The Social Security Administration and

Information Technology

October 1986

NTIS order #PB87-136834
Recommended Citation:

U.S. Congress, Office of Technology Assessment, The Social Security Administration and Information Technology-Special Report, OTA-CIT-311 (Washington, DC:

U.S. Government Printing Office, October 1986).

Library of Congress Catalog Card Number 86-600567

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402
— —

Foreword

The Social Security Administration in 1982 announced its Systems Modernization Plan (SMP), designed to restructure and extensively upgrade its datahandling systems. The agency told Congress that, without this major upgrading,

there might be serious disruption of its services, which are essential to the welfare of millions of Americans. The SMP was one of the most expensive civilian

information projects ever undertaken; it has since become a ‘‘rolling’ 5-year plan

with projected costs currently estimated at nearly $1 billion.

The disruption of services that the Social Security Administration feared in

1982 has been averted, but the SMP and its implementation have been the subject of continuing controversy and criticism within the Administration and in congressional oversight committees. The Social Security Administration has scheduled

major procurements in fiscal year 1987 that are central to implementation of SMP.

In this special report, OTA examines the objectives and technical strategies

embodied in the SMP and the progress that the Social Security Administration

has made toward its implementation. The report calls attention to some general

problems faced by both SSA and other Federal agencies that are increasingly dependent on communications and information technology in carrying out their

missions.

OTA appreciates the participation of the advisory panelists, workshop participants, Federal agency officials, and interested citizens, without whose help

this report would not have been possible. The report itself, however, is the sole

responsibility of OTA, not of those who advised and assisted us in its preparation.

- JOHN H. GIBBONS

Director

//’/
Social Security Workshop: March 5, 1986

Hale Champion, Chairman

Executive Dean, John F. Kennedy School of Government, Harvard University

Eileen Appelbaum

Professor of Economics

Temple University

Frank DeGeorge

Deputy Inspector General

Department of Commerce

Renny DiPentima

Deputy Associate Commissioner

Office of Systems Integration

Social Security Administration

Professor John Gessford

Information Sciences

Claremont Graduate School

Mark Hardy

Booz-Allen & Hamilton, Inc.

John D. Harris

Special Assistant to the President

American Federation of Government

Employees

Ed Howard

Villers Foundation

Jed Kee

Professor of Public Administration

The George Washington University

Ken Laudon

Educational Fund for Individual Rights

Paul Light

Director of Studies

National Academy of Public Administration

Raymond N. Palombo

Director, Human Resources Planning

J.C. Penney, Inc.

Nancy Shor

National Organization of Social Security

Claimants’ Representatives

Arthur Simermeyer

Acting Deputy Commissioner for Systems

Social Security Administration

James Strassberger

Steward, Local 1923

American Federation of Government

Employees

Eileen Sweeney

National Senior Citizens Law Center

Alan Westin

President

Educational Fund for Individual Rights

Renny DiPentima

Deputy Associate Commissioner

Office of Systems Integration

Social Security Administration

February 12, 1986 Meeting

Richard W. Eckert

Director, Division of Data Administration

Social Security Administration

Ken Laudon

Educational Fund for Individual Rights

Roger McDonnell

Assistant to the Commissioner for Systems

Social Security Administration

Peter Poetker

Program Manager, Software Engineering

Social Security Administration

David Schwartz

Social Security Administration

Arthur Simermeyer

Acting Deputy Commissioner for Systems

Social Security Administration

Alan Westin

President

Educational Fund for Individual Rights
OTA Project Staff: The Social Security Administration

and ‘Information Technology—Special Report

John Andelin,

Science, Information,

Assistant Director, OTA

and Natural Resources Division

Fred W. Weingarten, Program Manager

Communication and Information Technologies Program

Vary T. Coates, Project Director

Ben Amick, Analyst

Administrative Staff

Liz Emanuel Sandra Serbinoff Audrey Newman

Contractors

Ken Laudon

Educational Fund for Individual Rights

Alan Westin

President, Educational Fund for Individual Rights
Reviewers

Arthur G. Anderson

IBM Corp. (retired)

Eileen Appelbaum

Professor of Economics

Temple University

Christie Bentzen

General Accounting Office

Jerry J. Berman, Esq.

Legislative Counsel

American Civil Liberties Union

R. J. Bogumil

Society on Social Implications of Technology

Institute of Electrical and Electronics

Engineers

James W. Carey

Dean, College of Communications

University of Illinois

Hale Champion

Executive Dean

John F. Kennedy School of Government

Harvard University

Robert L. Chartrand

Senior Specialist

Congressional Research Service

Tony Cicco

Group Director

IMTEC D, General Accounting Office

Melvin Day

Vice President

Research Publications

Frank DeGeorge

Deputy Inspector General

Department of Commerce

Joseph Duncan

Corporate Economist

The Dunn & Bradstreet Corp.

William Dutton

Professor, Annenberg School of

Communications

University of Southern California

David H. Flaherty

Professor of History and Law

University of Western Ontario

J. William Gadsby

Associate Director, Human Resources Division

General Accounting Office

John Gessford

Professor of Information Sciences

Claremont Graduate School

Carl Hammer

Consultant

Mark Hardy

Booz-Allen & Hamilton, Inc.

John D. Harris

Special Assistant to the President

American Federation of Government

Employees

Robert D. Harris

Deputy Assistant Director for Budget Analysis

Congressional Budget Office

Starr Roxanne Hiltz

Professor of Sociology

Upsala College

Ed Howard

Villers Foundation

Kenneth W. Hunter

Senior Associate Director for Program

Information

General Accounting Office

Jed Kee

Professor of Public Administration

The George Washington University

Richard P. Kusserow

Inspector General

Department of Health and Human Services

John C. Lautsch

Chairman, Computer Law Division

American Bar Association

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the reviewers. The reviewers

do not, however, necessarily approve, disapprove, or endorse this report, OTA assumes full responsibility for the report

and the accuracy of its contents.

vi
Theodore J. Lowi

John I.. Senior Professor of American

Institutions

Cornell University

Edward F. Madigan

Office of State Finance

State of Oklahoma

Felix J. Majka

Assistant Inspector General for Audit

Department of Health and Human Services

Marilyn Gel] Mason

Director

Atlanta Public Library

S. Anthony McCann

Assistant Secretary for Management and

Budget

Department of Health and Human Services

John McNicholas

Chief, Information Policy Branch

Office of Management and Budget

Vince Muzzuca

Director, EDP Audit Division

Office of the Inspector General

Department of Health and Human Services

Joe Quasney

Associate Director

IMTEC D, General Accounting Office

Jim Rife

Committee on Government Operations

U.S. House of Representatives

Roger Sperry

Governmental Affairs Committee

U. S. Senate

Terril J. Steichen

President

New Perspectives Group, Ltd.

Paul Steitz

Committee on Ways and Means

Subcommittee on Social Security

U.S. House of Representatives

George Trubow

Director

Center for Information Technology and

Privacy Law

The John Marshall School

Bernie Unger

Group Leader, Human Resources Division

General Accounting Office

Susan Welch

Professor and Chairperson of Political Science

Department

University of Nebraska

Langdon Winner

Associate Professor of Political Science

Department of Science and Technology Studies

Rensselaer Polytechnic Institute

OTA Reviewers

Earl Dowdy

Fred Wood

vii
Contents

Page

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Part I: An Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Chapter l: SSA and Information Technology:

Conclusions, Issues, and Options . . . . . . . . . . . . . . . . . . . . . . . . 7

Part II: The Systems Modernization Plan and Its Potential Effects . . . . . 29

Chapter 2: The Status of Systems Modernization at SSA, 1986 . . . . . . . . 33

Chapter 3: Systems Modernization and Related Issues, 1986-90 . . . . . . . . 57

Chapter 4: The Future: The Necessity of Long-Range

Technology Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Part III: The Case History of Information Technology Management

at the Social Security Administration . . . . . . . . . . . . . . . . . . . . . . . . 89

Chapter 5: Years of Service and Satisfaction, 1935-71 . . . . . . . . . . . . . . . . . 93

Chapter 6: Deepening Problems, 1972-81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Chapter 7: The Beginning of the Systems Modernization Plan, 1982 . . . . 119

Chapter 8: The Oversight of SMP, 1982-86 . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Glossary of Technical, Institutional, and Legislative Terms

Used in This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

. . Vlll
Summary

In 1982, the Social Security Administration (SSA) announced a 5-year plan to modernize its information

systems. The Systems Modernization Plan (SMP) was a multimillion dollar response to serious problems

that had developed during the 1970s, and that repeatedly threatened to disrupt SSA’s services delivery

operations. Congressional oversight had identified many of these problems, but had not fully revealed

their persistent, deep-seated, and cumulative effect on the agency’s ability to respond efficiently to congressional mandates and priorities.

This special report explores the factors that led to SSA’s information systems problems. It concludes that

other Federal agencies are vulnerable to similar problems as they automate and modernize data-handling

operations. It also concludes that effective oversight and monitoring of agencies dependent on advanced

information systems is becoming more difficult, as technological decisionmaking and management increasingly requires specialized knowledge.

Issues for Congress

The basic strategy of SSA’s SMP as set out in 1982 is reasonable and defendable in the sense that

it is consistent with accepted systems engineering practices. Some experts argue that alternative strategies

should have been adopted, such as regional decentralization of data processing. However, whether or not

the original decisions were the best ones, the alternative strategies also have disadvantages and risks;

they cannot be shown to offer stronger guarantees of success than does SMP. Achieving SMP’s objectives

now depends on SSA's technical competence, on the quality of its management as it implements the

SMP, and on certain factors outside of the agency’s control, including Administration policy and directives.

SSA has made significant progress toward achieving the goals of the plan in many areas, especially hardware acquisition. In other areas, SSA has fallen behind. The report identifies a series of serious unresolved

problems in software engineering, database architecture, and database integration. Even though the strategy is sound, these problems cast doubt on SSA’s understanding of the nature of some technical questions,

and its commitment to the quality of management that is essential to success of SMP.

