40 U.S.C. § 11302 — Capital planning and investment control

Page 226 TITLE 40—PUBLIC BUILDINGS, PROPERTY, AND WORKS § 11302 1 See References in Text note below. (e) Within 120 days of the completion of their inven- tories, agencies shall make their inventories available to the public, to the extent practicable and in accord- ance with applicable law and policy, including those concerning the protection of privacy and of sensitive law enforcement, national security, and other pro- tected information. SEC. 6. Interagency Coordination. Agencies are ex- pected to participate in interagency bodies for the pur- pose of advancing the implementation of the Principles and the use of AI consistent with this order. Within 45 days of this order, the CIO Council shall publish a list of recommended interagency bodies and forums in which agencies may elect to participate, as appropriate and consistent with their respective authorities and missions. SEC. 7. AI Implementation Expertise. (a) Within 90 days of the date of this order, the Presidential Innovation Fellows (PIF) program, administered by the General Services Administration (GSA) in collaboration with other agencies, shall identify priority areas of expertise and establish an AI track to attract experts from in- dustry and academia to undertake a period of work at an agency. These PIF experts will work within agencies to further the design, development, acquisition, and use of AI in Government, consistent with this order. (b) Within 45 days of the date of this order, the Office of Personnel Management (OPM), in coordination with GSA and relevant agencies, shall create an inventory of Federal Government rotational programs and deter- mine how these programs can be used to expand the number of employees with AI expertise at the agencies. (c) Within 180 days of the creation of the inventory of Government rotational programs described in section 7(b) of this order, OPM shall issue a report with rec- ommendations for how the programs in the inventory can be best used to expand the number of employees with AI expertise at the agencies. This report shall be shared with the interagency coordination bodies identi- fied pursuant to section 6 of this order, enabling agen- cies to better use these programs for the use of AI, con- sistent with this order. SEC. 8. Responsible Agencies and Officials. (a) For pur- poses of this order, the term ‘‘agency’’ refers to all agencies described in section 3502, subsection (1), of title 44, United States Code, except for the agencies de- scribed in section 3502, subsection (5), of title 44. (b) This order applies to agencies that have use cases for AI that fall within the scope defined in section 9 of this order, and excludes the Department of Defense and those agencies and agency components with functions that lie wholly within the Intelligence Community. The term ‘‘Intelligence Community’’ has the meaning given the term in section 3003 of title 50, United States Code. (c) Within 30 days of the date of this order, each agen- cy shall specify the responsible official(s) at that agen- cy who will coordinate implementation of the Prin- ciples set forth in section 3 of this order with the Agen- cy Data Governance Body and other relevant officials and will collaborate with the interagency coordination bodies identified pursuant to section 6 of this order. SEC. 9. Scope of Application. (a) This order uses the definition of AI set forth in section 238(g) of the [John S. McCain] National Defense Authorization Act for Fis- cal Year 2019 [Pub. L. 115–232, 10 U.S.C. 2358 note] as a reference point. As Federal Government use of AI ma- tures and evolves, OMB guidance developed or revised pursuant to section 4 of this order shall include such definitions as are necessary to ensure the application of the Principles in this order to appropriate use cases. (b) Except for the exclusions set forth in section 9(d) of this order, or provided for by applicable law, the Principles and implementation guidance in this order shall apply to AI designed, developed, acquired, or used specifically to advance the execution of agencies’ mis- sions, enhance decision making, or provide the public with a specified benefit. (c) This order applies to both existing and new uses of AI; both stand-alone AI and AI embedded within other systems or applications; AI developed both by the agency or by third parties on behalf of agencies for the fulfilment of specific agency missions, including rel- evant data inputs used to train AI and outputs used in support of decision making; and agencies’ procurement of AI applications. (d) This order does not apply to: (i) AI used in defense or national security systems (as defined in 44 U.S.C. 3552(b)(6) or as determined by the agency), in whole or in part, although agencies shall adhere to other applicable guidelines and principles for defense and national security purposes, such as those adopted by the Department of Defense and the Office of the Director of National Intelligence; (ii) AI embedded within common commercial prod- ucts, such as word processors or map navigation sys- tems, while noting that Government use of such prod- ucts must nevertheless comply with applicable law and policy to assure the protection of safety, security, pri- vacy, civil rights, civil liberties, and American values; and (iii) AI research and development (R&D) activities, although the Principles and OMB implementation guid- ance should inform any R&D directed at potential fu- ture applications of AI in the Federal Government. SEC. 10. