
the PRA.
What Is the CIO's Role in the Capital Planning Process?
The CIO will ensure that a capital planning process is
established and rigorously used to define and validate all
information resource investments. Through this process, the CIO will
monitor and evaluate the performance of the information technology
portfolio of the agency and advise the agency head on key budget,
program, and implementation issues concerning information
technology.
Additionally, the CIO will help establish a board composed of
senior level managers, including the Chief Financial Officer and
Chief Procurement Executive, who will have the responsibility of
making key business recommendations on information resource
investments, and who will be continuously involved. Many agencies
will institute a second board, composed of program or project level
managers, with more detailed business and information resource
knowledge. They will be able to provide technical support to the
senior level board in proposing, evaluating, and recommending
information resource investments.
What Is the CIO's Role in the Annual Budget Process?
The CIO will be an active participant during all agency annual
budget processes and strategic planning activities, including the
development, implementation, and maintenance of agency strategic
plans. The CIO's role is to provide leadership and a strategic
vision for using information technology to transform the agency.
CIO's must also ensure that all information resource investments
deliver a substantial mission benefit to the agency and/or a
substantial return on investment (ROI) to the taxpayer.
Additionally, the CIO will ensure integration of information
resource planning processes and documentation with the agency's
strategic, performance and budget process, in coordination with the
CFO and Procurement Executive.
Section 9a(4)
Why Is the CIO Considered an Ombudsman?
The CIO designated by the head of each agency under 44 U.S.C.
3506(a) is charged with carrying out the responsibilities of the
agency under the PRA. Agency CIOs are responsible for ensuring that
their agency practices are in compliance with OMB policies. It is
envisioned that the CIO will work as an ombudsman to investigate
alleged instances of agency failures to adhere to the policies set
forth in the Circular and to recommend or take corrective action as
appropriate. Agency heads should continue to use existing mechanisms
to ensure compliance with laws and policies.
[FR Doc. 00-31507 Filed 12-11-00; 8:45 am]
BILLING CODE 3110-01-P