A $300 million IT flop

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Six years and nearly $300 million later, the Social Security Administration has decided to press "reset" on its project to improve the claim processing system. Here's what happened.

After six years of development at a cost of nearly $300 million, the Social Security Administration has decided to press "reset" on its project to improve a claim processing system after a recent report found it to be not up to the task.

A report by McKinsey and Co., commissioned by the SSA in early 2014 on the status of the Disability Case Processing System, found that the program "delivered limited functionality, and faced schedule delays as well as increasing stakeholder concerns."

The project was conceived to replace 54 separate components used in the SSA's disability determination system.

The Disability Case Processing System would replace those disparate elements with a common case-processing system that uses automated tools to reduce processing time for initial disability claims, decrease processing-related task time and increase system availability.

But it remains a work in progress, McKinsey concluded.

"While current release plan and beta testing model are conceptually sound, execution has fallen short, resulting in deployment of immature software to production that does not deliver incremental value to [disability determination systems]," the report said.

The McKinsey report said the SSA's response to the problems with the new system "has been to continue going broad without maintaining high quality and full functionality, which has exacerbated change management challenges."

The report also found more than 380 outstanding problems with the latest beta, and the system was unable to process all the new claims or accurately track them throughout the system.

Throughout the past six years, the project has been stuck in the beta phase. According to McKinsey, "for past 5 years, Release 1.0 is consistently projected to be 24-32 months away."

Lockheed Martin, prime contractor on the project, said it has reviewed the report and is "committed to delivering on this program and for our customer."

Greg Gershman, co-founder of Ad Hoc LLC., a technology consulting company focused on helping improve government's approach to IT projects, said that starting over might not be a bad idea.

"With an IT system like this, it would be smart to bring in technology experts, people who have experience with transactional, data-driven applications, to assess what they currently have, can it be salvaged or does it need to be started over from scratch," Gershman said.

Echoing McKinsey, Gershman said that without a strong leadership element, IT projects of this magnitude are almost doomed to fail from the start.

"If there's not strong leadership, problems arise with coordinating work between contractors, and there's no one person looking at the system as a single entity -- everyone is making sure their piece is done, and fulfilling their responsibility up to a certain point," he said.

In response to the report, SSA appointed Terri Gruber, an assistant deputy commissioner, as program executive with full authority. SSA also is establishing an integrated program team and will refresh requirements, strengthen vendor management, update its cost benefit analysis and adopt a more agile approach to program development, a spokesperson said in an email to FCW.

Gershman, who also worked on the tech surge, said there are some commonalities between the two failed projects. And he took particular aim at the use of large firms that don't do web development as their first priority.

"You have companies like Lockheed Martin -- they're not web development companies, they don't do work in the private sector, they're not building start-ups," Gershman said. "There's very little in the market that forces them to adopt new technologies."

"Government needs to change how it approaches projects like this, not using system integrators or defense contractors who have repeatedly come up with failures," he said

And, as was the case with, Congress is getting involved. Lawmakers wrote a letter to Carolyn Colvin, acting commissioner at SSA, requesting all documents and communications related to DCPS since March 1, 2014.

According to that letter, written by Reps. Darrell Issa, R-Calif., Jim Jordan, R-Ohio, and James Lankford, R-Okla., "the report found that the DCPS project is adrift, the scope of the project is ambiguous, the project has been poorly executed, and the project's development lacks leadership."

The letter also said that whistleblowers informed the House Oversight and Government Reform Committee, which Issa chairs, of the existence of the report and told the committee that senior officials at SSA failed to follow standard protocols and procedures in disseminating the report throughout the agency, with the intention of keeping the findings secret until after the Senate confirmed Colvin as commissioner.

The SSA said it anticipated implementing the revamped DCPS in all of the disability determination systems and federal case processing sites in fiscal 2015.

"We are committed to implementing the assessment recommendations and are confident we will deliver this vital initiative successfully," SSA told FCW.

About the Author

Colby Hochmuth is a former staff writer for FCW.


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