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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

March 2011: 

Electronic Government: 

National Archives and Records Administration's Fiscal Year 2011 
Expenditure Plan: 

GAO-11-299: 

GAO Highlights: 

Highlights of GAO-11-299, a report to congressional committees. 

Why GAO Did This Study: 

Since 2001, the National Archives and Records Administration (NARA) 
has been working to develop an Electronic Records Archive (ERA) to 
preserve and provide access to massive volumes of all types of 
electronic records. NARA originally planned to complete the system in 
2012, but has repeatedly revised the program schedule and estimated 
cost and is now planning to deploy an ERA system with reduced 
functionality by the end of fiscal year 2011. As required by the 
Consolidated Appropriations Act, 2010, and the Continuing 
Appropriations Act, 2011, NARA submitted an expenditure plan to 
Congress to support its request for fiscal year 2011 ERA funding. The 
legislation also requires that this plan meet six conditions, 
including review by GAO. GAO’s objectives in reviewing the fiscal year 
2011 plan were to (1) determine whether the plan satisfies legislative 
conditions, (2) determine the extent to which NARA has implemented 
prior GAO recommendations, and (3) provide any other observations on 
the plan or the ERA acquisition. To do this, GAO reviewed the 
expenditure plan and other agency documents and interviewed NARA 
officials. 

What GAO Found: 

NARA’s fiscal year 2011 expenditure plan satisfies four of the six 
legislative conditions and partially satisfies two. Specifically, it 
partially satisfies the condition that NARA meet requirements for 
reviewing the progress of capital investments, such as ERA. While NARA 
has held regular meetings with senior-level agency management to 
review ERA progress, these groups did not document approval of 
important schedule and scope changes, and NARA did not validate the 
estimated benefits and costs of deployed ERA capabilities. Further, 
NARA partially satisfies the condition that the expenditure plan be 
approved by NARA and the Office of Management and Budget (OMB). NARA 
approved the expenditure plan in October 2010, but the plan was not 
approved by OMB. Without approval from OMB, Congress will have limited 
assurance of the plan’s reliability and accuracy. 

NARA has fully implemented one of GAO’s four prior recommendations and 
partially implemented three. It implemented a recommendation to ensure 
that ERA’s requirements are managed using a disciplined process by, 
for example, developing a process to keep requirements current. NARA 
partially implemented three other recommendations. First, to improve 
its executive-level oversight, NARA documented meetings to review ERA 
progress, but did not document approval of important changes to a 
recent phase, or increment, of the system. Second, NARA added 
information in its expenditure plan on ERA cost, schedule, and 
performance as recommended, but the plan lacks other key information, 
such as the estimated costs of an ongoing increment. Third, NARA 
documented a plan to strengthen its processes for measuring program 
progress, but continues to have weaknesses in this area, including not 
accurately portraying ERA program status. 

GAO has three observations on the expenditure plan and ERA acquisition: 

* The fiscal year 2011 expenditure plan does not provide a reliable 
basis for informed investment decision making. For example, NARA’s 
cost estimates do not reliably reflect the work to be completed 
because of weaknesses in its supporting methodology, and the plan does 
not clearly show what functionality is planned to be delivered in the 
final year of development, by when, and at what cost. 

* NARA’s expenditure plan does not address how remaining multiyear 
funds from fiscal year 2010 will be allocated. Specifically, NARA’s 
plans for using the remaining $20.1 million are not discussed in the 
plan. 

* Although NARA recently updated the ERA requirements, the agency has 
not yet determined which of the requirements would be addressed before 
the end of development in fiscal year 2011 and has not fully 
prioritized the requirements to ensure that critical stakeholder needs 
will be met. 

Without a reliable expenditure plan and adequate management of the ERA 
acquisition, it is unclear whether NARA can make substantial progress 
in delivering additional system capabilities by the end of fiscal year 
2011 to justify its planned investment. 

What GAO Recommends: 

Congress should consider limiting funding of further ERA development 
until NARA addresses weaknesses in its oversight and management of the 
acquisition. GAO is also recommending actions for NARA to take to 
address these weaknesses. NARA concurred with GAO’s recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-11-299] or key 
components. For more information, contact David A. Powner at (202) 512-
9286 or pownerd@gao.gov. 

[End of section] 

Contents: 

Letter: 

Conclusions: 

Matter for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Briefing for Staff of Congressional Committees: 

Appendix II: Comments from the National Archives and Records 
Administration: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Abbreviations: 

EOP: Executive Office of the President: 

ERA: Electronic Records Archives: 

EVM: earned value management: 

NARA: National Archives and Records Administration: 

OMB: Office of Management and Budget: 

OPA: Online Public Access: 

SA-CMM: Software Acquisition-Capability Maturity Model: 

SEI: Software Engineering Institute: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

March 4, 2011: 

The Honorable Richard J. Durbin: 
Chairman: 
The Honorable Jerry Moran: 
Ranking Member: 
Subcommittee on Financial Services and General Government: 
Committee on Appropriations: 
United States Senate: 

The Honorable Jo Ann Emerson: 
Chairwoman: 
The Honorable José E. Serrano: 
Ranking Member: 
Subcommittee on Financial Services and General Government: 
Committee on Appropriations: 
House of Representatives: 

Since 2001, the National Archives and Records Administration (NARA) 
has been working to develop a modern Electronic Records Archive (ERA). 
According to NARA, this major information system is estimated to cost 
between $456 and $481 million and is intended to preserve and provide 
access to massive volumes of all types of electronic records, 
independent of their original hardware or software. NARA plans for the 
system to manage the full life-cycle of electronic records, from their 
ingestion through preservation and dissemination to customers. 

Because of the system's complexity, NARA awarded a contract to 
Lockheed Martin to develop ERA in five phases, or increments, the 
first of which is referred to as the "ERA base." According to NARA, 
the ERA base included initial functionality for transferring federal 
electronic records into the system and achieved initial operating 
capability in June 2008. The second increment includes the Executive 
Office of the President (EOP) system or "ERA EOP," and NARA certified 
that it reached initial operating capability in December 2008. NARA 
originally planned to complete the development of the remaining 
increments and achieve full operating capability in March 2012. 
However, in acquiring this system, NARA has repeatedly revised the 
program schedule and increased the estimated costs. As a result, in 
July 2010, the Office of Management and Budget (OMB) directed NARA to 
halt ERA development at the end of fiscal year 2011, 1 year earlier 
than originally planned. 

As mandated by the Consolidated Appropriations Act,[Footnote 1] NARA 
is required to submit an expenditure plan before obligating multiyear 
funds for the ERA program. On October 1, 2010, the agency submitted 
its fiscal year 2011 expenditure plan to support its request for $85.5 
million in ERA funding, which includes $61.8 million in multiyear 
funds. In the expenditure plan, NARA also included support for 
requests at two alternative funding levels--$72.0 million and $61.4 
million--based on congressional direction. Subsequently, on October 
19, 2010, NARA submitted a summary of its expenditure plan that 
included revised requests at $72 million and $65 million funding 
levels. According to NARA, both the expenditure plan and the summary 
reflect fiscal year 2011 as the final year of ERA development. 

As in the previous year, the plan must satisfy six legislative 
conditions, including a review by GAO. Our objectives in reviewing the 
plan and the summary were to (1) determine whether NARA's fiscal year 
2011 expenditure plan satisfies legislative conditions, (2) determine 
the extent to which NARA has implemented prior GAO recommendations, 
and (3) provide any other observations about the expenditure plan and 
the ERA acquisition. 

To assess compliance with legislative conditions, we analyzed the 
expenditure plan submitted by NARA in October 2010 and reviewed its 
budget submission to OMB, along with other program documentation. To 
determine the extent to which NARA had implemented our prior 
recommendations, we obtained and reviewed agency documents, which 
included briefings to senior management on ERA cost, schedule, and 
performance; requirements management documentation; and earned value 
management processes. To develop observations on the ERA expenditure 
plan and acquisition, we analyzed fiscal year 2010 and 2011 cost, 
schedule, and planned system functionality information contained in 
the expenditure plans and other ERA briefings. In addition, we 
reviewed and analyzed requirements management documentation, including 
the revised list of ERA requirements. We also interviewed NARA and 
Lockheed Martin officials. 

To assess the reliability of the data in the expenditure plan, we 
interviewed NARA officials to gain an understanding of the data and 
discussed our use of the data in this briefing. We concluded that the 
data were sufficiently reliable for our purposes. In addition, we 
reviewed NARA budget documents, as well as its consolidated financial 
statement results for the fiscal year 2010 Performance and 
Accountability Report. We did not, however, assess the reliability of 
the information in these documents. 

We conducted this performance audit from October 2010 to March 2011 at 
NARA's College Park, Maryland, location in accordance with generally 
accepted government auditing standards. Those standards require that 
we plan and perform the audit to obtain sufficient, appropriate 
evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

On December 21, 2010, we transmitted the results of our review to the 
staffs of the Senate Subcommittee on Financial Services and General 
Government, Committee on Appropriations, and the House Subcommittee on 
Financial Services and General Government, Committee on 
Appropriations. This report transmits the briefing materials we 
provided, the matter we suggest Congress consider, and the 
recommendations that we made to the Archivist of the United 
States.[Footnote 2] The full briefing materials, including details on 
our scope and methodology, are reprinted as appendix I. 

In summary, we made the following major points: 

* NARA's fiscal year 2010 expenditure plan satisfies four of the six 
legislative conditions. Specifically, NARA's plan complies with the 
agency's enterprise architecture, conforms to the agency's enterprise 
life-cycle methodology, reflects certain system acquisition best 
practices, and was reviewed by GAO. The expenditure plan partially 
satisfies the other two conditions: 

- NARA partially satisfies the condition that it develop capital 
planning and investment control review processes designed to help 
ensure that projects are being implemented at an acceptable cost and 
within expected time frames and that they are contributing to 
observable improvements in mission performance. While NARA has 
conducted regular meetings with senior-level agency management to 
review ERA progress, these groups did not document approval of 
important schedule and scope changes to a recent ERA increment. 
Further, NARA has not conducted post-implementation reviews of 
deployed ERA capabilities, such as the recently deployed congressional 
records component, to validate estimated benefits and costs. As a 
result, NARA has limited ability to ensure that the system is being 
implemented at an acceptable cost and within expected time frames, and 
that deployed capabilities are contributing to observable improvements 
in mission performance. 

- NARA partially satisfies the condition that the expenditure plan be 
approved by the agency and OMB. NARA approved the expenditure plan in 
October 2010, but the plan was not approved by OMB because, according 
to NARA officials, OMB will only review the expenditure plan if there 
is an existing appropriation with language requiring its review. 
Without approval from OMB, Congress will have limited assurance that 
the plan is accurate and reliable. 

