Census Bureau facing huge cost increase, possible delays in 2010 effort

By Gautham Nagesh

March 5, 2008

The 2010 Census is at serious risk of massive cost increases and delays caused by problems with a contract to develop handheld computers that the Census Bureau plans to use to collect data.

Because of the problems, costs for the decennial census could increase by between $600 million to $2 billion, according to testimony given by the Government Accountability Office Wednesday at a hearing of the Senate Homeland Security and Governmental Affairs Committee. The increase would be on top of the $11.8 billion the bureau estimates the census will cost.The problems with the contract are so great that the GAO took the unusual step of adding the project to its list of high-risk programs during mid-year. Typically, GAO adds programs to its risk list every two years at the beginning of new Congresses. GAO has added programs during mid-sessions only four times. "So serious is the crisis that if it is not dealt with immediately, it could threaten the integrity of the 2010 count," said Sen. Tom Coburn, R-Okla., in his opening statement at the hearing. "We now find ourselves facing a situation in which we might have to revert to conducting the census entirely by paper -- no differently than it was done in the 19th century." The source of the trouble is the Field Data Collection Automation Contract, which the bureau awarded in 2006 to Harris Corp. for $595 million. Under the contract, Harris is developing handheld computers for 525,000 enumerators who will use them to collect data from Americans who do not send in their census forms. Since awarding the contract, the project has experienced problems, including changing system requirements, which have caused costs to increase and the bureau to miss deadlines. At the hearing, Commerce Secretary Carlos Gutierrez acknowledged in blunt terms that "significant miscommunication concerning technical requirements between the Census Bureau and Harris" were a main reason for the failings. David Powner, director of information technology management issues at GAO, said final requirements for the FDCA program were not delivered to Harris until Jan. 16. For years, the bureau's top executives have downplayed any perceptions that the contract was in trouble. Most recently, at a Dec. 11 hearing of the House Subcommittee on Information Policy, Census and National Archives, former Census Director Charles Louis Kincannon blamed the delays on Congress' inability to pass the bureau's budget and downplayed the nature of the program's shortcomings. However, at Wednesday's hearing, Gutierrez testified that "the problem was more significant than had been conveyed in the Dec. 11 hearing" and admitted that the Census Bureau and Harris "could have done things differently and better over the past couple years." "This is a case of classic risk mismanagement," said Bob Charette, a risk management expert who consults with federal agencies. "Very early in the contract, [the Census Bureau] should have realized they did not do some of things they should have for a large-scale automation like this. Doing it now is like locking the barn door after the horse is gone." Gutierrez and Steven Murdock, who recently replaced Kincannon as head of the bureau, offered four options to fix the contract's problems. Under one, called the baseline option, Harris and the Census Bureau would complete the FDCA project as planned, while each of the other options progressively remove a number of functionalities of the handhelds, with those functions being completed by paper. The $600 million to $2 billion estimate of the cost increase depends largely on which option is chosen. But sources expressed doubt about that estimate because the bureau cannot accurately predict the cost and timeframe of the 2010 census at this time.

By Gautham Nagesh

March 5, 2008

http://www.govexec.com/oversight/2008/03/census-bureau-facing-huge-cost-increase-possible-delays-in-2010-effort/26439/