This report also raises strong questions about the reliability and completeness of the information that

SSA has provided to Congress and to the public about its progress in SMP implementation. Congress

may therefore want to intensify its monitoring and oversight of all aspects of implementation, to make

sure that the goals of systems modernization, efficient management, and improved services delivery that

Congress accepted in funding the SMP, are achieved. Alternatively, Congress may want to accept the judgment of SSA and its executive branch monitoring agencies as to whether current progress toward solving

major implementation problems is acceptable, and implementation should proceed through the planned

steps and scheduled milestones. This choice has a bearing on two immediate issues: a large SMP procurement in fiscal year 1987, and the proposal to make SSA an independent agency.

The SMP schedule calls for procurements to automate claims filing in field offices in early 1987. If

implementation of SMP were proceeding satisfactorily, the timing of these acquisitions probably would

not be controversial. The benefits of a modernized claims process, with improved service for the growing

population of beneficiaries and greater productivity for SSA, would outweigh the cost of temporarily

underused computer capacity while other procedures are automated. Unfortunately, there is conflicting

evidence about the reality and pace of this progress, and whether SSA fully understands the nature of

the technical hurdles that must still be surmounted. SSA has not convincingly demonstrated that it

is on the way to solving its software and database problems, and some experts have questioned the advisability of proceeding with this or other procurements until such demonstration is made.

The decision about the procurement should be made in the overall context of the SMP and the desirable

long-term goal, adopted in 1982, to modernize the SSA system. Analysis of costs and benefits of any

procurement should include the effects of its timing on all aspects of SMP implementation. Proceeding

with the procurement risks incurring the costs of unused communication and computer capacity while software is developed for automating additional field office services. On the other hand, procurement delay

risks losing possible productivity gains in claims processing, as well as possible degradation in service,

should staff reductions take place. It appears that the claims process could be automated, with considerable

benefit to clients and the agency, while the software work continues. The database problems must be solved,

regardless of the procurement decision. The immediate procurement issue should not deflect attention

from, nor should it determine the course of actions related to the larger systems management problems in SSA.

1
Congress may wish to consider giving SSA a cautious “go-ahead” in conjunction with increased monitoring and close oversight, and insisting that broad corrective actions be taken over the next year to

strengthen SSA's management control and its systems development capability. A second option is to

stop SMP procurement and contracting, and to take advantage of this interval for congressional reevaluation of the goal of providing SSA with state-of-the-art technological systems, and its feasibility,

in the light of current priorities.1 In this situation, however, some potential productivity gains may be

foreclosed for the near future, and the commitment to and impetus of systems modernization may fall

into disarray, and be difficult to recapture. A third option is to require each step in implementation to

be justified in isolation; however, this involves Congress in a difficult process of micromanagement that

may lose sight of the overall objectives of the SMP effort.

Some potential risks to the timely success of systems modernization are outside of SSA’s control. The

current pressure to realize productivity benefits by severe work force reductions before the modernized

systems are ready, could lead to a return of the problems of 1978 to 1982, and thus discredit SMP and

whatever progress has been made. Renewed instability of leadership and organizational restructuring

could also delay progress and disrupt SSA’s still fragile attempts to institutionalize advanced planning

and to improve labor-management relations, both of which are essential to the success of systems modernization. These factors are as important to SMP success as is the immediate procurement issue.

The House of Representatives has voted for independent status for SSA; in part to reduce some of these

risks. While this might buffer the systems modernization effort against some external pressures, it would

not necessarily resolve the difficult questions about the most effective modes of congressional oversight

and monitoring.

The Long-Range Implications of SSA Systems Modernization

SSA’s ability to respond to congressionally mandated changes in benefits programs has already been

improved, and will be strengthened further when it succeeds with software development and improvement.

However, continuing automation of both operations and management functions-both in SSA and other

Federal agencies-is likely to make effective congressional oversight more demanding and difficult. Information technologies can make it easier to select, manipulate, or obscure critical performance data, and

the costs of failures in implementing and managing advanced systems may make it more tempting to

do so. Evaluating management decisions and performance related to advanced technological systems

increasingly requires specialized knowledge.

As the automation of SSA’s operations proceeds, labor-management relations will inevitably be stressed.

Displacement of some workers will occur, and there will be increasing need for retraining and relocation

of other workers, and for reconsideration of personnel recruitment, retention, advancement, and compensation policies.

State-of-the-art information technology, by facilitating increased use of computer-matching techniques

and the sharing of data about individuals with other organizations, and broadening access to data, will

exacerbate present concerns about the privacy and security of social security information.

The findings of the report about the source of SSA’s problems, why they were not resolved, and why

their seriousness was not fully revealed by oversight and monitoring mechanisms before they became

critical, have significant implications for other Federal agencies and for Congress. Many of the problems

were found to stem from factors and forces that may affect all Federal agencies that become dependent

on advanced information systems.

The report describes some mechanisms or actions that have been suggested for facilitating congressional oversight of SSA’s systems modernization. They include independent agency status, broader and

more frequent studies by congressional support organizations, integration of SSA oversight in one committee of each House, a stronger mandate for subcommittees overseeing government information technology decisions, and an external blue-ribbon advisory panel on government information technology decisions. The most promising of these options are those that could be generalized to apply to other Federal

agencies with similar problems now or in the future.

*This option was recommended by the General Accounting Office in its recent report on SSA automated data processing acquisitions dated August 1986.

2
Part I

An Overview

Chapter 1 summarizes the report of information technology management in

the Social Security Administration (SSA), highlighting the conclusions of the study,

and the issues related to SSA’S Systems Modernization Plan and its implementation from 1982 through 1986 and beyond.
Chapter 1

SSA and Information Technology:

Conclusions, Issues, and Options
Contents

Page

Summary of Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Why SSA Faced Potential Disruption of Service in 1982 . . . . . . . . . . . . . . 11

Brief History of SSA and Information Technology . . . . . . . . . . . . . . . . . 11

Underlying Factors in SSA’s Critical Systems Deficiency . . . . . . . . . . . . 13

Why Monitoring and Oversight Failed To Correct SSA’s Problems . . . . . 17

The Basic Strategy of SSA's Systems Modernization Plan Is Sound . . . . 19

Conflicting Evidence on Progress in Systems Modernization . . . . . . . . . . . 20

The Effects of Systems Modernization: Closely Related Issues . . . . . . . . . 24

SSA Responsiveness to Congressional Mandates . . . . . . . . . . . . . . . . . . . 25

Independent Status for SSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Privatization of or Contracting out Government Operations . . . . . . . . . 25

The Work Force and Labor-Management Relations . . . . . . . . . . . . . . . . . 26

Privacy and Security Concerns . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . 26

Options for Facilitating Congressional Oversight of Systems

Modernization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... , . . . . 27

Table

Table No. Page

1. Major Reported Accomplishments of the SSA’s

Systems Modernization Plan in Its First 4 Years and

Future Milestones by Specific Program Areas . . . . . . . . . . . . . . . . . . . . . . 22

Figure

Figure No. Page

1. Cumulative Projected Total Costs for the Systems Modernization Plan

for 1982, 1985, and 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Chapter 1

SSA and Information Technology:

Conclusions, Issues, and Options

In 1982, the Social Security Administration

(SSA) began an effort to thoroughly modernize its data-handling systems, in order to “. . .

avoid potential disruption of service through

immediate improvement of critical system deficiencies, to restore integrity and public confidence, to improve productivity, and to close

the technology gap”l that had developed

over the last decade.

Projected to cost $500 million and take 5

years to carry SSA “from survival to state of

the art, the SSA Systems Modernization Plan

(SMP) was one of the most expensive civilian

information projects ever undertaken. It has

since become a ‘‘rolling’ 5-year plan with projected costs currently estimated at nearly $1

billion. See figure 1.

This report of SSA and its SMP addresses

the following questions:

● Why did SSA face ‘‘potential disruption

of service’ through ‘‘critical system deficiencies” in 1982?

● Why did continual congressional oversight and executive branch monitoring fail

‘ This is an abbreviated quote from SS/4 .S~.ster12s ,JZocfernization I)lan: From .5’ur~’i~’al to State of the .~lrt, ch. 1, Februar~r

1982, pp. 1 W 19. Material in this chapter describing the Sjstems Modernization Plan and not otherwise attributed is drawn

from SSA documents and discussions with SSA officials.

to prevent emerging problems from becoming critical?

How sound are the basic strategies of

SSA’s Systems h’modernization Plan?

Is there evidence that the progress on

SMP to date is reasonable}’ satisfactory,

and that it will achieve its objectives?

How will SSA’s systems modernization

affect, or be affected by, several issues now

before Congress such as the movement to

give SSA independent agency status, the

effort to reduce SSA budget and the size

of its work force, or the possibility}’ of

changes in social security programs, benefits, or eligibility determinations’?

In addition, the report seeks to explore several broader questions that are addressed

throughout the report:

●

●

●

●

Are the problems that SSA had, and is

having, generic problems that other Federal agencies are likely to face in managing information technology’?

What can be learned from SSA experience that can be helpful in future adoption, use, and management of advanced

systems for government operations?

Will advanced information systems facilitate, or make more difficult, congressional

oversight of executive agencies?

Are there feasible strategies for making

oversight more effective?

SUMMARY OF CONCLUSIONS

The necessity of modernizing SSA’s infor- of certain critical choices that SSA made. There

mation technology systems was beyond dis- is serious doubt about how much progress has

pute, yet in the 4 years that SMP has been been made in systems modernization; and

underway, it has never been free of criticism about whether SSA fully understands and is

and controversy. There has been widespread prepared to cope with some persistent probquestioning of the basic strategy of SMP and lems, or has dealt, in an open and frank way,

7
8

Figure 1.— Cumulative Projected Total Costs for the Systems Modernization Plan (SMP) for 1982,1985, and 1986

1,000 f

950

900

850

800

200

150

100

50

-

0 L

0--- -

● — C

81 82 83 84 85 86 87 88 89 90 91

Year of SMP

SOURCES. U S Department of Health and Human Services Soc(al Secur(t y Adrm mstrdtlor] S} stems r$fcidero~:a(~o,? Plan from Surv/ka/ tL] Stare (of (he A rf Fehruary

1982, U S Department of Health and Human Serwces Soc(al Securlfy Adrnl m strat Ion Systems ?vfode,nl:~ffor~ f’/dn f98.5 Upd~fe PutIl I( at Ion No 40004

January 1985, U S Department of Health and Human Services Soc Ial Securtv Admlnlst~dtlon SSA S\ stem Modernl.7dt/orl P/d’ 1:786 Lo,Iq Raoqe SI,a/eqILP/afl, Publlcatlon No 40-004, October 1985

with its oversight organizations in terms of

these problems and SSA’s plans to cope with

them.

