Statement of Valerie C. Melvin, Director, Information 

Management and Technology Resources Issues

Testimony 

Before the Subcommittee on Federal 

Workforce, U.S. Postal Service, and 

the Census, Committee on Oversight 

and Government Reform, House of 

Representatives

For Release on Delivery 

Expected at 1:30 p.m. ET

Wednesday, December 

10, 2014

GAO-15-277T

United States Government Accountability Office

FEDERAL RETIREMENT 

PROCESSING

Applying Information 

Technology Acquisition 

Best Practices Could Help 

OPM Overcome a Long 

History of Unsuccessful 

Modernization Efforts
United States Government Accountability Office

Highlights of GAO-15-277T, a testimony

before the Subcommittee on Federal 

Workforce, U.S. Postal Service, and the 

Census, Committee on Oversight and 

Government Reform, House of 

Representatives

December 10, 2014

FEDERAL RETIREMENT PROCESSING

Applying Information Technology Acquisition Best 

Practices Could Help OPM Overcome a Long History 

of Unsuccessful Modernization Efforts

Why GAO Did This Study

The use of IT is integral to OPM’s

ability to carry out its responsibilities in 

modernizing federal employee 

retirement claims processing. Since 

1987, the agency has undertaken a 

number of initiatives that were aimed at 

modernizing its paper-intensive 

processes and antiquated systems, but 

that were unsuccessful. 

GAO was asked to summarize findings 

from its previous reports on the 

challenges that OPM has faced in 

modernizing its retirement claims 

processing systems. The testimony 

also summarizes the agency’s current 

plans to acquire new technology to 

improve the retirement process and

key IT acquisition best practices that 

could serve as critical factors in the 

agency’s successful accomplishment 

of its latest modernization efforts.

The information in this testimony is

primarily based on GAO’s previous

work at OPM. GAO also reviewed the 

agency’s plans and related information 

discussing current efforts to improve 

retirement processing systems. 

Additionally, the testimony highlights 

findings from GAO’s previous report on 

critical success factors for major IT 

acquisitions. Work in support of this 

testimony was performed during 

November and December 2014.

What GAO Recommends

GAO is not making new 

recommendations at this time. GAO 

has previously made numerous 

recommendations to address IT 

management challenges that OPM has 

faced in carrying out its retirement 

modernization efforts. Fully addressing 

these challenges remains key to the 

success of OPM’s efforts.

What GAO Found

In a series of reviews, GAO found that the Office of Personnel Management’s 

(OPM) efforts over two decades to modernize its processing of federal employee

retirement applications were fraught with information technology (IT)

management weaknesses. Specifically, in 2005, GAO made recommendations to 

address weaknesses in project, risk, and organizational change management. In 

2008, as OPM was on the verge of deploying an automated retirement 

processing system, GAO reported deficiencies in, and made recommendations to 

address, additional weaknesses in system testing, cost estimating, and progress 

reporting. In 2009, GAO reported that OPM continued to have deficiencies in its 

cost estimating, progress reporting, and testing practices and made 

recommendations to address these and other weaknesses in the planning and 

oversight of the agency’s modernization effort. OPM began to address these 

recommendations; however, in February 2011, it terminated the modernization 

effort. 

OPM’s Strategic Plan for Fiscal Years 2014-2018 includes a goal to deliver 

retirement benefits to employees accurately, seamlessly, and on time. To 

achieve this goal, the agency has plans to acquire a new case management 

system and, ultimately, to transition to a paperless system that will authorize 

accurate retirement benefits on the day they are due. In addition, the agency 

plans other initiatives that are intended to incrementally improve retirement 

claims processing. 

GAO has previously reported that its experience at other agencies has 

demonstrated that successfully overcoming challenges, such as those that have 

plagued OPM’s past efforts, can best be achieved when critical success factors 

are applied. Nine common factors critical to the success of IT acquisitions are

• Active engagement of senior officials with stakeholders.

• Qualified and experienced program staff.

• Support of senior department and agency executives.

• Involvement of end users and stakeholders in the development of 

requirements.

• Participation of end users in testing system functionality prior to formal end 

user acceptance testing.

• Consistency and stability of government and contractor staff.

• Prioritization of requirements by program staff.

• Regular communication maintained between program officials and the prime 

contractor.

• Sufficient funding.

