Thrift Savings Plan upgrade may have to start over

Nearly four years of work to modernize the Thrift Savings Plan's computer system may have to be scrapped, TSP Executive Director Roger Mehle said Monday. The TSP board is trying to regroup and push forward with an ambitious schedule after last month's firing of American Management Systems. The Fairfax, Va.-based contractor was hired in 1997 to modernize TSP's 15-year old record-keeping system. The $29.5 million job was supposed to be finished by May 2000. In March, AMS said it would deliver a final product by January 2002 at a cost of nearly $90 million-three times more than expected. On July 17, the TSP board fired AMS and filed a $350 million lawsuit against the contractor alleging breach of contract. It then awarded the modernization contract to Materials, Communication & Computers Inc. (Matcom) of Alexandria, Va. At a briefing for the retirement system's directors Monday, Mehle said a preliminary analysis of work done by AMS shows that little can be salvaged. "AMS' work seems virtually valueless," he said. AMS officials did not comment Monday, but in a July 17 statement, company officials said they were disappointed that the board shifted focus from its "own deficiencies … After more than three years, the board still has not fully determined its system needs."

The original contract called for AMS to develop a customized product using off-the-shelf software made by SunGard Employee Benefit Systems. One of the goals was to have the fewest number of customized codes in the new system as possible. AMS developed 1.2 million lines of code, nearly five times the original estimate. "We do not expect anything like that from Matcom," Mehle told the board. Matcom is scheduled to complete a review of AMS' work by Sept. 30 and finish work on the entire project by next July. The TSP board manages a 401k-style plan for 2.5 million current and former federal employees. In October, nearly 3 million military personnel will be eligible to enroll.