The Development and Award of the Social Security Administration's Systems Engineering and Integration Contract

Testimony was given on the development and award of the Social Security Administration's (SSA) Systems Engineering and Integration (SE&I) contract to a prime contractor and its subcontractor. GAO found several irregular procurement practices which continued for 2 years preceding the contract award, including: (1) subcontractor personnel were given office space at SSA even though they had no contracts or formal relationship with SSA; (2) the subcontractor had the opportunity to develop relationships with key SSA staff; (3) the subcontractor obtained special knowledge of SSA automatic data processing problems through the performance of two brief sole-source consulting contracts; (4) the subcontractor obtained information directly relating to the selection of a contractor; (5) the subcontractor's special status was known to the SSA officials participating in the selection process; and (6) several SSA officials accepted numerous restaurant meals from the subcontractor. GAO found that the subcontractor's presence at SSA initially was associated with the President's transition efforts at SSA; however, SSA officials could not explain why the subcontractor remained in their offices for 2 years. The subcontractor stated that it had been providing free services to SSA during that period. Finally, GAO found that the SE&I system has significant problems which result from the lack of an effective systems integration effort because SSA had diverted the contractors from integration activities to detailed software tasks, creating a significant potential for conflict of interest. GAO found that: (1) critical components of the modernization program are seriously behind schedule; (2) SSA has deviated from the plan's approaches in two of the major programs; and (3) SSA is pursuing a high-risk approach which could create another system crisis by the 1990's.