TSP suit against AMS settled

Thrift Savings Plan

American Management Systems Inc. has agreed to pay $5 million to the board that oversees the Thrift Savings Plan, settling a lawsuit stemming from the troubled TSP system modernization.

AMS was the original contractor for the TSP modernization.

The agreement, announced today, marks the end to the ongoing contract dispute over the troubled TSP computer modernization. The modernization effort has been troubled almost from the start, leaving both sides frustrated.

The acrimonious relationship culminated in July 2001 when the board fired Fairfax, Va.-based AMS and filed a $350 million suit alleging fraud.

The board had argued that AMS had failed to meet the terms of the contract, repeatedly missing key deadlines that resulted in at least four delays. AMS officials rejected the board's accusations, arguing that it was the board's failure to meet its contractual obligations that resulted in the failed four-year effort to implement the Thrift Savings Plan's new recordkeeping system.

Soon after AMS was fired, the board then hired Materials, Communication and Computers Inc. (MatCom) of Alexandria, Va., for a $20 million, one-year contract to complete the modernization.

"Basicly everything that AMS did ended up in the trash" said Lawrence Stiffler, director of automated systems for the board.

The board unveiled a host of new services on the TSP Web site June 16, although that debut was marred by system glitches that left most current and retired federal workers unable to access their accounts.