* NARA has fully implemented one of our prior recommendations and 
partially implemented three: 

- NARA implemented our recommendation to ensure that ERA's 
requirements are managed using a disciplined process by updating the 
ERA requirements document and developing a process to ensure that the 
ERA requirements are kept current following significant changes to the 
program, such as significant modifications to the contract. 

- NARA has partially implemented three other recommendations. First, 
in response to our recommendation that NARA ensure that its investment 
review process has adequate executive-level oversight by maintaining 
documentation of the results of reviews, NARA documented meetings that 
its senior management attended where the ERA program was discussed, 
but the agency did not document approval of important changes to a 
recent increment through its review process. Second, in response to 
our recommendation that NARA provide additional information in the 
fiscal year 2011 expenditure plan on what was spent and delivered for 
deployed increments, NARA added information on delivered functionality 
and additional capabilities planned for fiscal year 2011. However, the 
expenditure plan lacked other important information, such as the 
estimated fiscal year 2011 costs and the expected completion date of 
an ongoing increment. Third, in response to our recommendation to 
strengthen its use of earned value processes, NARA documented an 
action plan to improve its earned value processes, but continues to 
have weaknesses in this area. Among other things, we found that ERA's 
earned value data trends do not accurately portray program status, and 
future cost overruns would likely be between $195 and $433 million if 
the full ERA system were to be completed as originally designed. 
[Footnote 3] 

* We made three observations related to the ERA program and fiscal 
year 2011 expenditure plan and summary: 

- NARA's fiscal year 2011 ERA expenditure plan does not provide a 
reliable basis for informed investment decision making. Specifically, 
NARA's plan does not clearly show what functions have been delivered 
to date or how actual costs compare to planned costs. For example, the 
plan does not clearly show the system functions of an ongoing 
increment that have been delivered and how the actual costs of this 
increment compare to the amount NARA planned to spend, as reported in 
the fiscal year 2010 expenditure plan. Further, even though NARA plans 
to end development in fiscal year 2011, the fiscal year 2011 
expenditure plan does not clearly show what functionality is planned 
to be delivered, by when, and at what cost during this period. For 
example, the plan does not discuss the delivery date of an ongoing 
increment, nor the fiscal year 2011 costs associated with completing 
this increment. Lastly, NARA's cost estimates, used as the basis for 
determining its fiscal year 2011 funding requests, do not reliably 
reflect the work to be completed because of weaknesses in the 
supporting methodology. For example, while NARA's estimates were based 
on information provided by the contractor, including estimates of the 
total lines of software code required and the related costs, these 
data could not be traced back to their original sources, and NARA did 
not validate the information when preparing its cost estimates. 

- NARA's fiscal year 2011 expenditure plan does not address how 
remaining multiyear funds from fiscal year 2010 will be allocated. 
Specifically, in fiscal year 2010, NARA spent $41.7 million of the 
$61.8 million in accumulated multiyear funds that it was provided by 
Congress to develop the ERA system, which resulted in a balance of 
$20.1 million that is available for obligation in fiscal year 2011. 
According to NARA officials, the ERA program plans to use the $20.1 
million to fund development efforts needed to make the system 
available to all federal agencies, as well as to fund other operations 
and maintenance costs. However, NARA's plans for using these funds and 
their supporting details are not included in the fiscal year 2011 
expenditure plan or the revised summary. Until NARA specifies how it 
will use the multiyear funds remaining from fiscal year 2010, 
appropriators will lack information important for evaluating NARA's 
fiscal year 2011 request. 

- NARA has not yet determined which ERA requirements will be 
implemented in fiscal year 2011, nor fully prioritized the remaining 
requirements. In June 2010, we reported that NARA had developed and 
documented a set of 853 high-level business requirements for ERA and 
planned to complete about 57 percent of them by the end of fiscal year 
2010. Subsequently, in July 2010, NARA updated its requirements 
document. According to NARA, the original 853 requirements were 
decomposed to a more detailed set of 1,577 requirements, portions of 
which were allocated to Increments 1 through 5, deferred to post-
Increment 5 (i.e., post-fiscal year 2011), or removed from the scope 
of the ERA program. However, NARA could not determine which of the 
remaining requirements would be addressed before the end of fiscal 
year 2011 because, according to NARA officials, the requirements were 
subject to ongoing negotiations with the development contractor. This 
uncertainty is further exacerbated because NARA has not fully 
prioritized its requirements. Maintaining a prioritized set of system 
requirements can better ensure that the requirements that are most 
critical to the customer and other stakeholders are addressed quickly. 
Until the ERA program fully prioritizes the ERA requirements to be 
completed during fiscal year 2011, it will be unclear what system 
development work is planned to be completed and whether it will result 
in functionality that is most critical to NARA's customers and other 
stakeholders. 

Conclusions: 

While NARA's fiscal year 2011 expenditure plan meets four of the six 
legislative conditions, the lack of critical capital planning and 
oversight steps--including documentation demonstrating approval of 
significant changes to a recent ERA increment, post-implementation 
reviews of deployed capabilities, and OMB's approval of the 
expenditure plan--limits NARA's ability to ensure that the system is 
being implemented at an acceptable cost and within expected time 
frames and contributes to observable improvements in mission 
performance. These issues are further exacerbated by the agency's 
partial implementation of several open GAO recommendations, such as 
those related to improving investment oversight and earned value 
processes. With significant weaknesses in many basic oversight and 
management processes, as well as continued delays in completing 
Increment 3, NARA's ability to make significant development progress 
in the remainder of the fiscal year will be challenged. 

In addition, without a reliable ERA expenditure plan, NARA has not 
provided adequate information to assist congressional oversight and 
informed decision making related to the use of appropriated funds. 
When these weaknesses are combined with the lack of prioritization of 
the remaining requirements under negotiation for fiscal year 2011, 
Congress has little assurance that additional funds allocated to ERA 
will result in significant benefits to potential users. With OMB's 
direction to stop development after 2011, it is unclear whether NARA 
will be able to effectively address the full range of weaknesses we 
identified and still have adequate time to complete significant 
development efforts. 

Matter for Congressional Consideration: 

The identified deficiencies in NARA's expenditure plan and management 
of the ERA acquisition make it unclear whether NARA can make 
substantial progress in delivering additional ERA system capabilities 
that justify its planned investment by the end of fiscal year 2011. As 
such, we suggest that Congress consider employing an accountability 
mechanism that limits NARA's ability to use funds appropriated for ERA 
development until NARA implements an adequate capital planning and 
investment control process, updates its expenditure plan to clearly 
describe what system capabilities and benefits are to be delivered in 
fiscal year 2011, and establishes an associated set of prioritized 
system requirements and adequate earned value reporting. 

Recommendations for Executive Action: 

We are recommending that the Archivist of the United States 
immediately take the following two actions while the current system 
development contract is active: 

* Report to Congress on the specific outcomes to be achieved with the 
balance of any previous multiyear funds in fiscal year 2011. 

* Ensure that the ERA requirements planned for fiscal year 2011 are 
fully prioritized so that those most critical to NARA's customers and 
other stakeholders are addressed. 

To ensure that any future efforts are completed within reasonable 
funding and time constraints, we are recommending that the Archivist 
of the United States take the following four actions: 

* Ensure that significant changes to ERA's program's cost, schedule, 
and scope are approved through NARA's investment review process. 

* Conduct post-implementation reviews of deployed ERA capabilities to 
validate estimated benefits and costs. 

* Submit ERA expenditure plans to OMB for review and approval prior to 
submitting to Congress. 

* Update the ERA Requirements Management Plan and related guidance to 
mandate requirements prioritization throughout the project's life- 
cycle. 

Agency Comments: 

In written comments on a draft of this report, which are reprinted in 
appendix II, the Archivist of the United States concurred with our six 
recommendations. Specifically, he stated that NARA has sufficiently 
addressed the first two recommendations. He further stated that NARA 
would be unable to address the final four recommendations in a near- 
term action plan since those were specific to a future ERA development 
effort. The Archivist also noted that NARA is developing an addendum 
to the fiscal year 2011 expenditure plan to provide updated 
information on ERA requirements, costs, and the schedule of software 
releases. 

We are sending copies of this report to the Archivist of the United 
States. The report will also be available at no charge on the GAO Web 
site at [hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions concerning this report, 
please contact me at (202) 512-9286 or by e-mail at pownerd@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. GAO staff who 
made major contributions to this report are listed in appendix III. 

Signed by: 

David A. Powner: 
Director, Information Technology Management Issues: 

[End of section] 

Appendix I: Briefing for Staff of Congressional Committees: 

Electronic Government: Review of the National Archives and Records 
Administration's Fiscal Year 2011 Electronic Records Archive 
Expenditure Plan: 

Briefing for Staff Members of the Subcommittee on Financial Services 
and General Government, Committee on Appropriations, U.S. Senate
and the Subcommittee on Financial Services and General Government, 
Committee on Appropriations, House of Representatives: 

December 21, 2010: 

Contents: 
* Introduction; 
* Objectives, Scope, and Methodology; 
* Results in Brief; 
* Background; 
* Results; 
* Conclusions; 
* Matter for Congressional Consideration; 
* Recommendations for Executive Action; 
* Agency Comments and Our Evaluation. 

Introduction: 

Since 2001, the National Archives and Records Administration (NARA) 
has been working to develop a modern Electronic Records Archive (ERA). 
According to NARA, this major information system is estimated to cost 
between $456 and $481 million and is intended to preserve and provide 
access to massive volumes of all types of electronic records, 
independent of their original hardware or software. NARA plans for the 
system to manage the full life cycle of electronic records, from their 
ingestion through preservation and dissemination to customers. It is 
to consist of: 

* infrastructure elements, including hardware and operating systems; 

* business applications that will support the transfer, preservation, 
dissemination, and management of all types of records; and; 

* a means for public access via the Internet. 

Because of the system's complexity, NARA awarded a contract to 
Lockheed Martin to develop ERA in five phases, or increments, the 
first of which is referred to as the "ERA base." According to NARA, 
the ERA base included initial functionality for transferring federal 
electronic records into the system and achieved initial operating 
capability in June 2008. The second increment includes the Executive 
Office of the President (EOP) system or "ERA EOP," and NARA certified 
that it reached initial operating capability in December 2008. NARA 
originally planned to complete the development of the remaining 
increments and achieve full operating capability in March 2012. 
However, in acquiring this system, NARA has repeatedly revised the 
program schedule and increased the estimated costs. As a result, in 
July 2010, the Office of Management and Budget (OMB) changed the 
direction of the program, and NARA is now planning to deploy an ERA 
system with reduced functionality by the end of fiscal year 2011. 