These critical success factors can serve as a model of best practices that OPM 

could apply to enhance the likelihood that the incremental IT investments the 

agency now plans, including the acquisition of a new case management system, 

will be successfully achieved. 

View GAO-15-277T. For more information, 

contact Valerie C. Melvin at (202) 512-6304 or 

melvinv@gao.gov.
Page 1 GAO-15-277T 

Chairman Farenthold, Ranking Member Lynch, and Members of the 

Subcommittee:

I am pleased to be here today to comment on the Office of Personnel 

Management’s (OPM) efforts toward modernizing federal employee 

retirement claims processing. The use of information technology (IT) is 

integral to carrying out this very important responsibility. However, OPM’s 

efforts over two decades to modernize the retirement process have been 

fraught with IT management challenges and have not achieved the 

desired capabilities.

The agency has reported an IT investment of approximately $96 million in 

fiscal year 2014 and has indicated its intent to further invest in capabilities 

to improve the retirement claims processing system. Effectively applying 

IT acquisition best practices can help agencies better ensure successful 

outcomes from their investment efforts.

As agreed with your staff, my testimony today summarizes findings from 

reports that we have previously issued on the challenges that OPM has 

faced in managing its retirement modernization efforts.1 It also speaks to 

the agency’s current plans to acquire new technology to improve the 

retirement process, as well as key IT acquisition best practices that could 

serve as critical factors in the agency’s successful accomplishment of its 

latest modernization projects.2

The information in my testimony is primarily based on our previous work 

at OPM. We also reviewed the agency’s plans and related information 

discussing its recent efforts to improve retirement processing services. In 

addition, we considered our prior report that discussed critical success 

 1

GAO, Office of Personnel Management: Retirement Modernization Planning and 

Management Shortcomings Need to Be Addressed, GAO-09-529 (Washington, D.C.: Apr. 

21, 2009); Office of Personnel Management: Improvements Needed to Ensure Successful 

Retirement Systems Modernization, GAO-08-345 (Washington, D.C.: Jan. 31, 2008); 

Comments on the Office of Personnel Management’s February 20, 2008 Report to 

Congress Regarding the Retirement Systems Modernization, GAO-08-576R (Washington, 

D.C.: Mar. 28, 2008); and Office of Personnel Management: Retirement Systems 

Modernization Program Faces Numerous Challenges, GAO-05-237 (Washington, D.C.: 

Feb. 28, 2005). 

2

GAO, Information Technology: Critical Factors Underlying Successful Major Acquisitions, 

GAO-12-7 (Washington, D.C.: Oct. 21, 2011).
Page 2 GAO-15-277T 

factors of major IT acquisitions.3 We performed our work in support of this 

testimony during November and December 2014. All work on which this 

testimony is based was conducted in accordance with generally accepted 

government auditing standards. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide 

a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objectives.

As the central human resources agency for the federal government, OPM 

is tasked with ensuring that the government has an effective civilian 

workforce. In carrying out its mission, the agency delivers human 

resources products and services, including policies and procedures for 

recruiting and hiring, provides health and training benefit programs; and 

administers the retirement program for federal employees. The agency 

reports that approximately 2.7 million active federal employees and nearly 

2.5 million retired federal employees rely on its services.4

According to OPM, the retirement program serves current and former 

federal employees by providing tools and options for retirement planning 

and retirement compensation. Two defined-benefit retirement plans that 

provide retirement, disability, and survivor benefits to federal employees 

are administered by the agency: (1) the Civil Service Retirement System 

(CSRS), which provides retirement benefits for most federal employees 

hired before 1984 and (2) the Federal Employees Retirement System 

(FERS), which covers most employees hired in or after 1984 and 

provides benefits that include Social Security and a defined contribution 

system.5

Retirement processing includes functions such as determining retirement 

eligibility, inputting data into benefit calculators, and providing customer 

 3

GAO-12-7.

4

OPM, Fiscal Year 2012 Annual Performance Report (February 2013).

5

The Social Security Administration is responsible for administering Social Security, and 

the Federal Retirement Thrift Investment Board administers the defined-contribution 

system known as the Thrift Savings Plan. Defined-benefit plans calculate benefit amounts 

in advance of retirement based on factors such as salary level and years of service, and 

defined-contribution plans calculate benefit amounts based on how the amount is invested 

by the employee and employer.

