Additional Information on SSA Management of Data Communications Contracts with Paradyne Corporation

Pursuant to a congressional request, GAO reviewed various aspects of the Social Security Administration's (SSA) management of data communications contracts with Paradyne Corp.

GAO found that there were major differences between the computer equipment Paradyne described in its proposal, used at its preaward operational capability demonstration (OCD), delivered for testing, and installed in SSA field offices. SSA experienced persistent performance problems with its Paradyne terminal systems for at least 2 years after they were initially installed, and excessive downtime caused by inoperative Paradyne equipment has been a serious impairment to public service. In 1983, SSA decided not to use the Paradyne terminals to support local office automation, and the agency is currently moving ahead with an alternative technical approach. This approach will cause delays in automating local field office work loads which will cost SSA the anticipated savings in personnel costs for each year that its automation plans are delayed. In May 1984, an independent report was issued on the reliability and maintainability of Paradyne equipment in the SSA data communications system. GAO stated that the credibility of the study's conclusions concerning Paradyne's performance is compromised because SSA did not control or monitor the underlying performance data. SSA officials who observed the OCD may not have been aware that Paradyne had demonstrated controller equipment which it had not proposed. GAO was not able to determine whether Paradyne's alleged cash-flow problems were a significant factor in the SSA determination to purchase the Paradyne equipment rather than to exercise the lease-to-purchase contract option during fiscal year 1982.