Social Security spent $300M on 'IT boondoggle'

Agency's plan was to replace outdated computer systems to handle growing flood of disability claims
Associated Press
Jul 24, 2014


Six years ago the Social Security Administration embarked on an aggressive plan to replace outdated computer systems overwhelmed by a growing flood of disability claims. Nearly $300 million later, the new system is nowhere near ready and agency officials are struggling to salvage a project racked by delays and mismanagement, according to an internal report commissioned by the agency.

In 2008, Social Security said the project was about two to three years from completion. Five years later, it was still two to three years from being done, according to the report by McKinsey and Co., a management consulting firm.

Today, with the project still in the testing phase, the agency can't say when it will be completed or how much it will cost.

In the meantime, people filing for disability claims face long delays at nearly every step of the process — delays that were supposed to be reduced by the new processing system.

"The program has invested $288 million over six years, delivered limited functionality, and faced schedule delays as well as increasing stakeholder concerns," the report said.

As a result, agency leaders have decided to "reset" the program in an effort to save it, the report said. As part of that effort, Social Security brought in the outside consultants from McKinsey to figure out what went wrong.

They found a massive technology initiative with no one in charge — no single person responsible for completing the project. They issued their report in June, though it was not publicly released.

As part of McKinsey's recommendations, acting Social Security Commissioner Carolyn Colvin appointed Terrie Gruber to oversee the project last month. Gruber had been an assistant deputy commissioner.

"We asked for this, this independent look, and we weren't afraid to hear what the results are," Gruber said in an interview Wednesday. "We are absolutely committed to deliver this initiative and by implementing the recommendations we obtained independently, we think we have a very good prospect on doing just that."

The revelations come at an awkward time for Colvin. President Barack Obama nominated Colvin to a full six-year term in June, and she now faces confirmation by the Senate. Colvin was deputy commissioner for 3½ years before becoming acting commissioner in February 2013.

The House Oversight Committee is also looking into the program, and whether Social Security officials tried to bury the McKinsey report. In a letter to Colvin on Wednesday, committee leaders requested all documents and communications about the computer project since March 1.

The letter was signed by Rep. Darrell Issa, R-Calif., chairman of the Oversight committee, and Reps. Jim Jordan, R-Ohio, and James Lankford, R-Okla. They called the project "an IT boondoggle."

The troubled computer project is known at the Disability Case Processing System, or DCPS. It was supposed to replace 54 separate, antiquated computer systems used by state Social Security offices to process disability claims. As envisioned, workers across the country would be able to use the system to process claims and track them as benefits are awarded or denied, and claims are appealed.

But as of April, the system couldn't even process all new claims, let alone accurately track them as they wound their way through the system, the report said. In all, more than 380 problems were still outstanding, and users hadn't even started testing the ability of the system to handle applications from children.

"The DCPS project is adrift, the scope of the project is ambiguous, the project has been poorly executed, and the project's development lacks leadership," the three lawmakers said in their letter to Colvin.

Maryland-based Lockheed Martin was selected in 2011 as the prime contractor on the project. At the time, the company valued the contract at up to $200 million, according to a press release.

McKinsey's report does not specifically fault Lockheed but raises the possibility of changing vendors, and says Social Security officials need to better manage the project.

Gruber said Social Security will continue to work with Lockheed "to make sure that we are successful in the delivery of this program."

Steve Field, a spokesman for Lockheed Martin, would only say that the company is committed to delivering the program.

Nearly 11 million disabled workers, spouses and children get Social Security disability benefits. That's a 45 percent increase from a decade ago. The average monthly benefit for a disabled worker is $1,146.

The report comes as the disability program edges toward the brink of insolvency. The trust fund that supports Social Security's disability program is projected to run out of money in 2016. At that point, the system will collect only enough money in payroll taxes to pay 80 percent of benefits, triggering an automatic 20 percent cut in benefits.

Congress could redirect money from Social Security's much bigger retirement program to shore up the disability program, as it did in 1994. But that would worsen the finances of the retirement program, which is facing its own long-term financial problems.

Social Security disability claims are first processed through a network of field offices and state agencies called Disability Determination Services. There are 54 of these offices, and they all use different computer systems, Gruber said.

If your claim is rejected, you can ask the state agency to reconsider. If your claim is rejected again, you can appeal to an administrative law judge, who is employed by Social Security.

