Why SCCM 2012 Clients Do Not Get Software Updates?

Points of My Scenario:
1. I have deployed SCCM 2012 on Windows Server 2008 R2, using SQL Server 2008 R2, SP3
2. I have implemented a Software Update Point
3. There were NO errors during any of the implementations
4.  All SCCM and SUP (software update point) components are on a single server, BUT the SQL databases (for SCCM and WSUS) are located on a separate server running Windows Server 2008 R2 and SQL Server 2008 R2, servicepack 3
5. I have deployed CM client software, created and deployed software update groups to device collections, making sure that the updates match the clients' OS - BUT the clients never receive the updates.
6. All clients are Windows Server 2008 R2.
7. Server Log (wsyncmgr.log) shows the following: "sync: SMS synchronizing updates, processed 15780 out of 15780 items (100%)"
8. Client's Log UpdatesDeployment.log show (a) "Attempting to install 0 updates" and (b) "No actionable updates for install task. No attempt required"
9. Client's Log PolicyEvaluator.log show (a) "Evaluation not required. No changes detected." and (b) "Settings update not required. No changes detected."
10. In Config Manager's Software Library section, all software updates (thousands) show 0 (zero) for Required, Installed, and Percent Compliant. "Deployed" status is show "Yes" for the few software updates I have included in the test deployment packages.

NOTE: The above results have been consistent for 2 weeks no matter what I do. I have watched videos from CBTNuggets, Pluralsight (TrainSignal), and YouTube. I seem to be doing everything right!    :-(

QUESTION: What should I do to make the clients download & install the updates I have deployed to them?
waltforbesSenior IT SpecialistAsked:
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waltforbesSenior IT SpecialistAuthor Commented:
UPDATES (Log Errors)

(1) WUAHandler.log Errors:
Unable to read existing WUA resultant policy. Error = 0x80070002.
Group policy settings were overwritten by a higher authority (Domain Controller) to: Server  and Policy NOT CONFIGURED
Failed to Add Update Source for WUAgent of type (2) and id ({BBCDB9AC-1F22-460A-AF5C-4B522E828AC4}). Error = 0x87d00692.
Its a WSUS Update Source type ({BBCDB9AC-1F22-460A-AF5C-4B522E828AC4}), adding it.
Unable to read existing resultant WUA policy. Error = 0x80070002.
Enabling WUA Managed server policy to use server: http://sccm-server.fqdn:8530
Waiting for 2 mins for Group Policy to notify of WUA policy change...
Unable to read existing WUA resultant policy. Error = 0x80070002.
Group policy settings were overwritten by a higher authority (Domain Controller) to: Server  and Policy NOT CONFIGURED
Failed to Add Update Source for WUAgent of type (2) and id ({BBCDB9AC-1F22-460A-AF5C-4B522E828AC4}). Error = 0x87d00692.

(2) UpdatesDeployment.log Errors:
Job error (0x87d00692) received for assignment ({F2B733C0-CFED-434B-88D1-27AF911A31F9}) action
Updates will not be made available
CodePage(437), SMS_LocaleID(1033)]
instance of SMS_SUMAgentAssignmentError_EvaluationJob_Mom
{
      AssignmentId = "{F2B733C0-CFED-434B-88D1-27AF911A31F9}";
      ClientID = "GUID:D8764661-1E57-4536-B986-890C524471F9";
      DateTime = "20150308222945.164000+000";
      insAssignmentId = "{F2B733C0-CFED-434B-88D1-27AF911A31F9}";
      MachineName = "sccm-server";
      ProcessID = 2392;
      SiteCode = "ABC";
      ThreadID = 2620;
      Win32ErrorCode = 2278557330;
};
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Nagendra Pratap SinghDesktop Applications SpecialistCommented:
You have a conflict in a GPO . Your LAN has a GPO pointing to a WSUS server which does not exist.
 
Remove the GPO and then retry.

You can check the current WSUS setting by opening

HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\WindowsUpdate

Also you may RUN RSOP.MSC and check the overlaps.
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waltforbesSenior IT SpecialistAuthor Commented:
Spot on, Nagendra! Many thanks for your wonderful help!
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