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SECY-98-032
February 27, 1998
FOR: | The Commissioners |
FROM: | A.J. Galante /s/ Chief Information Officer |
SUBJECT: | REVISED PROCESS FOR INFORMATION TECHNOLOGY CAPITAL PLANNING AND INVESTMENT CONTROL |
PURPOSE:
The purpose of this paper is to inform the Commission of our plans to implement a revised Capital Planning and Investment Control (CPIC) process. The proposed new CPIC process is attached.
BACKGROUND:
The Clinger-Cohen Act (formerly the Information Technology Management Reform Act or ITMRA) of 1996 required each Federal agency head to design and implement a CPIC process for evaluating information technology (IT) projects.
A proposed prototype process for the fiscal year (FY) 1999 budget cycle was detailed in a memorandum dated November 21, 1996, from the Executive Director for Operations to Chairman Jackson. The prototype was approved in a memorandum dated January 8, 1997, from Chairman Jackson to the Acting Chief Information Officer.
DISCUSSION:
During the FY 1999 budget cycle, three major proposed IT projects (the Reactor Program System - RPS, PC Replacement, and the Agencywide Document Access and Management System - ADAMS) were reviewed using the prototype CPIC process. Subsequently, the Office of the Chief Information Officer (OCIO) staff solicited comments from participants in that process. And, in July 1997, OCIO staff attended a Best Practices Workshop in which 23 agencies shared their CPIC experiences.
CONTACT: | Francine F. Goldberg, OCIO/PRMD 301-415-7545 |
Lessons Learned From NRC and Other Agencies' Experiences
From NRC experience, we learned the following:
From the Best Practices Workshop, we learned the following:
Principles Underlying the Proposed New CPIC Process
The proposed new CPIC process is based on the following principles:
Summary of Changes in the Proposed CPIC Process Based on Lessons Learned and Underlying Principles
The proposed new process continues to satisfy the law, addresses OMB guidance, and improves on the prototype process by
Step 1 - Project Screening | ||
-- | The ITBC screens the proposed project and either rejects it or gives the sponsor the go-ahead to scope the project and to begin the CPIC analysis | |
Step 2 - CPIC Review |
||
-- | The ITBC and the CIO review the CPIC analysis and Project Management Plan to determine whether the proposed project is ready for Executive Council (EC) review or the project is rejected due to a weak business case, and/or too high a risk level with little or no offsetting benefit to the NRC | |
Step 3 - EC Review |
||
-- | If approved by the EC, the project funding is requested through the normal budget process |
Coordination
The Chief Financial Officer has reviewed this Commission Paper for resource implications and has no objections. This paper has been coordinated with the Executive Director for Operations who has no objections. The Office of the General Counsel (OGC) has reviewed this paper and has no legal objections (see Enclosure 3, which reflects OGC guidance).
Next Steps
We plan to proceed to modify the CPIC guidance and to implement the new process within 10 working days of the date of this paper. We plan to have the NRC CPIC process peer review by the CIO Council's Capital Planning subcommittee as part of its planned assessment of agency implementation of capital planning guidance. The CPIC procedures will be refined to reflect feedback from this peer review, if appropriate.
A.J. Galante Chief Information Officer |
Enclosures: | 1. The Proposed NRC Capital Planning and Investment Control Process (CPIC) 2. IT Project Proposal Screening Form 3. Specific Procedures Addressing Clinger-Cohen Act Section on "Content of Process" |
Distribution: | PRMD R/F PRMD S/F CIO R/F (3) |
ENCLOSURE 1
The Proposed NRC Capital Planning and Investment Control Process (CPIC)
This document describes the Capital Planning and Investment Control (CPIC) process for a proposed new project. Figure 1 is a graphical representation of the process.
PROCESS TRIGGERING ACTION - IT PROJECT PROPOSAL SCREENING FORM SUBMISSION
Initial Screening by OCIO
NEXT STEPS IF PROJECT COST GREATER THAN $500,000
Concept/Selection Phase
Step 1 - Review of Screening Form
Step 2 - CPIC Analysis
Step 3 - EC Approval
Project/Control Phase
Operational/Evaluation Phase
PROJECT COST LESS THAN $500,000
Proposed IT investments with estimated project costs of less than $500,000 would need the CIO's approval. The CIO has the discretion to ask the ITBC to review these proposed IT investments. As shown in Figure 1, such projects would require less documentation and fewer reviews. Sponsors of projects in the variance category must ask the CIO for approval to continue (pending additional funds being made available by the sponsoring office), before the cost overrun occurs. These projects will be stopped pending the consideration of the need for an in-depth CPIC analysis if the variance would put them over the $500K threshold.
