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A Federal Agency Responds To Criticism Of Wasting Money

A retirement-fund agency says barbs from Congress are factually correct, but that it has taken steps to remedy the situation, which involves an overbudget IT effort.
A federal agency accused earlier this month by the Senate Governmental Affairs Committee of wasting $36 million in federal retirement assets responded Friday to these allegations by acknowledging that the committee was right. But the agency emphasized steps taken to remedy its "troubled" effort to develop a retirement-savings record-keeping system.

In a July 16 letter, Andrew Saul, chairman of the Federal Retirement Thrift Investment Board, wrote to committee chairwoman Susan Collins, R-Maine, and ranking member Joe Lieberman, D-Conn., that there were no factual discrepancies in the committee's report and that the board would take the committee's findings and recommendations to heart when conducting future business.

"Your comprehensive review of this ill-fated project has helped us better understand what occurred and how to avoid similar problems in the future," Saul wrote.

Collins and Lieberman had sent Saul a July 7 letter highly critical of the board and IT contractor American Management Systems, the company hired to develop the record-keeping system for participants and beneficiaries of a retirement savings plan for civilians who are employed by the U.S. government and members of the uniformed services.

The burden of the project's failure was "borne by Thrift Savings Plan participants and beneficiaries, who have yet to receive an adequate explanation of what happened and why," the committee's letter said.

The original project called for AMS to develop and implement a record-keeping system that would help Thrift Investment Board members better record and track federal employee retirement contributions. The project was also to provide federal employees and retirees with online access to their retirement accounts. CGI Group Inc. and CACI International Inc. acquired AMS's different assets in May.

Scheduled for completion by May 2000, the project was to cost an estimated $29.7 million. This quickly ballooned to $65 million because of delays and extra charges. The board later turned to Materials, Communications and Computers Inc. to complete the project in 18 months at a cost of $33 million.

Saul's letter Friday noted that the board experienced some "relatively minor (but highly publicized) problems," but that he and the then-brand-new executive director accepted responsibility and assured Congress that these problems would be quickly resolved. The board has also had a chance in leadership since the project began, Saul wrote. Gary Amelio took over the role as the board's executive director from former director Roger Mehle, who was in charge at the project's inception.

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