Another Failed Gov’t Tech Project Cost $1.1 Billion
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The Fiscal Times
November 26, 2013

Last February, the Pentagon and the Veterans Affairs Department abandoned a project to build an integrated electronic health record system.  After five years, they had already spent $1.1 billion on the failed program.

At the time, lawmakers criticized the DOD and VA for giving up on the project that had already cost ¼ of the estimated total budget—and would never be used. Senate Veterans Affairs Committee Chairman Bernie Sanders (I-VT) said he was “deeply disappointed.” Likewise, House Veterans Affairs Committee Chairman Rep. Jiff Miller called it “very troubling.”

Related: The Government Wastes More Money than You Think

DOD and VA department officials said canceling the project was ultimately the most cost-effective decision, since it was already severely running over budget and was on track to costing a total $28 billion---or seven times the original estimate.

Now, a new report to Congress from the interagency program office (IPO), which was congressionally mandated to oversee the project, paints a clearer picture of why such enormous cost overruns were likely occurring and raises questions over whether the office was spending its money irresponsibly.

Indeed, the bulk of the project’s funding--$330 million of $350 million -- was spent on expensive contractors in 2012. According to the report, the majority of the budget was intended to pay for staffing, but only $19 million was spent on hiring government workers.

The report blames the program’s failure on “staffing challenges, bureaucratic red tape and senior officials not approving requests in a reasonable timeframe.” Now that the joint program has been halted, both departments are moving forward on their own.

Related: Pentagon Mocks Sequester with New Millions Wasted

DOD officials are planning to purchase a new commercial system that will cost at least another $4 billion and won’t be ready until at least 2017. Meanwhile, the VA said it will upgrade its existing system and has not released an estimate of how much that will cost. Both still plan to integrate their systems eventually so they will be able to share data.

This isn’t the first time a report has revealed irresponsible money management or lax oversight at defense agencies. Here is a sample: 

In one example of many, claims processors at the VA received massive bonuses, despite the department’s massive claims backlog. While the backlog ballooned by 155 percent in 2011, more than two-thirds of claims processors received a collective $5.5 million in bonuses.

Meanwhile , DOD hasn’t successfully been audited since 1996, the first year the federal government required departments to be audited by law.

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Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.