VA financial management system: FLITE delayed

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 2010.

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 said.

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 needs.

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 estimate.

•Improve the reliability of program earned value management reporting by ensuring that contractor earned value management systems comply with industry standards.

•Complete a 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 and dependencies.

•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.

About the Author

William Jackson is a Maryland-based freelance writer.

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