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (i) the authority granted by law to an executive de- partment or agency, or the head thereof; or (ii) the functions of the Director relating to budg- etary, administrative, or legislative proposals. (b) This order shall be implemented consistent with applicable law and subject to the availability of appro- priations. (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforce- able at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. DONALD J. TRUMP. § 11302. Capital planning and investment control (a) FEDERAL INFORMATION TECHNOLOGY.—The Director of the Office of Management and Budg- et shall perform the responsibilities set forth in this section in fulfilling the responsibilities under section 3504(h) of title 44. (b) USE OF INFORMATION TECHNOLOGY IN FED- ERAL PROGRAMS.—The Director shall promote and improve the acquisition, use, security, and disposal of information technology by the Fed- eral Government to improve the productivity, efficiency, and effectiveness of federal programs, including through dissemination of public infor- mation and the reduction of information collec- tion burdens on the public. (c) USE OF BUDGET PROCESS.— (1) DEFINITIONS.—In this subsection: (A) The term ‘‘covered agency’’ means an agency listed in section 901(b)(1) or 901(b)(2) of title 31. (B) The term ‘‘major information tech- nology investment’’ means an investment within a covered agency information tech- nology investment portfolio that is des- ignated by the covered agency as major, in accordance with capital planning guidance issued by the Director. (C) The term ‘‘national security system’’ has the meaning provided in section 3542 of title 44.1 (2) ANALYZING, TRACKING, AND EVALUATING CAPITAL INVESTMENTS.—As part of the budget Page 227 TITLE 40—PUBLIC BUILDINGS, PROPERTY, AND WORKS § 11302 process, the Director shall develop a process for analyzing, tracking, and evaluating the risks, including information security risks, and results of all major capital investments made by an executive agency for information systems. The process shall cover the life of each system and shall include explicit criteria for analyzing the projected and actual costs, benefits, and risks, including information se- curity risks, associated with the investments. (3) PUBLIC AVAILABILITY.— (A) IN GENERAL.—The Director shall make available to the public a list of each major information technology investment, without regard to whether the investments are for new information technology acquisitions or for operations and maintenance of existing information technology, including data on cost, schedule, and performance. (B) AGENCY INFORMATION.— (i) The Director shall issue guidance to each covered agency for reporting of data required by subparagraph (A) that provides a standardized data template that can be incorporated into existing, required data reporting formats and processes. Such guidance shall integrate the reporting process into current budget reporting that each covered agency provides to the Office of Management and Budget, to minimize additional workload. Such guidance shall also clearly specify that the investment evaluation required under subparagraph (C) adequately reflect the investment’s cost and schedule performance and employ incremental development approaches in appropriate cases. (ii) The Chief Information Officer of each covered agency shall provide the Director with the information described in subpara- graph (A) on at least a semi-annual basis for each major information technology in- vestment, using existing data systems and processes. (C) INVESTMENT EVALUATION.—For each major information technology investment listed under subparagraph (A), the Chief In- formation Officer of the covered agency, in consultation with other appropriate agency officials, shall categorize the investment ac- cording to risk, in accordance with guidance issued by the Director. (D) CONTINUOUS IMPROVEMENT.—If either the Director or the Chief Information Officer of a covered agency determines that the in- formation made available from the agency’s existing data systems and processes as re- quired by subparagraph (B) is not timely and reliable, the Chief Information Officer, in consultation with the Director and the head of the agency, shall establish a program for the improvement of such data systems and processes. (E) WAIVER OR LIMITATION AUTHORITY.