VA financial management system: FLITE delayed
- By William Jackson
- Dec 02, 2009
The Veterans Affairs department has let the pilot program of a new
asset management system slip by two months, just five months since the
agency awarded the contract, according to a new report by the
Government Accountability Office. GAO attributed the problems to
inadequate staffing and poor program management.
In the report, GAO blamed General Dynamics, the contractor, for falling behind schedule.
The VA awarded the contract for the Strategic Asset Management system in
April to General Dynamics in April. The system is one of two major
components of VA's Financial and Logistics Integrated Technology
Enterprise (FLITE), an effort to produce a department-wide integrated
financial and asset management system. FLITE is one of the programs
that the Office of Management and Budget has designated high risk.
The second component is the Integrated Financial Accounting System
(IFAS). VA awarded a program management contract for IFAS to Booz-Allen
Hamilton in March, and a pilot for that system is scheduled to begin in
The VA is the second largest federal agency, with 250,000 employees.
The Veterans Health Administration operates 154 hospitals, 995
outpatient clinics, 135 community living centers, 49 residential rehab
centers and 232 counseling centers. But it is plagued with inefficient
and unstandardized business systems that require repeated manual
entries, GAO said.
“VA has for over a decade been pursuing improvements in its business
processes and replacement of its existing financial and asset
management systems with an integrated financial management system,” GAO
The lack of an integrated financial management system has been
recognized as a departmental weakness since 1991, and FLITE is the
second attempt to provide one. Work on the earlier proposed Core
Financial and Logistics System began in 1998 and was scheduled to be
completed in 2006, but the agency dropped the program in 2004 when
pilot projects revealed it would be unable to support the department’s
Planning for FLITE began in 2005, with full operational
implementation scheduled for 2014 at a cost of $608.7 million. As of
September, the VA had spent about $91 million on the program.
The department picked the Maximo Enterprise Asset Management
software suite from IBM as FLITE’s Strategic Asset Management (SAM)
program, and General Dynamics IT was given the contract to implement at
pilot in Milwaukee. By September, the contractor had not started 11 of
34 tasks, including a security assessment, and was behind schedule on
16 of the remaining 23 tasks, GAO said.
“VA attributed the [delays] to a shortage of FLITE program office
human capital resources and poor project management by the contractor,”
GAO said. According to the program director, the program did not have
the personnel it needed during the initial months of the SAM pilot
project to provide the contractor with the information it needed.
The GAO noted that the department has made improvements in FLITE
management, filling some vacant positions. But, “while VA has recently
taken steps to address the staffing shortages that have substantially
contributed to this delay, it has not yet fully established the
management capability necessary for FLITE to be successful,” the report
said. “The department is faced with significant challenges in
implementing FLITE’s pilot systems as planned, while simultaneously
working to fully establish program management capabilities.”
The department has agreed with GAO on steps needed to put FLITE on a more secure footing:
•Improve the reliability of the program cost estimate by
ensuring that the estimate includes system operations and maintenance
costs and that the estimate is reconciled with the independent cost
•Improve the reliability of program earned value
management reporting by ensuring that contractor earned value
management systems comply with industry standards.
revised integrated master schedule that includes all key program
activities, including reconciliation of the program cost estimate and
implementation of earned value management, and identifies all resources
•Ensure that all relevant and applicable federal
financial management system requirements are included in FLITE’s
requirements and establish and maintain requirements traceability.
•Ensure that all comments from independent verification and validation reviews are addressed.
William Jackson is a Maryland-based freelance writer.