Background
Page 3 GAO-15-277T 

service. The agency uses over 500 different procedures, laws, and 

regulations, which are documented on the agency’s internal website, to 

process retirement applications. For example, the site contains 

memorandums that outline new procedures for handling special 

retirement applications, such as those for disability or court orders. 

Further, OPM’s retirement processing involves the use of over 80 

information systems that have approximately 400 interfaces with other 

internal and external systems.

Recognizing the need to improve the efficiency and effectiveness of its 

retirement claims processing, OPM has undertaken a number of 

initiatives since 1987 that were aimed at modernizing its paper-intensive 

processes and antiquated systems. Initial modernization visions called for 

developing an integrated system and automated processes to provide 

prompt and complete benefit payments. However, following attempts over 

more than two decades, the agency has not yet been successful in 

achieving the modernized retirement system that it envisioned.

In early 1987, OPM began a program called the FERS Automated 

Processing System. However, after 8 years of planning, the agency 

decided to reevaluate the program, and the Office of Management and 

Budget requested an independent review of the program, which identified 

various management weaknesses. The independent review suggested 

areas for improvement and recommended terminating the program if 

immediate action was not taken. In mid-1996, OPM terminated the 

program.

In 1997, OPM began planning a second modernization initiative, called 

the Retirement Systems Modernization (RSM) program. The agency 

originally intended to structure the program as an acquisition of 

commercially available hardware and software that would be modified inhouse to meet its needs. From 1997 to 2001, OPM developed plans and 

analyses and began developing business and security requirements for 

the program. However, in June 2001, it decided to change the direction of 

the retirement modernization initiative.

In late 2001, retaining the name RSM, the agency embarked upon its 

third initiative to modernize the retirement process and examined the 

possibility of privately sourced technologies and tools. Toward this end, 

the agency determined that contracting was a viable alternative and, in 

2006, awarded three contracts for the automation of retirement 

OPM Has a Long History 

of Unsuccessful Efforts to 

Modernize Retirement 

Processing
Page 4 GAO-15-277T 

processing, the conversion of paper records to electronic files, and 

consulting services to redesign its retirement operations.

In February 2008, OPM renamed the program RetireEZ and deployed an 

automated retirement processing system. However, by May 2008 the 

agency determined that the system was not working as expected and 

suspended system operation. In October 2008, after 5 months of 

attempting to address quality issues, the agency terminated the contract 

for the system. In November 2008, OPM began restructuring the program 

and reported that its efforts to modernize retirement processing would 

continue. However, after several years of trying to revitalize the program, 

the agency terminated the retirement system modernization in February 

2011.

In mid-January 2012, OPM released a plan to undertake targeted, 

incremental improvements to retirement processing rather than a largescale modernization, which described planned actions in four areas:

• hiring and training 56 new staff to adjudicate retirement claims and 20 

additional staff to support the claims process;

• establishing higher production standards and identifying potential 

retirement process improvements;

• working with other agencies to improve the accuracy and 

completeness of the data they provide to OPM for use in retirement 

processing; and

• improving the department’s IT by pursuing a long-term data flow 

strategy, exploring short-term strategies to leverage work performed 

by other agencies, and reviewing and upgrading systems used by 

retirement services.6

Through implementing these actions, OPM said that it aimed to eliminate 

the agency’s retirement processing backlog and accurately process 90 

percent of its cases within 60 days by July 31, 2013. While its Fiscal Year 

2013 Summary of Performance and Financial Information indicated that 

the agency was on track to eliminate the backlog, the agency nonetheless

 6

OPM, Strategic Plan for Retirement Services (Jan. 17, 2012).
Page 5 GAO-15-277T 

reported that two factors beyond its control prevented achieving the goal.7

In March 2014, OPM again articulated a retirement claims processing 

improvement goal as part of its Fiscal Year 2014-2015 Agency Priority 

Goals strategy. Specifically, the agency reiterated the goal to process 90 

percent of retirement cases within 60 days, but extended the date for 

doing so to July 2014. However, OPM did not achieve this goal, reporting 

that 77.9 percent of cases were processed within 60 days in July 2014. 

Further, in October 2014, the most recent month for which the agency 

has reported, 83.2 percent of cases were processed within 60 days.

First, Voluntary Early Retirement Authority and a Voluntary Separation 

Incentive Program offered by the U.S. Postal Service increased OPM’s 

retirement processing workload by over 20,000 cases. Second, funding 

reductions due to sequestration required the agency to curtail overtime 

work on retirement processing in April 2013.