—The applicability of subparagraph (A) may be waived or the extent of the information may be limited by the Director, if the Director determines that such a waiver or limitation is in the national security interests of the United States. (F) ADDITIONAL LIMITATION.—The require- ments of subparagraph (A) shall not apply to national security systems or to tele- communications or information technology that is fully funded by amounts made avail- able— (i) under the National Intelligence Pro- gram, defined by section 3(6) of the Na- tional Security Act of 1947 (50 U.S.C. 3003(6)); (ii) under the Military Intelligence Pro- gram or any successor program or pro- grams; or (iii) jointly under the National Intel- ligence Program and the Military Intel- ligence Program (or any successor pro- gram or programs). (4) RISK MANAGEMENT.—For each major in- formation technology investment listed under paragraph (3)(A) that receives a high risk rat- ing, as described in paragraph (3)(C), for 4 con- secutive quarters— (A) the Chief Information Officer of the covered agency and the program manager of the investment within the covered agency, in consultation with the Administrator of the Office of Electronic Government, shall conduct a review of the investment that shall identify— (i) the root causes of the high level of risk of the investment; (ii) the extent to which these causes can be addressed; and (iii) the probability of future success; (B) the Administrator of the Office of Elec- tronic Government shall communicate the results of the review under subparagraph (A) to— (i) the Committee on Homeland Security and Governmental Affairs and the Com- mittee on Appropriations of the Senate; (ii) the Committee on Oversight and Government Reform and the Committee on Appropriations of the House of Rep- resentatives; and (iii) the committees of the Senate and the House of Representatives with primary jurisdiction over the agency; (C) in the case of a major information technology investment of the Department of Defense, the assessment required by sub- paragraph (A) may be accomplished in ac- cordance with section 2445c 1 of title 10, pro- vided that the results of the review are pro- vided to the Administrator of the Office of Electronic Government upon request and to the committees identified in subsection (B); and (D) for a covered agency other than the Department of Defense, if on the date that is one year after the date of completion of the review required under subsection (A), the in- vestment is rated as high risk under para- graph (3)(C), the Director shall deny any re- quest for additional development, mod- ernization, or enhancement funding for the investment until the date on which the Chief Information Officer of the covered agency determines that the root causes of the high level of risk of the investment have been ad- dressed, and there is sufficient capability to deliver the remaining planned increments within the planned cost and schedule. Page 228 TITLE 40—PUBLIC BUILDINGS, PROPERTY, AND WORKS § 11302 (5) REPORT TO CONGRESS.—At the same time that the President submits the budget for a fiscal year to Congress under section 1105(a) of title 31, the Director shall submit to Congress a report on the net program performance bene- fits achieved as a result of major capital in- vestments made by executive agencies for in- formation systems and how the benefits relate to the accomplishment of the goals of the ex- ecutive agencies. (d) INFORMATION TECHNOLOGY STANDARDS.— The Director shall oversee the development and implementation of standards and guidelines per- taining to federal computer systems by the Sec- retary of Commerce through the National Insti- tute of Standards and Technology under section 11331 of this title 1 and section 20 of the National Institute of Standards and Technology Act (15 U.S.C. 278g–3). (e) DESIGNATION OF EXECUTIVE AGENTS FOR AC- QUISITIONS.—The Director shall designate the head of one or more executive agencies, as the Director considers appropriate, as executive agent for Government-wide acquisitions of infor- mation technology. (f) USE OF BEST PRACTICES IN ACQUISITIONS.— The Director shall encourage the heads of the executive agencies to develop and use the best practices in the acquisition of information tech- nology. (g) ASSESSMENT OF OTHER MODELS FOR MAN- AGING INFORMATION TECHNOLOGY.—On a con- tinuing basis, the Director shall assess the expe- riences of executive agencies, state and local governments, international organizations, and the private sector in managing information technology. (h) COMPARISON OF AGENCY USES OF INFORMA- TION TECHNOLOGY.—The Director shall compare the performances of the executive agencies in using information technology and shall dissemi- nate the comparisons to the heads of the execu- tive agencies. (i) MONITORING TRAINING.—The Director shall monitor the development and implementation of training in information resources management for executive agency personnel. (j) INFORMING CONGRESS.