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$300m later, IT system in disarray

WASHINGTON — Six years ago, the Social Security Administration embarked on an aggressive plan to replace outdated computer systems overwhelmed by a growing flood of disability claims. Nearly $300 million later, the system is nowhere near ready, and officials are struggling to salvage a project racked by delays and mismanagement, according to a report commissioned by the agency.

In 2008, Social Security said the project was two to three years from completion. Five years later, it was still two to three years from being done, according to the report, done by McKinsey and Co., a management consulting firm.

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Today, with the project still in the testing phase, the agency can’t say when it will be completed or how much it will cost.

In the meantime, people filing disability claims face long delays at nearly every step of the process — delays that were supposed to be reduced by the new system.

‘‘The program has invested $288 million over six years, delivered limited functionality, and faced schedule delays as well as increasing stakeholder concerns,’’ the report said.

As a result, agency leaders have decided to ‘‘reset’’ the program in an effort to save it, the report said. As part of that effort, Social Security brought in the outside consultants from McKinsey to figure out what went wrong.

They found a massive technology initiative with no one in charge — no single person responsible for completing the project. They issued their report in June, though it was not publicly released.

As part of McKinsey’s recommendations, acting Social Security Commissioner Carolyn Colvin appointed Terrie Gruber to oversee the project last month. Gruber had been an assistant deputy commissioner.

‘‘We asked for this, this independent look, and we weren’t afraid to hear what the results are,’’ Gruber said Wednesday. ‘‘We are absolutely committed to deliver this initiative and by implementing the recommendations we obtained independently, we think we have a very good prospect on doing just that.’’

The revelations come at an awkward time for Colvin. President Obama nominated her to a full six-year term in June, and she now faces confirmation by the Senate. Colvin was deputy commissioner for 3½ years before becoming acting commissioner in February 2013.

The House Oversight Committee is also looking into the program, and whether Social Security officials tried to bury the McKinsey report. In a letter to Colvin on Wednesday, committee leaders requested all documents and communications about the computer project since March 1.

The project, known at the Disability Case Processing System, or DCPS, was supposed to replace 54 antiquated systems used by state Social Security offices to process claims. Workers across the country would be able to use the system to process claims and track them as benefits are awarded or denied, and claims are appealed.

But as of April, the system couldn’t even process all new claims, let alone accurately track them as they wound their way through the system, the report said.

Lockheed Martin was selected in 2011 as the prime contractor. At the time, it valued the contract at up to $200 million, a press release said.

McKinsey’s report does not specifically fault Lockheed but raises the possibility of changing vendors.

Gruber said Social Security will continue to work with Lockheed ‘‘to make sure that we are successful in the delivery of this program.’’

A spokesman for Lockheed Martin would say only that the company is committed to delivering the program.

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