As mandated by the Consolidated Appropriations Act,[Footnote 4] NARA 
is required to submit an expenditure plan before obligating multi-year 
funds for the ERA program. The plan must satisfy the following 
legislative conditions: 

* meet the capital planning and investment control review requirements 
established by OMB; 

* comply with the agency's enterprise architecture; 

* conform to the agency's enterprise life-cycle methodology; 

* comply with the acquisition rules, requirements, guidelines, and 
system acquisition management practices of the federal government; 

* be approved by the agency and OMB; and; 

* be reviewed by GAO. 

On October 1, 2010, the agency submitted its fiscal year 2011 
expenditure plan to the relevant House and Senate appropriations 
committees to support its request for $85.5 million in ERA funding. Of 
this amount, $61.8 million consists of multi-year funds allocated to 
ERA. In the expenditure plan, NARA also included support for requests 
at two alternative funding levels—$72.0 million and $61.4 million—
based on congressional direction. Subsequently, on October 19, 2010, 
NARA submitted a summary of its expenditure plan to the appropriations 
committees that included revised requests at $72 million and $65 
million funding levels. According to NARA, both the expenditure plan 
and the summary reflect fiscal year 2011 as the final year of ERA 
development. 

Objectives, Scope, and Methodology: 

Our objectives were to: 

* determine whether NARA's fiscal year 2011 expenditure plan satisfies 
legislative conditions; 

* determine the extent to which NARA has implemented prior GAO 
recommendations: and; 

* provide any other observations about the expenditure plan and the Mk 
acquisition. 

To assess compliance with legislative conditions, we: 

* obtained and reviewed NARA's briefings to senior management and OMB. 
minutes of Information Technology Executive Committee meetings, 
information related to post-implementation reviews of deployed ERA 
functionality, and the fiscal year 2011 exhibit 300 submissions 
[Footnote 5] to OMB to determine the extent to which the agency has 
complied with OMB's capital planning and investment control 
requirements; 

* obtained and reviewed data on NARA's enterprise architecture to 
determine the status of the agency's enterprise architecture efforts; 

* reviewed NARA's ERA system life-cycle processes, which include 
processes for managing system investments, configuration management, 
and managing risks, and reviewed related agency documentation 
describing how these processes were implemented for the ERA project, 
such as minutes of oversight boards and risk watchlists to determine 
if ERA conforms with NARA's enterprise life-cycle methodology; 

* obtained and reviewed NARA documentation on the ERA acquisition, 
which included internal assessments of ERA compliance with the 
Software Engineering Institute's Capability Maturity Model, to 
determine if NARA follows system acquisition best practices; 

* obtained and reviewed information related to the agency's and OMB's 
approval of the expenditure plan; and; 

* reviewed and analyzed the fiscal year 2011 expenditure plan 
submitted by NARA on October 1, 2010, and a summary of the expenditure 
plan with revised information submitted by NARA on October 19, 2010. 

To determine the extent to which NARA has implemented our prior 
recommendations, we obtained and reviewed agency documents, which 
include briefings to senior management on ERA cost, schedule, and 
performance: requirements management documentation; earned value 
management processes; and the expenditure plan. 

To develop observations on the ERA expenditure plan and acquisition, 
we analyzed fiscal year 2010 and 2011 cost, schedule, and planned 
system functionality information contained in the expenditure plans 
and other ERA briefings. We reviewed and analyzed requirements 
management documentation, including the revised list of ERA 
requirements. We also interviewed NARA and Lockheed Martin officials. 

To assess the reliability of the data in the expenditure plan, we 
interviewed NARA officials in order to gain an understanding of the 
data and discussed our use of the data in this briefing. We concluded 
that the data were sufficiently reliable for our purposes. In 
addition, we reviewed NARA budget documents as well as its 
consolidated financial statement results for the fiscal year 2010 
Performance and Accountability Report, We did not, however, assess the 
reliability of the information in these documents. 

We conducted this performance audit from October 2010 to December 2010 
in accordance with generally accepted government 'auditing standards, 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Results in Brief: 

NARA's fiscal year 2011 expenditure plan satisfies four of the six 
legislative conditions contained in the 2010 Consolidated 
Appropriations Act. Specifically. NARA's plan complies with the 
agency's enterprise architecture. conforms to the agency's enterprise 
life-cycle methodology, reflects certain system acquisition best 
practices. and was reviewed by GAO. The expenditure plan partially 
satisfies the other two conditions. 

* NARA partially satisfies the condition that it develop capital 
planning and investment control review processes designed to help 
ensure that projects are being implemented at an acceptable cost and 
within expected time frames. While NARA has conducted regular meetings 
with senior-level agency management to review ERA progress, these 
groups did not document approval of important schedule and scope 
changes to a recent ERA increment, Further, NARA has not conducted 
post-implementation reviews of deployed ERA capabilities, such as the 
recently deployed congressional records component, to validate 
estimated benefits and costs. As a result, NARA has limited ability to 
ensure that the system is being implemented at an acceptable cost and 
within expected time frames, and that deployed capabilities are 
contributing to observable improvements in mission performance. 

* NARA partially satisfies the condition that the expenditure plan be 
approved by the agency and OMB. NARA approved the expenditure plan in 
October 2010, but the plan was not approved by OMB because, according 
to NARA officials, OMB will only review the expenditure plan if there 
is an existing appropriations bill with language requiring its review, 
Without approval from OMB, Congress will have limited assurance that 
the plan is accurate and reliable. 

NAHA fully implemented one of our prior recommendations and partially 
implemented three: 

* NARA implemented our recommendation to ensure that ERA's 
requirements are managed using a disciplined process by updating the 
ERA requirements document and developing a process to ensure that the 
ERA requirements are kept current following significant changes to the 
program, such as significant modifications to the contract. 

* NARA has partially implemented three other recommendations. First, 
in response to our recommendation that NARA ensure that its investment 
review process has adequate executive-level oversight by maintaining 
documentation of the results of reviews, NARA documented meetings that 
its senior management attended where the ERA program was discussed, 
but the agency did not document approval of important changes to a 
recent increment through its review process. Second, in response to 
our recommendation that NARA provide additional information in the 
fiscal year 2011 expenditure plan on what was spent and delivered for 
deployed increments, NARA added information on delivered functionality 
and additional capabilities planned for fiscal year 2011, However, our 
review of the expenditure plan showed that it lacked other important 
information, such as the estimated fiscal year 2011 costs and expected 
completion date of an ongoing increment. Third, in response to our 
recommendation to strengthen its use of earned value processes, NARA 
documented an action plan to improve its earned value processes, but 
continues to have weaknesses in this area. Among other things. we 
found that ERA's earned value data trends do not accurately portray 
program status and future cost overruns would likely be between $195 
and $433 million if the full ERA system is completed as originally 
designed, 

We have three observations related to the ERA program and fiscal year 
2011 expenditure plan: 

* NARA's fiscal year 2011 ERA expenditure plan does not provide a 
reliable basis for informed investment decision-making. Specifically, 
we have identified the following weaknesses: 

- NARA's plan does not clearly show what functions have been delivered 
to date or how actual costs compare to planned costs. For example, the 
plan does not clearly show the system functions of an ongoing 
increment that have been delivered and how the actual costs of this 
increment compare to the amount NARA planned to spend, as reported in 
the fiscal year 2010 expenditure plan. 

- NARA's plan does not clearly show what functionality is planned to 
be delivered in the final year of development, by when, and at what 
cost. For example. the plan does not discuss the delivery date of an
ongoing increment, nor the fiscal year 2011 costs associated with 
completing this increment. 

- NARA's cost estimates. used as the basis for determining its fiscal 
year 2011 funding requests, do not reliably reflect the work to be 
completed because of weaknesses in the supporting methodology. For 
example, while NARA's estimates were based on information provided by 
the contractor, including estimates of the total lines of software 
code required and the related costs, these data could not be traced 
back to their original sources and NARA did not validate the 
information when preparing its cost estimates. 
	
NARA officials attributed many of the issues we identified with the 
reliability of the expenditure plan, in part, to ongoing program 
uncertainty due to negotiations with its development contractor. 
Without more specific information on what functionality will be 
delivered before the completion of development at the end of fiscal 
year 2011 and more reliable cost estimates. Congress will continue to 
lack important information for evaluating NARA's funding request and 
measuring overall program progress. 

* NARA's fiscal year 2011 expenditure plan does not address how 
remaining multi-year funds from fiscal year 2010 will be allocated. 
Specifically, in fiscal year 2010, NARA spent $41.7 million of the 
$61,8 million in multi-year funds that it was provided by Congress to 
develop the ERA system, which resulted in a balance of $20.1 million 
that is available for obligation in fiscal year 2011. According to 
NARA officials, the ERA program plans to use the $20.1 million to fund 
development efforts needed to make the system available to all federal 
agencies. as well as to fund other operations and maintenance costs. 
However, NARA's plans for using these funds and their supporting 
details are not included in the fiscal year 2011 expenditure plan or 
the revised summary. Until NARA specifies how it will use the multi-
year funds remaining from fiscal year 2010, appropriators will lack 
information important for evaluating NARA's fiscal year 2011 request. 

* NARA has not yet determined which ERA requirements will be 
implemented in fiscal year 2011, nor fully prioritized the remaining 
requirements, In June 2010. we reported that NARA had developed and 
documented a set of 853 high-level business requirements for ERA and 
planned to complete about 57 percent of them by the end of fiscal year 
2010. Subsequently, in July 2010, NARA updated its requirements 
document, According to NARA, the original 853 requirements were 
decomposed to a more detailed set of 1,577 requirements, portions of 
which were allocated to Increments I through 5, deferred to post-
Increment 5 (i.e., post-fiscal year 2011), or removed from the scope 
of the ERA program. However, NARA could not determine which of the 
remaining requirements would be addressed before the end of fiscal 
year 2011 because, according to NARA officials, the requirements were 
subject to ongoing negotiations with the development contractor. This 
uncertainty is further exacerbated because NARA has not fully 
prioritized its requirements. Maintaining a prioritized set of system 
requirements can better ensure that the requirements that are most 
critical to the customer and other stakeholders are addressed quickly. 
Until the ERA program fully prioritizes the ERA requirements to be 
completed during fiscal year 2011, it will be unclear what system 
development work is planned to be completed and whether it will result 
in functionality that is most critical to NARA's customers and other 
stakeholders. 

The identified deficiencies in NARA's expenditure plan and management 
of the ERA acquisition make it unclear whether NARA can make 
substantial progress in delivering additional ERA system capabilities 
by the end of fiscal year 2011 that justify its planned investment. As 
such, we suggest that Congress consider employing an accountability 
mechanism that limits NARA's ability to use funds appropriated for ERA 
development until NARA implements an adequate capital planning and 
investment control process. updates its expenditure plan to clearly 
describe what system capabilities and benefits are to be delivered in 
fiscal year 2011, and establishes an associated set of prioritized 
system requirements and adequate earned value reporting, We are also 
making specific recommendations to NARA to improve its oversight and 
management of the ERA acquisition while the current system development 
contract is active and in preparation for any future ERA development 
efforts. 