Our prior reports noted that OPM’s efforts to modernize its retirement 

system were hindered by weaknesses in key IT management disciplines. 

For example, in reporting on RSM in February 2005, we noted 

weaknesses in project management, risk management, and 

organizational change management.8

• Project management is the process for planning and managing all 

project-related activities, including defining how project components 

are interrelated. Effective project management allows the 

performance, cost, and schedule of the overall project to be measured 

and controlled in comparison to planned objectives. Although OPM 

had defined major retirement modernization project components, it 

had not defined the dependencies among them. Specifically, by not 

identifying critical dependencies among project components, OPM 

increased the risk that unforeseen delays in one activity could hinder 

progress in other activities.

• Risk management entails identifying potential problems before they 

occur. Risks should be identified as early as possible, analyzed, 

mitigated, and tracked to closure. OPM officials acknowledged that 

 7

OPM, Summary of Performance and Financial Information: Fiscal Year 2013 (March 31, 

2014).

8

GAO-05-237. 

OPM’s Efforts to 

Modernize 

Retirement 

Processing Have 

Been Plagued by IT 

Management 

Weaknesses
Page 6 GAO-15-277T 

they did not have a process for identifying and tracking retirement 

modernization project risks and mitigation strategies on a regular 

basis but stated that the agency’s project management consultant 

would assist it in implementing a risk management process. Lacking 

such a process, OPM did not have a mechanism to address potential 

problems that could adversely impact the cost, schedule, and quality 

of the retirement modernization project.

• Organizational change management includes preparing users for the 

changes to how their work will be performed as a result of a new 

system implementation. Effective organizational change management 

includes plans to prepare users for impacts the new system might 

have on their roles and responsibilities, and a process to manage 

those changes. However, OPM officials had not developed a detailed 

plan to help users transition to different job responsibilities. Without 

having and implementing such a plan, effective implementation of new 

systems could be hindered by confusion about user roles and 

responsibilities.

We recommended that the Director of OPM ensure that the retirement 

modernization program office expeditiously establish processes for 

effective project management, risk management, and organizational 

change management. In response, the agency initiated steps toward 

establishing management processes for retirement modernization and 

demonstrated activities to address our recommendations.

We reported again on OPM’s retirement modernization in January 2008, 

as the agency was about to deploy a new automated retirement 

processing system.9

• Effective testing is an essential activity of any project that includes 

system development. At the time of our review, test results showed 

that the new system had not performed as intended. Although the 

agency planned to perform additional tests to verify that the system 

would work as intended, the schedule for conducting these tests 

became compressed, with several tests to be performed concurrently 

rather than sequentially. The agency stated that a lack of testing 

We noted weaknesses in additional key 

management capabilities, including system testing, cost estimating, and 

progress reporting.

 9

GAO-08-345.
Page 7 GAO-15-277T 

resources and the need for further system development, contributed 

to the delay of planned tests and the need for concurrent testing. The 

high degree of concurrent testing that OPM planned to meet its 

February 2008 deployment schedule increased the risk that the 

agency would not have the resources or time to verify that the 

planned system worked as expected.

• Cost estimating is the identification of individual project cost elements, 

using established methods and valid data to estimate future costs. 

Establishing a reliable cost estimate is important for developing a 

project budget and having a sound basis for measuring performance, 

including comparing the actual and planned costs of project activities. 

Although OPM developed a retirement modernization cost estimate, it 

was not supported by the documentation that is fundamental to a 

reliable cost estimate. Without a reliable cost estimate, OPM lacked a 

sound basis for formulating retirement modernization budgets or for 

developing the cost baseline that is necessary for measuring and 

predicting project performance.

• Earned value management (EVM) is a tool for measuring program 

progress by comparing the value of work accomplished with the 

amount of work expected to be accomplished. Fundamental to reliable 

EVM is the development of a baseline against which variances are 

calculated. OPM used EVM to measure and report monthly 

performance of the retirement modernization system. The reported 

results indicated that the project was progressing almost exactly as 

planned. However, this view of project performance was not reliable 

because the baseline on which it was based did not reflect the full 

scope of the project, had not been validated, and was unstable (i.e., 

subject to frequent changes). This EVM approach in effect ensured 

that material variances from planned performance would not be 

identified and that the state of the project would not be reliably 

reported.

