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A project by the National Archives and Records Administration (NARA) to creative a massive digital archive of electronic records is soaring over budget due to persisting project-management troubles, according to a federal watchdog agency.

NARA Electronic Records Archive (ERA) will likely cost $1.2 billion to $1.4 billion when completed, exceeding the current $995 million estimated cost by 21% to 41%, according to a recent report by the Government Accountability Office (GAO). The agency blames the increased costs on the agency's ineffective use of a project-management technique aimed at making it easier, not harder, to manage a project.

NARA has been working on the ERA project since 2001 to preserve and provide electronic access to large volumes of government records. Lockheed Martin is the primary contractor on the project; the agency awarded the company a $317 million contract in 2005 to develop a contemporary digital archive for government records.

To help it manage the project, NARA has been using an approach called earned value management (EVM) that is meant to create objective reports of project status and anticipated completion costs if used properly.

However, the GAO said that NARA is mishandling its use of EVM because it lacks comprehensive EVM policy, training, and specialized resources. Moreover, it keeps re-planning the program, which also has complicated the management process.

The GAO and others in the past have criticized NARA for its handling of the project -- an inherently complex and unwieldy project, by any standards, that includes cooperation with multiple federal agencies. It's currently on the Office of Management and Budget's list of 26 high-risk IT projects that are in danger of being scaled back or cut if the agency in charge doesn't get the project on a better track. As a result of its inclusion on the list, NARA plans to roll out an electronic archive in the fall that will not have its originally planned functionality.

For its part, Lockheed Martin said it's on schedule to complete its contract requirements by September 30 and will continue to work with NARA to address any GAO concerns "to ensure that tax dollars going toward this program are well spent and deliver a system that preserves and provides access to all types of electronic records," according to a company spokeswoman.

The GAO made several recommendations for NARA to salvage their use of EVM on the project and manage it more efficiently. Among other things, the agency recommended that NARA come up with a comprehensive EVM-based plan for all of the remaining work, improve the accuracy of the results from earned-value performance reports, and work with appropriate executives to correct persistent problems NARA has had managing ERA.

Story updated 02/08/11

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