It takes more than 100 days, on average, to processing initial applications, according to agency data. The average processing time for a hearing before an administrative law judge is more than 400 days.

The new processing system is supposed to help alleviate some of these delays.



Finn Finn

The gist of the article, obviously, is the computer / IT problems. My question is, why are there so many collecting disability? 45 percent increase from a decade ago? Holy cow!!!


Put them on disability social security ergo they don't have to be included in the monthly unemployment count, makes for good PR,


Re: "they don't have to be included in the monthly unemployment count,"

The U.S. is in a govt. camouflaged economic depression.

Hundreds of billions spent annually on unearned entitlement payments are masking the problem.

The soup kitchens and bread lines of the 1930s have been transformed into the EBT card, welfare payments, SSDI and a myriad of other govt. programs in the 21st Century.

More than 50% of the U.S. population receives some type of direct govt. monetary subsidy.

With fewer makers and increasingly more takers (10K baby boomers turn age 65 EVERY DAY), this massive govt. controlled Ponzi scheme is eventually doomed.


Hmmm, ya know once a company get the taste of the governments payments and they keep on getting them, why on earth with the company ever complete that project? It's like the people on welfare, once they on it and get their medical, foodstamps and monthly check pffft, why try to get off it? ** sounds bout right doesnt it? **Just saying**

Dr. Information

More government waste right in front of our eyes. Liberals hate this, they think there is no waste.


Oh, noes! ANOTHER over-large, over-priced, mismanaged government bureaucracy? Say it isn't so! Only in the government would you find a $300 million project without a project manager... And only in government would you find such a thing shrugged off! We need to treat government entities just like "civilian" entities and fire the lazy, incompetent, and/or corrupt (and then prosecute most of them).

We NEED to. Of course, that doesn't mean that we WILL! Between corrupted/power-hungry politicians/bureaucrats, and blind sheep following a party line and/or wanting to protect whatever it is that gives THEM "free" money, I'm not holding my breath.

The Hero Zone's picture
The Hero Zone

Yet there are some who vehemently will contest you trying to change any aspect of this declining, mismanaged system. That's almost more of a shame than the system itself being rife with...whatever you want to call this. Can I please have my private account option now?

The Big Dog's back

Only in Gov? Really? So there are no bad projects private sectors are affiliated with? Oh, OK. Time to take your head out of the sand.


No, and you know it. You ALSO know that bad projects in the private sector result in firings, corporate reorganizations, etc. Where are the firings and reorganizations HERE, eh? THAT'S the point you so studiously ignored. Or did it go over your head?

The Big Dog's back

I didn't know it was over yet. Of course you sit in on those meetings like you do with the financial advisers. Seriously, do you need medical attention? You don't drive do you?

Dr. Information

No worries folks. Obama has once again side stepped Congress and changed Obamacare on his own, exempting 5 US territories/4 million people from Obamacare all together.

Such an ignorant fool.


Obama is obviously a racist, excluding those territories from his awesome "free healthcare for all" program! I guess they're not as good as "regular" Americans. You know, sort of like unions, members of certain religions, and so on...

The Big Dog's back

Now all we need is pooh to go with the right wingnuts off topic blather. sam, do you ever post anything without tying Obama to it? It started under bush, and btw, was good intentioned. To bad a private company hosed them.


Re: "sam, do you ever post anything without tying Obama to it?"

All the time. Even when I do, though, I don't make up cutesy little derogatory names for those who are wrong or with whom I otherwise disagree. Probably because I'm a) informed, and b) a grown-up.

Re: "It started under bush, and btw, was good intentioned."

No, it didn't. It started under Clinton as "Hillarycare," and was deservedly shot down. As for "good intentioned," need I remind you what the road to Hell is paved with?

Re: "To bad a private company hosed them."

Who hosed whom? The only blame borne by a private company where Obamacare is concerned is that abysmal excuse for a functional web site -- which, of course, SHOULD have been carefully overseen by somebody in the Obama administration and obviously wasn't.

Any other non-facts you'd care to share this morning?

The Big Dog's back

"Hillarycare"? What the ell are you talking about? This is a computer upgrade. Lay off the crack pipe.

The Big Dog's back

"Obamacare"? Do you know what the article is about? Do you need medical attention?


Yep here is another win win for the American taxpayer! what wonderful things come from government! The more you give them the more they destroy!