We provided a draft of this briefing for review and comment to the 
Archivist of the United States. In oral comments, the Archives' GAO 
liaison stated that NARA generally agreed with our findings, NARA did 
not comment on cur recommendations, 

Background: 

The ability to find, organize, use, share, appropriately dispose of, 
and save records-—the essence of records management-—is vital for the 
effective functioning of the federal government. In the wake of the 
transition from paper-based to electronic processes, records are 
increasingly electronic, and the volumes of electronic records 
produced by federal agencies are vast and rapidly growing, providing 
challenges to NARA as the nation's record keeper and archivist. 

Besides sheer volume, other factors contributing to the challenge of 
electronic records include their complexity and their dependence on 
software and hardware. Specifically, the computer operating systems 
and the hardware and software that are used to create electronic 
documents can become obsolete. If they do, they may leave behind 
records that cannot be read without the original hardware and 
software. Further, the storage media for these records are affected by 
both obsolescence and decay. Media may be fragile, have limited shelf 
life, and become obsolete in a few years. For example, few computers 
today have disk drives that can read information stored on 8-or 5v4-
inch diskettes, even if the diskettes themselves remain readable. 

Another challenge is the growth in electronic presidential records. 
The Presidential Records Act gives the Archivist of the United States 
responsibility for the custody, control, and preservation of 
presidential records upon the conclusion of a President's term of 
office.[Footnote 6] The act states that the Archivist has an 
affirmative duty to make such records available to the public as 
rapidly and completely as possible consistent with the provisions of 
the act. 

In response to these widely recognized challenges, the Archives began 
a research and development program to develop a modern archive for 
electronic records. In 2001. NARA hired a contractor to develop 
policies and plans to guide the overall acquisition of an electronic 
records system. In December 2003, the agency released a request for 
proposals for the design of ERA. In August 2004. NARA awarded two firm-
fixed-price[Footnote 7] contracts for the design phase, totaling about 
$20 million—one to Harris Corporation and the other to Lockheed Martin 
Corporation. On September 8, 2005, NARA announced the selection of 
Lockheed Martin Corporation to build the ERA system. The total value 
of the contract with Lockheed through 2012 is about $317 million, 
which includes provisions for award fees based on how well the 
contractor meets technical, program management, and cost-control 
criteria. As of the end of fiscal year 2010, NARA has paid Lockheed 
approximately $199,5 million, including $181.6 million for development 
and $17.9 million for operations and maintenance. 

The final operational ERA system is to consist of six key functions: 

* Ingest enables the transfer of electronic records from federal 
agencies. 

* Archival Storage enables stored records to be managed in a way that 
guarantees their integrity and availability. 

* Records Management supports scheduling,[Footnote 8] appraisal, 
[Footnote 9] description, and requests to transfer custody of all 
types of records, as well as ingesting and managing electronic 
records, including the capture of selected records data (such as 
origination date, format and disposition). 

* Preservation enables secure and reliable storage of files in formats 
in which they were received, as well as creating backup copies for off-
site storage. 

* Local Services and Control regulates how the ERA components 
communicate with each other, manages internal security, and enables 
telecommunications and system network management. 

* Dissemination enables users to search descriptions and business data 
about all types of records, and to search the content of electronic 
records and retrieve them. 

NARA currently plans to deliver ERA system capabilities in five 
separate increments, Each increment involves multiple releases that 
are to deliver specific functionality. Below is a summary of the 
specific releases delivered or planned for delivery in each increment: 

* Increment 1 was deployed in two releases. Release 1 established the 
ERA base system—the hardware, software, and communications needed to 
deploy the system, Release 2 enabled functional archives with the 
ability to preserve electronic data in their original format, enable 
disposition agreements and scheduling, and receive unclassified and 
sensitive data from four federal agencies; according to NARA 
officials, this increment was certified as complete in June 2008. 
However, additional enhancements were made to Increment 1. release 2 
that were completed in March 2010. 

* Increment 2 includes the EOP system, which was designed to handle 
records from the Executive Office of the President. This increment was 
to include the content searching and management for special access 
requests.[Footnote 10] The EOP system was certified for initial 
operating capability in December 2008. However, NARA did not finish 
ingesting the presidential records it received from the George W. Bush 
administration until September 2009, 9 months after initial operating 
capability. 

* Increment 3 is expected to include the following: 

- Storage and access capabilities for electronic records of the 
Congress. NARA received authority to operate the first release of 
Increment 3—-the congressional records component-—in January 2010. 

- Public access to provide the public with tools needed to search and 
access electronic records, including descriptions of archival records, 
copies of electronic records, and digital surrogates of non-electronic 
records. NARA completed a prototype of the Online Public Access (CPA) 
interface in April 2010 and plans to release the system for public use 
by December 2010. 

- Planning for preservation to include development of a preservation 
framework prototype. According to NARA, this prototype was completed 
in April 2010 and included functionality for file transformations and 
capturing preservation metadata, such as the relationship between 
different file versions. 

- Upgrades to the ERA base system to, among other things, integrate 
additional commercial-off-the-shelf products. Development and 
contractor testing of these upgrades were originally planned to be 
completed in March 2010 but, according to NARA officials, were not 
completed until November 2010—a slip of 8 months, These delays were 
due, in part, to unanticipated additional development work, as well as 
issues identified during testing that required additional work, 
According to NARA officials, as of December 2010, these upgrades were 
undergoing additional government testing. 

NARA planned to complete Increment 3 in June 2010: however, due to the 
delays in upgrading the ERA base system, this milestone was postponed. 
According to NARA officials, Increment 3 is now expected to be 
delivered in January 2011-7 months later than planned. 

* Increment 4 was originally planned to build upon the base 
architecture delivered as part of Increment 3 and insert newly 
available technology, particularly for preservation capabilities. 
Specifically, in its fiscal year 2010 expenditure plan, NARA stated 
that Increment 4 would provide capabilities for, among other things, 
managing access-restricted records, managing Freedom of Information 
Ace cases,[Footnote 11] and redacting records and managing redacted 
versions of records. However, NARA reduced the time allocated to this 
increment from 12 months to 3 months and revised the scope. In 
particular, all functionality planned to be implemented during this 
increment was deferred to Increment 5 or removed. According to NARA, 
the revised scope of this increment included, among other things, 
supporting the OPA and preservation framework prototypes, and early 
requirements work for Increment 5. This increment was completed in 
September 2010. 

* Increment 5 is expected to expand on system capabilities implemented 
in the prior increments and address functionality deferred from 
previous increments, According to NARA, its development priorities for 
fiscal year 2011 include modifications to the ERA system needed to 
store classified records from the Iraq conflict, enable the faster 
release of George W. Bush presidential records when they are legally 
open to Freedom of Information Act requests in 2014, and store 
electronic records from the 2010 Census. NARA is currently negotiating 
the work to be completed during this increment with the development 
contractor. 
	
According to NARA, as of October 2010, the cost of the ERA program 
through fiscal year 2011 was between $456 million and $481 million, 
[Footnote 12] which includes not only the development contract costs, 
but also program management, research and development, and program 
office support, among other things. 
	
Table 1 shows reported spending from the program's inception to the 
end of fiscal year 2010. 

Table 1: Summary of ERA Spending from Fiscal Year 2002 through Fiscal 
Year 2010: 

Project category: Development Contract-—Lockheed Martin; 
Spending: $195.5 million. 

Project category: System Analysis and Design Contracts-—Lockheed 
Martin and Harris Corporation; 
Spending: $40.8 million. 

Project category: Program Management; 
Spending: $47.8 million. 

Project category: Program Office Support Team; 
Spending: $34.2 million. 

Project category: Research and Development; 
Spending: $27.2 million. 

Project category: Integrated Deployment and Support; 
Spending: $16.0 million. 

Project category: Independent Verification and Validation; 
Spending: $8.8 million. 

Project category: Security; 
Spending: $0.2 million. 

Project category: End of Year Balance; 
Spending: $0.4 million. 

Project category: Adjustment[A]; 
Spending: $0.0 million. 

Project category: Total; 
Spending: $374.9 million[B]. 

Source: GAO analysis of NARA data. 

[A]Recoveries at prior year funds, adjustments to obligations 
incurred, obligations against prior years, and carryover funds 
expiring at the end of fiscal year 2010. 

[B]Total number may not equal the sum of individual items due to 
rounding. 

[End of table] 

In fiscal year 2010, NARA spent about $41.7 million of the $61.8 
million in multi-year funds that it was provided by Congress to 
develop the ERA system, and plans to use the remaining balance of 
$20.1 million in fiscal year 2011. 

NARA's estimated ERA obligations for fiscal year 2011 in the 
President's budget request, including both single-year and multi-year 
funds, are $85.5 million. Table 2 shows how NARA plans to distribute 
funds across the ERA program in fiscal year 2011. 

Table 2: Summary of NARA% Fiscal Year 2011 Estimated Obligations for 
ERA: 

Project category: Development Contract; 
Description: Activities performed under the EPA system acquisition 
contract with Lockheed Martin; 
Estimated obligations: $61.8 million. 

Project category: Program Management; 
Description: Salaries and benefits, supplies, equipment, and 
telecommunications; 
Estimated obligations: $10.5 million. 

Project category: Program Office Support Team; 
Description: Labor, contracts, and materials to support ERA program 
management; 
Estimated obligations: $5.4 million. 

Project category: Research and Development; 
Description: Research performed with other agencies; 
Estimated obligations: $4.5 million. 

Project category: Independent Verification and Validation[A]; 
Description: Verification and validation activities; 
Estimated obligations: $1.8 million. 

Project category: Integrated Deployment and Support; 
Description: Interagency agreements for ERA facilities, including 
Allegany Ballistics Lab at Rocket Center, West Virginia; 
Estimated obligations: $1.5 million. 

Project category: Security; 
Description: Security clearances for government personnel; 
Estimated obligations: $0.1 million. 

Project category: Total; 
Estimated obligations: $85.5 million[B]. 

Source: GAO analysis of NARA's fiscal year 2011 expenditure plan. 

[A] NARA contracted with Northrop Grumman to perform independent 
verification and validation on policies and plans produced by the ERA 
program and contract deliverables produced by Lockheed Martin. 

[B] Total includes estimated obligations and does not include the 
balance of available multi-year funds from previous years. Total 
number may not equal the sum of individual items due to rounding.
	
