White House kills e-flood insurance project

The White House has pulled the plug on a program to automate the processing of flood insurance claims, as part of a review of vital information technology systems at risk of squandering the government's nearly $80 billion IT budget. Federal officials recently reviewed 16 of 26 projects that were incurring cost overruns, running late -- or at risk of both-- and have revised project plans to save an expected $1.3 billion during those systems' lifecycles.

"A decision was made to terminate" the national flood insurance program IT system "so we did not continue to throw good money over bad," federal Chief Information Officer Vivek Kundra said in a call with reporters on Wednesday evening.

The Homeland Security Department, which managed the program, has spent $69.8 million on it since October 2001, according to the IT Dashboard, a federal website that tracks major technology investments governmentwide. The system, which carried a total cost of $101.2 million, was intended to rate flood insurance policies, access claims data and report on insurance delivery.

In addition to killing the DHS e-insurance project, the Office of Management and Budget opted to scale back eight systems to increase their odds of meeting expectations and to save money, federal Chief Performance Officer Jeff Zients said during the call. OMB officials also worked with agencies to accelerate the launch of seven systems, largely by breaking up projects into segments that can be turned on separately.

The decisions were made over the course of five months, as part of a three-pronged effort to refurbish the government's outdated methods of buying IT. First, the White House halted and then pared back development on all financial management systems, which historically have burned through millions of dollars without producing effective software.

Then, in July, agency chief information officers combed their IT inventories to identify and fix any mission-critical projects that were at risk of busting budgets, missing deadlines or failing to function. The moves are anticipated to achieve $3 billion in budget reductions over the lifespan of the projects, according to OMB officials. In November, White House officials unveiled a new policy approach to working with IT contractors that officials will detail on Thursday morning.

Following OMB's recent assessment, the National Archives and Records Administration plans to speed delivery of the $994.9 million Electronic Records Archives program -- infrastructure that aims to ensure all content preserved for posterity can be accessed decades from now without depending on certain hardware or software. The government has spent $425.2 million on the program since September 2002 but hardly any agencies are using the system, Kundra said. Under the expedited schedule, all agencies will be able to access the e-repository by the end of next year, he added.

The Interior Department expects to shave $500 million off its $7.6 billion consolidated infrastructure automation telecommunications project by consolidating data centers and shifting to cloud operations, or hardware and software hosted off-site and online by third-party IT companies, Kundra said.

According to a July Homeland Security assessment of its floundering flood IT program, the now-nixed upgrade was supposed to be completed in 2008. The department had been using a 25-year old system for insuring flood victims and now will continue funding and relying on that system until new technology is operable. DHS officials over the summer said that the "program has suffered from a lack of proper adherence to IT program management disciplines and oversight."

DHS spokeswoman Amy Kudwa on Wednesday night said, "When this administration came into office, this project had already been in the works for years but remained behind schedule and still did not provide the functionality we needed. DHS halted the project this summer to review if any portions of it were usable, and has determined that it will not be able to meet our needs."

The department has hired an insurance industry executive and is conducting a survey to identify systems already serving companies today, rather than build a custom application from scratch, Homeland Security officials said.

OMB officials already had announced in September the choice to end a Justice Department computer system and overhaul an Interior Department security project, both of which were on the high-risk list. Zients said the White House has committed to finish evaluating the remaining eight programs "by the time the budget is rolled out" in early February.

Kundra said of lawmakers, "From the appropriators to the authorizers, we've been getting very positive reactions" to the reprogramming.