Social Security's $300 Million IT Project Doesn't Work

Social Security Medicare
Charles Dharapak/APActing Social Security Commissioner Carolyn W. Colvin
WASHINGTON -- After spending nearly $300 million on a new computer system to handle disability claims, the Social Security Administration still can't get it to work. And officials can't say when it will.

Six years ago, Social Security embarked on an aggressive plan to replace outdated computer systems overwhelmed by a growing flood of disability claims. But the project has been racked by delays and mismanagement, according to an internal report commissioned by the agency.

Today, the project is still in the testing phase, and the agency can't say when it will be operational 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," said a report by McKinsey & Co., a management consulting firm.

Hitting the Reset Button

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 wasn't 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 as 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.

Project Adrift

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 (LMT), 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.

Brink of Insolvency

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.

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July 28 2014 at 4:23 AM Report abuse rate up rate down Reply

How about if the government penalizes the contractors working on the project, instead of throwing more truckloads of taxpayers' money at it. Force the contractors to fix their own problems at their own expense...not the government's. The government should have been using a finished product long ago. No more excuses from this totally incompetent Adminstration that can never get the job done. Obama said he was going to get rid of the Wall Street good old boy networks and the way they do business with D.C. ... Well, Lockheed Martin is most definitely one of the good old boys; and, the Social Security Adminstration is definitely part of D.C.! If the good old boy network can't get the job done, including the "new" good old boy networks that Obama has added to the old good old boys; break them up...and, that goes for the good old boy "protection associations," too; and the Congress that purposely writes loopholes, ambiguities, and vagueness into the legislation for appropriations financing these projects...and, let's not forget about our equally infamous Supreme Court Justices, all obviously lacking the Wisdom of Solomon, that will try the lawsuits!

July 26 2014 at 12:49 AM Report abuse -1 rate up rate down Reply

People, better come up with some answers or I 'll start posting about my ancestors

July 25 2014 at 8:46 PM Report abuse -1 rate up rate down Reply

Waiting for some dumb rightwinger to blame it on President Obama.........

July 25 2014 at 7:40 PM Report abuse rate up rate down Reply
1 reply to navy85736usnret's comment

The approval ratings about some it up.

July 25 2014 at 8:47 PM Report abuse rate up rate down Reply

Incompetent at your work? If you're in private business, you're going to lose your job. In government, you may get promoted! This is not a problem in government, if they need another system (computer), they'll just buy a different one (still no guarantee it'll work) with your tax money. Welcome to BIG government!

July 25 2014 at 7:39 PM Report abuse -2 rate up rate down Reply
Charlie Jackson

Sorry folks-----This "Social Security's $300 Million IT Project Doesn't Work" is not on my radar. You can say I am very fixated on comprehensive trade, tax and immigration policies.

All I know is when you change computer systems especially like humongous computer systems like the one by SS will have some glitches. May be I am using this site to vent my frustrations but I am always hoping the best for America and for all Americans
At the end of the day --- I have no enemies and I am happy with myself

July 25 2014 at 7:04 PM Report abuse rate up rate down Reply
Charlie Jackson

When you install a new computer system you will have issues until the interfaces are made totally compatible and software glitches are addressed.-----just take a break and inhale----calm down---take your meds!!

July 25 2014 at 6:40 PM Report abuse -2 rate up rate down Reply

Why doesn't this leader- Obama - start leading? Hold people accountable. This black gal clearly isn't qualified to manage the ladies room let alone the S.S. Obama , start firing your incompetents...IRS, S.S., Staff, etc. No wonder this counrty is in a mess and I am not a Republican!

July 25 2014 at 5:29 PM Report abuse -1 rate up rate down Reply
Charlie Jackson

I suggest that all police stations, hospitals and funeral homes must inform SS office when people die so that they can remove that person from the payee lists immediately.

July 25 2014 at 4:56 PM Report abuse +1 rate up rate down Reply
Charlie Jackson

So you really don't know examples of voter suppression? Closing polling places early, reducing the number of polling places especially in heavily populated areas, reducing the number of polling workers, reducing the time for polling, reducing the early voting time, mal-functioning computers at polling places? purging voter lists, disqualifying votes (just like hanging chad)-----------------

July 25 2014 at 4:40 PM Report abuse rate up rate down Reply