VA cancels $400M modernization contract

Agency will divert funds to other efforts

The Veterans Affairs Department is cancelling its $400 million financial system modernization program, and will direct those resources to other projects throughout the agency, a senior official has confirmed.

The VA’s Financial and Logistic Integrated Technology Enterprise (FLITE) modernization program is not central to the department’s mission and core responsibilities, Roger Baker, assistant secretary for information and technology at the VA, said during a press conference this morning.

“Prioritization of the projects has been the primary driver of this, along with the recognition that we can’t do everything,” Baker added.

Instead, VA wants to work on projects closer to its overall mission, such as modernizing the veterans benefit system and upgrading its health records system. “We have limited resources, and we have to make certain that we’re going to be successful at the large projects that we do decide to roll forward with,” Baker said.

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The FLITE program was a multiyear initiative to standardize business processes and update the IT infrastructure that supports financial and asset management inside the VA. The program consists of two parts: the Integrated Financial Accounting System (IFAS), the largest component, and the Strategic Asset Management System. It also includes the VA’s Financial Reporting Data Warehouse service, which integrates several separate systems. IFAS and the data warehouse make up approximately two-thirds of the entire program, according to Baker.

The overall FLITE program had an estimated price tag of between $400 million and $500 million, Baker said. So far, the VA has spent $16 million over the last several years in the planning phase for IFAS.

Baker said the VA has yet to award the most important task order, which is for the IFAS component, and that was the key to making the decision right now. The VA had been holding the procurement because of problems in the program. And, while straightening out those issues, officials realized the FLITE program was not a priority item, he said.

Instead, the VA would consider working on the financial system with smaller projects that have less risk and a greater likelihood of success, Baker said. The VA has had its current core financial management system (FMS) since the 1990s. He said the VA can fix its financial management weaknesses by addressing the systems that feed into FMS. Through smaller projects, the VA wants to make sure it can track its financial data being fed into the core system, Baker said.

The VA’s decision comes just two weeks after the Office of Management and Budget put a hold on all financial system modernization projects, of which the VA’s FLITE program was scheduled to be reviewed by OMB officials. Before OMB’s memo announcing the hold, VA and OMB officials had been in discussions about the future of the project, Baker said.

"These are the right decisions to make. They're hard decisions," Baker said. While the financial system needs attention, "we need to do things that we know we are going to be successful at and that are going to be the most impactful with the dollars that we spend."

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Wed, Jul 28, 2010

Thank God! The comment above on re-basling is sadly true, though this is changing with Baker's PMAS, which also has its weakness in that the reporting capabilities are not "ready" and it is "too complicated". As much as I hate micro-management, Baker really needs to micro-manage these folks...

Wed, Jul 21, 2010

I agree with Mr. Baker's decisions and the move towards a small step approach. Too often we move toward the monster solution, which is too big to implement no matter how much we think it should. The current system grew from small pieces over time. The same can be done with its successor and what is needed is a strong overall set of standards to drive each piece's development.

Mon, Jul 19, 2010

Having left a VA project over 1 year ago, this decision doesn't surprise me. What Mr. Baker needs to realize is that every GS-14 and above are willing roadblocks against him and his agenda. Project Management and following a sofware development life-cycle process are foreign entities. My gosh, most of VA thinks Agile programming means getting sofware out quickly, while continuing to add new functionality and requirements. Secondly, the inability of the VA Executive team to adequately know where they are with projects is because projects are continually re-baselined without executive oversight and therefore projects always look on time and on schedule. It's no wonder the VA has difficulties getting software released.

Thu, Jul 15, 2010 Scott

I don't think the person who said VA was rotting was to referring to Roger Baker. I think they were to referring to the career folks below him. This is not unfounded. In the case of ethics, we all remember the cases that came out last August with questionable bonus's, nepotism, and inappropriate relationships. And, VRM, VLER, and their data center execution all point to leadership that lacks business acumen. If Roger Baker has the stomach for it, he needs to take a close look at his senior leaders. Rogeris not Captain American and can not save the VA alone.

Thu, Jul 15, 2010 Editor

EDITOR'S NOTE: We've received numerous comments on this story that question the motivations, good faith and and ethics of VA management. As a general practice, we ask commenters to maintain a sense of civil decorum because it leads to more productive discussions. Criticism is welcome, though we encourage readers to be constructive in spirit.

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