Role and Responsibilities of the Chairman and the Commission in the CPIC Process
The Chairman, in accordance with the Clinger-Cohen Act, reports yearly to OMB any significant variance from project cost, performance, or schedule goals established for major IT investments. (OMB's Circular A -11 defines significant variance as 10 percent or more deviation from the baseline project phase costs initially reported.)
The Commission would review and approve the major projects reportable to OMB as part of its review of the annual NRC Performance Plan.
FIGURE 1
Proposed IT Project Review Framework
Triggering Action - Sponsor prepares and submits IT Project Proposal Screening Form to OCIO for initial screening. Review path then determined by the estimated project cost.
\/ | \/ | |
Project Cost (less than $500,000) OCIO reviews project outline contained in Proposal Screening Form |
Project Cost (greater than $500,000) ITBC reviews project outline contained in Proposal Screening Form | |
\/ | \/ | |
Sponsor allocates seed money
Sponsor scopes project Sponsor and OCIO develop Project Management Plan Sponsor prepares abbreviated CPIC analysis |
Sponsor allocates seed money
Sponsor scopes project Sponsor and OCIO develop Project Management Plan Sponsor prepares CPIC analysis | |
\/ | \/ | |
OCIO reviews CPIC analysis | ITBC reviews CPIC analysis | |
\/ | ||
OCIO provides input on CPIC analysis | ||
\/ | \/ | |
Sponsor presents project (CPIC) to the EC | ||
\/ | ||
CIO approves project or, may request ITBC review | EC reviews project | |
\/ | \/ | |
If approved, project funding is requested through normal budget process | If approved, project funding is requested through normal budget process | |
\/ | \/ | |
Business project manager manages project within Project Management Plan | Business project manager manages project within Project Management Plan | |
\/ | \/ | |
Exceptions to plan or 5 percent cost overrun require OCIO approval to continue & funds provided by sponsor | Exceptions to plan or 5 percent cost overrun require EC approval to continue & additional funds from CFO |
ENCLOSURE 3
Specific Procedures Addressing Clinger-Cohen Act Section on "Content of Process"
This enclosure addresses elements of the Clinger-Cohen Act identified by the Office of the General Council as not being explicitly covered in the Commission Paper or Enclosure 1. Note that the references are to the Steps identified in Enclosure 1, "The Proposed NRC Capital Planning and Investment Control Process."
Procedures to be included in the document providing detailed guidance for implementing the Capital Planning and Investment Control process are as follows:
Procedure to be included in a Charter for the Information Technology Business Council:
ENCLOSURE 2
(February 9, 1998)
IT PROJECT PROPOSAL SCREENING FORM
Purpose of this form: To provide information to the CIO and the Information Technology Business Council (ITBC) for screening proposed information technology projects to determine whether they merit further analysis to develop a business case (i.e., requirements identification, alternatives analysis, and Project Management Plan). Proposals with estimated project phase costs of less than $500K will be reviewed by the CIO. Those with estimated costs greater than $500K will be reviewed by the ITBC. Projects covered by this process include new application systems, major modification to existing application systems, and modifications to local and agencywide IT infrastructure. Single-user personal productivity applications, scientific codes, and any associated high-performance computing equipment are not included. Sponsors of proposed IT projects should submit completed forms via memorandum from their Office Director to the CIO at any time during the year. (An electronic copy of the submission to the CIO should be sent to John Sullivan (JAS2).) Assistance in completing this form is available from John Sullivan (415-5857, e-mail JAS2). |
Sponsoring Office: Contact Name/Phone:
Project Title: |
MISSION NEED:
What are the business needs, both internal and external, that are driving this project? How do they relate to the Commission's mission, strategic plan and performance plan? What specific goals and measures will this project support? List the primary benefits of the project. How is it expected to improve mission/program/operational performance?
PROJECT OBJECTIVES:
What are the principal objectives of the project?
PROCESS BENCHMARKING AND REDESIGN:
Describe background and project preparatory activities conducted to date. Which of the following have been accomplished: (a) Benchmarking - comparison of NRC business practice and operations with "best practices" in other organizations? (b) Process optimization - consideration of ways to change agency operations to improve efficiency and effectiveness?
INTEGRATION WITH BUSINESS AREA PLANS:
What business areas, functions, and processes does the proposed project support? (Please identify on page 3.) What is the relationship of the project to current plans for the business area as a whole, i.e., what is the relationship of the proposed project to other existing or planned applications systems? What existing systems, if any, will the new system replace? What are the plans for integration and data sharing with other systems? What involvement is needed by other offices, including both offices that will create data for the system as well as offices that will use the system to conduct their business?
USERS:
If the project would create an application system, which offices would use the system? Would the regions use the system? How many of the agency's staff would have access to the system? Would the public have access to the system?