[End of table] 
	
NARA's fiscal year 2011 expenditure plan also included estimated ERA 
obligations at two additional funding levels—$72,0 million and $61.4 
million—based on congressional direction. Table 3 shows how NARA plans 
to distribute funds across the ERA program at these funding levels. 

Table 3: Summary of NARA's Fiscal Year 2011 Estimated Obligations for 
ERA at Alternate Funding Levels: 
	
Project category: Development Contract; 
Description: Activities performed under the ERA system acquisition 
contract with Lockheed Martin	
Estimated obligations at $72.0 million funding level: $56.0 million; 
Estimated obligations at $61.4 million funding level: $45.4 million. 

Project category: Program Management; 
Description: Salaries and benefits, supplies, equipment, and 
telecommunications	
Estimated obligations at $72.0 million funding level: $9.5 million; 
Estimated obligations at $61.4 million funding level: $9.5 million. 

Project category: Program Office Support Team; 
Description: Labor, contracts, and materials to support EPA program 
management	
Estimated obligations at $72.0 million funding level: $3.4 million; 
Estimated obligations at $61.4 million funding level: $3.4 million. 

Project category: Research and Development; 
Description: Research performed with other agencies	
Estimated obligations at $72.0 million funding level: $1.5 million; 
Estimated obligations at $61.4 million funding level: $1.5 million. 

Project category: Integrated Deployment and Support; 
Description: Interagency agreements for ERA facilities	
Estimated obligations at $72.0 million funding level: $1.5 million; 
Estimated obligations at $61.4 million funding level: $1.5 million. 

Project category: Security; 
Description: Security clearances for government personnel	
Estimated obligations at $72.0 million funding level: $0.1 million; 
Estimated obligations at $61.4 million funding level: $0.1 million. 

Project category: Total; 
Estimated obligations at $72.0 million funding level: $72.0[A million; 
Estimated obligations at $61.4 million funding level: $61.4[A] million. 

Source: GAO analysis of NARA's fiscal year 2011 expenditure plan. 

Note: For both alternate funding levels, NARA estimated obligations of 
$30,000 towards independent Verification and Validation, but
this Is not shown In the table because the amounts are equal to zero 
when converted Into millions and rounded to one decimal place. 

[A] Totals Include estimated obligations only and do not include the 
balance of available multi-year funds from previous years. 

[End of table] 

Prior GAO Work: 
	
Since 2002, we have issued several reports on ERA and its development. 
[Footnote 13] In November 2009, we testified that NARA had completed 
two of its five planned increments. but experienced delays and cost 
overruns. and several functions planned for the system's initial 
release were deferred.[Footnote 14] We further testified that although 
NARA initially planned for the system to be capable of ingesting 
federal and presidential records in September 2007, the two system 
increments to support those records did not achieve initial operating 
capability until June 2008 and December 2008. respectively. In 
addition, NARA reportedly spent about $80 million on the base 
increment, compared to its planned cost of about $60 million. 

In our review[Footnote 15] of NARA's fiscal year 2010 expenditure 
plan, we made three observations about the expenditure plan and ERA 
acquisition: 

* The ERA system was experiencing cost increases, and system 
development was behind schedule. Since 2007, the ERA estimated life-
cycle cost had increased from about $531 million to $567.4 million, or 
about 7 percent. In addition, the planned completion dates for two of 
the increments were about 1 year later than milestones established in 
program planning documents. 

* NARA had not fully detailed the system capabilities to be included 
in the final two ERA increments. While the fiscal year 2010 
expenditure plan provided a high-level description of these 
capabilities, it did not have fully defined plans, including specific 
dates for completion and what capabilities were to be delivered. 

* NARA had not effectively defined or managed ERA's system 
requirements. Although NARA developed a baseline set of system 
requirements for ERA, it lacked firm plans to implement about 43 
percent of them. In addition. NARA had not updated its requirements 
document to reflect changes as the project progressed and did not 
conduct system requirements reviews as called for in its requirements 
management plan. 

Accordingly, we made recommendations to NARA to improve its investment 
review process and ensure that ERA's requirements are managed using a 
disciplined process. 
	
More recently, we reported[Footnote 16] on weaknesses in NARA's 
information security controls. For example, while the agency has 
maintained and tracked configuration changes for ERA. it has not 
consistently documented the status of those changes. As a result, NARA 
faces an increased risk that the integrity of the ERA system could be 
compromised. We recommended that NARA take steps to address its 
information security-related weaknesses. 

In addition, the Senate Committee on Homeland Security and 
Governmental Affairs and the House Committee on Oversight and 
Government Reform asked us to evaluate whether NARA is adequately 
using earned value management (EVM)[Footnote 17] techniques to manage 
the ERA acquisition, as well as to evaluate ERA's earned value data to 
determine the program's cost and schedule performance. Among other 
things, we found that NARA has not yet fully implemented key practices 
for establishing a comprehensive EVM system. Further, we found that 
ERA's earned value data trends do not accurately portray program 
status and that if the full ERA system is completed as originally 
designed, ERA's costs could be between $195 to $433 million (34 to 76 
percent) higher than NARA's previous estimate of $567 million. 
[Footnote 18] We are recommending, among other things. that NARA 
establish a comprehensive plan for all remaining work, including new 
life-cycle cost and schedule estimates for the program; improve the 
accuracy of earned value performance reports; and engage executive 
leadership in correcting negative trends. We plan to issue a report on 
this work in January 2011. 

Citing our concerns related to the cost, schedule, and performance of 
the ERA system. OMB recently directed changes to the ERA program. 
Specifically. in July 2010, OMB directed NARA to halt all development 
activities by the end of fiscal year 2011 and develop an action plan 
to address our finding on the lack of defined system functionality for 
the final two increments of the ERA program and the need for improved 
strategic planning. In response. NARA plans to finish ERA development 
in 2011 with reduced functionality, as reflected in its fiscal year 
2011 expenditure plan. However. as of December 2010. the revised scope 
of the program had not yet been determined because of ongoing 
negotiations with the contractor regarding the development activities 
to be completed in fiscal year 2011. 

Despite changes in program direction, the Archivist noted that the 
essential goals of ERA would remain unchanged. He stated that 
beginning in fiscal year 2012. ERA would fully support the transferal 
of electronic records to an archival repository, as well as access and 
preservation of electronic archival records. To do this, the Archivist 
stated that the agency would work on those elements determined to be 
the highest priorities in fiscal year 2011. According to NARA, these 
changes may lead to a second phase of the ERA development in the 
future. 

Results: Legislative Conditions 

Objective 1: NARA's expenditure plan satisfies four of the fiscal year 
2011 legislative conditions and partially satisfies two. 

Table 4: Fiscal Year 2011 Expenditure Plan Provisions for Satisfying 
Legislative Conditions: 

Legislative condition: 1. Meets OMB capital planning and investment 
control requirements; 
Status: Partially satisfied; 
Expenditure plan provisions: OMB requires agencies to develop capital 
planning and investment control review processes that help ensure that 
projects are being implemented at acceptable cost and within 
reasonable and expected time frames and that they are contributing to 
observable improvements in mission performance. In order to do this, 
agencies should establish an oversight entity that periodically
reviews capital assets (e.g., the ERA system) to determine how mission 
requirements might have changed whether the asset continues to fulfill 
mission requirements and deliver intended benefits to the agency and 
customers. Further, agencies should indicate (i.e., document) that the 
Investment has been reviewed and approved by the responsible oversight 
entity. NARA partially met this condition; it has established groups 
to oversee ERA's progress and provided them with regular briefings. 
However, NARA did not document approval of important schedule and 
scope changes to the ERA program. Specifically, Increment 4 was 
originally planned to build upon the base architecture and insert 
newly available technology: however. NARA reduced the time allocated 
to this increment from 12 months to 3 months and deferred originally 
planned functionality to Increment 5 or removed it. Approval of these 
changes was not documented through NARA's Investment review process 
because, according to NARA officials, the agency Instead relies on 
briefings to senior management to proceed with these changes. Further, 
NARA has not conducted any post-implementation reviews of deployed ERA 
capabilities, including the system's first two increments, as well as 
the first release of Increment 3—the congressional records component. 
According to NARA officials, these reviews were not conducted because 
the agency's IT policy does not require it and the ERA program instead 
relies on system acceptance testing to ensure that a system performs 
in accordance with stakeholder expectations. Without ensuring that key 
schedule and scope changes are approved and post-implementation 
reviews of deployed capabilities are conducted, NARA has limited 
ability to ensure that the system Is being implemented at acceptable 
cost and within expected time frames, and that deployed capabilities 
are contributing to observable improvements in mission performance. 

Legislative condition: 2. Complies with NARA's enterprise architecture; 
Status: Satisfied; 
Expenditure plan provisions: OMB requires NARA to include ERA in its 
agency-level enterprise architecture, which is updated on a yearly 
basis. NARA's most recently approved agencywide enterprise 
architecture-—version 5.5 updated in May 2009--includes ERA and 
consists of several component architectures, 
including business, data, systems, application, operations, 
performance, and information technology security architectures. In May 
2014, NARA released its annual update to its enterprise architecture, 
version 5.6; however, it has not yet been reviewed by OMB. In 
addition, OMB requires that any major IT Investment be mapped to and 
support the Federal Enterprise Architecture. The business case for the 
investment must also demonstrate the relationship between the 
investment and the business, performance, data services, application, 
and technology layers of the agency's architecture. NARA's business 
case for the ERA system certified compliance with these requirements 
and was approved by NARA's Acting Chief Information Officer at the 
time. 

Legislative condition: 3. Conforms with NARA's enterprise life-cycle 
methodology; 
Status: Satisfied; 
Expenditure plan provisions: The ERA project conforms with NARA's life-
cycle methodology. For example, the expenditure plan includes 
descriptions of the incremental approach the agency has adopted tor 
acquiring ERA and its management of program risks. In particular, the 
risk management methodology calls for the agency to identify and 
categorize risks, qualify the probabilities and consequences of the 
risks, specify a strategy to mitigate each risk, communicate risk 
status, and formulate actions needed to mitigate the risk. NARA 
manages risks using an agency-level risk review board and a program-
level risk review board. In addition, the ERA program office produces 
monthly reports that include top identified risks and specify 
associated mitigation strategies. The office also generates reports of 
pending or active risks from its risk management database that specify 
the probability and consequences of identified risks. Further, risk 
status is communicated to senior NARA management on a monthly basis, 
to OMB through ad-hoc technical review sessions, and to Congress on a 
quarterly basis. The quarterly reports also identify executive actions 
needed to mitigate risks. 