Some of the doubts about and criticisms of

SSA’s systems modernization plan can probably not be answered definitively. Both in the

public sector and in the private sector, large

organizations with complex data operations

are still struggling to find the best ways to use

advanced technology to maximum advantage.

While many lessons have been learned from

experience, experts can be found to attack or

defend any strategy with plausible reasoning

and with equal vehemence. There is no clear

and indisputable ‘right or ‘best way to automate the operations of a large data-handling

operation; there are several alternative approaches, each of which has some advantages

and disadvantages. SSA's plan must be evaluated in that context.

The basic strategy of SSA Systems Modernization Plan is in accord with accepted engineering practice; it is reasonable and defendble. To reverse this strategy four years into

the effort probably would be wasteful of investments already made, and alternative broad

strategies suggested by critics would not necessarily provide any stronger guarantee of

success. This conclusion does not however necessarily imply that SSA performance in im-
9

plementing the plan is satisfactory or that the

objectives of the plan will be achieved. At a

minimum, increased monitoring and close oversight are necessary if SSA is allowed to proceed according to its current schedule; but it

is essential that decisions about specific SMP

procurements be made in the context of the

broad plan.

The success of SMP in meeting its reasonable objectives will depend not only on the

basic soundness of the plan, but also on:

1. whether SSA has the technical competence to implement the plan,

2. whether SSA exercises good management

in carrying out the plan, and

3. whether certain conditions are obtained

at SSA at this critical stage in its implementation.

There are some serious questions about

whether the progress toward implementation

of the plan can be considered satisfactory. In

some areas, the implementation of SMP is far

behind schedule, and although SSA makes

strong claims to have solved, or to be well on

the way to solving, serious technical problems

in achieving its goals, it has not been able to

demonstrate to independent experts that this

is the case. There are disturbing signals that

SSA either may not understand the seriousness of these problems, is relying on "solutions” that are likely not to work, or is covering up the seriousness and persistence of the

problems.

SSA appears to have just begun to develop

some management procedures and mechanisms to improve its capability at advanced

systems development, for example, to remove

long-standing friction between the systems development and operations components of the

organization, to improve the recruitment and

training of systems personnel, and to use an

innovative and constructive approach to labormanagement relations. These management improvements, if they are developing as SSA officials describe, are still highly fragile. As this

report is being completed, there has just been

a change in SSA top leadership. Whether this

will strengthen or disrupt these promising developments, remains to be seen. A thorough

reorganization of the agency could, for example, interrupt or destroy these still tenuous

management improvements.

Other impending events that will affect the

likelihood of success in systems modernization

are largely out of SSA’s control. For example,

the attempt to reap the anticipated benefits

of increased productivity, in the form of severe

work force reductions, before the systems are

in place to provide these benefits could pose

significant risks to continued progress. The

Administration is insisting on immediate reduction of SSA’s work force. If SMP’s promised increases in productivity are not yet in

place to support such reductions (as they probably are not), any subsequent temporary expansion of the volume of work (e.g., implementing a legislatively mandated change in benefits

or coverage) could again lead to huge backlogs,

which could discredit SMP before it is completed, and would almost surely result in a

breakdown of a promising but still embryonic

joint agreement designed to reduce crippling

labor-management tensions.

SSA’s problems in data-handling built up

slowly, but became evident when the agency

was several times able to respond to congressional mandates only with extraordinary efforts and with long-lasting, deleterious aftereffects, For at least a decade, SSA's frequently

changing leadership was unable to solve

chronic organizational problems, and the

agency failid to communicate effectively these

problems to Congress throughout several Administrations.

Many of the problems that in the decade before 1982 drove SSA to the brink of crisis were

common to many large organizations with similarly complex operations and rapidly growing

workloads. In the case of SSA, however, they

persisted and were exacerbated almost beyond

the point of solution by, on the one hand, certain characteristics of the organization and
10

failures of its management, and on the other

hand, by external constraints and pressures,

such as frequent changes in organization and

in its top leadership.

Government agencies are properly and necessarily subject to constraints, accountability

requirements, and oversight that do not affect

private sector organizations. These greatly

complicate agencies’ decisions about technology and forbid some routes to modernization

that private sector organizations have found

productive. In addition, governmental agencies are insulated against suffering the immediate marketplace penalties for bad decisions;

this allows them at times to persevere in faulty

management practices and to ignore or conceal emerging problems until they become intractable. The report indicates that in some

aspects of systems modernization, SSA did

this persistently in the 1970s and may well be

doing it today.

The problems that SSA has demonstrated

will be likely to afflict other government agencies as they adopt, and struggle to use, advanced information technologies.

A number of Federal agencies are like SSA

in that they handle huge volumes of highly

standardized data, deal with individuals

directly, and are now absolutely dependent on

information technology systems to perform

their missions: the Internal Revenue Service,

the Bureau of the Census, and the U.S. Treasury are obvious examples. They are vulnerable

to the same pressures that caused SSA to fall

behind technologically, and those that the

agency encountered in modernizing and managing systems, to the extent that these are

structural or generic problems.

Congressional oversight procedures did not

detect or understand emerging problems in

SSA —for reasons that involved the priorities

of SSA, the Administration, and congressional

committees themselves. Similar problems in

making congressional oversight effective are

almost certain to occur in the future, and to

become progressively more troublesome. A

defensiveness on the part of SSA career officials, described in other chapters of this report,

appears to have contributed to this situation

and still complicates attempts to understand

SSA’s problems. This defensiveness was extreme but is not unique to SSA. The highly

technical decisions that must be made with regard to advanced computer systems pose special difficulties for most congressional oversight committees. Special mechanisms may be

needed to facilitate oversight of major technological decisions by Federal agencies.

The issue of restoring SSA to the status of

an independent agency is now before Congress;

the House of Representatives has already

passed a bill (H. R. 5050) to this effect. One of

the reasons that has been put forward in advocating this action is to improve SSA’s responsiveness to congressional policies related

to systems modernization. Whether or not this

action is advisable on other grounds, independent status is unlikely to solve either SSA systems development problems or problems with

congressional oversight of that process.

For long-term success in achieving systems

modernization and allowing SSA to use information technology efficiently and effectively

in carrying out its mission, a strong systems

planning capability is crucial. SSA’s effective

planning horizon is limited to 5 years forward,

and is focused on achieving the state of the

art of today technology, not on being at the

leading edge of information-handling technology as it continues to develop rapidly. SSA

officials have said that they do not want to

be on the leading edge but rather in a position

of average industry performance. This means,

however, that in 20 years it may again be a

decade behind current practice, unless it continually forecasts and monitors emerging technological capabilities with a view toward their

future utilization.

There are several other areas in which Congress may wish to clarify its policies or priorities with regard to SSA practices; among these

are safeguards for the privacy and integrity

of client information. This report of the SSA

systems modernization efforts is intended to

help in foreseeing and understanding those

problems.
—

WHY SSA FACED POTENTIAL DISRUPTION

OF SERVICE IN 1982

The first question addressed in the report

is, ‘‘why did SSA face potential disruption of

services . . . through critical system deficiencies’ as it stated when announcing its Systems

Modernization Plan in 1982. The reasons for

these deficiencies bear on the extent to which

such problems are unique to SSA or may be

of more general governmental concern. The

steps through which SSA moved toward service disruption will be briefly summarized below. (Part II of this report is a more detailed

case history. )

Brief History of SSA and

Information Technology

Three Decades of Healthy Progress

In its first few years, 1935 to 1939, SSA began to establish a reputation as a highly efficient and well-managed agency. It was able to

recruit a well-qualified staff, set high standards for data security and privacy and for

responsiveness to client needs, and maintain

low administrative costs. SSA then enjoyed

a high degree of autonomy. Its needs for datahandling equipment stretched or exceeded the

limits of then available technology, but the

agency was able to work closely with manufacturers to push the state of the art. Commissioners were experienced managers and maintained a good balance between attention to

daily operations and insistence on long-range

planning for technological development.

From 1940 to 1970 there was steady growth

in SSA operations. Congressional support for

social security programs had become broadly

bipartisan. Programs were expanded and new

programs were added; but as the volume of

work expanded the work force grew proportionately, at least in the first two decades. SSA

employment tended to be a lifetime career, and

workers and managers had a strong shared

commitment to the social programs for which

the agency was responsible.

In 1946, SSA was placed within the Federal

Security Administration; thereafter, it was

headed by a single commissioner rather than

a three-person board. A few years later, it became a component in the new and massive Department of Health, Education, and Welfare.

In the late 1950s and 1960s, as information

technology steadily improved, SSA developed

a special relationship with IBM, and worked

closely with that company to adopt and adapt

systems to fit its needs. This was in no way

unusual, since IBM was then the clear leader

in the field, and computer systems in most Federal agencies were predominantly IBM. SSA

was a leader in use of information technology

through much of this period, although as late

as 1971, SSA operations, like those of other

data-handling organizations, were still heavily paper-based.

Early Signals of Emerging Problems

After Public Law 89-306 (’‘the Brooks Act’

was passed in 1965, it was clear that SSA

relationships with computer vendors and its

methods of procurement would have to change.

But by this time IBM had able competitors.

Competitive procurement should not have

caused major troubles. By the end of the 1960s,

however, there were emerging but not fully recognized problems at SSA. By virtue of having been one of the first users of large computers, SSA also had the oldest system; it was

no longer at the leading edge and would fall

steadily farther behind. If new systems were

not necessarily to be IBM equipment, there

would be problems of compatibility. Software

conversion and updating would be a growing

necessity. Documentation of changes in the

software would become more essential; but the

importance of this had not been fully realized

earlier, and as the software had been adapted

to accommodate changes in benefits or eligibility determination procedures, these modifications had not been well documented.
12

Because SSA had been at the forefront of

computer use, its system designers, managers,

programmers, and analysts had to learn their

craft on the job. People at SSA tended to stay

there, and some allowed their skills to become

obsolete. Because promotions were based on

seniority, and because SSA no longer had stateof-the-art technology, it became difficult to

make room for, or to attract, highly trained

newcomers.

