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OPM's RetireEZ Program At Risk Of Failure, GAO Says

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Until the Office of Personnel Management (OPM) addresses serious weaknesses, the agency's retirement modernization initiative "remains at risk of failure", says the Government Accountablity Office (GAO) in a report released yesterday.

The modernization program, also called RetireEZ, affects nearly
1 million active federal employees who will be eligible to retire -- 600,000 of which will most likely retire -- by 2016.

"OPM remains far from achieving the modernized capabilities it had planned," the report summarizes.


For the past two decades, OPM has been working to modernize the paper-intensive processes and antiquated systems used to support the retirement of federal employees. By moving to an automated system, OPM intends to improve the program's efficiency and effectiveness.

RetireEZ (tag-lined "Federal Retirement Made Easy"), has promised to modernize the current paper-based process, assisting federal employees in calculating their retirement annuities and processing their retirements online. Government-wide access to the RetireEZ online system for all federal and postal employees was orginally projected for this year.

The technology underlying RetireEZ is the Defined Benefits Technology Solution (DBTS), a private sector solution which is being modified to comply with federal laws and regulations.

In January 2008, the GAO recommended that the OPM address risks to successful system deployment of RetireEZ. Nevertheless, OPM deployed a limited initial version of the modernized system in February 2008. After unsuccessful efforts to address system quality issues, OPM suspended system operation.

In October 2008, OPM announced it canceled a 10-year, $290 million contract with Hewitt Associates, after the company apparently failed to deliver a functioning retirement calculation engine for the RetireEZ program. OPM then announced it would continue to progress with the RetireEZ program without the assistance of Hewitt Associates and began restructuring the modernization effort.

Highlights of GAO Findings

(editor's note: these summary items have been sourced directly from the GAO report)

Few Retirement Modernization Capabilities Have Been Implemented

OPM's retirement modernization plans from 2007 described eight capabilities that were to be implemented to achieve modernized processes and systems. As of late March 2009, the agency had partially implemented two of these capabilities while the remaining six had not been implemented (see below).

OPM Does Not Have a Complete Plan for the Future of the RetireEZ Program

A plan for the future of the RetireEZ program has not been completed.

In November 2008, OPM began restructuring the program and reported it was continuing toward retirement modernization without the DBTS contract. The restructuring efforts have resulted in a wide variety of documentation, including multiple descriptions of the program in formal agency reports, budget documentation, agency briefing slides, and related documents.

Regardless, OPM's various reports and documents describing its planned retirement odernization activities do not provide a complete plan for its restructured program.

Specifically, although agency documents describe program implementation activities, they do not include a definition of the program, its scope, lines of responsibility and authority, management processes, and schedule. Also, the modernization program documentation does not describe results-oriented (i.e., objective, quantifiable, and measurable) performance goals and measures. According to the RetireEZ program manager, the agency is developing plans, but they will not be ready for release until the new OPM director has approved them, which is expected to occur in April 2009.

OPM Is Not Positioned to Effectively Manage Its Retirement Modernization Initiative

OPM has significant management weaknesses in five areas that are important to the success of its retirement modernization program:

1. cost estimating,
2. Earned Value Management (a project management technique for measuring project progress in an objective manner),
3. requirements mmanagement,
4. testing, and
5. program oversight.

OPM Has Yet to Complete Key Steps in Developing a Reliable Cost Estimate for Retirement Modernization

Weaknesses in the reliability of OPM's retirement modernization cost estimate have been long-standing.

OPM officials stated that they intend to complete a modernization program cost estimate by July 2009. However, the agency has not yet fully completed initial steps for developing the new estimate. Specifically, the agency has not yet fully defined the estimate's purpose, developed the estimating plan, defined program characteristics in a technical baseline description, or determined the estimating structure.

OPM Has Not Established Processes Needed to Effectively Develop and Manage Retirement Modernization Requirements

According to RetireEZ program officials, insufficiently detailed requirements, poorly controlled requirements changes, and inadequate requirements traceability were factors that contributed to DBTS not performing as expected.

Moreover, these requirements development and management weaknesses were identified, and recommendations for improvement were made by OPM's independent verification and validation contractor before DBTS deployment. However, the agency has not yet corrected these weaknesses.

OPM Is Not Positioned to Effectively Manage Retirement Modernization Testing

OPM has not begun to plan test activities in coordination with developing its requirements for the RetireEZ program. According to OPM officials, the agency intends to begin its test planning by revising the previously developed DBTS test plans after requirements have been developed. However, the agency has not yet added test planning to its project schedule.

If it does not plan test activities early in the life cycle of RetireEZ, OPM increases the risk that it will again deploy a system that does not satisfy user expectations and meet requirements (i.e., accurately calculate retirement benefits) because of its potential inability to address a higher number of defects than expected.

OPM Is Not Providing Effective Oversight for Retirement Modernization

OPM's Investment Review Board was established to ensure that major investments are on track by reviewing their progress and determining appropriate actions when investments encounter challenges. Despite meeting regularly and being provided with information that indicated problems with the retirement modernization, the board did not ensure that the investment was on track, nor did it determine appropriate actions for course correction when needed.

In addition, OPM established an Executive Steering Committee to oversee retirement modernization. However, the committee was inactive for most of 2008 and, consequently, did not exercise oversight of the program during a crucial period in its development.
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OPM's Response to the GAO Report

The GAO provided six recommendatinos to OPM in the report. On April 15, OPM Director John Berry provided comments to a draft version of the report stating OPM agreed with the recommendations and that the agency "has already begun to address them."

About the Report

The complete GAO report including the recommendatinos and comments from OPM are available at: http://www.gao.gov/new.items/d09529.pdf

Posted with Permission from: MyFederalRetirement.com

OPM's RetireEZ Program At Risk Of Failure, GAO Says
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