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Government Leader home > news stories
05/30/08
Software problem puts RetireEZ on hold
By Richard W. Walker
Citing software performance problems, the Office of Personnel Management has suspended work by its prime contractor on RetireEZ, the agency’s retirement systems modernization project.
OPM said May 29 it issued a stop-work order to Hewitt Associates for the implementation of the calculation engine, one of three components of the RetireEZ system.
In addition to the stop-work order, OPM said it had issued a show cause notice to Hewitt, giving the company 10 calendar days to respond to the performance issues OPM raised.
Federal annuitants will not be adversely affected by the action, OPM said.
The agency added that the other two components of RetireEZ — data conversion and change management — will continue uninterrupted.
“Progress to date on those two components has already resulted in improvements in the federal retirement processing,” the agency said in a statement. “This foundation, when joined with a successful calculation engine, will enable all federal employees to plan for and process their retirements electronically."
OPM and Hewitt are facing a bigger challenge than expected to meet federal functionalities, sources told Federal News Radio.
OPM awarded a 10-year, $290 million contract in May 2006 to Hewitt, an Illinois-based human resources systems provider, to furnish the information technology systems for RetireEZ. Hewitt is modifying its commercial system, the Defined Benefits Technology Solution, to comply with federal laws and regulations.
In late February, OPM implemented the first phase, or Wave 1, of RetireEZ, which covers about 26,000 employees at four agencies.
When the agency issued a March 31 report on RetireEZ, it didn’t identify any performance issues with the system. The report was a response to a Government Accountability Office review of the project, which questioned OPM’s life cycle cost estimates for RetireEZ.
OPM stated that previous estimates of RSM’s life cycle costs erroneously included millions of dollars spent on earlier efforts to acquire modern retirement processing systems. OPM disclosed it had spent $69.6 million since the 1990s on abandoned efforts to automate the processing of federal retirement benefits before deciding to outsource that function two years ago.
OPM's revised life-cycle cost estimate for RetireEZ is $360.7 million.
Richard W. Walker writes for Federal Computer Week, an 1105 Government Information Group publication.
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