In the late 1960s and early 1970s, these and

other emerging problems were not highly visible to Congress, and perhaps not even to

SSA’s top management. As the work force

grew, labor-management relations inevitably

became more complex. The training and orientation given to new workers was somewhat

diluted and their commitment to the goals of

social security programs was less personally

and directly translatable into standards of performance and loyalty to the agency. In the mid1960s, with the rapid growth in most employees’ workload, conditions deteriorated, and

there were signs of serious tension. After 1962,

union membership and collective bargaining

for Federal workers made labor-management

problems more adversarial.

Beginning in 1968, there were several forced

reductions in SSA’s labor force, although the

work had increased with the expanded social

programs of the Great Society. The increased

workload strained the operating efficiency of

the agency and further stressed the workers,

while recurring announcements of layoffs

caused resentment and feelings of insecurity.

However, growing use of computers allowed

the work to be absorbed without serious disruptions or delays.

A Decade of Deepening Problems

During the 1970s, SSA’s problems deepened

and became intractable. From 1972 to 1981,

15 new laws made changes in retirement, survivors, and disabled insurance programs. Four

of these made significant changes in entitlements and benefits. This often required extensive changes in coding and revisions in software. Repeatedly the time allowed between the

passing of a law mandating changes and the

time at which they were to go into effect proved

to be inadequate. The changes could not be

made in an orderly and efficient manner, and

were accomplished only at the cost of heavy

overtime for the workers, high error rates, and

disruption of other activities (e.g., quality control, new software development, and above all,

long-range planning). Backlogs became a recurrent problem.

Instability of leadership and repeated and

incomplete reorganizations of the agency, perhaps intended to solve the problems, instead

made them worse. Between 1973 and 1981,

SSA had seven different commissioners or acting commissioners, with an average tenure of

1,1 years. There were four drastic reorganizations, none of them fully completed in the sense

of establishing clear jurisdictional boundaries

and program account ability before the next reorganization. In the course of these, the activities of the major social security programs were

split apart and distributed between functional

divisions of the agency; program coherence was

lost and performance measures were obscured.

Advanced systems planning was fragmented,

its professional resources drained to bolster

over-stretched and failing operations; finally

advanced planning was almost completely discontinued. Mechanisms for decisionmaking

and for review and control of technology procurements, which had been institutionally separated, were merged so that important checks

and controls were lost.

In the larger world, it was increasingly recognized that software development, rather

than advances in hardware, was the key to the

effectiveness of future computer systems. In

this area SSA was now falling further and further behind. The complexity of its operations

and the frequent changes in procedures that

were necessary required frequent modifications of codes and software programs, but

these were done piecemeal and under pressure,

with little attention to uniformity, standards,

documentation, or knowledge of the just beginning discipline of software engineering.
Promotion by seniority for systems personnel was by now taking its toll. The long tenure

of SSA upper managers carried with it experience, loyalty, and dedication to the mission

that was SSA’S strength, but the managers

also developed a deep defensiveness and a suspicion of both consultants and new administrators who criticized established procedures

or tried to introduce management innovations.

The passage of the Supplemental Security

Income (SS1) Program, at the end of 1972,

evoked a crisis—still spoken of at SSA as a

disaster–that made the agency’s problems

only too visible. This program was very different from other SSA programs, although the

differences were not widely recognized at the

time. It involved much greater interaction between SSA service representatives and clients,

often under conditions of distress and urgency,

and these interactions often took on the character of prolonged negotiations, or became contentious and adversarial.

SSA had two planning groups studying SS1

proposals before Congress passed the bill, but

there was considerable doubt until the last moment that it would pass, and in any case the

planners had no resources to do more than minimal paper studies. After the bill passed, SSA

had 14 months to get ready. At this point it

chose to put in place a new telecommunication

system to link service representatives with

headquarters. There were only one or two terminals per office, the systems failed frequently,

and the communications traffic exceeded expectations and soon saturated the communication lines. The communication system became a bottleneck in SSI operations rather

than a facilitator.

Moreover, the number of people trained to

operate the system and to provide client services was grossly inadequate. Long lines of

clients formed, waited for hours, and were sent

home to come again. Huge backlogs developed.

SSA reputation and public relations suffered

severe damage, and its chronic problems were

now visible to Congress.

Congress had not anticipated this outcome,

and was surprised and indignant. Congressional oversight committees blamed SSA for

poor technological decisionmaking, for misestimating the resource requirements of the

new program, or for failing to inform Congress

of the impending crisis. They suspected that

SSA had been prevented from making its problems and resource needs known by its parent

agency and the Office of Management and

Budget (OMB), whose overriding priority was

to reduce SSA work force and budget. Employees of SSA say that agency officials had

repeatedly warned the Administration and, indirectly at least, Congress that the preparation time and the work force for the new program would prove inadequate. All parties to

the debacle agree that the oversight process

had somehow failed to reveal the extent of

SSA’S problems in meeting congressional

mandates, and those problems had become intractable.

The Systems Modernization Plan introduced

in 1982 was designed to solve these problems.

(The progress that SSA has made since then

is discussed in ch. 2.) Neither SSA’S problems,

nor severe criticism of the agency in Congress

and elsewhere, has disappeared. Stringent enforcement of the Disability Amendments Act

of 1980 and the Debt Collection Act of 1982

brought SSA strong criticism. Pressure to reduce the SSA work force troubles its employees. There are many concerns about the agency’s ability to respond to future congressional

mandates for changes in its programs or procedures.

Underlying Factors in SSA’S Critical

Systems Deficiency

Problems Common to Large

Data-Handling Organizations

From this brief overview and more detailed

discussions in Part III, broad factors that contributed to SSA’S nearly disastrous situation

can be identified. Some were problems to which

many private sector organizations had also

fallen victim. The restructuring of the computer industry in the 1960s had caused widespread confusion and floundering in systems

planning.
14

SSA’S problem was not that its computers

were “old” or “obsolete.” It was that the workload had become too large, too complex, and

too dependent on automated processing to be

handled by SSA’S existing work force with existing technology. In this situation, every addition to the workload became a potential crisis.

●

●

●

Information processing was:

pieced together, program by program,

with manual handling and mechanical

flow of data in between automated steps,

with no agencywide planning or designing of a system that could allow the work

to flow smoothly, and little backup for systems that “went down” when the workload was heaviest;

the computer systems were driven by

heavily patched, inefficient software, with

years’ of changes and revisions that were

poorly documented; and

the data in 50 years of SSA files was

categorized and recorded variably and unsystematically, with data definitions that

differed across files; there was no “corporate (agency) database. ”

Advanced computer systems cost millions

of dollars and several years to procure and implement. These investments cannot be lightly

abandoned. Continuing modernization of hardware requires continuing software upgrading

and conversion. When technological capabilities are improving rapidly, the leaders in a

field, having sunk large costs, may be overtaken and left behind by more recent adopters

of the technology. Government officials are not

as free to take risks as are corporate entrepreneurs; nor can they independently undertake

to raise capital for new ventures on the gamble that this will pay off in the marketplace.

Thus Federal agencies are particularly vulnerable to falling behind the state of the art in

technology.

The greatest management failure at SSA

was lack of planning and advanced development. Professional competence in computer

technology was scarce and had to be devoted

to solving immediate operational problems; the

budget did not provide adequate resources for

long-term systems development; top-level executive officers, who were not technologically

sophisticated, did not insist on its importance;

and political decisionmakers did not want to

encourage demands.

Special Problems for Federal Agencies

Box A summarizes some conclusions from

a series of OTA assessments of Federal Government Information Technology.z This special report on the Social Security Administration found that many of the generic problems

identified in these earlier studies could be observed in this agency. Many of the Social Security Administration’s problems are not particular to it, but typical of problems in large

Federal Government organizations. The conclusions in box A were based on cross-cutting

examination of many Federal agencies, but can

also be read as a diagnosis of SSA problems

in information technology management.

Excessive Instability of Leadership.— While

much of the SSA work force, up through the

levels of middle management, suffered from

a lack of “new blood, ” the top level of management was continually changing. Commissioners are political appointees; in recent years

they came and went almost yearly. Most had

little understanding of advanced technology

resource needs and constraints, or technologyoriented management, but sought to gain control by reorganizing the agency.

Frequent, drastic reorganizations broke up

the earlier coherence and accountability of major programs, but failed to provide what may

have been better–a rational structure based

on a redesigned work flow and technologybased functions. There were no organizationwide systems or system development planning,

because operations and systems development

2U. S. Congress, Office of Technology Assessment, Electronic

surveillance and Civi] ~Jiberties (Washington, DC: U.S. Government Printing Office, October 1985); Ikfanagernent, Security,

and Congressional Oversight [Washington. DC: U.S. Government Printing Office, February 1986); Electronic Record Systems and Individual l+it~acy (Washington, DC: U.S. Government Printing office, June 1986). Conclusions in box A are

quoted or abstracted from Management, Security, and Congressional O}ersight, pp. 1-5.
Box A.—General Problems in Federal Government Information Technology and

Information Policy As Identified in Previous OTA Assessments

Strategic Planning: Failure to:

. include strategic as well as operational planning in 5-year plans;

• identify innovative opportunities for use of information technology;

● connect planning effectively to implementation;

● involve users, clients, and the interested public in the planning process;

 explicitly consider the implications of information technology use for protection of data security and privacy; and

• have an effective vision of the future, with strategies for using new technology to further

government missions.

Information Availability and Quality

● There are serious deficiencies in the scope and quality of information available to Congress

and to agencies themselves, which can hamper effective congressional oversight and agency

decisionmaking. There is a need to specify the types of information that should be reported

to assist oversight of information technology, and to strengthen data quality standards and

procedures.

Innovation

● Where there are examples of agency innovation, such as use of electronic mail, videoconferencing, and computer-based decisionmaking, the exchange of this experience and learning with

other agencies is irregular or nonexistent. Many agencies view innovations as too risky to try.

