TSP system saga

Readers of this column know that I have been critical in the past of how the Federal Retirement Thrift Investment Board is handling the upgrade to the Thrift Savings Plan recordkeeping system. Well, the saga continues.

Instead of hiring an experienced 401(k) plan administrator or the Agriculture Department's National Finance Center, the board hired a private contractor to design and implement a system, but planned to operate the system itself. As we know, that effort is in shambles. In typical bureaucratic fashion, the board fired and is now suing the contractor, American Management Systems Inc., and has awarded a new contract to Materials, Communication & Computers In

In addition, the board has done a lot of public finger-pointing and issued press releases highly critical of AMS. But suing the contractor won't undo all of the mismanagement done by the board. Why didn't the board's staff recognize the problem much earlier? Has anyone been fired? I doubt it. The board's executive director, Roger Mehle, says the work done by the contractor "seems virtually valueless." I guess that means contractor oversight was also "virtually valueless." AMS officials blame the board's members because they couldn't specify what they wanted. That's not hard to believe, although I'm sure the contractor deserves some of the blame. Contractors love cost-plus contracts—whenever the client asks for something new, the contractor says, "No problem. But it'll cost you." I've been there. I know.

Meanwhile, costs continued to rise. AMS' estimate went from about $30 million in May 1997 to nearly $90 million, according to the board. But how much of that was due to specification changes made by the customer? We'll never know. What's amusing is that the contractor was supposed to use off-the-shelf software with hardly any customization. I don't think 1.2 million lines of code is "hardly any customization." So now the new contractor is scheduled to complete a review of the former contractor's work by Sept. 30 and finish work on the entire proj.ect by next July.

Already I suspect problems. How can the new company commit to a completion date before finishing the review? This sounds like a political solution, but as you all know, systems have to work. Top-level bureaucrats can't decree when a system will be implemented.

It looks as if the crew over at the board hasn't learned its lesson and is again making promises it can't keep. The new contractor has undertaken the job for a fixed price of $20 million. What if that doesn't happen? What guarantees are there? And what will the board do if the new contractor can't complete the system on time or within budget? Issue a new press release? Or a new task order? Or both? The longer it takes to roll out the new recordkeeping system, the longer feds will have to wait for new features—such as real-time account balance information or account transfers—to arrive.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week.