A major National Archives project to preserve and provide access to federal records, 10 years in the making, faces massive delays and cost overruns.
Lockheed Martin, the contractor, was originally awarded a contract for $317 million in 2005 with a target date for completion by the end of this year. Instead the Government Accountability Office now estimates the project will be completed in March 2017 at a cost of $1.2 billion.
The National Archives and Records Administration has not been able to identify cost increases, delays, or take timely action to correct problems. Frequent revisions have led to cost overruns, between $195 million and $433 million.
The National Archives has yet to implement a contract management program, required by the government for this type of project with expected cost overruns.
A recent revision in the project calls for the records system to be deployed with reduced functionality by the end of 2011. The project is set up in a way that heavily favors the contractor, Lockheed Martin. Constant changes in project baselines means the contractor can easily reach objectives and receive award fees. GAO labels the project “highly inefficient”, since resources are spent re-planning and revising the project instead of developing it.
The project has repeatedly missed goals, but instead of making up for the shortcomings, basic benchmarks were deferred to the next phase. The National Archives is not employing the government’s contract management approach, which compares the planned cost of work against the estimated worth of work already completed and highlights problem areas more accurately.
Since the upcoming work will be more complex, the GAO warns that its cost overrun projections are on the conservative side. “The program’s historical cost and schedule performance suggests that the Electronic Records Archive system, at full operational capability, will likely be deployed at least 67 months behind schedule (in March 2017) and that the total life cycle cost for the program could be at least $1.2 billion (a 21 percent increase),” the GAO report said.
FAST FACT: National Archives estimated the development cost of the record system to be $317 million, the amount awarded to Lockheed Martin. It has since increased the estimated costs to $567 million, but the GAO estimates real cost to be $762 million to $1 billion. This figure does not include the full life cycle costs.
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