Computer Sciences Corp. (CSC:US)’s performance on a failed $1 billion software project for the U.S. Air Force and the service’s management of it are under investigation by the Senate Armed Services Committee.
“I have directed the committee’s investigative staff to conduct a comprehensive investigation” to determine “the causes of the failure and assess steps that can be taken to avoid similar failures,” Senator Carl Levin, the Michigan Democrat who heads the panel, said in an e-mailed statement.
The Expeditionary Combat Support System, once described as “revolutionary” by the Air Force, was canceled in November after the service determined the supply-chain management project was “no longer a viable option” to help meet a goal of having its financial books in shape for a federal audit by 2017.
That’s been a major objective of departing Defense Secretary Leon Panetta. An additional $1.1 billion would have been required to fix the system and put it in operation by 2020 -- eight years after the planned date, according to the Air Force.
Of nine software systems that the Pentagon is installing to improve longstanding financial management deficiencies, the Air Force program was one of at least six that were running as much as 12 years late and $6.9 billion over their original cost estimates, the Government Accountability Office reported in September 2010.
The Senate panel’s staff has conducted in-depth probes such as its 2011 investigation of counterfeit parts in military systems. The investigation of the Air Force software project follows a Dec. 6 letter that Levin and Republican Senator John McCain of Arizona sent Panetta saying “this case appears to be one of the most egregious examples of mismanagement in recent memory.”
“I can understand the senators’ frustration,” Air Force Lieutenant General Charles Davis, the service’s top uniformed acquisition official, said in an interview. “I can understand the fact that a billion-plus of taxpayer’s money went to essentially nothing.”
It’s proper for the senators to be “holding us accountable,” Davis said.
The software project was scrapped after being reorganized three times in three years, making it “apparent the Air Force will be better served by developing an entirely new strategy versus revamping” it, the service said when it announced the cancellation in November.
In March, the Air Force had terminated a fixed-price contract for the system with Computer Sciences after paying the Falls Church, Virginia-based company $527 million, according to the service.
The company’s “poor schedule performance was a contributing factor,” Air Force spokeswoman Ann Stefanek said in e-mail.
Computer Sciences “has not received notification” that the software project is being reviewed and “will provide information on its role” to “any congressional inquiries,” company spokeswoman Heather Williams said in an e-mail.
Williams said in an earlier e-mail that the company “worked closely and cooperatively with the Air Force’s senior leadership to close out” the contract.
“We stand behind the work accomplished to date which can provide a solid foundation for the program’s future,” she said.
Tom Carper, a Delaware Democrat who is chairman of the Senate Homeland Security and Governmental Affairs Committee, said in e-mail that the Air Force system was “grossly behind schedule and over budget.”
While Carper praised Panetta for “taking decisive action” on the program, he said the cancellation “is strong evidence that the department has a long way to go before its financial systems are up to task.”
A “mix of a variety of things” lead to the cancellation, Davis said.
“Yes, there were problems” with Computer Sciences, Davis said. “Yes, we had problems in the government controlling requirements. Yes, there’s a problem with not having an adequate acquisition process that can handle such a large, complex program with nebulous requirements.”
“We will accept a suitable amount of responsibility for that,” he said.
Senator Tom Coburn, an Oklahoma Republican who worked with Carper reviewing the system, said in an e-mail that the Air Force “waited too long to make the right decision.”
The senator is “also concerned the Air Force appears to be the furthest away of all the military services in complying with laws on auditing,” his spokesman John Hart said in the e-mail.
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