—The Director shall keep Congress fully informed on the extent to which the executive agencies are improving the performance of agency programs and the accom- plishment of the agency missions through the use of the best practices in information re- sources management. (k) COORDINATION OF POLICY DEVELOPMENT AND REVIEW.—The Director shall coordinate with the Office of Federal Procurement Policy the devel- opment and review by the Administrator of the Office of Information and Regulatory Affairs of policy associated with federal acquisition of in- formation technology. (Pub. L. 107–217, Aug. 21, 2002, 116 Stat. 1237; Pub. L. 108–458, title VIII, § 8401(1), (2), Dec. 17, 2004, 118 Stat. 3869; Pub. L. 113–291, div. A, title VIII, § 832, Dec. 19, 2014, 128 Stat. 3440; Pub. L. 115–88, § 2, Nov. 21, 2017, 131 Stat. 1278; Pub. L. 115–91, div. A, title VIII, § 819(a), Dec. 12, 2017, 131 Stat. 1464.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 11302 .......... 40:1412. Pub. L. 104–106, div. E, title LI, § 5112, Feb. 10, 1996, 110 Stat. 680. Editorial Notes REFERENCES IN TEXT Section 3542 of title 44, referred to in subsec. (c)(1)(C), was repealed by Pub. L. 113–283, § 2(a), Dec. 18, 2014, 128 Stat. 3073. See section 3552 of Title 44, Public Printing and Documents. Section 2445c of title 10, referred to in subsec. (c)(4)(C), was repealed by Pub. L. 114–328, div. A, title VIII, § 846(1), Dec. 23, 2016, 130 Stat. 2292. The text of section 11331 of this title, referred to in subsec. (d), was generally amended by Pub. L. 117–167, div. B, title II, § 10246(f), Aug. 9, 2022, 136 Stat. 1492, so as to provide for the prescription by the Secretary of Commerce of standards and guidelines pertaining to Federal information systems. AMENDMENTS 2017—Subsec. (c)(5). Pub. L. 115–88 and Pub. L. 115–91 amended subsec. (c) identically, striking out par. (5) re- lating to sunset of certain provisions. Text read as fol- lows: ‘‘Paragraphs (1), (3), and (4) shall not be in effect on and after the date that is 5 years after the date of the enactment of the Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 2015.’’ 2014—Subsec. (c). Pub. L. 113–291 added pars. (1), (3), (4), and par. (5) relating to sunset of certain provisions and redesignated former pars. (1) and (2) as par. (2) and par. (5) relating to report to Congress, respectively. 2004—Subsec. (b). Pub. L. 108–458, § 8401(1), inserted ‘‘security,’’ after ‘‘use,’’. Subsec. (c)(1). Pub. L. 108–458, § 8401(2), inserted ‘‘, including information security risks,’’ after ‘‘evalu- ating the risks’’ and ‘‘costs, benefits, and risks’’. Statutory Notes and Related Subsidiaries CHANGE OF NAME Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Con- gress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representa- tives by House Resolution No. 5, One Hundred Eight- eenth Congress, Jan. 9, 2023. MANAGEMENT OF SOFTWARE LICENSES Pub. L. 114–210, July 29, 2016, 130 Stat. 824, provided that: ‘‘SECTION 1. SHORT TITLE. ‘‘This Act may be cited as the ‘Making Electronic Government Accountable By Yielding Tangible Effi- ciencies Act of 2016’ or the ‘MEGABYTE Act of 2016’. ‘‘SEC. 2. OMB DIRECTIVE ON MANAGEMENT OF SOFTWARE LICENSES. ‘‘(a) DEFINITION.—In this section— ‘‘(1) the term ‘Director’ means the Director of the Office of Management and Budget; and ‘‘(2) the term ‘executive agency’ has the meaning given that term in section 105 of title 5, United States Code. ‘‘(b) OMB DIRECTIVE.—The Director shall issue a di- rective to require the Chief Information Officer of each executive agency to develop a comprehensive software licensing policy, which shall— ‘‘(1) identify clear roles, responsibilities, and cen- tral oversight authority within the executive agency Page 229 TITLE 40—PUBLIC BUILDINGS, PROPERTY, AND WORKS § 11303 for managing enterprise software license agreements and commercial software licenses; and ‘‘(2) require the Chief Information Officer of each executive agency to— ‘‘(A) establish a comprehensive inventory, includ- ing 80 percent of software license spending and en- terprise licenses in the executive agency, by identi- fying and collecting information about software li- cense agreements using automated discovery and inventory tools; ‘‘(B) regularly track and maintain software li- censes to assist the executive agency in imple- menting decisions throughout the software license management life cycle; ‘‘(C) analyze software usage and other data to make cost-effective decisions; ‘‘(D) provide training relevant to software license management; ‘‘(E) establish goals and objectives of the software license management program of the executive agen- cy; and ‘‘(F) consider the software license management life cycle phases, including the requisition, recep- tion, deployment and maintenance, retirement, and disposal phases, to implement effective decision- making and incorporate existing standards, proc- esses, and metrics. ‘‘(c) REPORT ON SOFTWARE LICENSE MANAGEMENT.— ‘‘(1) IN GENERAL.