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June 2012
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MONEY PIT Feds are easy mark for bad IT projects

Want to get rich quick and retire early? The best and most lucrative path appears to be to sell the federal government a computer system that doesn't work and is never finished. By recent accounts, it's a booming business.

Remember the Obamacare website debacle last fall? For months, most people couldn't even sign on to the website and those who did weren't able to complete the insurance sign-up process.

Much was made at the time of HealthCare.gov's purported $394 million price tag. That figure was the one generally reported by the mainstream press. The number came from a Government Accountability Office report. Less reported was a story by the respected capitol publication The Hill, which put the total cost of the malfunctioning website at more than $1 billion.

The Hill's report was based on the work of Bloomberg Government Analyst Peter Gosselin. Gosselin looked beyond just the payments to CGI Federal, the government's primary contractor on the Obamacare website, which were the basis of the GAO figure. Gosselin found 10 contractors that worked on various aspects of Affordable Care Act software, and when those are added in, the price tag tops $1 billion. And this was before President Obama's "tech surge" that was launched to get the website to its current state, which remains only nominally functional.

More recently it was disclosed that the Social Security Administration has spent $300 million on a project to upgrade software to handle disability claims. In 2008, the project was supposed to be two to three years from completion. Six years later, the project is still two to three years from completion. And much like HealthCare.gov, big pieces of the system still don't work.

How did that happen? To its credit, the Social Security Administration brought in management consultant McKinsey and Co. to find out. Not to its credit, the SSA tried to keep the findings of the McKinsey report from getting out. That didn't work, as members of the House Oversight Committee got wind of it and parts of the report became public last week.

The McKinsey and Co. study found that the SSA program was, to quote the Associated Press, "a massive technology initiative with no one in charge - no single person responsible for completing the project." So apparently, with no such leadership, the program has simply rolled on endlessly, no closer to completion today than it was six years ago. Another case of your tax dollars at work. And it rightly gripes taxpayers to think about what would happen to them in their own workplace if their fingerprints were found on such a debacle. But in government, there are no such consequences.

Finally comes a Washington Times report this week that says the Pentagon has lost track of 40 percent of the $626 million in firearms it has given to Afghanistan's security forces. The reason? According to the report of the Special Inspector General for Afghanistan Reconstruction, it's because the Pentagon's two primary weapons-tracking systems - the Reliable Logistics Oversight Database and the Security Cooperation Information Portal - are "rife with errors." Specifically, of 474,823 serial numbers recorded in the oversight database, 203,888 had missing or duplicate information, for an error rate of 43 percent.

We're not sure what the moral of this story is. Perhaps it is that the federal government isn't capable of managing big, complex IT projects and systems. But that's not much solace for taxpayers who are footing the bill for these debacles. The unfortunate reality is that when it comes to endless projects with endless overruns, the federal government continues to prove it is an easy mark.

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