FinCEN cancels BSA Direct contract

The Financial Crimes Enforcement Network has pulled the plug, effective yesterday, on its contract with EDS Corp. to develop the BSA Direct Retrieval and Sharing system, a data warehouse and information retrieval system.

The project has repeatedly missed program milestones and performance objectives during its two years of existence, almost doubling in cost, officials of the Treasury Department agency said.

The original cost estimate of $8.9 million for the contract increased to $15.1 million and the scheduled delivery date slipped from October 2005; the agency had already spent $14.4 million on the project. At least $8 million would likely be needed before the system could be completed, and an additional $2.5 million per year would be required for operations and maintenance.

Even this additional investment would not ensure a reliable schedule or a usable product, the agency said.

The BSA Direct project, intended to improve the analysis of data collected under the Bank Secrecy Act, was an ambitious one and could not be completely salvaged, said FinCEN Director Robert Werner.

"In good conscience, I could not devote further resources to the project when I can find no guarantee that any amount of added spending would ever produce the desired result,' he said.

With BSA Direct R&S, FinCEN aimed to improve law enforcement and regulatory users' ability to analyze and access Bank Secrecy Act data. FinCEN requires banks, money transmitters, casinos and other industries to report suspicious transactions and cash transactions of over $10,000. Individually or over time, these transactions could indicate money laundering, other financial crimes or terrorist financing.

EDS is disappointed that FinCEN decided to terminate the contract, a company spokesman said.

'We support the client's desire that their future capability meets user requirements. But at no time was EDS unresponsive,' said EDS spokesman Brad Bass.

FinCEN launched BSA Direct R&S in July 2004 as a component of BSA Direct, a project that also included existing electronic filing and secure access. FinCEN had intended to apply data warehousing technology to structure the data in a single, integrated, secure Web-based environment, and provide more sophisticated business intelligence and other analytical tools in a user-friendly portal.

FinCEN's law enforcement customers can continue to use FinCEN's Secure Outreach system to access BSA data and apply their own analysis. FinCEN soon will transition to the IRS' Web CBRS for retrieval and online analysis of BSA information.

Going forward, FinCEN will inventory its capacity, assess its needs and the needs of its customers, and begin planning for future capabilities for retrieval, sharing and enhanced analysis of the Bank Secrecy Act data, according to an agency evaluation of the project.

In March, Werner issued a 90-day stop-work order because of his concerns over the project's failure to meet its program milestones and performance objectives. Outside experts conducted an assessment of the future viability of the system. FinCEN extended the stop-work period an additional 30 days in May.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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