Re: Billion-dollar IT failure at Census Bureau

[David Farber <dave () farber net>]

________________________________________
From: Simon Higgs [simon () higgs com]
Sent: Tuesday, March 25, 2008 8:49 AM
To: David Farber
Cc: david () abscott com
Subject: Re: [IP] Re:    Billion-dollar IT failure at Census Bureau

The problem isn't the contract, it's the culture. Based on my experience
automating some the USG procurement processes, there are major cultural
deficiencies which hampers the implementation of old government business
processes with new technology (unlike new processes are easier to
implement).

The fact is, the government outsources to contractors because it is
incapable of doing it in-house. The idea may be sound but the ability to
understand the technology and the consequences of implementing that
technology isn't understood. As a result, the contract goals are often a
moving target. The more the government learns about what the new
technology can achieve, the further the project will move outside the
scope of the original contract and the higher the budget overruns. This
is all presuming the contractor didn't crash and burn as it hit
impenetrable walls of government culture as well.

Had this been FedEx or UPS or any commercially viable enterprise with a
fiscal accountability process (i.e. shareholders), this would have been
finished in a way that removed the cultural obstacles long before the
cost overruns put the company into receivership.


David Farber wrote:
> ________________________________________
> From: DV Henkel-Wallace [david () abscott com]
> Sent: Monday, March 24, 2008 9:31 PM
> To: eekid () aol com
> Cc: David Farber
> Subject: Re: [IP] Billion-dollar IT failure at Census Bureau
>
> Let's assume all had gone well (and let's assume there had been no
> overruns).  They put out a $600MM  contract, meaning the total project
> costs would be over 1.1 Bn (the contract would be only part of the
> project).
>
> Can anyone imagine a computerization project that would improve
> efficiency by 10%??  Forget the execution problem: what were they
> thinking?
>
> Or were they stoned on all that "magic computerization dust?"  It
> seems to be sprinkled liberally around anyone who thinks of elections
> (and around many businesses); why not the census too?
>
> -d
>
>
> On Mar 24, 2008, at 17:50 , David Farber wrote:
>
> > Why is anyone surprised. I spent many years on NRC (National
> > Research Council) study groups looking at Social Securit , IRS, FAA
> > and various DoD software procurements. They were all in serious
> > troubles usally due to very poor procurement processes; endlessly
> > changing requirments; poor software management etc etc etc. BUT it
> > still goes on and on and on. Try reading some of the NRC
> > reports,They are informative and sad.
> >
> > Dave
> >
> >
> > ________________________________________
> > From: eekid () aol com [eekid () aol com]
> > Sent: Monday, March 24, 2008 5:03 PM
> > To: dfarber () cs cmu edu; David Farber
> > Subject: Billion-dollar IT failure at Census Bureau
> >
> > http://blogs.zdnet.com/projectfailures/?p=660
> >
> > Billion-dollar IT failure at Census Bureau
> >
> > Posted by Michael Krigsman @ 7:51 pm
> >
> > 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:
> >
> > Billion dollar IT mismanagement at Census Bureau
> >
> > 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:
> >
> >   1. 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.
> >   2. 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.
> > ________________________________
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--
Best Regards,

Simon Higgs

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