Summary: GAO reviewed the development of computer software at the Veterans Benefits Administration (VBA) and at the Department of Veterans Affairs' Austin Automation Center. Neither VBA nor the Austin Automation Center had satisfied any of the key process areas required for a level 2 capability, as described by the Software Engineering Institute's five-level software capability model. Under a level 2 capability, basic project management processes are established to track cost, schedule, and functionality. Moreover, the necessary process discipline is in place to repeat earlier successes on projects with similar applications. The upshot is that the Department of Veterans Affairs (VA) has little assurance that (1) investments in new software development will achieve their objectives or (2) software will be delivered consistent with cost and schedule estimates. GAO recommends that VA delay any major investment in software development beyond what is needed to sustain critical day-to-day operations until the repeatable level of process maturity is achieved. VA should also obtain expert advice on how to improve the ability of VBA and the Austin Automation Center to develop high-quality software, develop a strategy to reach the repeatable level of process maturity, implement that strategy quickly, and ensure that any future contracts for software development require that the contractor have a software development capability of at least level 2.