Education chooses Andersen for modernization

Education Department officials plan to announce tomorrow that the department has chosen Andersen Consulting to oversee modernization of the troubled computer systems the agency uses to run billions of dollars in federal student aid programs.

The award to Andersen, under Education's Modernization Partner program, calls on the firm to act as sort of a right-hand man for information technology management. Education chose Andersen from a group of three finalists that also included Computer Sciences Corp. and Electronic Data Systems Corp.

As Modernization Partner for Education's Office of Student Financial Assistance Programs (OSFAP), Andersen will manage the execution of the department's "Modernization Blueprint," a plan for upgrading and integrating Education's maze of aging computer systems throughout the department. The office has long been criticized by government auditors and Congress for the inefficient patchwork of systems it uses to oversee almost $40 billion of student aid per year.

"This effort at the Department of Education marks a pivotal point in the reinvention of government, as the Office of Student Financial Assistance adopts new business models," said Steve Rohleder, Andersen's managing partner for the Americas Federal Government operating unit. "Andersen Consulting is committed to making this new performance-based model work for government."

In an attempt to remedy management problems at the department, Congress and the president last year made OSFAP a "performance-based organization," with passage of the Higher Education Amendments of 1998. As a PBO, the office must focus on setting and meeting performance goals. To do that, the PBO gets more management and procurement flexibility.

Steve Shane, managing partner with Andersen, said he did not know the value of Andersen's business under the Modernization Partner program. OSFAP manages about 80 percent of the department's annual information technology dollars—about $450 million worth of technology goods and services that support billions of dollars in student aid programs yearly.

Shane said that Andersen, as overseer of the modernization program, will not undertake all of the actual modernization work itself. "It's important that we really play to all the strengths of the contractors that exist at Education today," he said. "This is not a sole execution by Andersen."