Troubled $12m Texas project set for overhaul

Troubled $12m Texas project set for overhaul

By Wilson P. Dizard III

GCN Staff

Texas' Teacher Retirement System has launched a thorough management shake-up of its system upgrade in the wake of a critical report from the State Auditor's Office.

The project is at least $600,000 over budget and 10 months behind schedule. The reason: The auditors found that the retirement organization had taken over an ambitious, $12.7 million project from contractor TRW Inc. even though the agency lacked essential skills and management controls to complete it.

The software upgrade, known as the Benefit Services Transformation (BEST) project, began in 1997. TRW already had done $10.8 million worth of work on the job by the time the retirement agency's board canceled the contract in March.

BEST will replace nearly two dozen systems that the state uses to administer benefits to nearly 1 million current and retired teachers. The agency processes more than $2.8 billion in annual retirement benefits.

BEST's application software, which the agency's programmers now are developing in-house, will run under IBM OS/390 on an IBM 2003 Model 225 mainframe and under Microsoft Windows NT on its servers, eight Compaq ProLiant machines. State users will access BEST from 333-MHz Pentium PCs with 128M of RAM, 4G hard drives, NT Workstation and Netscape Communicator.

The state fired TRW after the contractor told the agency that BEST would not be ready by the Aug. 31 deadline, as required by the contract.

By the time the retirement agency took over the project, TRW had completed 10 of the 15 deliverables specified in its contract, the agency said in a statement. It had also made significant progress in completing the other five items, the agency said.

The agency 'had approximately $1.9 million in budgeted funds remaining,' the statement noted. 'For fiscal year 2001, the TRS board has authorized a budget of $2.5 million.'

The agency will implement the BEST project in phases and start by the middle of next year, officials said.

The agency's decision to add Web features to the program led to the delays, said Joe Fay, vice president of human services for TRW's public-sector solutions division.

'At the start of the year we sat down with TRS and realized that because of technology changes and changes in the way benefits had to be calculated, the project was going to extend beyond the August deadline,' he said. The Internet had not been a viable platform for the project when it began in 1997, Fay said.

TRW executives offered the agency three options: extend the scope of contract beyond this month, roll out part of BEST's capabilities beginning this month or end TRW's involvement in the project.

Looking for Daffy

Jim Simms, chairman of the retirement agency's board and vice president of Amarillo National Bank, said, 'We weren't getting through the project as rapidly and successfully as we wanted to.

'None of us envisioned the problems going in. We had a bunch of feathers and we knew somewhere in there was a duck.'

Soon after the agency decided to cancel the TRW contract, the state's auditing office began reviewing whether the agency was capable of completing the project. In its recent report, the auditor concluded that the agency might not have the skills and controls it needs.

'Discussions with management indicate that skill and time requirements have not been adequately assessed,' the audit team said.

The audit pointed out several steps the agency should take to gain control of the project, including developing and implementing 'a current, realistic, integrated project work plan.'

The auditor's office suggested that the retirement agency reorganize and strengthen the project steering committee and assess the agency's technical and project management skills.

To regain control of the project, the auditors suggested that they 'implement a well-defined, fully documented, integrated system development lifecycle methodology.'

Charles Dunlap, executive director of the agency, responded to the report in a letter and concurred with the report's recommendations. He pledged to implement all the suggested changes.

Carol Smith, the audit's manager, said of the BEST problems, 'There were some controllable factors and some uncontrollable factors. I am certain there were a number of delays because this was happening in the middle of the [year 2000 date rollover]. Everyone was experiencing shortages of programmers.'

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