We recommended that the Director of OPM conduct effective system 

tests prior to system deployment and improve program cost estimation 

and progress reporting. OPM stated that it concurred with our 

recommendations and would take steps to address the weakness we 

identified. Nevertheless, OPM deployed a limited initial version of the 

modernized retirement system in February 2008. After unsuccessful 

efforts to address system quality issues, the agency suspended system 

operation, terminated the system contract, and began restructuring the 

modernization effort.
Page 8 GAO-15-277T 

In April 2009, we again reported on OPM’s retirement modernization, 

noting that the agency still remained far from achieving the modernized 

retirement processing capabilities that it had planned.10

• Although it concurred with our January 2008 recommendation to 

develop a revised cost estimate for the retirement modernization 

effort, OPM had not completed initial steps for developing the new 

estimate by the time we issued our report in April 2009. We reported 

that the agency had not yet fully defined the estimate’s purpose, 

developed an estimating plan, or defined the project’s characteristics. 

By not completing these steps, OPM increased the risk that it would 

produce an unreliable estimate and not have a sound basis for 

measuring project performance and formulating retirement 

modernization budgets.

Specifically, we 

noted that significant weaknesses continued to exist in the areas of cost 

estimating, progress reporting, and testing, while also noting two 

additional weaknesses related to planning and oversight.

• OPM also concurred with our January 2008 recommendation to 

establish a basis for effective EVM but had not completed key steps 

as of the time of our report. Specifically, despite planning to use EVM 

to report the retirement modernization project’s progress, the agency 

had not developed a reliable cost estimate and a validated baseline. 

Engaging in EVM reporting without first taking these fundamental 

steps could have again rendered the agency’s assessments 

unreliable.

• As previously discussed, effective testing is an essential component 

of any project that includes developing systems. To be effectively 

managed, testing should be planned and conducted in a structured 

and disciplined fashion. Beginning the test planning process in the 

early stages of a project life cycle can reduce rework later. Early test 

planning in coordination with requirements development can provide 

major benefits. However, at the time of our April 2009 report, the 

agency had not begun to plan test activities in coordination with 

developing its requirements for the system it was planning at that 

time. Consequently, OPM increased the risk that it would again deploy 

a system that did not satisfy user expectations and meet 

requirements.

 10GAO-09-529.
Page 9 GAO-15-277T 

• Project management principles and effective practices emphasize the 

importance of having a plan that, among other things, incorporates all 

the critical areas of system development and is to be used as a 

means of determining what needs to be done, by whom, and when. 

Although OPM had developed a variety of informal documents and 

briefing slides that described retirement modernization activities, the 

agency did not have a complete plan that described how the program 

would proceed in the wake of its decision to terminate the system 

contract. As a result, we concluded that until the agency completed 

such a plan and used it to guide its efforts, it would not be properly 

positioned to proceed with its restructured retirement modernization 

initiative.

• Office of Management and Budget and GAO guidance11

 11GAO, Information Technology Investment Management: A Framework for Assessing 

and Improving Process Maturity, Version 1.1, 

call for 

agencies to ensure effective oversight of IT projects throughout all lifecycle phases. Critical to effective oversight are investment 

management boards made up of key executives who regularly track 

the progress of IT projects such as system acquisitions or 

modernizations. OPM’s Investment Review Board was established to 

ensure that major investments are on track by reviewing their 

progress and identifying appropriate actions when investments 

encounter challenges. Despite meeting regularly and receiving 

information that indicated problems with the retirement modernization, 

the board did not ensure that retirement modernization investments 

were on track, nor did it determine appropriate actions for course 

correction when needed. For example, from January 2007 to August 

2008, the board met and was presented with reports that described 

problems the program was facing, such as the lack of an integrated 

master schedule and earned value data that did not reflect the “reality 

or current status” of the program. However, meeting minutes indicated 

that no discussion or action was taken to address these problems. 

According to a member of the board, OPM had not established 

guidance regarding how the board was to communicate 

recommendations and needed corrective actions for investments it 

oversaw. Without a fully functioning oversight body, OPM lacked 

insight into the retirement modernization and the ability to make 

needed course corrections that effective boards are intended to 

provide.

