Waste Watch: Federal waste and inefficiency in IT management

Billions of taxpayer dollars fund government projects that are mismanaged and go over budget. Taxpayer money is also wasted on fees that government agencies are charged by software companies that have created a monopoly.

In a recent letter addressed to Elon Musk and Vivek Ramaswamy, co-chairs of the Department of Government Efficiency (DOGE), Senator Joni Ernst (R-IA) argued that significant federal waste could be reduced through improved management systems and a more competitive market for government software programs.

“For every $1 billion Washington spends, $102 million is wasted as projects go over budget, are delayed, or fail to meet projected goals,” the letter read, urging the DOGE project to require government agencies to apply basic project management principles required in private industry.

the cloud’s silver lining

Federal agencies are required to migrate their data and software to the cloud whenever feasible. However, this shift often incurs additional taxpayer-funded expenses, including costs associated with software licensing and vendor policies.

Since 1994, the federal government has spent approximately $2 trillion on information technology (IT), with around $300 billion allocated to commercial off-the-shelf software (COTS). Maintaining and supporting this software costs between $10 billion and $15 billion annually. A substantial portion of this spending benefits a small group of software companies that dominate the industry, according to “Vendor-Lock,” a recent report by Michael Garland.

Garland asserts that fostering free-market competition could break the vendor lock, improve price performance by 5%, and generate annual savings of $500 to $750 million.

In a recent report, “Cloud Computing,” the Government Accountability Office (GAO) found that five of six federal agencies surveyed faced challenges due to restrictive software licensing practices. The affected agencies include the Department of Justice (DOJ), Department of Transportation (DOT), NASA, Social Security Administration (SSA), and the Department of Veterans Affairs (VA). The Office of Personnel Management (OPM) reported no such issues.

Four of these agencies incurred increased costs, such as repurchasing licenses for cloud use, paying additional fees for cloud software from other providers, and covering vendor charges to migrate software to the cloud.

The GAO made two recommendations to each of the six agencies; only the DOJ disagreed with the suggestions.

inefficient Management Practices

In fiscal year 2024, the federal government spent $6.75 trillion. By comparison, $584 billion has been spent so far in fiscal year 2025, up $114 billion from $470 billion during the same period in FY 2024.

Inefficient management and poor project performance waste substantial taxpayer dollars. Senator Ernst’s letter highlights that better management principles could save substantial taxpayer funds.

For instance, in a 2015 GAO congressional report entitled: “Defense Major Automated Information Systems,” 20 federal programs were reviewed for cost and schedule commitments. The report found that only eight programs had established an acquisition program baseline (APB), which includes cost and schedule baselines. Programs without an APB took about five years and two months and spent $452 million before establishing baselines. In contrast, those with APBs spent $33.9 million and took just over a year. The lack of baselines led to limited oversight and accountability for funds spent.

Ernst estimates that of the $6.75 trillion spent in FY 2024, taxpayers could have saved $688.5 billion if effective management systems had been in place.

Through our Waste Watch series, Carolina Journal shines a spotlight on wasteful government spending at both the state and federal levels, exposing projects that squander taxpayer dollars.

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