Procurement

● Government information technology procurement is subject to multiple and sometimes conflicting efforts to simultaneously expedite the procurement process (e.g, through General Services Administration’s delegation of procurement authority), increase the level of competition

(e.g., the competition in Contracting Act), and more clearly demonstrate a significant return

on investment in information technology (as now required by OMB).

● The “success” of procurement is closely tied to the government’s ability to plan and define

technology needs and to match technology to those needs. There still appears to be a need

for: better training of procurement staff, greater senior management involvement in and understanding of the planning and procurement process, improved mechanisms to exchange procurement experience and learning, and possibly a procurement and management troubleshooting

team to assist with serious trouble spots.

Information Resources Management (IRM)

● This concept was intended to bring together previously disparate functions—such as computers, telecommunications, office automation, and the like-and to establish the importance

of information as a resource. Actual implementation of IRM varies widely and has been only

partially or minimally implemented in many agencies.

. IRM is essential for large, long-term investments in equipment and its related training and

recruitment demands. Chief executives are not in control long enough to realize the return

on investment in resources spent for long-range planning and development.

were constantly forced to compete for profes- ficult by the imperatives and constraints that

sional resources and management attention, are special to public sector organizations.

and because reorganizations were generally not SSA’S performance in coping with technologicompleted and “set,” before a new commis- cal change in the face of these necessary govsioner and his team took over. ernmental rules was particularly poor; but the

explanation need not involve conspiracy, malPrivate sector organizations had similar feasance, or even special ineptitude. These pitproblems. SSA’S problems were made more dif- falls will continue to beset governmental agen-
cies as they attempt to reap the benefits offered

by advanced information systems.]

In some cases, new commissioners arrived

with a political directive (i.e., immediate budget reduction) that had to take priority over

finding long-term solutions to chronic operational problems or improving service delivery.

In addition, the scale of SSA operations and

the extent to which they had become dependent on technological systems made it difficult for new leaders to understand SSA problems quickly. This was compounded by the

defensiveness of the long-tenured middle managers. Committed to “getting the checks out

on time” and barely able to cope with growing backlogs, many of them feared any innovation, seeing it as carrying a risk of disrupting daily operations.

Lack of Control Over Changes in Its Workload

and Commitment of Resources. –Corporations

—if well managed—consider many factors before seeking a greater market, offering new

services, or making significant changes in their

operations. They pay particular attention to

the timing and to the manpower, skills, and

equipment that will be required. Often this

analysis is made easier by studying the experience of similar or competing organizations. For

SSA, assumption of new programs, provision

of new services, and changes in benefits and

entitlements are mandated by Congress. In

government there are always at least three sets

of actors in this situation: Congress, which

mandates changes in mission and responsibility; the agency, responsible for performance;

and the Administration, which can to some extent constrain the flow of resources, and to a

large extent control the communication to Congress of resource needs. An agency’s spokes-

‘For example, the Internal Revenue Service had serious troubles with its 1985 tax processing; a contractor review (according to Computerworld, which obtained the report from a congressional committee), said that IRS lacks a strategic plan, and

its processing system is ‘‘inefficient, fragmented, and difficult

to maintain.” Mitch Betts, “ IRS Systems Need Revamp, Auditors Say’, Computerworld, Mar. 24, 1986. p. 1.

man to Congress-its chief executive officer—

effectively represents the Administration,

rather than the agency.

Lack of Control Over Systems Procurement.–

Competitive procurement became a serious

problem chiefly because SSA had been accustomed to working closely with the vendor to

develop systems tailored to its needs, did not

clearly understand its technological requirements, and already was struggling with software loaded with poorly documented patches.

By the time competitive procurement laws were

passed, technological choices were broad, the

computer manufacturing industry offered

many alternative systems and vendors; there

were many large computer-using organizations

whose needs provided the stimulus for further

technological innovation. SSA poor procurement procedures rather than the legal requirements for maximum competition caused it serious troubles and opened the way both for

defective systems and for fraud and abuse by

SSA officials.

Nevertheless, the ability to schedule procurements at the best time for the organization,

to carry them through quickly, to choose without constraints, and to gamble on innovative

but unproven technology, gives private sector organizations a large advantage over government agencies in making technological

choices.

Impatience in Collecting the Return on Investment.–Putting in place radically different

technology for carrying out operations requires

adjustment of the flow of work, changes in internal jurisdictions, and acquisition of a skilled

work force and management team. Attempts

to grasp the benefits too quickly–to sharply

cut labor costs before the automation is ready

to pickup the load–can lead to overloads and

disruptions that discredit the systems and undermine management’s commitment to the

technology. The expectation that this will happen at SSA is now causing renewed resistance

to and criticism of the SMP both within SSA

and in oversight organizations.
WHY MONITORING AND OVERSIGHT FAILED

TO CORRECT SSA’S PROBLEMS

During the 1960s and 1970s, SSA was progressively less able to respond to congressional

mandates without herculean efforts, resulting

in large backlogs, high error rates, deteriorating cost-effectiveness, and worsening workplace conditions. Repeatedly, congressional

oversight committees were unpleasantly surprised by these outcomes, as revealed in later

hearings. Yet oversight mechanisms, during

this time, had been exercised diligently. Several factors contributed to these unpleasant

surprises:

● Differences in priorities between Congress, the Administration, and SSA itself

constrained SSA communication of resource needs.

The White House and both Houses of

Congress have been controlled by the

same party for only 4 of the last 18 years.

Administration constraints on the budget

sometimes overrode estimates of the

number of man hours necessary to make

changes that Congress mandated, whether

the Administration supported or opposed

those legislative initiatives. Thus in 1972,

the overwhelming demands that the Supplemental Security Insurance Program

would place on SSA staff were not clearly

communicated to Congress, although

enough analysis had been done within

SSA to make clear that new and more

time-consuming ways of dealing with

clients would be necessary.

In 1982, both the Administration and

Congress supported the large investment

in SMP but with differing perspectives on

its justification and expectations of its

outcomes. The Administration supported

automation as a means of increasing

productivity and trimming the Federal labor force. Many Members of Congress

give greater emphasis to improved responsiveness to clients.

The way in which SMP was justified to

congressional oversight committees in

1982 illustrates a problem that may occur frequently. The commissioner and his

aides presented in documents and several

hearings, a dramatically strong picture of

SSA’S “crisis” in operations. Congress

had not heard such strong statements in

the past, and heard them in 1982 only after an internal struggle at SSA. Some SSA

middle and upper level managers then disputed (and still dispute with some bitterness) the accuracy of these statements—

either because the statements were exaggerated, or from reluctance to reveal past

shortcomings, or to protect their power

base within the agency.

All information that congressional oversight committees receive is of necessity

affected by the political objectives of the

Administration, and by the attention and

concerns of the congressional committee

that poses, or fails to pose, crucial questions to the responsible officials.

Conflicting priorities among oversight

committees further obscured SSA developing problems.

Oversight of SSA is shared by several

committees in both the House and Senate. Appropriations committees have one

set of concerns—accountability and efficiency; other committees focus on social

programs and the special concerns of the

aging or of disabled workers; others are

chiefly concerned with competitiveness in

procurements. In addition, since 1981 the

House and Senate have been led by different parties, which emphasizes differences

in priorities in guidance to SSA, SSA officials repeatedly assured each committee

that the agency was attempting to respond to its chief concerns, without much

discussion of the conflicting directives

that this implied.

Alternative channels of communication

failed to reveal the cumulative, interactive, and long-range nature of emerging

problems.

GAO performed scores of studies of

SSA for various congressional coremittees
18

●

●

during this period. Most addressed specific, narrowly framed questions posed by

the committees, usually having to do with

technical performance or compliance with

a particular law. It was difficult for any

one person—even by reading all of the

reports—to get an integrated, coherent

picture of the situation that was steadily

developing. (GAO’s new series of agency

management reviews takes a more integrated approach.)

Special studies by national commissions

focused on the viability of the social security Trust Fund and did not probe SSA

management issues; others (such as the

Grace Commission and the National Academy of Public Administration) looked at

management issues but did not give great

attention to quality of services or to the

long-range future.

SSA officials themselves had little motivation to call attention to accumulating

problems.

Congress does not confine its attention

in hearings to the Commissioner. It heard

from many other SSA officials or former

officials, vendors, and outside experts during this time. There are also less formal

channels of communication between bureaucrats and Congress. SSA officials who

testified were nevertheless either political appointees or under their control, and

so inclined not to dispute the Administration position. Those who held positions in

operations and those who held positions

in systems development, moreover, often

lacked a comprehensive or disinterested

view of the problems that were developing. Some others who appeared at hearings either had no credible source of information about SSA’S internal problems

or (especially vendors or potential contractors) had a vested interest in possible congressional actions.

Members of Congress and the staff of

most oversight comittees lacked the specid”zed expertise to challenge statements

about advanced data-processing capabilities, options, or resource requirements.

●

Most congressional oversight committees do not have either Members or staff

with the specialized training and experience to fully understand or challenge what

they are told about the increasingly complex and esoteric field of advanced information systems. Experts themselves disagree on many critical issues of design,

capabilities, choice, implementation, management, and lifecycle costs; and few experts can discuss these questions in jargon-free language understandable to the

nonspecialist. Staff members who have

made themselves expert on one aspect

(such as competition in procurement, or

systems capabilities) may still not be experienced in problems of management.

Relatively few are able to ask hard questions about the likely course of technological development over the next 10 years.

Thus, it is increasingly likely that many

important questions about long-range return on public investments will go unasked by Congress and thankfully unanswered by government agencies.

SSA own estimates may have been unreliable.

Though SSA people say that their requests for resources were repeatedly cut

by the Department of Health and Human

Services or OMB before reaching Congress, these estimates of requirements

were themselves often the focus of dispute

between operations officials, systems development people, and the Commissioner’s office; it is not clear whether they were

credible projections.