GAO-04-394G (Washington, D.C.: March 

2004).
Page 10 GAO-15-277T 

Our April 2009 report made new recommendations calling for OPM to 

address the weaknesses in the retirement modernization project that we 

identified. Although the agency began taking steps to address them, the 

recommendations were overtaken by the agency’s decision in February 

2011 to terminate the retirement modernization project.

OPM’s Strategic Plan for Fiscal Years 2014-2018 includes a strategic 

goal to “Ensure that Federal retirees receive timely, appropriate, 

transparent, seamless, and accurate retirement benefits.” To achieve this 

goal, the agency has set forth a strategy to improve the retirement claims 

processing system by, among other things, investing in information 

technology solutions, such as the acquisition of a case management 

system. In addition, the agency’s February 2014 Strategic Information 

Technology Plan articulated OPM’s vision of “transitioning the retirement 

program to a paperless system that will truly honor a Federal employee’s 

service by authorizing accurate retirement benefits on the day they are 

due, answering customers’ questions in a timely manner, and promoting 

self-service account maintenance.” The plan also reiterated the agency’s 

intention to acquire a new case management system.

According to OPM’s chief information officer (CIO), as of late-November 

2014, the case management initiative is the agency’s primary focus. 

Toward this end, the strategic plan states that OPM intends to complete 

documentation of its needs, evaluate available commercial solutions 

against those needs, and create an acquisition plan for procuring licenses 

and services this month. The agency then intends to develop a plan to 

begin implementing the chosen solution in August 2015. OPM received a 

fiscal year 2014 appropriation of $2.6 million for the case management 

system and, according to an agency official, is expecting to receive 

additional funding for the system in fiscal year 2015.

Beyond acquisition of the case management system, the strategic IT plan 

also describes other initiatives that are intended to incrementally improve 

retirement claims processing. These initiatives include

• expanding and testing a retirement data repository to include data 

from agency human resources and payroll systems, data submitted 

via the online retirement application, and scanned documents;

• building a capability for the retirement calculator to pull data from the 

retirement data repository;

OPM Plans to Acquire 

New Technology to 

Improve Retirement 

Processing
Page 11 GAO-15-277T 

• identifying functional requirements for deployment of a web-based 

retirement data viewer to additional agencies; and

• developing requirements for a web-based electronic retirement 

application.

According to the plan, pursuit of these initiatives is dependent on OPM 

receiving additional funding.

While we have not conducted a detailed examination of OPM’s plans for 

acquiring new technology for retirement processing, it will be important for 

the agency to leverage all available opportunities to ensure that its 

investments are carried out in the most effective manner possible, and 

not repeat mistakes of the past. Our experience has shown that 

challenges, such as those that have plagued the agency’s past efforts, 

can successfully be overcome through using a more disciplined approach 

to IT acquisition management.

To help federal agencies, such as OPM, address the acquisition 

challenges that they face, in 2011, we reported on nine common factors 

critical to the success of IT acquisitions.12 Specifically, we reported that 

department officials from seven agencies had each identified a successful 

investment acquisition, in that they best achieved their respective cost, 

schedule, scope, and performance goals.13

Among these seven IT investments, the officials identified nine factors as 

critical to the success of three or more of the seven. The factors most 

commonly identified include active engagement of stakeholders, program 

staff with the necessary knowledge and skills, and senior department and 

agency executive support for the program. These nine critical success 

 12GAO-12-7.

13 The seven departments and associated successful IT investments are the Department 

of Commerce, Decennial Response Integration System; Department of Defense, Global 

Combat Support System-Joint Increment 7; Department of Energy, Manufacturing 

Operations Management Project; Department of Homeland Security, Western Hemisphere 

Travel Initiative; Department of Transportation, Integrated Terminal Weather System; 

Department of the Treasury, Customer Account Data Engine 2; and Department of 

Veterans Affairs, Occupational Health Record-keeping System.

Critical Factors 

Underlying 

Successful Major 

Acquisitions
Page 12 GAO-15-277T 

factors are consistent with leading industry practices for IT acquisitions. 

