VA Mismanaged FLITE Contractor

The Department of Veterans Affairs' (VA's) mishandling of a contractor relationship slowed progress of a project within a larger effort to overhaul its financial-management system, according to the agency's inspector general.

In a Sept. 7 report, the auditor found that program managers for the Financial and Logistical Integrated Technology Enterprises (FLITE) program's Strategic Asset Management (SAM) System pilot project didn't adequately stay on top of the performance of one of its contractors, General Dynamics Information Technology. VA project managers did not adequately monitor the contractor's performance, failing to provide quarterly assessments of General Dynamics' work, according to the report.

They also did not assign programmers that were to assist the contractor on the SAM project in a timely fashion, putting them on the project only six months after General Dynamics won the contract. Project managers also failed in their responsibilities to define roles and responsibilities for written procedures for the contractor and VA personnel to develop certain aspects of the project, such as its interface, according to the report.

Moreover, project managers didn't ensure the contractor and VA staff assigned to the project collaborated effectively, and in fact pressured VA personnel to complete contractor's deliverables, according to the report. "FLITE program managers were unable to successfully foster an effective working environment between both parties," auditors said. "In addition, FLITE program managers needed to ensure that other VA support staff provided more timely and productive feedback to the contractor by actively participating earlier in the development process."

The VA already has scaled back its plans for FLITE, an overhaul of its financial-management system that was estimated to cost $400 million to $500 million.

In July, the agency said it would eliminate FLITE's Integrated Financial Accounting System and Financial Reporting Data Warehouse, the two most costly components of the multiyear project. At the time, it said it would continue with the SAM program, which is only a small portion of the overall project.

To get the program back on track, the inspector general is recommending that the VA's assistant secretary for information and technology establish oversight for the project; assign adequate resources to support its completion; validate that project officials complete system migration plans; and ensure they develop a plan for testing the project's reliability once the pilot is operational in a production environment.