Legislative condition: 4. Complies with the acquisition rules, 
requirements, guidelines, and systems acquisition management practices 
of the federal government; 
Status: Satisfied[A]; 
Expenditure plan provisions: NARA satisfied this provision by 
implementing key processes that reflect best practices for acquiring 
software-intensive systems like ERA. The quality of software is 
governed largely by the quality of the processes involved in 
developing or acquiring it and maintaining it Carnegie Mellon 
University's Software Engineering institute (SEI),[B] recognized for 
its expertise in software processes, has developed models and methods 
that define and determine organizations' software process maturity. 
Specifically, NARA conducted internal assessments in 2002 and 2004 
that used SEI's SA-CMM[C] methods to determine the maturity of ERA's 
system policies, processes, and practices and implemented a process to 
address the assessment's recommendations. In addition, NARA's Chief 
Information Officer certified that the ERA program continues to be in 
compliance with the Clinger-Cohen Act on November 19, 2009[D] 

Legislative condition: 5. Approved by NARA and OMB; 
Status: Partially satisfied; 
Expenditure plan provisions: 
* NARA—October 1, 2010
* OMB--NARA officials stated that the expenditure plan was not 
reviewed by OMB prior to submitting it to Congress. Officials stated 
that OMB will only review the expenditure plan if there is an existing 
appropriations bill with language requiring its review. Without 
approval from OMB, Congress will have limited assurance that the plan 
is accurate and reliable. 

Legislative condition: 6. Reviewed by GAO 
Status: Satisfied 
Expenditure plan provisions: GAO—-December 21, 2010, briefing to 
congressional appropriations committees. 

Sources; GAO analysis of NARA data and the Consolidated Appropriations 
Act, 2010. 

[A] We did not independently examine NARA's compliance with 
acquisition rules of the federal government. Instead, we limited our 
analysis to the agency's use of the Software Engineering Institute's 
Capability Maturity Model and certification from NARA's Chief 
Information Officer that the ERA program is in compliance with the 
Clinger-Cohen Act. 

[B] SEI is a federally funded research and development center operated 
by Carnegie Mellon University and sponsored by the Department of 
Defense. It provides leadership in software engineering and in the 
transition of new software engineering technology into practice.
The Software Acquisition-Capability Maturity Model (SA-CMM) identifies 
key process areas that are essential to effectively managing software-
intensive system acquisitions. 

[C] Among other things, the Clinger-Cohen Act of 1996 required OMB to 
establish processes to analyze, track, and evaluate the risks and 
results of major capital investments in IT systems made by executive 
agencies. As such. OMB developed policy and issued guidance for the 
planning, budgeting, acquisition, and management of federal capital 
assets. 

[End of table] 

Objective 2: NARA has partially implemented most of our open 
recommendations: 

In July 2009 and June 2010, we made recommendations, to NARA to help 
improve the expenditure plan and ERA acquisition. NARA has implemented 
one of our recommendations and partially implemented three. 

Table 5: Status of NARA's Progress in Implementing Prior GAO 
Recommendations: 

Prior GAO recommendation: Ensure that ERA's requirements are managed 
using a disciplined process that results in requirements that are 
traceable throughout the project's life cycle and are kept current 
(GAO-10657); 
Implementation status: Implemented; 
Statue as of November 2010: NARA updated its ERA requirements document 
and conducted a gap analysis to identify which requirements had been 
satisfied and which remained outstanding. The results of this analysis 
were entered into an automated requirements tracking tool to 
facilitate traceability analyses. Further, in September 2010, NARA 
developed a process to ensure that the ERA requirements document is 
kept current Following significant changes to the program, such as 
significant modifications to the contract or change requests to the 
system. 

Prior GAO recommendation: Ensure that NAIRA's Investment review 
process has adequate executive-level oversight by maintaining 
documentation of the results of reviews, including changes to the 
program's cost and schedule baseline and any other corrective actions 
taken as a result of changes in ERA cost, schedule, and performance 
{GAO-10-657}; 
Implementation status: Partially implemented; 
Statue as of November 2010: NARA documented meetings that NARA senior 
management attended where the ERA program was discussed and documented 
corrective actions that were proposed in response to Issues related to 
the ERA program. In addition, NARA conducted and documented briefings 
to senior management on the status of the ERA program's cost, schedule 
and performance, and the status of corrective actions. However, NARA 
did not document approval of significant changes to Increment 4. 
Including reducing the Increment's timeframe from 12 months to 3 
months, through Its investment review process. 

Prior GAO recommendation: Provide detailed information in future 
expenditure plans on what was spent and delivered for deployed 
increments of the ERA system and cost and functional delivery plans 
for future increments (GAO-09-733); 
Implementation status: Partially implemented; 
Statue as of November 2010: NARA’s fiscal year 2011 expenditure plan 
includes additional information on ERA cost, schedule, and 
performance. For example, NARA’s 2011 plan discusses the estimated 
amount spent on Increment 3 in fiscal year 2010 through August 2010 
($18.8 million) and the delivery dates of the first release—the 
congressional records component-—in December 2009, and two prototype 
systems, in April 2010. It also discusses plans to achieve a 
significant milestone in system testing for the final component of 
Increment 3—-upgrades to the ERA base system—in early fiscal year 
2011. For Increment 4, the 2011 plan includes the estimated amount 
spent in fiscal year 2010 through August 2010 ($16.3 million) and a 
description of significant changes to the increment’s schedule and 
scope, including the removal of planned functionality. Further, the 
2011 plan includes the estimated cost of Increment 5 ($49.8 million) 
and planned functionality, including OPA. However, the plan does not 
fully discuss other important information. For example, although it 
estimates the amount spent on Increments 3 and 4 in fiscal year 2010, 
it does not show how these costs compare to the amount NARA planned to 
spend on these increments, as reported in the fiscal year 2010 plan. 
Further, the plan does not include the estimated delivery date of 
Increment 3, nor the estimated fiscal year 2011 costs associated with 
completing this increment. Lastly, while the plan describes the 
expected functionality and costs planned for Increment 5 during fiscal 
year 2011, this information is not reliable
because of, among other things, weaknesses in the cost estimating
methodology (as discussed later in this briefing). 

Prior GAO recommendation: Strengthen the earned value process so that 
it follows the practices described in GAO’s Cost Estimating Guide and 
more reliable cost, schedule, and performance information can be 
included in future expenditure plans and monthly reports (GAO-09-733); 
Implementation status: Partially implemented; 
Statue as of November 2010: In response to our recommendation, NARA 
developed but has not fully
implemented an action plan to improve its earned value processes to
follow best practices described in GAO’s Cost Estimating Guide.a
However, NARA continues to have weaknesses in its implementation of
earned value processes and has not yet fully implemented key
practices for establishing a comprehensive earned value management
system, ensuring that the resulting data are reliable, and using earned
value data for decision-making purposes. In addition, ERA’s earned
value data trends do not accurately portray program status, and future
cost overruns would likely be between $195 and $433 million if the full
ERA system is completed as originally designed. 

Source: GAO analysis of NARA data. 

[A] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, GAO-09-3SP (Washington, 
D.C.: March 2009). 

[End of table] 

Results: Observations: 

Objective 3: Observations about NARA’s 2011 ERA Expenditure Plan and 
Acquisition: 

Observation 1: NARA’s ERA fiscal year 2011 expenditure plan does not 
provide a reliable basis for informed investment decision-making. 

NARA’s expenditure plan should include a sufficient level and scope of 
information for Congress to understand what system capabilities and 
benefits are to be delivered, by when, and at what costs, and what 
progress is being made against the commitments that were made in prior 
expenditure plans. However, NARA’s plan does not clearly show what 
functions have been delivered to date and at what costs, and what 
additional system capabilities are planned for fiscal year 2011, 
including reliable costs estimates for these capabilities. 

The fiscal year 2011 expenditure plan includes three different 
spending scenarios: $85.5 million—based on the President’s budget 
request, and two additional figures—-$72 million and $61.4 million—-
based on congressional direction. In addition, as previously 
mentioned, NARA also submitted a revised summary of its expenditure 
plan that includes two different spending scenarios: (1) $72 million 
and (2) $65 million. 

The fiscal year 2011 expenditure plan does not clearly show what 
functionality has been delivered to date, or how the actual costs of 
ongoing and completed increments compare to planned costs, as 
documented in the fiscal year 2010 expenditure plan. Specifically, it 
is unclear from the expenditure plan exactly what Increment 3 
functionality has been delivered to date because the information 
provided does not consistently provide adequate detail to understand 
the status. For example, the plan provides status information for 
system functions included in Increment 3, such as the output of assets 
(i.e., electronic records) in various formats; however, it does not 
provide other important information, such as the types of file formats 
that have been completed to date. 

Further, while the fiscal year 2011 expenditure plan reports the 
estimated amounts spent on Increments 3 and 4 during fiscal year 2010, 
it does not compare these amounts to what was planned to be spent on 
these increments, as reported in the fiscal year 2010 plan. For 
example, in its fiscal year 2010 expenditure plan, NARA indicated that
it planned to spend approximately $16.6 million on Increment 3 
development during fiscal year 2010; however, in its fiscal year 2011 
plan, NARA estimated that it had already spent $18.8 million on 
Increment 3 development as of August 2010—an increase of $2.2 million, 
with one month remaining in the fiscal year. NARA’s fiscal year 2011
expenditure plan did not compare these planned or actual amounts or 
include a discussion of why costs were higher than planned. 

Even though NARA plans to end development in fiscal year 2011, the 
fiscal year 2011 expenditure plan does not clearly show what 
functionality is planned to be delivered, by when, and at what cost 
during this period. For example, as previously mentioned, NARA 
originally planned to complete Increment 3 in June 2010, but 
experienced delays in upgrading the ERA base system. According to NARA 
officials, this increment is now expected to be delivered by January 
2011. However, NARA’s fiscal year 2011 expenditure plan does not discuss
the delivery date of Increment 3, nor the fiscal year 2011 costs 
associated with completing this increment. 

In addition, while best practices call for the development of 
realistic and well-documented cost estimates, NARA’s fiscal year 2011 
cost estimates are unreliable and do not provide an accurate basis for 
realistic budget formulation. A reliable cost estimate is critical to 
the success of any IT program, as it provides the basis for informed 
investment decision-making, realistic budget formulation and program 
resourcing, meaningful progress measurement, proactive course 
correction, and accountability for results. Our research has 
identified a number of practices for effective program cost 
estimating.[Footnote 19] Among other things, the methodology used to 
perform the cost estimate should be clearly documented, including 
traceability back to the original data sources, and the estimate 
should include clearly documented calculations and results. Further, 
in cases where estimates are based on data derived by the subjective 
judgment of engineers or other technical experts, this data should be 
validated before being used in a cost estimate. Validation involves 
cross-checking the results, in addition to analyzing the data and 
examining the documentation for the judgment. 

