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FEMA Blasted For IT Systems Overhaul Waste

Inspector General report finds delays, lack of oversight by IT leadership, and questionable ethical behavior at the Federal Emergency Management Agency.

Questionable ethical behavior and poor oversight during a $40 million, multi-year IT system overhaul and contractor transition at the Federal Emergency Management Agency led to numerous delays, a divisive working environment, and millions of dollars wasted, according to a report by the agency's inspector general.

The report finds serious problems with IT management and oversight in FEMA's National Flood Insurance Program, which provides more than 5.5 million federally-backed flood insurance policies, creates floodplain management regulations, and maps flood hazards.

The problems arose as FEMA looked to simultaneously switch IT services providers from Computer Sciences Corporation to the much smaller Optimal Solutions and Technologies and have Optimal Solutions oversee the multi-year development of a new system of record called NextGen that would provide Web-based access to insurance companies and federal contractors who needed to enter and retrieve flood insurance information.

The contractor transition between CSC and Optimal Solutions and Technologies, originally scheduled for 2008, has yet to be completed, and the new system still hasn't taken over for the legacy system. The report lays much of the blame on poor oversight and the "misplaced allegiances" of employees at FEMA's mitigation directorate (of which the flood insurance program is a part).

Although the current acting assistant administrator for the directorate said he knew little about IT, the directorate attempted to upgrade the systems without involving FEMA's CIO and acquisition managers, with the assistant administrator relying on reports from his managers to keep him informed. In addition, FEMA's CISO didn't even hear about NextGen until 5 years after its development had begun. Ultimately, the administrator came to distrust the information he was getting and sought assistance from the agency CIO, but this came too late, the report finds.

The lack of necessary expertise and oversight, the report finds, inevitably led to the development of and payment for an unproven system that didn't meet FEMA's security and technical requirements, wasting as much as $7.5 million.

Former contractor employees appear to be a big part of the problems. According to the report, there's a "revolving door" of former IT contractors and FEMA employees at NFIP. "The apparent inability of these employees to leave behind past alliances led to a divide within the directorate and prevented an honest assessment of the status of [the next generation system] and the transition," the report says.

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