Hewitt Associates wins $290m OPM modernization deal

Hewitt Associates of Lincolnshire, Ill., has won the Office of Personnel Management's long-awaited Retirement Systems Modernization contract?a program OPM hopes will revolutionize how the agency computes and releases federal retirement benefits.

The 10-year performance-based contract is estimated to be worth approximately $290 million, OPM said.

OPM issued the solicitation for the RSM last November and expects it will modernize the existing Federal Retirement System by improving services through new technologies and business processes. It is a multiphase, multiyear program that will revamp various processes that provide services to employees participating in the government's retirement program.

Included in the contract is a defined benefits technology solution that OPM said will provide a paperless benefits service delivery model and give employees, retirees and agency officials immediate access online to retirement-related records and benefits elections.

"When fully operational, RSM and the defined benefits technology solution will improve the quality and timeliness of services OPM and employing agencies provide to federal employees and retirees," said OPM director Linda Springer. "Many of the best-run companies in America offer similar benefits services to their employees, and we will do the same."

The contract is a significant step for RSM, which in the past has had its share of problems.

OPM has been working on the system for the last eight years, and the Government Accountability Office in March 2005 said the system was at risk of failing.

In a report, GAO found OPM's project team has yet to sufficiently develop management processes, jeopardizing the initiative's chances of meeting its cost and schedule milestones. Between 1997 and 2001, OPM spent $12 million on planning and analyses.

Congress asked OPM to consult with GAO in 2002 and in 2003 instituted quarterly meetings with auditors.