While NARA has documented the cost estimates used as the basis for 
determining its fiscal year 2011 funding requests, there are 
limitations in the supporting methodology, resulting in estimates that 
do not reliably reflect the work to be completed. Specifically, NARA 
stated that the cost estimates for key components (e.g., ERA base, OPA)
were based on information provided by the contractor, including 
estimates of the total lines of software code required and the related 
costs. According to NARA officials, the lines of code required for 
each task are based on the contractor’s analysis of the complexity, 
duration, and interdependencies of the task with other requirements. 

However, there are weaknesses in NARA’s methodology. While NARA’s 
documentation included the estimated lines of code required and the 
related costs (as provided by the contractor) for planned development 
tasks, NARA did not provide evidence of the traceability of these 
estimates back to their original data sources. For example, NARA’s 
cost estimates for providing OPA functionality were based, in part, on 
requiring 1,800 lines of code to implement user registration; however, 
NARA could not provide documentation to support this estimate and 
others. In addition, NARA did not fully validate important data 
provided by the contactor, such as the lines of code required for 
planned tasks, when preparing its fiscal year 2011 cost estimates. 
This is important because our analysis of NARA’s documentation showed 
that the estimated cost of each line of code ranged from $287 to 
$4,737. While NARA officials stated that the lines of code required 
would be reviewed during negotiations with the contractor, this has 
not yet been completed. Without validating the contractor’s estimates 
by, for example, cross-checking the results against other sources, it 
is unclear whether such a wide range of costs for each line of code 
are justified based on the complexity of the planned development work. 
As a result, NARA’s cost estimates do not provide a reliable basis for 
informed investment decision-making and realistic budget formulation. 

NARA officials attributed many of the issues that we found with the 
reliability of the expenditure plan, in part, to ongoing program 
uncertainty due to negotiations with its development contractor. NARA 
provided descriptions of tasks for fiscal year 2011 development 
activities to Lockheed Martin and, as of December 2010, is working 
with the contractor to refine them. 

Without more specific information on what functionality will be 
delivered before the completion of development at the end of fiscal 
year 2011 and more reliable cost estimates associated with those 
functions, appropriators will continue to lack important information 
for evaluating NARA’s request and have limited ability to measure 
overall program progress. 

Observation 2: NARA’s fiscal year 2011 expenditure plan does not 
address how remaining multi-year funds from fiscal year 2010 will be 
allocated. 

NARA’s fiscal year 2011 expenditure plan mentions a balance of 
remaining multi-year funds, but the plan does not specify how the 
agency plans to allocate these funds. Specifically, in fiscal year 
2010, NARA spent about $41.7 million of the $61.8 million in multi-
year funds that it was provided by Congress to develop the ERA system, 
which resulted in a balance of $20.1 million that is available for 
obligation in fiscal year 2011. NARA’s fiscal year 2011 expenditure 
plan includes planned ERA system capabilities at three different 
funding levels-—$85.5 million, $72 million, and $61.4 million, and its 
revised summary of the expenditure plan includes an updated list of 
planned of ERA system capabilities and associated costs at two 
additional funding levels—-$72 million and $65 million, but none of 
these estimates include the planned ERA capabilities to be delivered 
with the $20.1 million remaining from fiscal year 2010. According to 
NARA officials, NARA will use the $20.1 million to fund development 
efforts needed to make the ERA system available to all federal 
agencies, as well as to fund other operations and maintenance costs. 
However, NARA’s plans for using these funds and their supporting 
details are not included in the fiscal year 2011 expenditure plan or 
the revised summary provided to Congress. Until NARA specifies how it 
will use the multiyear funds remaining from fiscal year 2010, 
appropriators will lack information important for evaluating NARA’s
request. 

Observation 3: NARA has not yet determined which ERA requirements will 
be implemented in fiscal year 2011, nor fully prioritized the 
remaining requirements. 

System requirements describe the functionality needed to meet user 
needs and perform as intended in the operating environment and should 
be clearly defined and managed throughout the project in a disciplined 
way. Among other things, requirements should be prioritized to guide 
the acquirer in determining which requirements to include the project 
scope.[Footnote 20] As work products are developed and more is learned 
about the system that is being developed, information is occasionally 
found that requires a change to the original requirements. Maintaining 
a prioritized set of system requirements can better ensure that the 
requirements that are most critical to the customer and other 
stakeholders are addressed quickly. 

NARA recently revised its requirements, and our analysis reveals that 
it has made less progress in completing ERA than reported earlier this 
year. In June 2010, we reported that NARA had developed and documented 
a set of 853 high-level business requirements for ERA and planned to 
complete about 57 percent of them by the end of fiscal year 2010. 
Subsequently, in July 2010, NARA updated the ERA requirements. 
According to NARA, the original 853 requirements were decomposed to a 
level such that each requirement could only be allocated to one 
increment (e.g., Increment 1) and one component (e.g., ERA base). This 
resulted in a revised set of 1,577 requirements, portions of which 
were allocated to Increments 1 through 5, deferred to post-Increment 
5, or removed from the scope of the ERA program. 

Our analysis of the 1,577 revised requirements indicates that only 36 
percent of the requirements had been implemented by the end of fiscal 
year 2010-—a 21 percent decrease in planned progress compared to 
earlier this year, even though NARA spent more time than planned on 
system development. Specifically, as of November 2010, we found that 
NARA had identified 571 (36 percent) of the revised requirements as 
implemented. NARA also indicated that roughly 8 percent of the 
remaining requirements would be completed when Increment 3 is delivered,
11 percent of the requirements were removed from the program, and an 
additional 18 percent are to be addressed after the completion of the 
current development contract at the end of fiscal year 2011 (i.e., 
post-Increment 5). For the remaining 430 requirements (27 percent of 
the total) NARA could not determine whether they would be addressed in 
fiscal year 2011 because, NARA officials said, they were subject to 
ongoing negotiations with the development contractor. 

Table 6 shows the status of the ERA requirements. 

Table 6: Status of NARA ERA Requirements (as of October 2010): 

Requirements category: Increment 1; 
Requirements implemented: 319; 
Requirements not yet implemented: 0. 

Requirements category: Increment 2; 
Requirements implemented: 158; 
Requirements not yet implemented: 0. 

Requirements category: Increment 3; 
Requirements implemented: 94; 
Requirements not yet implemented: 128. 

Requirements category: Increments 4 and 5; 
Requirements implemented: 0; 
Requirements not yet implemented: 430. 

Requirements category: Deferred to post-Increment 5; 
Requirements implemented: n/a; 
Requirements not yet implemented: 277. 

Requirements category: Removed;
Requirements implemented: n/a; 
Requirements not yet implemented: 171[A]. 

Requirements category: Total;
Requirements implemented: 571; 
Requirements not yet implemented: 1,006. 

Source: GAO analysis of NARA data. 

[A] According to NARA, 33 requirements were removed because they were 
too high-level to accurately track, while the other 138 were removed 
because, among other things, they were no longer valid based on NARA’s 
business process or the ERA implementation approach. 

[End of table] 

The uncertainty about which requirements will be completed in the 
coming year is attributable in part to NARA not fully prioritizing its 
requirements. As previously mentioned, maintaining a prioritized set 
of system requirements can better ensure that the requirements that 
are most critical to the customers and other stakeholders are addressed
quickly. To its credit, NARA prioritized its major business functions 
planned for fiscal year 2011 and used those prioritized business 
functions during negotiations with the development contractor. For 
example, NARA has prioritized certain functions associated with its 
planned OPA system, such as user registration and the ability to
download certain electronic records. However, NARA has not fully 
prioritized the remaining 430 ERA system requirements under 
negotiation with the contractor. While NARA has prioritized 242 of the 
430 requirements (about 56 percent), it has not prioritized the 
remaining 188 requirements (about 44 percent), nor used a full set of
prioritized requirements during negotiations with the contractor 
regarding the scope of work to be completed in the final year of 
development. 

The ERA requirements are not fully prioritized, in part, because the 
ERA Requirements Management Plan, dated December 2003, only requires 
prioritization of the requirements during the program’s concept 
exploration phase. However, significant changes to the ERA program 
have occurred since this phase ended in 2004, including the recent 
updates to the ERA requirements in July 2010. Although NARA recently 
issued a supplemental requirements control process in September 2010 
to ensure that the ERA requirements are kept current following changes 
to the program (such as significant modifications to the contract), 
this process does not include evaluating the prioritization of the 
requirements after major changes occur. Until the ERA program fully 
prioritizes the ERA requirements to be completed during fiscal year 
2011, it will be unclear whether planned system development work will 
result in functionality that is most critical to the customer and 
other stakeholders. 

Conclusions: 

NARA’s fiscal year 2011 expenditure plan met four of the six 
legislative conditions, but the lack of critical capital planning and 
oversight steps, including documentation demonstrating approval of 
significant changes to a recent ERA increment, post-implementation 
reviews of deployed capabilities, and OMB’s approval of the 
expenditure plan, limits NARA’s ability to ensure that the system is 
being implemented at an acceptable cost and within expected time 
frames and contributes to observable improvements in mission 
performance. These issues are further exacerbated by problems with 
NARA’s information security controls and the agency’s partial 
implementation of several open GAO recommendations, such as those 
related to improving investment oversight and earned value processes. 
With significant weaknesses in many basic oversight and management 
processes, as well as continued delays in completing Increment 3, NARA’
s ability to make significant development progress in the remainder of 
the fiscal year will be challenged. 

In addition, without a reliable ERA expenditure plan, NARA has not 
provided adequate information to assist congressional oversight and 
informed decision-making related to the use of appropriated funds. 
When combined with the lack of prioritization of the remaining 
requirements under negotiation for fiscal year 2011, Congress has
little assurance that additional funds allocated to ERA will result in 
significant benefits to federal taxpayers. With OMB's direction to 
stop development after 2011, it is unclear whether NARA will be able 
to effectively address the full range of weaknesses we identified and 
still have adequate time to complete significant development efforts. 

Matter for Congressional Consideration: 

The identified deficiencies in NARA’s expenditure plan and management 
of the ERA acquisition make it unclear whether NARA can make 
substantial progress in delivering additional ERA system capabilities 
by the end of fiscal year 2011 that justify its planned investment. As 
such, we suggest that Congress consider employing an accountability 
mechanism that limits NARA’s ability to use funds appropriated for ERA 
development until NARA implements an adequate capital planning and 
investment control process, updates its expenditure plan to clearly
describe what system capabilities and benefits are to be delivered in 
fiscal year 2011, and establishes an associated set of prioritized 
system requirements and adequate earned value reporting. 

Recommendations for Executive Action: 

We are recommending that the Archivist of the United States 
immediately take the following two actions while the current system 
development contract is active: 

* Report to Congress on the specific outcomes to be achieved in fiscal 
year 2011 with the balance of any previous multi-year funds. 