—Beginning in the first fiscal year beginning after the date of enactment of this Act [July 29, 2016], and in each of the following 5 fiscal years, the Chief Information Officer of each executive agency shall submit to the Director a report on the financial savings or avoidance of spending that re- sulted from improved software license management. ‘‘(2) AVAILABILITY.—The Director shall make each report submitted under paragraph (1) publically available.’’ APPROPRIATE USE OF REQUIREMENTS REGARDING EXPE- RIENCE AND EDUCATION OF CONTRACTOR PERSONNEL IN THE PROCUREMENT OF INFORMATION TECHNOLOGY SERVICES Pub. L. 106–398, § 1 [[div. A], title VIII, § 813], Oct. 30, 2000, 114 Stat. 1654, 1654A–214, provided that: ‘‘(a) AMENDMENT OF THE FEDERAL ACQUISITION REGU- LATION.—Not later than 180 days after the date of the enactment of this Act [Oct. 30, 2000], the Federal Acqui- sition Regulation issued in accordance with sections 6 and 25 of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 405 and 421) [see 41 U.S.C. 1121, 1303] shall be amended to address the use, in the procure- ment of information technology services, of require- ments regarding the experience and education of con- tractor personnel. ‘‘(b) CONTENT OF AMENDMENT.—The amendment issued pursuant to subsection (a) shall, at a minimum, provide that solicitations for the procurement of infor- mation technology services shall not set forth any min- imum experience or educational requirement for pro- posed contractor personnel in order for a bidder to be eligible for award of a contract unless— ‘‘(1) the contracting officer first determines that the needs of the executive agency cannot be met without any such requirement; or ‘‘(2) the needs of the executive agency require the use of a type of contract other than a performance- based contract. ‘‘(c) GAO REPORT.—Not later than one year after the date on which the regulations required by subsection (a) are published in the Federal Register, the Comp- troller General shall submit to Congress an evaluation of— ‘‘(1) executive agency compliance with the regula- tions; and ‘‘(2) conformance of the regulations with existing law, together with any recommendations that the Comptroller General considers appropriate. ‘‘(d) DEFINITIONS.—In this section: ‘‘(1) The term ‘executive agency’ has the meaning given that term in section 4(1) of the Office of Federal Procurement Policy Act (former 41 U.S.C. 403(1)) [now 41 U.S.C. 133]. ‘‘(2) The term ‘information technology’ has the meaning given that term in section 5002(3) of the Clinger-Cohen Act of 1996 (40 U.S.C. 1401(3)) [now 40 U.S.C. 11101(6)]. ‘‘(3) The term ‘performance-based’, with respect to a contract, means that the contract includes the use of performance work statements that set forth con- tract requirements in clear, specific, and objective terms with measurable outcomes.’’ § 11303. Performance-based and results-based management (a) IN GENERAL.—The Director of the Office of Management and Budget shall encourage the use of performance-based and results-based manage- ment in fulfilling the responsibilities assigned under section 3504(h) of title 44. (b) EVALUATION OF AGENCY PROGRAMS AND IN- VESTMENTS.— (1) REQUIREMENT.—The Director shall evalu- ate the information resources management practices of the executive agencies with re- spect to the performance and results of the in- vestments made by the executive agencies in information technology. (2) DIRECTION FOR EXECUTIVE AGENCY AC- TION.—The Director shall issue to the head of each executive agency clear and concise direc- tion that the head of each agency shall— (A) establish effective and efficient capital planning processes for selecting, managing, and evaluating the results of all of its major investments in information systems; (B) determine, before making an invest- ment in a new information system— (i) whether the function to be supported by the system should be performed by the private sector and, if so, whether any com- ponent of the executive agency performing that function should be converted from a governmental organization to a private sector organization; or (ii) whether the function should be per- formed by the executive agency and, if so, whether the function should be performed by a private sector source under contract or by executive agency personnel; (C) analyze the missions of the executive agency and, based on the analysis, revise the executive agency’s mission-related processes and administrative processes, as appro- priate, before making significant invest- ments in information technology to be used in support of those missions; and (D) ensure that the information security policies, procedures, and practices are ade- quate. (3) GUIDANCE FOR MULTIAGENCY INVEST- MENTS.—The direction issued under paragraph (2) shall include guidance for undertaking effi- ciently and effectively interagency and Fed- eral Government-wide investments in informa- tion technology to improve the accomplish- ment of missions that are common to the ex- ecutive agencies. (4) PERIODIC REVIEWS.—The Director shall implement through the budget process peri- odic reviews of selected information resources management activities of the executive agen-