OPM rethinks strategy for retirement system

After abandoning a nearly decade-old effort to develop a computer system to manage the federal government's retirement systems the Office of Personnel Management last month completed a review of what services a revamped system should support.

OPM undertook the review this past spring months after it canceled a $65 million contract with Computer Sciences Corp. to develop a computer system that would manage the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS).

"Take a Timeout"

"It seemed to me that we were developing a system that didn't first really examine the products and services it would provide " said Ed Flynn associate director of retirement and insurance services at OPM. "We were running a risk of developing a system that was too large and complex. We decided it was time to take a timeout."

OPM did not kill the system because of poor vendor performance but because the agency has repeatedly failed to re-evaluate retirement system plans and processes since the mid-1980s said Lauren Steinkolk director of the Fed 500 program at Federal Sources Inc. a McLean Va.-based market research firm. "They were automating a system that was conceived 14 years ago " Steinkolk said. "It was old when it was supposed to be new."

In the spring OPM hired American Management Systems Inc. to evaluate agency operations. In the "Information Management" section of the audit AMS cited 119 requirements in areas such as information collection dissemination privacy and disaster recovery.

OPM is beginning to identify a course of action for a new system design. The new plan will be heavy on business process re-engineering (BPR) to keep the agency from making the same mistakes experienced with the FERS Automated Processing System Flynn said.

AMS "will tell us in very precise terms the things we need to do including the specific platforms and functions necessary for what the retirement systems need to do and what the agency needs to do in terms of integrating those systems " Flynn said. OPM will then devise "a new contracting effort for business process re-engineering.

"There are two primary challenges we face as we work our way through this " Flynn said. "First is the richness of the employee data that we will have in the system and how that can be used to serve customers better. The second issue has to do with the degree to which the system is operated on a centralized or decentralized basis. We are still wrestling our way through that. Our concept of operation has been focusing hard on those issues."

AMS is working on the concept of operation which includes automation. "We will be breaking down the system into major processing components and looking at industry best practices to meet OPM's services goal " said Frank Bianchi vice president and team leader for AMS' Retirement Plan and Services Practice. "We will also be identifying technologies [to foster] that success."

AMS is due to complete the concept of operation by early December and OPM will decide by next spring how to proceed on its BPR course Flynn said.

-- Jones is a free-lance writer based in Falls Church Va.