* Ensure that the ERA requirements planned for fiscal year 2011 are 
fully prioritized so that those that are most critical to NARA’s 
customers and other stakeholders are addressed. 

To ensure that any future efforts are completed within reasonable 
funding and time constraints, we are recommending that the Archivist 
of the United States take the following four actions: 

* Ensure that significant changes to ERA’s program’s cost, schedule, 
and scope are approved through NARA’s investment review process. 

* Conduct post-implementation reviews of deployed ERA capabilities to 
validate estimated benefits and costs. 

* Submit ERA expenditure plans to OMB for review and approval prior to 
submitting to Congress. 

* Update the ERA Requirements Management Plan and related guidance to 
require requirements prioritization throughout the project’s life 
cycle. 

Agency Comments and Our Evaluation: 

We provided a draft of this briefing for review and comment to the 
Archivist of the United States. In oral comments, the Archives’ GAO 
liaison stated that NARA generally agreed with our findings. NARA did 
not comment on our recommendations. The liaison also commented that 
NARA would like a member of GAO’s staff to be assigned to help the 
agency address the ERA program’s weaknesses. Establishing such a 
consultative working relationship would create the appearance of a 
conflict of interest under GAO's professional standard for independence.
However, we remain committed to working with NARA to discuss or 
clarify any issues raised in this product. 

[End of briefing slides] 

Appendix II: Comments from the National Archives and Records 
Administration: 

National Archives: 
Archivist of the United States: 
David S. Ferriero: 

15 February 2010: 

Government Accountability Office: 
Director of Information Technology Management Issues: 
Mr. David A. Powner: 
441 G Street NW: 
Washington DC, 20548: 

Dear Mr. Powner: 

Thank you for the opportunity to comment on the draft report GAO-11-
299, Electronic Government: National Archives and Records 
Administration's Fiscal Year 2011 Expenditure Plan. As with prior ERA 
related reports, we find the observations and recommendations in this 
report to be helpful as we move forward. 

The report includes six recommendations. We concur with all and 
believe that we have sufficiently satisfied the first two. We will 
provide documentation for these recommendations under separate cover. 
The last four recommendations are specific to a future ERA.
Since we do not know when new development efforts may start, nor the 
scope or cost of such development, we are unable to address them in a 
near term action plan. 

Please note that we are also developing an addendum to the FY 2011 
Expenditure Plan. The addendum is being prepared pursuant to an 
agreement reached at an ERA meeting attended by Senate and House 
Appropriations Committee staffs, GAO, OMB, and NARA to provide 
updated, clarified information on requirements, costs, and the 
schedule of software releases. At GAO's request, NARA has also 
included additional information related to security, cost estimating, 
and requirements. 

If you have any questions regarding this memo or our action plan 
process, please contact Mary Drak, NARA's Audit Liaison at 301-837-
1668 or via email at mary.drak@nara.gov. 

Signed by: 

David S. Ferriero: 
Archivist of the United States: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

David A. Powner (202) 512-9286 or pownerd@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, key contributions to this 
report were made by James R. Sweetman, Jr., Assistant Director; Monica 
Perez-Nelson; Eric Costello; Lee McCracken; Tarunkant Mithani; Karl 
Seifert; Jonathan Ticehurst; and Adam Vodraska. 

[End of section] 

Footnotes: 

[1] Consolidated Appropriations Act, 2010, Pub. L. No. 111-117, div. 
C, title V, 123 Stat. 3034, 3193 (Dec. 16, 2009). As of March 1, 2011, 
Congress had not yet enacted the Financial Services and General 
Government Appropriations Act applicable to NARA for fiscal year 2011. 
However, the Continuing Appropriations Act, 2011, as extended to March 
4, 2011, appropriates funds under the authority and conditions of 
applicable appropriations acts, including the Consolidated 
Appropriations Act, 2010, Pub. L. No. 111-242, sections 101(7) and 103 
(Sept. 30, 2010); Pub. L. No. 111-290 (Dec. 4, 2010); Pub. L. No. 111- 
317 (Dec. 18, 2010); and Pub. L. No. 111-322 (Dec. 22, 2010). 
Therefore, the legislative conditions that applied in fiscal year 2010 
to NARA's expenditure plan continue to apply at this point in fiscal 
year 2011. At the time of our briefing, the Continuing Appropriations 
Act had been extended to December 21, 2010, and the legislative 
conditions continued to apply at that time. 

[2] Subsequent to our briefing, on January 14, 2011, NARA provided GAO 
with a revised version of its fiscal year 2011 expenditure plan. We 
did not analyze the extent to which NARA's revised plan satisfies 
legislative conditions. 

[3] For more information related to our evaluation of NARA's use of 
earned value processes, see GAO, Electronic Records Archive: National 
Archives Needs to Strengthen Its Capacity to Use Earned Value 
Techniques to Manage and Oversee Development, [hyperlink, 
http://www.gao.gov/products/GAO-11-86] (Washington, D.C.: Jan. 13, 
2011). At the time of our briefing, this report had not yet been 
issued. 

[4] Consolidated Appropriations Act, 2010, Pub. L. No. 111-117, div. 
C, title V, 123 Stat, 3034, 3193 (Dec, 16, 2009). As of the data of 
this briefing, Congress has not yet enacted the Financial Services and 
General Government Appropriations Act applicable to NARA for fiscal 
year 2011. However, the Continuing Appropriations Act, 2011, as 
extended to Dec. 21, 2010, appropriates funds under the authority and 
conditions of applicable appropriations acts, including the 
Consolidated Appropriations Act, 2010, Pub, L. No. 111-242, sections 
101 (7) & 103 (Sept. 30, 2010); Pub, L, No, 111-290 {Dec. 4, 2010); 
Pub, L. No. 111-317 (Dec, 18, 2010). Therefore, the legislative 
conditions that applied in fiscal year 2010 to NARA's expenditure plan 
continue to apply at this point in Fiscal year 2011. 

[5] Agencies develop an exhibit 300, also known as the Capital Asset 
Plan and Business Case Summary, to justify each request for a major 
information technology investment, OMB sets forth requirements for the 
exhibit 300 in Circular A-11, Part 7, Planning, Budgeting, 
Acquisition, and Management of Capital Assets. 

[6] 44 U.S.C. § 22030)(1). 

[7] According to the Federal Acquisition Regulation, a firm-fixed-
price contract provides for a price that is not subject to any 
adjustment on the basis of the contractors cost experience in 
performing the contract. This type of contract places on the 
contractor maximum risk and full responsibility for costs and 
resulting profit or loss. 46 C.F.R, § 16,202-1. 

[8] A record schedule is a document that describes agency records, 
establishes a period for their retention by the agency, and provides 
mandatory instructions for what to do with them when they are no 
longer needed for current government business. 

[9] Records appraisal is the process of determining the value and the 
final disposition of records, making them either temporary or 
permanent. 

[10] These are requests NARA receives from the current and former 
administrations, the Congress, and the courts for access to 
presidential records, The priorities are determined by NARA's Office 
of Presidential Libraries based on experience with the records of 
previous administrations. 

[11] The Freedom of Information Act establishes that federal agencies 
must provide the public with access to government information, thus 
enabling them to learn about government operations and decisions, 5 
U.S.C. § 552. 

[12] In June 2010, we reported that NARA's estimated cost for ERA 
through 2012 was $567 million, See GAO, Electronic Records Archive: 
Status Update on the National Archives and Records Administration's 
Fiscal Year 2011 Expenditure Plan, GAO-10-567 (Washington, D.C.: June 
11, 2010. Subsequently, as previously mentioned, OMB directed NARA to 
end development in 2011 and, as a result, the current cost estimate is 
lower than we previously reported. 

[13] GAO, Information Management: Changes in Managing and Preserving 
Electronic Records, [hyperlink, 
http://www.gao.gov/products/GAO-02-556] (Washington, D.C.: June 17, 
2002); Records Management: Planning for the Electronic Records 
Archives Has improved, [hyperlink, http://www.gao.gov/products/GAO-04-
927] {Washington, D.C.: Sept. 23, 2004); information Management: 
Acquisition of the Electronic Records Archives is Progressing, 
[hyperlink, http://www.gao.gov/products/GAO-05-802] (Washington, D.C.; 
July 15, 2006); Electronic Records Archives: The National Archives and 
Records Administration's Fiscal Year 2006 Expenditure Plan, 
[hyperlink, http://www.gao.gov/products/GAO-05-906] (Washington, D.C.: 
Aug. 18, 2006); information Management: The National Archives and 
Records Administration's Fiscal Year 2007 Expenditure Mari, 
[hyperlink, http://www.gao.gov/products/GAO-07-997] (Washington, D.C.: 
July 27, 2007); Information Management: Chalienges in Implementing an 
Electronic Records Archive, [hyperlink, 
http://www.gao.gov/products/GAO-08-738T] (Washington, D.C.: May 14, 
2008); Information Management: The National Archives and Records 
Administration's Fiscal Year 2008 Expenditure Plan, [hyperlink, 
http://www.gao.gov/products/GAO-08-1105] (Washington, D.C.: Sept. 26, 
2008); and Electronic Records Archive: The National Archives and 
Records Administration's Fiscal Year 2009 Expenditure Plan, 
[hyperlink, http://www.gao.gov/products/GAO-09-733] (Washington, D.C.: 
July 24, 2009). 

[14] GAO, National Archives: Progress and Risks in Implementing its 
Electronic Records Archive Initiative, [hyperlink, 
http://www.gao.gov/products/GAO-10-222T] (Washington, n.C.: Nov. 6, 
2049). 

[15] [hyperlink, http://www.gao.gov/products/GAO-10-657]. 

[16] GAO, Information Security: National Archives and Records 
Administration Needs to Implement Key Program Elements and Control's, 
[hyperlink, http://www.gao.gov/products/GAO-11-20] (Washington, D,C,: 
Oct. 21, 2010). 

[17] EVM integrates the investment scope of work with schedule and 
cost elements for investment planning and control. The method compares 
the value of work accomplished during a given period with that of work 
expected in the period. Differences in expectations are measured in 
both cost and schedule variances, OM requires agencies to use EVM as 
part of their performance-based management system for any investment 
under development or with system improvements under way. 

[18] Our analysis of NARA's projected cost overruns was based on a 
NARA cost estimate that included development costs in 2012, As we 
discussed previously, OMB directed NARA to end development in 2011 
and, as a result, the current cost estimate is lower than we 
previously reported. 

[19] [hyperlink, http://www.gao.gov/products/GAO-09-3SP].

[20] Software Engineering Institute, Capability Maturity Model@ 
Integration for Acquisition, Version 1.2, CMU/SEI-2007-TR-017
(Pittsburgh, Pa.: November 2007). 

[End of section] 

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