As Federal agencies become more dependent

on large computer systems both for operations

and for internal administration, critical information that Congress needs for effective oversight will more and more be embedded in large

databases. Management information systems

can be made to extract, combine, manipulate,

and format data to produce performance measures, accounting categories, benchmarks, and

trend projections tailored to almost any purpose. The temptation to present such informa-
19

tion ‘ ‘in the best possible light (or, according stakes riding on investment in systems that

to purpose, in the worst possible light) has al- promise high, but delayed, return on investways existed; but computers can make it eas- ment, It will be more and more difficult for

ier to get away with it by removing such proc- most Congressmen and Congresswomen to

essing a few steps further from easy perusal, challenge what they are told by agency offieveryday experience and plain common sense. cials about their technological choices and

At the same time, the motivation to conceal problems.

mistakes or failures is increased by the high

THE BASIC STRATEGY OF SSA’S SYSTEMS

MODERNIZATION

Another question addressed by this report

is the soundness of the basic strategy of SNIP.

That strategy is:

1.

2.

3.

4.

To Upgrade computer Capacit&v: TO consolidate SSA scattered computing systems and sites, greatly increase its total

computer capacity, acquire more modern

computers, develop a local network for

high-speed data transfers, and acquire better peripheral equipment.

To Integrate Its Database: To rationalize and integrate files into an SSA database, by moving files onto disk storage,

achieving direct (random) access to data,

developing an overall ‘ ‘database architecture, ” and establishing a data dictionary

to standardize the definition and form of

separate units of data,

To Institute Modern Techniques of Software Engineering: To retain and upgrade

as much as possible existing software, rewriting as much code as necessary; enforce

consistent standards for all future software; improve and modernize all software

documentation (reference manuals, user

and training manuals, records of changes);

develop new software applications.

To Build a Data-Communications Utility:

To re-engineer and consolidate three major telecommunications networks into a

modern, expanded conduit for two-way

transmission of data and interactive communications between service representatives in the field offices and the headquarters processing operations.

PLAN IS SOUND

5. To Add Automated Management Tools:

To these primary goals were added, somewhat later, the development of automated

techniques for managing and scheduling

computer operations, and development of

information systems for use in management and administration.

Most elements of this strategy are noncontroversial, but there are several points at which

the strategy has been questioned, as is discussed in more detail in chapter 2. One debate

centers on whether centralization of processing was a sound choice; the alternative is distribution of data-processing operations to regional centers. A second critical question is

whether SSA should have bought or developed

all new software, rather than choosing to preserve, modify, or rewrite millions of lines of

code. (In practice, SSA now appears to be taking a middle course, rewriting some code and

developing new software to modernize some

operation s.)

The questions and criticisms regarding basic

SMP decisions are serious ones, but they do

not have definitive ‘‘right’ answers to which

all experts can agree-in general or with regard to a specific organization such as SSA.

In terms of the basic SMPstrategy, the choices

that SSA has made may not be demonstrably

the “best” choices but they are reasonable, in

accord with well-established engineeringtices, and defendable. There is no guarantee

that alternative choices or strategies, urged

or implied by critics, would be more assured
20

of long-range success or involve fewer problems or risks, or indeed fewer doubts and

criticisms.

The main thrust of SMP strategy is to produce first a modernized claims process, with

service representatives in field offices using

interactive terminals to access SSA’S headquarters database to answer the clients questions and transmit an application to headquarters for final processing. Other program

procedures and management activities will also

be automated as the plan proceeds. It can be

argued that SSA should be looking much further ahead at developing technological capabilities and new ways of accomplishing its

mission, rather than automating today’s procedures with today’s technology. This, however, involves a degree of innovation, and

perhaps risk-taking, that few government

agencies are willing or able to assume.

Substantial progress has been made in some

areas of the SMP and there have already been

large expenditures of time and effort which

should show results in the near future. Torequire SSA to begin again with a different strategy does not appear to be justified even the

uncertain strength of the critical arguments.

To conclude that the basic strategy is sound

and should not be abandoned, however, does

not necessarily mean that SSA can and will

carry the systems modernization plan to a successful conclusion. Neither will it answer the

broader question of how long-range technology planning and development— which will always be beset by uncertainty and risk—can

best be evaluated in ways that are both useful

to Congress and supportive rather than threatening to public servants with a difficult mission to perform.

What is needed is a mechanism or mechanisms for providing both agency officials and

Congress with an independent and disinterested source of expert advice and evaluation, separate from monitoring and investigatory functions and also apart from both

regulatory responsibilities and political objectives. While there would often be a lack of consensus among such expert advisors, the range

of options available for consideration by agencies and by Congress would possibly be broadened and the relative advantages and disadvantages of the options clarified before

choices are made. Such mechanisms already

exist in the several congressional support agencies, but their assistance is often sought after

basic decisions have been made and implemented. Also, since they are located within the

legislative branch, their assistance and advice

is usually not available in helping agencies

frame action proposals to be put forward to

the Administration or to Congress. One alternative is to create new mechanisms for this

kind of public service. Some possibilities are

outlined in the options section of this chapter.

CONFLICTING EVIDENCE ON PROGRESS

IN SYSTEMS MODERNIZATION

There appear to be serious implementation

problems to which SSA–in spite of strong

claims of accelerating progress-does not yet

appear to have a credible solution. Denial that

these problems exist, or unsubstantiated assertions that they have been solved (in ways

that to outside experts are not clear or convincing) leave considerable room for doubt that

SSA understands its technical difficulties or

is addressing them adequately. For example,

while SSA proceeds with hardware procurement and upgrading, it consistently downplays

the problems it is having in defining a database architecture and making decisions about

database integration and management. Only

persistent challenges to the statements of SSA

officials and comparison of those statements

with information gleaned from workers, contractors, and monitors, reveal the existence of

some of SSA’S persistent, unresolved techni-
21

cal problems. GAO’s forthcoming management review, based on examination of records

not directly available to other congressional

support organizations, may answer at least

some of the questions raised in this report

about the adequacy of SSA response to technical problem areas and the amount of sound

progress that has been made. (See table 1.) If

GAO confirms the apparent gaps between

SSA’S official statements and the degree to

which SMP objectives are being realized, this

will underscore the increasing difficulties in

monitoring highly technology-dependent government operations.

As of the end of fiscal year 1986, it appears

that about 20 percent of SMP’S currently projected costs have been expended. Major procurements for the SMP, especially for placing

the interactive data communication terminals

in field offices, will occur in fiscal years 1987

and 1988. Some SSA critics say that before

such steps are taken, Congress should insist

on a complete reexamination of the assumptions and strategy of the SMP with a view to

aiming it in radically different directions, or

formulating a quite different plan. At a minimum, they say, the procurement of 22,000 to

39,000 interactive terminals should not be done

this calendar year as scheduled—instead, terminals should be phased in over the next 2 to

5 years, or the procurement should wait until

all field office services are redesigned and automated. Even though there are no convincing

arguments for reversing SMP’S basic strategy

at this stage, it is not certain that SSA is making satisfactory progress in development of

software; it would not be unreasonable to move

more slowly in making major procurements

until there is proof of acceptable progress in

all areas. This decision, however, should be

made in the light of its effect on SMP as a

whole. To stop a pivotal SMP procurement on

the grounds that the 1974-82 operational crisis has been surmounted would effectively be

a rejection of the concept and objectives of systems modernization.

The most unequivocal progress in implementing SMP has been made in upgrading the

capacity of large primary computer systems.

Major programmatic systems computers

have been upgraded and “mean-time to fai]-

ure ” increased from 270 hours to 19,000 hours.

Telecommunication processors and some decision support systems have been installed.

Major files have been moved from tape storage to disk storage. The six Program Service

Centers are still using very old, too small computers and a procurement award for their

replacement has been held up by a challenge

under the Competition in Contracting Law. In

general, however, the capacity upgrade program, which will account for about 24 percent

of SMP expenditures, is approximately on

schedule, with other procurements to be completed this year.

The soft ware engineering program has had

serious problems and is behind schedule. SSA

claims to have completed essential early steps:

definition of its functional requirements for

data-handling and software applications, developing software engineering standards, and

preparing a basic Software Engineering Technology manual. The agency says that it is making a strong effort to enforce new tools and

standards for software development.

Some new software systems and applications

have been put in place. SSA apparently judiciously abandoned vague promises to rewrite

all old code, but software improvement has begun. SSA is, however, still far from having

made its existing software ‘maintainable and

transferable, as was to have been achieved

by this time.

There is evidence that in some areas the functional requirements are not well enough developed to be an effective guide to systems redesign, and that use of software engineering

tools and standards is not yet stringently enforced. Software will not be ready for full and

efficient use of the new interactive terminals

being procured for field offices for several

years.

About 21 percent of total SMP projected

costs are allocated to the software engineering technology program; expenditures in this

program have been running somewhat ahead

of projections.

Database integration is also far behind

schedule; SSA now says that by 1987 this part
22

—

Tabl e .—Major Reported Accomplishments of the SSA’S Systems Modernization Plan

in Its First 4 Years and Future Milestones by Specific Program Areas

Accomplishments a

Software engineering program:

● Piloting a modernized claims system at two dis

offices

• Initiated functional requirements for LAGs

● Completed operational software improvements

● Designed new debt management system

● Began piloting critical payment SET

● Designed AWR

• Established PDTF/TTSF

Database integration program:

ri ct

• Implemented nationwide, on-line query capabiIity on

several major master files for district offices

● Converted major fiIes from tape to disk storage

Ž Implemented data administration tool

• Began piloting target database architecture

● Initiated data purification

● Initiated database support for LAGs

Data communications utility program:

● Continued with procurements of DCU network and

terminals

● Replaced SSADARS host computers

• Upgraded telecommunicate ions Iines and software

● Completed general DCU design

• Planned DCU and TAP implementation

Capacity upgrade program:

●

●

●

●

●

Completed seven phases of DASD installation

Converted on-line, programmatic, and test systems to

MVS/XA Operating System

Implemented local computing network and

HYPERchannel facilities

Installed high-speed printers at Baltimore sites

Replaced programmatic and TTSF host computers

●

●

●

●

●

●

●

●

●

●

●

●

●

System operations management program:

● Implemented new tape management system

. Increased job run frequency for critical system

● Implemented automated job rerun capability

● Improved off site storage process

●

●

●

●

●

●

Administrative/management information engineering program:

