Further Complications

Poor management can make a difficult software project impossible.

Complexity is innate to software, and complex things fail. Complex systems interact in unexpected ways. The more they're asked to do and the larger they get, the more likely unanticipated consequences will pop up.

The question isn't whether or not software projects will sometimes fail. They will. A conservative estimate of the cost of federal software failures pegs the annual value at $3 billion, according to Robert Charette, president of ITABHI Corp., a Spotsylvania, Va., risk-management consultancy.

Take the failure of an Internal Revenue Service electronic fraud detection system, for example. The IRS worked for five years to replace its old system with new Web-based software. Was the failure of the Web-based software a function of its essence, or was it an accident?

The tax agency had assurances from contractor Computer Sciences Corp. of El Segundo, Calif., that the new system would be online by January 2006. It wasn't. The IRS had no contingency plan and already had shut down its original system, leaving the 2006 tax season wide open for cheats. As a result, according to a Treasury Department inspector general for tax administration report (TIGTA 2006-20-108), tax dodgers may have gotten away with $318.3 million in improper refunds. The IRS had invested $20.5 million in the Web-based system through last April. When auditors investigated, they found that developers were unfamiliar with user needs, teams failed to coordinate with each other (so when one team made a change affecting others, the other teams wouldn't know about it, requiring a software fix), there was excessive turnover among CSC and IRS employees, and CSC repeatedly missed intermediate deadlines while still promising to complete the project on time.

"If anything could go wrong in a system-development-type atmosphere, it went wrong," says Margaret E. Begg, a Treasury tax administration assistant IG.

What happened at the IRS was neither an accident nor an example of software's complex essence, says Charette. It "doesn't even deserve the name 'failure,' " he says. "It's a blunder."

No governance process was in place to resolve difficulties and, despite a critical need for the software to perform, risks surrounding the project piled up mostly unattended, the IG found. When, before the project's collapse, the IRS director of refund crimes requested an independent study to scrutinize whether CSC would be able to deliver on its promises, he was informed that "the time needed to resolve 'a few existing glitches' " would prevent the study from starting until after the final deadline. At another point, when an IRS employee found that CSC grossly exaggerated the work it had completed, the IRS "did not pursue the matter," IG investigators found.

CSC refused to comment, citing contractual obligations. Asked about specific problems cited by auditors, the IRS responded with a statement that it is "taking a number of steps to ensure the continued integrity of this system" and has revamped its governance structure so "significant risks and issues are identified early on and elevated to the appropriate executive level for attention."

A blunder is classic and boring, the stuff of basic project management, Charette says. It's made up of avoidable execution mistakes. Proper management of a software project includes building into the design enough wiggle room to absorb a reasonable number of mistakes.

Blunders are avoidable, but also unlikely to disappear. Institutional pressures conspire to ensure that, despite having blundered many times, the federal government likely will blunder again. Getting a project funded often means overpromising results while downplaying costs. Managers have an incentive to make their projects look good, no matter their true status, often in the hope that problems will clear up before anybody else can notice. And, of course, deception is self-reinforcing and self-perpetuating; once it starts, it spreads. The problem is systemic: Industry proposes unrealistic costs and understates risks, while government agencies blithely accept them. "CSC led them to believe that [the fraud system] would be operational, right up until the end, when in fact, they were unable to deliver," notes Begg.

In August 2005, IRS managers began to realize they had a serious problem. The agency started holding biweekly meetings with contractors, and in early December, executives started meeting daily. During the project's last couple of months, technical staffers were sending out two or three daily voicemail updates.

Finally, on April 19, 2006, the IRS decided it had had enough. The April deadline for most Americans to file their personal tax returns had come and gone with no electronic fraud detection system in place. The agency halted further development work and said it would restore the old system, the one that in 2001 it had said needed replacement. IRS says the old system will be working in time for the 2007 tax season.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.