INFRASTRUCTURE IMPACT:
What IT infrastructure needs (PC capabilities, telecommunications, etc.) are associated with this project and when are these capabilities needed? Highlight any needs for infrastructure upgrades (e.g., telecommunications upgrades, software not currently on the LAN) that exceed currently planned and scheduled infrastructure capabilities.
STAFFING:
If a proposed IT project is approved and funded, is the office prepared to manage it on a full-time basis? What office plans have been made for providing a project manager and necessary staffing for detailed requirements analysis, prototyping, testing, etc.? What staff support is needed from OCIO and when?
ACQUISITION PLANS:
What IT equipment, software, and development service purchases are anticipated and what general acquisition approach is planned? Have you explored whether a commercially-available "off-the-shelf" application might satisfy your requirements or do you intend to develop a customized application? If acquisition vehicles other than those available through OCIO are anticipated, the office should highlight these.
SECURITY REQUIREMENTS:
Would the project create an application system that processes classified or sensitive data? (See definition in the glossary of Management Directive, Volume 12, Security)
PRELIMINARY ESTIMATED COST FOR PROJECT PHASE:
What is the estimated cost category of the Project Phase of the proposed IT investment? (An IT investment proposal becomes a project when its functional requirements are identified, has been approved to proceed, is funded, has a project team in place, and has a project workplan defined. It remains a project until it becomes an installed operational system). Cost categories are (1) Less than $500K, (2) $500K to $1M, (3) Over $1M but less than $3M, and (4) $3M or more.
ESTIMATED SEED MONEY:
Assuming the proposed project is approved to proceed, what is the estimated amount of seed money that will be required to prepare the business case for the project? Primary elements of the business case are (a) identify and define requirements, (b) identify potential solution together with several alternatives (including the status quo), (c) estimate the life cycle costs, benefits, and risks of each alternative, and (d) prepare, together with the OCIO, a detailed Project Management Plan with staffing, budget, schedule, milestones, and performance goals. Note that projects with estimated development costs of less than $500K will require an abbreviated business case, appropriately scaled to the size of the project.
DEFINITIONS:
APPLICATION SYSTEM: Computer hardware, software and procedures designed to capture, store, manipulate, retrieve and report data/information. (excludes scientific codes and single-user personal productivity applications).
NEW APPLICATION SYSTEM: Automation of a manual process or changes to an existing application significant enough to require a complete system rewrite.
MAJOR MODIFICATION TO AN APPLICATION SYSTEM: Changes to an existing application system, hardware or software, that go far beyond slight adjustments to the functionality. Adjustments including significant equipment and/or hardware changes or many data elements, reports, queries and process changes would be considered major. Adding, deleting or changing a few data elements or a few reports/queries would be considered a minor enhancement or maintenance.
INFRASTRUCTURE: Includes hardware, software, services, equipment, and components necessary to support local and enterprise-wide information technology requirements. This includes desktop systems, customer service, network components and services, telecommunications components and services, operational support, and maintenance.
PLEASE CIRCLE THE BUSINESS FUNCTION(S) THE PROPOSED PROJECT SUPPORTS
MISSION-RELATED BUSINESS AREAS | |
MANAGEMENT DIRECTION AND OVERSIGHT | |
Providing Direction Planning Organizing Monitoring and Evaluation | |
COMPLIANCE MANAGEMENT | |
Program Direction Planning Inspections and Investigations Performing Inspections and Investigations Documenting Inspections and Investigations Performing Enforcement | |
LICENSING/APPROVAL | |
Program Direction Receiving Application Performing Technical Review Performing Legal/Adjudicatory Review Decision Making | |
IDENTIFYING AND ASSESSING SAFETY CONCERNS | |
Program Direction Scoping Concerns Obtaining/Communicating Information Determining Significance Taking Action | |
RULEMAKING | |
Program Direction Developing Rulemaking/regulatory Guide Plan Formulating Initial Package Formulating Subsequent Packages | |
EXTERNAL AFFAIRS | |
Program Direction Information Collection Information Transmission/Notification Representation External Assistance Coordination with External Organizations | |
SUPPORT BUSINESS AREAS | |
FINANCIAL MANAGEMENT | |
Program Direction Budget Planning Management Funds Control Accounting Review/Audit | |
HUMAN RESOURCES MANAGEMENT | |
Program Management Recruiting, Hiring, Selection Managing Compensation Managing Staff Utilization Providing Organization Management Managing Workplace Environment Managing Labor-Management Relations Providing Staff Training and Development | |
INFORMATION RESOURCES MANAGEMENT | |
Program Direction IT Infrastructure Information Systems Information Management Records Management | |
FACILITIES AND PROPERTY MANAGEMENT | |
Program Direction Facility Operations Property Operations | |
ACQUISITION MANAGEMENT | |
Program Direction Planning Acquisitions Pre-Award Process Award Process Post-Award Administration |
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