New TSP computer system still not ready
The launch date for a long-awaited computer system that would give federal employees more control over their 401k-style Thrift Savings Plan accounts is still up in the air, according to TSP officials.
Lawrence Stiffler, director of TSP's Office of Automated Systems, told TSP board members Thursday that while there has been progress on the automated record keeping system during the past few months, a date for implementation had still not been set. About 3 million civilian and military participants have about $100 billion invested in the TSP. The new system would allow participants to check the value of their funds daily, offer them more ways to withdraw money and provide online service for loans and withdrawals.
In October, TSP board members delayed the system's launch indefinitely after testing uncovered that the new system couldn't handle large numbers of TSP transactions at once. In the months since, Stiffler told board officials, contractors have successfully separated the database into five sections and are now able to process the transactions in one night.
"We've documented that it works well," Stiffler said.
The price tag for the six-year-old project continues to grow, in part because the original contractor hired to do the job was fired in July 2001 after four years of work and several delays. American Management Systems, the Fairfax, Va.-based company hired in 1997, was supposed to complete work on the system by May 2000 for $29.5 million. When board officials finally fired the company, AMS had estimated it would complete the new system by January 2002 at a cost of nearly $90 million. The thrift board then sued AMS, asking for $350 million in damages, but a federal judge dismissed the case, ruling that the board could only sue AMS through the Justice Department. Materials, Communication & Computers Inc., based in Alexandria, Va., currently manages the project.
On Wednesday, Stiffler asked board members to commit another $994,000 to the project to help pay for the parallel testing phase, which will ensure the new system can handle the TSP's high volume and complexity of transactions. According to Stiffler, having all the contractors on hand during the testing phase who took part in the development phase would help make the transition go more smoothly and quickly.
"If it's necessary to bring the system up, then I think it's a good idea," said Acting Executive Director James Petrick. Board members then moved to put the additional money into the budget.
Several board members are also facing a lawsuit from former Executive Director Roger Mehle, who claims they breached their fiduciary duty and failed to act with "care, skill, prudence and diligence" as trustees of the TSP fund. The recent lawsuit stems from the legal battle the board waged against AMS under Mehle's leadership. Mehle retired in November 2002.