●

●

●

●

●

●

●

Established information center ●

Initiated office automation projects for SSA ●

components ●

Initiated MID project to provide reliable management ●

information for SSA

Initiated projects to define management Information ●

requirements for MID

Implemented end-user computing guidelines

Developed framework for an integrated MIS

Installed FAIMS database management system on the

TTSF

a

The text raises questions about some of these accomplishments

KEY AWR

DASD

DCU

FAIMS

LAG

MID

MIS

MVS

—Annual Wage Reporting

—Direct Access Storage Device

—Data Communications Utillty

—Financial and Administrative Integrated Management System

— Logical Application Groups

–Management Information Design

– Management Information System

–Multiple Virtual Storage

Design, develop, and implement LAG software

Upgrade SET

Continue software improvement

Implement claims modernization nationwide

Implement on-line omnibus query capability on all

major master files

Complete data purification through verification and

validatlon

Develop and implement database architecture

Provide database support for LAGs

Implement DCU backbone network nationwide

Acquire and install new terminals for district offices

Engineer future network components and expanded

capabilities

Install new hardware at PSCS

Upgrade programmatic, telecommunications, and test

capacity

Continue to Institutionalize and enforce data center

standards

Complete user service agreements

Expand use of automated tools to on-line and decision

support systems

Complete NCC integrated control center

Modernize computer operations at PSCS

Implement on-line operating environment

Implement new systems to provide reliable MIS

Increase office automation

Implement SSA’S portions of FAIMS

Develop management information database

architecture

Provide telecommunications support for management

informat ion

NCC —National Computer Center

PDTF –Program Development and Test Facility

PSCs — Program Service Centers

SET –Software Engineering Technology

SSADARS—SSA Data Acqusition and Response System

TAP —Terminals Acquisition Project

TTSF —Test and Time Sharing Facility

XA – Extended Architecture

SOURCE U S Department of Health and Human Services Social Security Administration SSA Systems Modernization Plan 1986 Long Range Stralegic Plan Publication

No 40004 October 1985
of the implementation may be back in step.

Some tasks have been accomplished. Master

files have been transferred from magnetic tape

to disk storage, and the number of tapes in use

for storage has been significantly reduced.

Field offices have been given limited access to

the master data files through a file management and access system, although processing

is still sequential, and random (direct) access

to records is still beyond SSA capability. A

data dictionary has been developed, but it will

take years to rewrite all of the 50 years of

records to make them fit the data dictionary

categories and standards.

Real database integration is, however, still

far in the future. SSA has still not settled on

a database architecture, although the agency

says that a “target” database architecture has

been defined. This in turn further delays the

rewriting of software. It is difficult to tell

whether SSA has, in fact, made any significant progress toward real database integration. Recent statements that it has taken a big

step toward solving the architecture problem

by deciding to use an already available data

management system appear to be almost

meaningless on close examination.

This program was originally expected to

spend about 14 percent of projected SMP

costs; it appears so far to have accounted for

about 4 percent of expenditures.

The data communications utility program

appears to be about on schedule. Troublesome

data transmission backlogs were greatly reduced during the first year of SMP by replacing the host computers, adding trunk lines, and

upgrading telecommunications. The backlogs

have now been eliminated. The design of the

communications utility has been completed,

and by early 1987 SSA plans to put over 22,000

interactive terminals in field offices, to modernize its claims process. The timing of this

move is controversial; many critics argue that

terminals cannot be used to full capacity for

several years, and a full-scale procurement

should not go forward at this time. The data

communications development program has expended 7 percent of SMP costs to date, but

will eventually account for about 28 percent.

23

In 1984a new component was added to SMP,

the systems operation and management program, to develop automated procedures for

scheduling and managing major computer operations. It has already implemented automated job scheduling and several other applications, and is on schedule. This will account

for less than 3 percent of SMP costs. Another

element belatedly added to the plan is the administrative/management information engineeringprogram, to develop management information systems and other administrative

tools, and to encourage personal computer applications and use. This effort is one of the more

advanced elements of SMP, although hardly

avant-garde. Not including this element in the

original SMP was a blunder that may have significantly increased the costs of the management information systems development. The

program will probably account for about 20

percent of SMP costs.

SSA reports that the backlogs and high error rates that marked the crisis period have

largely been overcome, that SMP has already

significantly improved performance, and that

the basic steps have been accomplished to allow continuing and steady progress in the later

phases of SMP.

According to SSA, significant progress has

been made in developing new mechanisms for

strategic planning and for resolution of the persistent conflicts between operations and systems development personnel, through their

mutual involvement in the systems modernization effort. There is said to be an active program of outreach to the systems users to further define changing functional requirements.

The agency has expanded its training programs as it implements the SMP, and has recently recruited some senior computer systems

experts. A joint agreement with the union was

signed last year, which appeared at that time

to hold great promise for improving labormanagement relations.

One critical test of SSA’S claims of improved

management and resolution of internal conflicts over systems modernization will come

during the next 6 to 9 months, as the claims

modernization project is implemented, If these
24

improvements are real, they are more hopeful

signs of progress than acquisitions or quantitative measures of performance, because such

management innovations would signal a change

in SSA organizational culture and behavior.

Such changes are probably essential to the success of SMP.

There are, unfortunately, reports that these

new mechanisms have already disappeared or

gone dormant. The joint agreement with the

union is being severely strained by SSA official position with regard to work force reduction, and there is widespread disappointment

with the present lack of activity in putting its

provisions to practice. Since the announcement

of a change in leadership of SSA, the expectation of another drastic reorganization has

raised fears of a protracted period of uncertainty, confusion, and possible internal power

struggles. The present organizational structure

is probably far from ideal; however, it has the

advantage of allowing for agencywide rather

than program-by-program design of an automated work flow, and its continuation for a

while could help avoid the disruption and turmoil caused by repeated reorganizations of

SSA over the last decade. Assessment of the

likelihood of progress in systems modernization in the near future must take into account

these troublesome uncertainties.

Many critics of SMP are skeptical of SSA’S

ability to achieve its objectives. Some individuals inside and outside SSA and in monitoring organizations privately dispute some of

SSA’S claims of progress, say that bad news

is being concealed, or suggest that performance indicators have been changed and, therefore, results of SMP (in terms of comparison

with past performance) cannot be demonstrated. Such private comments may sometimes be based on biased judgments, or on obsolete information; progress of SMP has, if

SSA claims are accepted, quickened in this fiscal year in spite of some unanticipated delays

because of challenges under the Competition

in Contracting Act.

Both SSA statements about progress or results and the statements of its critics are difficult to evaluate since those who do not have

a vested interest to protect also do not have

independent access to operational data or close

familiarity with SSA’S complicated tasks.

GAO is now undertaking an extensive management study of SSAJ that will provide

another expert judgment; however, both GAO

auditors and OTA assessors are in part dependent on information selected and presented by

SSA.

The more fundamental difficulty for Congress, however, has been and will be the necessity of making judgments about complex

technological strategies for which there are no

categorically right or wrong answers and on

which even computer experts disagree.

‘Recognizing that good management is essential to the effectiveness of a department or agency in achieving its mission,

GAO in 1982 launched a new initiative, to perform reviews of

the overall management of selected Federal agencies. These reviews are to facilitate effective congressional oversight by showing how breakdowns or problems in agency management structures and systems contribute to long-standing programmatic

and administrative problems. The GAO management review

of SSA is not yet complete.

THE EFFECTS OF SYSTEMS MODERNIZATION:

CLOSELY RELATED ISSUES

Systems modernization is likely to affect and tion, privatization of government services,

to be affected by a number of questions and Federal labor-management relations, and data

issues now before Congress: suggested modifi- privacy and security concerns. These are discations in social security programs, independ- cussed briefly below, and in more detail in chapent status for the Social Security Administra- te 3.
SSA Responsiveness to

Congressional Mandates

The ability of SSA to respond efficiently and

quickly to congressional changes in programs,

entitlements, and benefits has improved because of the elimination of backlogs of work,

and should be further improved if the systems

modernization plan meets its objectives. So far,

however, the elimination of large backlogs and

achievement of a smoother flow in daily operations has been made possible largely by the

hardware improvements–the capacity upgrade. Significant further improvement probably depends on resolution of the technical

difficulties with software development and

database management, and redesign of postentitlement systems. It is, therefore, possible

that assignment of responsibility for large new

programs (e.g., as support for immigration control measures) at this stage could complicate

and delay implementation of some SMP steps

by suddenly increasing its volume of operations, or requiring new data to be collected and

managed. Some congressional sources have

suggested a moratorium on legislative changes

until SSA is closer to completion of its systems modernization, but this is probably not

essential. The changes that appear most likely

to be proposed over the next few years, according to congressional committee staffs, appear

reasonably small and could probably be assimilated without the large backlogs that occurred

in the 1970s.

Independent Status for SSA

The House of Representatives has (in July

1986) passed H.R. 5050, a bill to give SSA independent status, and similar proposals are expected to come before the Senate. Support for

the measure comes from some who hope:

1.

2.

3.

to give SSA more stability and continuity in leadership;

to facilitate congressional oversight of

SSA by removing the “political filter”

that they believe distorts communications

with Congress;

to protect SSA from OMB work force reduction and privatization pressures; or

4

25

to prevent measures that they believe will .

adversely affect the quality of social security services, such as overly zealous attempts to cut disability rolls.

Stable, experienced leadership could contribute significantly to success in systems modernization, if that modernization is a high priority of the appointed leaders. Independent

status might do relatively little to facilitate

congressional oversight, because it has also

been hampered by other factors, as described

above, including SSA own tendency to hide

its problems. Independent status must necessarily be limited to a few agencies, yet most

of the problems that SSA has had in managing information technology are likely to affect

other government agencies as their information needs expand and as they first adopt new

information systems. Congress can clearly not

make all agencies that suffer from these problems–or from specific Administration directives—into independent agencies.

Systems modernization is thus not, in itself,

an argument for giving SSA independent

agency status. However, if Congress decides

that Administration personnel and privatization directives are likely to disrupt SSA operations before systems modernization can be

achieved, this option will become more attractive.

Privatization of or Contracting Out

Government Operations

The Department of Health and Human Services has directed SSA to develop a plan for

contracting-out the equivalent of 8,600 fulltime positions, about 12 percent of its work

force, in operations such as the processing of

annual wage reports and running the National

Computer Center (where central beneficiary

records are maintained). Privatization of determination of disability status (now done by

the States) has also been proposed. OMB,

GSA, and GAO have found that privatization

of some government services can result in significant cost-savings and improved services.

