New retirement claims system not ready for rollout, GAO says

The Government Accountability Office strongly critiqued the Office of Personnel Management's preparations for the Retirement Systems Modernization program, set to go online this month, in a report released Thursday, saying the agency had failed to set and meet consistent baselines for performance and was relying on faulty budget estimates.

The program would replace the current paper-based method of processing claims in the Civil Service Retirement System and Federal Employees Retirement System.

The report praised OPM for doing a better job of selecting contractors and establishing performance targets for the system. But, GAO warned, "the agency's management of the program in other areas that are important to the successful deployment of new systems has not ensured that system components will perform as intended."

In particular, the report cautioned that one of the key RSM components might not function.

"Initial test results do not provide assurance that a major system component, the defined benefits technology solution, will perform as intended," GAO said. "Until actual test results indicate improved system quality, the agency faces increased risk that it will deploy technology that does not work as expected."

In four rounds of testing, the Defined Benefits Technology System passed 77 percent, 4 percent, 22 percent and 39 percent of the time.

RSM is plagued by problems in its testing process, GAO concluded. Staffing shortages was one factor, as was the decision to perform tests concurrently rather than consecutively.

In some cases, the systems to be tested have not even been fully developed, the report said.

"OPM identified the lack of testing resources, including the availability of subject matter experts, and the need for further system development, as contributing to the delay of planned tests and the need for concurrent testing," GAO said.

Those circumstances could force the RSM staff to divide their attention between testing and system development.

"OPM is faced with performing a significant volume of concurrent test activities at the same time that critical resources, particularly key staff, are also engaged in activities such as completing the building of interfaces and modification of legacy systems," the report warned.

Also, the report noted, a flaw discovered during one test could contaminate all the other tests running at the same time, GAO said. Concurrent testing also produced a significant backlog of problems to be corrected, according to the investigators.

"Until defect trends indicate resolution of the backlog of urgent and high-priority defects, OPM faces increased risk that it will not have sufficient time to resolve significant problems before its planned February 2008 deployment," the report said.

OPM Director Linda Springer said in a statement that the agency had dedicated additional resources and subject matter experts to the defined benefits system since first viewing GAO's report, and put together a comprehensive strategy to keep the program as a whole on track. She also noted that in a subsequent round of testing, the backlog of urgent and high-priority defects had been reduced somewhat.

GAO also criticized OPM's method of setting benchmarks both for the project's budget and its performance.

"In 2007, OPM revised the program life-cycle cost estimate from $371.2 million to $421.6 million. However, the reliability of this estimate is questionable because the agency could not support the estimate with a description of the system to be developed and a description of the methodology used to produce the estimate," the report said. "Without a reliable cost estimate, the agency does not have a sound basis for formulating future RSM program budgets or for monitoring and predicting program performance."

OPM used two methods to manage its performance. GAO disagreed with the agency's statement that it had performed adequately by both standards of measurement.

"With respect to goals, the agency reported that it had met its fiscal year 2007 goals, including completing the imaging of paper-based retirement records and beginning training. While OPM's reporting that it satisfied program goals provided a favorable view of progress, this view did not include program areas for which the agency had not established goals," the report noted.

And GAO said that because OPM changed its baselines under its earned value management measurement, "the agency's EVM reporting did not reliably reflect program progress."

Springer said her agency took GAO's recommendations seriously and planned to address them.

"Unlike past initiatives to address this major deficiency in a core OPM function, this project will have a successful outcome," she wrote.