And you thought your phone bill was expensive.
The government wasted $395 million because many agencies that were supposed to switch to a new, cheaper communication system dubbed Networx did not do so in a timely way and because the General Services Administration kept paying for parts of the old system, an investigative report says.
The problems could soon happen all over again, as the same GSA that was in charge of these programs is gearing up to implement yet another phone system.
“GSA’s failure to successfully transition its telecommunications services to Networx is the latest in a long line of contracting problems,” said Sen. Tom Coburn of Oklahoma, a leading advocate of reducing fiscal waste and the top Republican on the Homeland Security and Governmental Affairs Committee.
“Too often we’ve seen poor planning, unnecessary duplication and inadequate management at GSA,” Mr. Coburn said. “Such mismanagement and waste is simply unacceptable, especially at a time of increasing debts and limited resources.”
For being so slow to switch to technology systems that cost millions of dollars, the GSA and its fellow federal agencies win this week’s Golden Hammer, a distinction given by The Washington Times to examples of fiscal abuse, waste and fraud.
The original plan was to have all government agencies switched to Networx by 2010. But a year after that, investigators found that only 61 out of 158 federal offices and agencies had made the transition. Instead, most were still relying on communication technology developed during the 1990s that was much more expensive to run. The GAO estimates that the delay cost taxpayers $329 million.
The GSA itself incurred an extra $66 million above its original estimates, paying contractors for several years to run the old phone system as it tried to switch agencies to the new one. Ironically, throughout the process, one of the GSA’s stated goals was “minimizing transition expenses.”
“It’s this kind of incompetence that makes Americans so frustrated with Washington’s reckless spending,” said Bill Riggs, a spokesman for Public Notice, a nonprofit fiscal watchdog.
“The complex bureaucracy involved in switching phone systems shows how the federal government has become too big and too inefficient to spend our money wisely. When politicians try to say there’s no more waste to cut, Americans should point right back to stories like this and call their bluff,” he said.
The Government Accountability Office, Congress’ investigative arm, said in a report released this week that “complex acquisition processes and weaknesses in project planning contributed to the delays experienced on the Networx transition, resulting in cost increases and missed savings.”
Part of the problem, the GAO said, is a “high-risk” lack of skilled telecommunications specialists in the federal workforce.
“Agencies are concerned that the shortage of telecommunications specialists will get worse because there are not enough to replace experienced workers nearing retirement,” investigators said.
The GSA said it would review the problems with the Networx transition and try to make sure they aren’t repeated.
The office will “examine potential governmentwide telecommunication expertise shortfalls” and improve “project planning guidance to agencies” to ensure they move over to new systems on time, said Dan Tangherlini, the head of the GSA.
“GSA will implement the GAO’s recommendations to provide federal agencies with enhanced planning and guidance as well as continuing to share the many lessons we have learned,” said spokeswoman Mafara Hobson. “We want to underscore to federal agencies how critical it is that they transition effectively and on time. GSA’s Networx program helped federal agencies save American taxpayers more than $678 million in 2013 on telecommunication services, demonstrating the results GSA can get for taxpayers.”
But the plan to implement the next system by 2017 — this one known as NS2020 — already has been delayed by three years.
“However, according to agency officials, there is a high risk that this milestone will not be achieved,” the GAO warned, saying the deadline is likely to be pushed back again and could lead to more fiscal waste.
One of the biggest reasons for the delays in transferring to Networx was that agencies made the transition look like it was going smoother than it was by front-loading the smallest, easiest tasks to show “progress” according to bureaucratic ledgers.
“Agencies tended to transition easier items before they transitioned more complex items,” the GAO said.
But that meant the more involved, time-intensive projects weren’t addressed until late in the process and agencies weren’t ready when the deadline arrived.
“By planning to transition time-consuming services earlier in the project, agencies could have reduced or avoided delays incurred,” the watchdog said.
The other major slowdown was that agencies weren’t sure what services they needed to switch to the new system and requested the GSA’s help. Subsequently, the administration had to take time to go through the phone contracts for each agency line by line and possibly create modifications. By the time they were finished, the number of line items on the phone contracts had risen from 5,100 to 13,400.
The entire time GSA was delaying deadlines while it worked to help agencies make the switch, it had to pay $66.4 million above the original budget to keep contractors operating the out-of-date communication technology.
The GSA was able to get all agencies transferred to Networx in March, almost three years after the original deadline.
Networx replaced a system known as FTS2001, which had been around since 1998.