Office of Personnel Management:

Retirement Modernization Planning and Management Shortcomings Need to Be Addressed

GAO-09-529: Published: Apr 21, 2009. Publicly Released: Apr 21, 2009.

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For the past two decades, the Office of Personnel Management (OPM) has been working to modernize the paper-intensive processes and antiquated systems used to support the retirement of federal employees. By moving to an automated system, OPM intends to improve the program's efficiency and effectiveness. In January 2008, GAO recommended that the agency address risks to successful system deployment. Nevertheless, OPM deployed a limited initial version of the modernized system in February 2008. After unsuccessful efforts to address system quality issues, OPM suspended system operation, terminated a major contract, and began restructuring the modernization effort, also referred to as RetireEZ. For this study, GAO was asked to (1) assess the status of OPM's efforts to plan and implement the RetireEZ program and (2) evaluate the effectiveness of the agency's management of the modernization initiative. To do this, GAO reviewed OPM program documentation and interviewed agency and contractor officials.

OPM remains far from achieving the modernized capabilities it had planned. Specifically, the agency has partially implemented two of eight planned capabilities: (1) an integrated database of retirement information accessible to OPM and agency retirement processing personnel and (2) enhanced customer service capabilities that support customer needs and provide self-service tools. However, the remaining six capabilities have yet to be implemented because they depended on deliverables that were to be provided by a contract that is now terminated. Examples of these missing capabilities include: (1) automated submission of retirement information through interfaces with federal agencies and (2) Web-accessible self-service retirement information for active and retired federal employees. Further, OPM has not yet developed a complete plan that describes how the program is to proceed without the system that was to be provided under the terminated contract. Although agency documents describe program implementation activities, they do not include a definition of the program, its scope, lines of responsibility and authority, management processes, and a schedule. Also, modernization program documentation does not describe results-oriented performance goals and measures. Until the agency completes and uses a plan that includes all of the above elements to guide its efforts, it will not be properly positioned to move forward with its restructured retirement modernization initiative. Further, OPM has significant weaknesses in five key management areas that are vital for effective development and implementation of its modernization program: cost estimating, earned value management (a recognized means for measuring program progress), requirements management, testing, and oversight. For example, the agency has not developed a cost estimating plan or established a performance measurement baseline--prerequisites for effective cost estimating and earned value management. Further, although OPM is revising its previously developed system requirements, it has not established processes and plans to guide this work or addressed test activities even though developing processes and plans, as well as planning test activities early in the life cycle, are recognized best practices for effective requirements development and testing. Finally, although OPM's Executive Steering Committee and Investment Review Board have recently become more active regarding RetireEZ, these bodies did not exercise effective oversight in the past, which has allowed the aforementioned management weaknesses to persist and OPM has not established guidance regarding how these entities are to intervene when corrective actions are needed. Until OPM addresses these weaknesses, many of which GAO and others made recommendations to correct, the agency's retirement modernization initiative remains at risk of failure. Institutionalizing effective management is critical not only for the success of this initiative, but also for that of other modernization efforts within the agency.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Office of Personnel Management agreed with our recommendation and took action to begin addressing the weaknesses we identified. For example, the agency began to develop a test plan that would be based on industry standards and finalized prior to testing activities. Although in February 2011, the agency decided to terminate the retirement system modernization program, we consider the action taken and to be responsive to our recommendation to address the weakness we identified.

    Recommendation: To improve OPM's effort toward planning and implementing its retirement modernization program by addressing management weaknesses, the Director of OPM should begin RetireEZ test planning activities early in the life cycle.

    Agency Affected: Office of Personnel Management

  2. Status: Closed - Implemented

    Comments: The Office of Personnel Management agreed with our recommendation and took action to begin addressing the weaknesses we identified. For example, the agency began developing a requirements management plan in accordance with recognized guidance. Although in February 2011, the agency decided to terminate the retirement system modernization program, we consider the action taken to be responsive to our recommendation to address the weakness we identified.

    Recommendation: To improve OPM's effort toward planning and implementing its retirement modernization program by addressing management weaknesses, the Director of OPM should develop a requirements management plan and execute processes described in the plan to develop retirement modernization requirements in accordance with recognized guidance.

    Agency Affected: Office of Personnel Management

  3. Status: Closed - Implemented

    Comments: The Office of Personnel Management agreed with our recommendation and took action to begin addressing the weaknesses we identified. For example, the agency began to establish a basis for reliable EVM by taking steps toward developing a revised cost estimate. Although in February 2011, the agency decided to terminate the retirement system modernization program, we consider the action taken to be responsive to our recommendation to address the weakness we identified.

    Recommendation: To improve OPM's effort toward planning and implementing its retirement modernization program by addressing management weaknesses, the Director of OPM should establish a basis for reliable EVM, when appropriate, by developing a reliable program cost estimate, performing an integrated baseline review, and validating a performance measurement baseline that reflects the program restructuring.

    Agency Affected: Office of Personnel Management

  4. Status: Closed - Implemented

    Comments: The Office of Personnel Management agreed with our recommendation and took action to begin addressing the weaknesses we identified. For example, the agency began efforts to develop a cost estimate by re-examining all aspects of the retirement modernization project using GAO's Cost Estimating and Assessment Guide. Although in February 2011, the agency decided to terminate the retirement system modernization program, we consider the action taken to be responsive to our recommendation to address the weakness we identified.

    Recommendation: To improve OPM's effort toward planning and implementing its retirement modernization program by addressing management weaknesses, the Director of OPM should develop a reliable cost estimate by following the best practice steps outlined in our Cost Estimating and Assessment Guide, including definition of the estimate's purpose, development of an estimating plan, definition of the program's characteristics, and determination of the estimating structure.

    Agency Affected: Office of Personnel Management

  5. Status: Closed - Implemented

    Comments: The Office of Personnel Management agreed with our recommendation and took action to begin addressing the weaknesses we identified. For example, the agency began revising its program management plan to reflect changes in the retirement system modernization program. Although in February 2011, the agency decided to terminate the program, we consider the action taken to be responsive to our recommendation to address the weakness we identified.

    Recommendation: To improve OPM's effort toward planning and implementing its retirement modernization program by addressing management weaknesses, the Director of OPM should develop a complete plan for the restructured program that defines the scope, implementation strategy, lines of responsibility and authority, management processes, and schedule. Further, the plan should establish results-oriented (i.e., objective, quantifiable, and measurable) goals and associated performance measures for the program.

    Agency Affected: Office of Personnel Management

  6. Status: Closed - Implemented

    Comments: The Office of Personnel Management agreed with our recommendation and took action to begin addressing the weaknesses we identified. For example, the agency began to review its processes for investment oversight in order to identify opportunities to strengthen its policies and procedures. Although in February 2011, the agency decided to terminate the retirement system modernization program, we consider the action taken to be responsive to our recommendation to address the weakness we identified.

    Recommendation: To improve OPM's effort toward planning and implementing its retirement modernization program by addressing management weaknesses, the Director of OPM should develop policies and procedures that would establish meaningful program oversight and require appropriate action to address management deficiencies.

    Agency Affected: Office of Personnel Management

 

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