Veterans Benefits

Redirected Modernization Shows Promise Gao ID: AIMD-94-26 December 9, 1993

In December 1992, the Department of Veterans Affairs (VA) awarded the first of its planned three-stage modernization procurements. This 8-year contract was awarded to Federal Data Corporation with a maximum value of $300 million. In response to congressional concerns about the benefits expected from this contract, this report discusses (1) the status of VA's business process redesign and its service improvement goals, (2) the validity of VA's cost estimates for the modernization, and (3) VA's contention that existing computer equipment failures were frequent and caused severe benefit service problems. In June 1993, VA and the Office of Management and Budget (OMB) agreed to redirect VA's modernization effort. This report also comments on the VA-OMB agreement.

GAO found that: (1) VBA proceeded with deployment plans for computer equipment before it determined how that equipment would improve delivery of benefit services; (2) VBA lacks specific operation goals and performance measures and cannot validate its life-cycle cost estimates because of mistakes and omissions; (3) it cannot substantiate the VBA contention that it needed certain computer equipment immediately to alleviate service problems caused by its aging equipment; (4) the VA and OMB agreement directs VA to establish service improvement goals for VBA business processes, make funding contingent on the demonstration of improved service to veterans and restrain spending under the initial contract; (5) although the agreement also calls for the update of the modernization's economic assessment in cooperation with OMB, a wholly new economic analysis based on refined requirements would provide VBA with more accurate and complete information; and (6) under the agreement, VA will improve departmental oversight by strengthening the chief information resources officer's role in prioritization, review, approval, and control of major automation projects.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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