March 20th, 2008
Billion-dollar IT failure at Census Bureau
 
The US Census Bureau faces cost overruns up to $2 billion on an IT initiative replacing paper-based data collection methods with specialized handheld devices for the upcoming 2010 census. The Bureau has not implemented longstanding Government Accountability Office (GAO) recommendations and may therefore be forced to scrap the program. Harris Corp., the contractor associated with this incompetently managed initiative, was awarded a $600 million contract to develop the handhelds and related software.
In March 5, 2008 testimony before the Senate, Commerce Secretary Carlos M. Gutierrez said: “There is no question that both the Census Bureau and Harris could have done things differently and better over the past couple of years.”
On the same date, Census Bureau Director, Steve H. Murdock, added:
I cannot over-emphasize the seriousness of this problem. My colleagues and I recognize that we must move quickly to address this problem, and implement solutions. While we still have an enormous challenge in front of us, I am confident that we are close to defining and implementing a strategy that will ensure a successful 2010 Census.
The GAO characterized the handheld initiative, known as the Field Data Collection Automation (FDCA) program, as follows:
Of the $11 billion total estimated cost of the 2010 Census, the Census Bureau planned (as of 2007) to spend about $3 billion on automation and information technology in order to improve census coverage, accuracy, and efficiency. Among other things, the Bureau is planning to automate many of its planned field data collection activities as a way to reduce costs and improve data quality and operational efficiency.
The GAO report, dated March 8, 2008, added:
In October 2007, GAO concluded that without effective management of key risks, the Field Data Collection Automation (FDCA) program responsible for the devices faced an increased probability that the system would not be delivered on schedule and within budget or perform as expected. The magnitude of these problems is not clear…. [T]he Bureau has not performed recommended analysis or provided sufficient information to provide a level of confidence in its $11.5 billion life-cycle cost estimate of the decennial census. The Bureau has not itemized the estimated costs of each component operation, conducted sensitivity analysis on cost drivers, or provided an explanation of significant changes in the assumptions on which these costs are based. Together, these weaknesses and actions raise serious questions about the Bureau’s preparations for conducting the 2010 Census.
Computer World blogger, Frank Hayes, summarized the situation succinctly, “The fancy custom handhelds might work. But if they don’t, the Census Bureau will use paper instead.”
THE IT PROJECT FAILURES ANALYSIS
Managing an $11 billion initiative is a daunting task and unforeseen problems are inevitable. Nonetheless, the GAO, going back to January, 2005, repeatedly identified significant procurement, management, and operational risks associated with this project. For reasons unknown, the Census Bureau chose not to follow these recommendations.
The following table summarizes significant project issues identified by the GAO:
How does a failure of this magnitude arise? Clearly, Census Bureau management is ineffective at properly and efficiently executing the organization’s basic mandate. A detailed analysis would probably reveal hidden agendas; conflicts of interest; good intentions gone bad; inexperienced, lazy, and incompetent management; lack of controls; and plain old poor judgment. I believe these deeply ingrained issues are symptomatic of fundamental problems shared by both Bureau leadership and line management.
My recommendation: The GAO must conduct a formal inquiry into two specific areas:
- It should investigate and analyze the management policies and procedures that allowed this situation to develop and persist over the course of several years. We must understand why program controls didn’t prevent this huge waste of dollars.
- It should perform a detailed (and I mean exhaustive) investigation of Harris Corp.’s role. Let an unbiased panel determine what percentage of the billion-dollar waste Harris caused and force the company to pay direct restitution for that amount.
Until the government holds contractors and their agency sponsors accountable, massive failures will continue and more money will be flushed down the drain.
Michael Krigsman is CEO of Asuret, Inc., a software and consulting company dedicated to reducing software implementation failures. Click here to discuss this post with him on Twitter. See his full profile and disclosure of his industry affiliations.
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| 03/21/08