Table 1 shows how many of the investments reported the nine factors.14

Table 1: Number of Selected Investments Identifying Critical Success Factors 

Critical success factor

Number of 

investments 

reporting

Program officials were actively engaged with stakeholders 7

Program staff had the necessary knowledge and skills 6

Senior department and agency executives supported the programs 6

End users and stakeholders were involved in the development of 

requirements

5

End users participated in testing of system functionality prior to formal end 

user acceptance testing

5

Government and contractor staff were consistent and stable 4

Program staff prioritized requirements 4

Program officials maintained regular communication with the prime 

contractor

4

Programs received sufficient funding 3

Source: GAO analysis of agency data. | GAO-15-277T

Officials for all seven selected investments cited active engagement with 

program stakeholders—individuals or groups (including, in some cases, 

end users) with an interest in the success of the acquisition—as a critical 

factor to the success of those investments. Agency officials stated that 

stakeholders, among other things, reviewed contractor proposals during 

the procurement process, regularly attended program management office 

sponsored meetings, were working members of integrated project 

teams,15

 14A more detailed discussion of the investments’ identification of success factors can be 

found in 

and were notified of problems and concerns as soon as 

possible. In addition, officials from two investments noted that actively 

engaging with stakeholders created transparency and trust, and 

increased the support from the stakeholders.

GAO-12-7.

15OMB defines an integrated project team as a multi-disciplinary team led by a project 

manager responsible and accountable for planning, budgeting, procurement, and life-cycle 

management of the investment to achieve its cost, schedule, and performance goals. 

Team skills include budgetary, financial, capital planning, procurement, user, program, 

architecture, earned value management, security, and other staff as appropriate.
Page 13 GAO-15-277T 

Additionally, officials for six of the seven selected investments indicated 

that the knowledge and skills of the program staff were critical to the 

success of the program. This included knowledge of acquisitions and 

procurement processes, monitoring of contracts, large-scale 

organizational transformation, Agile software development concepts,16

Finally, officials for five of the seven selected investments identified 

having the end users test and validate the system components prior to 

formal end user acceptance testing for deployment as critical to the 

success of their program. Similar to this factor, leading guidance 

recommends testing selected products and product components 

throughout the program life cycle.

and areas of program management such as earned value management 

and technical monitoring.

17

Use of the critical success factors described above can serve as a model 

of best practices for all agencies as they plan and conduct their own IT 

acquisitions. With specific regard to OPM, application of these acquisition 

best practices presents opportunities for the agency to undertake a more 

disciplined and, thus effective, management approach, as well as 

increase the likelihood that its planned IT investments to improve 

retirement processing will meet their cost, schedule, scope, and 

performance goals.

Testing of functionality by end users 

prior to acceptance demonstrates, earlier rather than later in the program 

life cycle, that the functionality will fulfill its intended use. If problems are 

found during this testing, programs are typically positioned to make 

changes that are less costly and disruptive than ones made later in the 

life cycle would be.

In summary, despite OPM’s longstanding recognition of the need to 

improve the timeliness and accuracy of retirement processing, the agency 

has thus far been unsuccessful in several attempts to develop the 

 16Agile software development is not a set of tools or a single methodology, but a 

philosophy based on selected values, such as prioritizing customer satisfaction through 

early and continuous delivery of valuable software; delivering working software frequently, 

from every couple of weeks to every couple of months; and making working software the 

primary measure of progress. For more information on Agile software development, see 

http://www.agilealliance.org.

17See, for example, Carnegie Mellon Software Engineering Institute, Capability Maturity 

Model® Integration for Acquisition (CMMI-ACQ), Version 1.3 (November 2010).
Page 14 GAO-15-277T 

capabilities it has long sought. For over two decades, the agency’s 

retirement modernization efforts were plagued by weaknesses in 

management capabilities that are critical to the success of such 

endeavors. Applying the information technology best practices we have 

identified to OPM’s acquisition of a new case management system could 

help the agency overcome its long history of unsuccessful retirement 

modernization efforts.

Chairman Farenthold, Ranking Member Lynch, and Members of the 

Subcommittee, this concludes my prepared statement. I would be 

pleased to respond to any questions that you or other members of the 

Subcommittee may have.
Appendix I: Contact and Acknowledgments

Page 1 GAO-15-277T 

If you have any questions concerning this statement, please contact 

Valerie C. Melvin, Director, Information Management and Technology 

Resources Issues, at (202) 512-6304 or melvinv@gao.gov.

Other individuals who made key contributions include Mark T. Bird, 

Assistant Director; Glenn Spiegel; Pavitri K. Daitnarayan; and Nancy E. 

Glover.

Appendix I: Contact and Acknowledgments

Contacts

Staff 

Acknowledgments

(311520) Page 15 GAO-15-277 
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