Retirement Security:

SSA Data Communications Contracts With Paradyne Corporation Demonstrate the Need for Improved Management Controls

IMTEC-84-15: Published: Jul 9, 1984. Publicly Released: Aug 2, 1984.

Contact:

Melroy D. Quasney
(202) 275-4659
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In response to a congressional request, GAO reviewed the Social Security Administration's (SSA) two contracts with the Paradyne Corporation for improving the SSA data communications network.

The SSA terminal replacement contract with Paradyne was the largest in SSA history. The first contract, valued at about $115 million, required Paradyne to install leased terminals in SSA offices nationwide for records management. The second sole-source contract award, valued at more than $2.5 million, called for Paradyne to enhance the data transmission capabilities of its terminals. This contract was terminated for the convenience of the government. GAO found that management weaknesses caused the acquisition of a data communications system that did not begin to meet contractual performance requirements until 2 years after contract award. Furthermore, the system is still experiencing a high-equipment failure rate. A 1982 purchase of some leased terminals and the sole-source award demonstrated inherent flaws in the systems procurement management structure of the agency, such as: (1) internal control deficiencies resulting from a realignment of the responsible SSA office; and (2) inadequate oversight of the procurement by the Department of Health and Human Services (HHS). Until corrected, these problems will continue to threaten the integrity of the SSA systems procurement process. These problems will affect a proposed purchase of the remaining leased Paradyne terminals and an upcoming acquisition of new terminals.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Secretary of Health and Human Services should direct the Commissioner of Social Security to defer further consideration of the agency proposal to spend $16.2 million to purchase the remaining leased Paradyne terminals until: (1) equipment failures have been reduced to a rate approximately that experienced by similar systems; and (2) SSA has a clearer idea of what further use should be made of the Paradyne equipment. At that time, all viable alternatives for meeting SSA needs should be carefully considered, including replacement of the Paradyne terminals through the upcoming terminal acquisition effort.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Not Implemented

    Comments: SSA is replacing all Paradyne equipment with newly purchased equipment from another manufacturer.

    Recommendation: The Secretary of Health and Human Services should direct the Commissioner of Social Security to limit requests for further delegations of procurement authority from the General Services Administration (GSA) for acquiring ADP and data communications resources until HHS and GSA agree that the SSA systems procurement process is sufficiently strengthened. Such requests should be restricted to those systems procurements which all three organizations agree cannot be deferred without jeopardizing agency operations.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: SSA recently established a Procurement Review Board to strengthen its systems procurement process.

    Recommendation: The Secretary of Health and Human Services should direct the Commissioner of Social Security to review SSA systems organizational structure and make adjustments to provide for separation of functions within the procurement process for systems modernization-related data communications acquisitions, especially with regard to separating the procurement request, specifications development function from the technical specifications review function.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: SSA recently established an independent Procurement Review Board to review procurement justifications, including the technical specifications.

    Recommendation: The Secretary of Health and Human Services should direct the Commissioner of Social Security to provide for greater depth and scope in technical reviews of automatic data processing (ADP) and data communications acquisition proposals by reviewing the superseded version of Administrative Directives Systems Guide 200-5 and identifying, for incorporation into the current version, those specific and detailed proposal review instructions needed to achieve thorough technical reviews.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Not Implemented

    Comments: The SSA Administrative Instructions Manual System (AIMS) was completed and instructions were incorporated for technical review of proposed acquisitions.

    Recommendation: The Secretary of Health and Human Services should direct the Assistant Secretary for Management and Budget to actively monitor all phases of ongoing and future SSA procurement actions requiring HHS approval. The Assistant Secretary should monitor SSA reconsideration of whether to buy the remaining leased Paradyne equipment to see that SSA has all the information it needs to make an informed decision.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: SSA is in the process of replacing its leased Paradyne terminals with new purchased terminals from a different manufacturer.

    Recommendation: The Secretary of Health and Human Services should direct the Commissioner of Social Security to ensure that the poor procurement practices used on the Paradyne acquisitions are not repeated on the upcoming 17,000-plus terminal procurement by: (1) closely reviewing the validity of the procurement justification; (2) performing an independent, in-depth review of the technical specifications contained in the pending solicitation to ensure that they include unambiguous and work-load-specific criteria for measuring vendor equipment performance during preaward and acceptance testing; and (3) using appropriately stringent performance validation techniques in conducting preaward and acceptance tests.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: The recently established SSA Procurement Review Board is due to address this recommendation.

    Jul 29, 2014

    Jul 28, 2014

    Jul 7, 2014

    Jun 16, 2014

    May 27, 2014

    Apr 21, 2014

    Mar 5, 2014

    Feb 26, 2014

    Dec 27, 2013

    Looking for more? Browse all our products here