Summary

From the early 1970's through 1977, the Federal Power Commission invested millions of dollars in an unsuccessful effort to develop a large computerized system to improve federal and state effectiveness in regulating the energy industry. After the Department of Energy (DOE) took over the system in 1977, it invested another 2 years and more money, but serious management weaknesses from the beginning kept the system from ever operating. The objectives of a comprehensive review of the Regulatory Information System by GAO were to: (1) assess the results achieved from the system development effort, (2) study why delays and problems continued to be encountered, and (3) consider whether further corrective actions by federal managers might still be needed.

It was not possible to identify all the costs associated with the effort to develop the Regulatory Information System, because federal offices did not separately account for all costs identified with the development and attempted implementation of the system. However, GAO identified over $26.5 million in such costs. The system failed because management deficiencies existed in all three major stages. In planning, the Federal Power Commission did not clearly define user needs or perform an adequate cost-benefit analysis of the system. In development, the Commission did not: (1) finalize reporting forms to be used by industry, (2) ensure the workability of the computer software, nor (3) define the format in which the reported data would be used. Implementation deficiencies occurred in attempting to use the system prematurely; large amounts of data were loaded into computerized files which were later found to be unusable. To make matters worse, neither the Commission nor the Energy Information Administration effectively monitored cost and progress during any of the three stages. The management deficiencies were further intensified by such disruptive influences as poor communication among system developers and intended users at federal and state levels, lack of continuous involvement and support from top federal management, and disruptions in both organization and personnel.