Collins, Lieberman release TSP report

A botched computer contract with American Management Systems Inc. squandered $36 million of federal retirement assets, according to a Senate report released this week.

Sen. Susan Collins (R-Maine), chairwoman of the Senate Governmental Affairs Committee, and ranking Democrat Joe Lieberman (D-Conn.) launched a months-long investigation into problems surrounding the contract between the Federal Retirement Thrift Investment Board and AMS. Committee staff reviewed thousands of e-mails exchanged between the two parties, such as this one from a board staff member to an AMS manager:

"As far as being productive, if AMS had acted like a productive and professional organization at any time during this project, we wouldn't be where we are and the client wouldn't have to be spending inordinate amounts of time trying to bail your [expletive] out of this."

The board hired AMS to develop a record-keeping system that would help Thrift Savings Plan employees better manage retirement contributions of federal employees and to make retirement accounts accessible online to federal employees and retirees.

But the senators' investigation found that the investment board spent an extra $33 million on a new contract with another company in 2001 after the AMS software proved worthless. Collins and Lieberman believe neither the board nor AMS has taken responsibility for the failure because of a legal settlement reached by the two parties.

The settlement, reached in June 2003, required AMS to pay the Thrift Savings Plan $5 million. The agency had already spent $2.7 million on attorney fees, and if it continued the litigation, fees were estimated to reach $58 million. The committee investigation examined a four-year period beginning in 1997.

Staffing shortages, deviation from original plans, including excessive customization of the software, and a failure to catch preliminary setbacks ultimately doomed the project, according to the report. But confusion and poor communication between the board and AMS also accounted for the resulting waste.

AMS is now CGI-AMS after CGI Group Inc. bought the company in March, excluding AMS' defense and intelligence work, which was bought by CACI International Inc.

The board hired Materials, Communications and Computers, Inc. to take over the task, which it completed in 18 months.