But there are serious concerns to be considered in privatizing social security operations:

61-085 0 - 86 - 2
26

these include the additional risk to confidentiality and security of SSA’S personal data on

160 million Americans; questions of public confidence in the fairness of eligibility and benefits determinations; the level of competition

that could be expected; the large amounts of

time and labor that would be necessary for contractors to learn and master SSA operations;

possible disruptions from periodic recompleting of the contracts; the likelihood of conflicts

of interest for many or most competent competitors; opportunities for fraud; additional

difficulties of congressional oversight; and

difficulties of contractually specifying a required level of quality of service.

An important question is whether privatization would reduce the return on investments

already made in SSA’S systems modernization.

Congress will want to consider carefully

whether privatization initiatives are likely to

prejudice the objectives that it has sought in

supporting SMP, i.e., improved qua.hty of services and equity as well as efficiency in use of

public resources.

The Work Force and LaborManagement Relations

Increasing tension between labor and management during the decade of mounting problems in the 1970s has worsened since 1982 with

the threat of severe work force reductions. Employees and their union take the position that

improved productivity should be translated

into enhancement of services and better working conditions rather than immediate elimination of jobs.

SSA and the union recently agreed to a Joint

Statement of Common Purpose toward labormanagement relations. After a promising

start, that agreement is now said by union

sources to be breaking down. Labor-management relations are likely to worsen if systems

modernization is directed toward immediate

labor force reduction.

Privacy and Security Concerns

Systems modernization will facilitate and

probably encourage data-sharing programs

and computer-matching programs that have

expanded under OMB directives and GAO recommendations. SSA is now considering their

use for front-end verification of eligibility,

which has not been done in the past. These

activities are considered useful for elimination

of waste and fraud, although SSA has not systematically evaluated their cost-effectiveness.

There are, however, growing concerns about

intrusions on personal privacy when data collected for many specific legitimate purposes

is aggregated and used for other purposes,

and/or shared with other Federal and State

agencies.

Security measures for SSA’S main computers and databanks have generally improved

since 1982 with consolidation of processing

activities in the National Computer Center and

improved backup of files. SSA does not, however, have procedures and policies to assure

privacy and security for data in personal computers. Opportunities for violations of privacy,

for fraud, or for inadvertent loss of data will

increase as SSA places interactive terminals

in field offices and puts a new data communications utility into use. Although SSA plans

to use standard techniques of restricted access,

passwords, audit trails, etc., for protection,

many of the planned control systems have not

yet been developed.

Other new technologies which SSA is using

or will use in the future, ranging from personal

computers to satellite transmission and integrated services digital networks, will also increase the opportunities for unauthorized access to, misuse of, or theft and loss of data.

SSA has done relatively little as yet to implement, or even plan for, privacy safeguards for

some of these technologies.

Systems modernization will tend to intensify concerns about the privacy and security

of SSA data.
27

OPTIONS FOR FACILITATING CONGRESSIONAL OVERSIGHT

OF SYSTEMS MODERNIZATION

In spite of the attentions of a half-dozen congressional committees and frequent hearings,

emerging problems were allowed to become

chronic and Congress was repeatedly surprised

by SSA’S serious difficulties in implementing

congressional mandates. At present, OTA has

identified a large number of unanswered questions and unresolved issues about which there

are strongly conflicting critical charges and

SSA claims regarding SSA information systems development and management. There are

disturbing signs that SSA’S statements on

some of these questions cannot be taken at face

value. Some of these questions are in that area

of uncertainty where there are no definitive

answers and even experts may disagree among

themselves. It is increasingly difficult for nonspecialists to challenge the actions or the

statements of agency managers, who must

both be given support in carrying out difficult

assignments and be held accountable for their

actions. New ways of supporting and assisting congressional committees in their difficult oversight role may be needed, including

sources of advice and evaluation that are not

associated with investigation, regulation, and

assignment of blame for inevitable mistakes.

At a minimum, Members of Congress and their

staff are concerned that they have access to

information about agency needs and agency

problems. This information can be provided

most easily by the agency, but is often filtered

or distorted to fit executive branch policies and

priorities. With particular regard to SSA, there

are a number of options that address the oversight issue:

1. Independent agency status for SSA has

been proposed as one approach to this

problem, but it is likely to be at best only

partially effective. Executive branch priorities have been only one factor in oversight problems; some of the trouble has

come from inside SSA. Moreover, this solution is a special or limited answer that

cannot be applied to all agencies that may

present similar problems.

2.

3.

4.

Increasing the number of GAO audits, or

studies from other sources, is a second option. GAO audits and several national

commissions have been invaluable in supporting congressional oversight but have

not entirely solved the problem. National

commission studies usually provide only

a snapshot of the situation at a given time,

and are in addition usually slow, costly,

and necessarily rare events. GAO studies

have in the past been technical and narrowly focused, responding to the specific

perspective and concerns of the requesting committee or of the Administration,

reflecting the fragmentation of oversight

responsibilities. They thus tended to overlook intensifying interactions between

problems, as well as the effects of one congressional directive or legislative requirement on other competing congressional

concerns. GAO is however now undertaking a broader management study of SSA

which will be available to Congress later

in 1986, and will provide additional insight

into current information technology ma.nagement problems and progress.

Designation of one committee in each

House, or a joint committee representing

both Houses, for comprehensive oversight

of the Social Security Administration is

a third option. This would tend to simplify,

integrate, and intensify oversight of the

agency, and allow Members and staff to

expand the attention they can give the

agency and deepen their knowledge of its

needs and problems. However, it might

lose the benefit of different points of view

and specialized knowledge that can be

brought to bear by other committees.

A more tightly focused mandate for the

subcommittees on government information technology management presently in

each House is a fourth option. At present

the responsibility for information technology is in each house combined with other,

somewhat disparate responsibilities. A

more tightly focused mandate would in-
28

crease the attention given to this subject.

This would, however, tend to cause consideration of technological issues to be

divorced from considerations of each

agency’s special mission, the quality of its

services, and congressionally proposed

changes in missions.

5. An external advisory body of nationally

recognized experts on advanced information technology could be established to assist all oversight committees now concerned with Federal agencies that are

becoming dependent on information technology to carry out their missions. For

best use, this body of experts should not

be charged with monitoring, investigation, or routine assessment, but should be

available, staffed, and ready on a continuing basis to translate for Congress in

discussions of technological issues and options, to evaluate agency and Administration positions on basic technological

choices and strategies, and to alert Congress to technological trends that might

offer alternatives. They could also assist

Federal agencies in technology-related

choices in an advisory and impartial way,

and thus could provide a counterweight

to Administration pressures for actions

that are not realistic in terms of technological capabilities.

Such a group could be located within an

existing congressional support agency.

This may however not be the best strategy, because:

● it is difficult to attract into government

service people of the prestige and standing that would make for greatest credibility, to assure them of independence,

to give them the resources necessary to

keep their expertise and their prestige

at the desired high level; and

● within a congressional agency, they

would be viewed by the executive agencies as investigatory and threatening

rather than as advisory and helpful.

Thus a blue-ribbon panel, selected

from industry and academia, with a

small but highly expert staff, may be

preferable.
Part II

The Systems Modernization Plan

and Its Potential Effects

Chapter 2 describes the Social Security Administration’s Systems Modernization Plan, discusses the status of its implementation, and identifies some persistent technical and management problems. It concludes that the plan is rational

and defendable, but there are serious unanswered questions about the implementation of the plan. SSA does not appear to recognize the seriousness of some of

these implementation problems, or has not been forthright in discussing them

with monitors and oversight institutions.

Chapter 3 discusses the implications of systems modernization and further

automation for SSA’S relationships with Congress, SSA’S employees and clients.

It considers questions about the future status of SSA, including proposals to make

it an independent agency, and to privatize some of its functions. Other public policy issues, such as the privacy and security of personal data processed by SSA,

are discussed in relation to the SMP.

Chapter 4 highlights the increased need for comprehensive long-range planning within SSA, to define goals and priorities and thus provide a context and

rationale for technological systems planning.
Chapter 2

The Status of Systems

Modernization at SSA, 1986
Contents

Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

SMP’s Principles and Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

SMPProjects and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

The Claims Modernization Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

The Software Engineering Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

The Database Integration Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

The Data Communications Utility Program . . . . . . . . . . . . . . . . . . . . . . . 43

The Capacity Upgrade Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

The System Operation and Management Program . . . . . . . . . . . . . . . . . . 47

The Administrative/Management Information Engineering Program . . 47

Planning and Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Evaluating the Progress ofSMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Staff Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

SSA Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Critics of SSAand SMP.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

How Well Has SSA Performed? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Imperatives for SSA.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Figures

FigureNo. Page

2. An Overview of the Social Security Administration’s

Systems Modernization Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

3. organizational Chart of Social Security Administration asof

Apr.4, 1986, Focusingon Systems Implementation . . . . . . . . . . . . . . . . . 37

4. The SSA Characterization of the Database Architecture

To Be Used in SMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

5. Available Computer Capacity and Projected Workload Requirements

of SSA’s Computer System, as projected in 1982 . . . . . . . . . . . . . . . . . . . 46
Chapter 2

The Status of Systems

Modernization at SSA, 1986’

INTRODUCTION

Commissioner John Svahn, newly appointed,’ began in 1981 to work out a strategic plan to develop modern information systems for the Social Security Administration’s

(SSA) data processing. A planning group was

formed under his direct control, to guide the

planning and its presentation to Congress.

The Systems Modernization Plan, hereafter

referred to as SMP, was to be an integrated

long-range plan for thoroughly upgrading

SSA’S data-handling operations, with new or

improved software, hardware, and telecommunication systems and increased computer capacity. Unlike previous SSA systems development efforts, SMP would be an agencywide

plan emphasizing integrated service to all programs and offices. In the recent past, work on

improving systems had been done in specific

SSA program areas, with little consideration

 The material in this chapter (not otherwise attributed) is

drawn from the 1982, 1984, 1985, and 1986 System Modernization Plan, and accompanying documents, provided by SSA; several briefings by top-level SSA officials in the Office of Systems and the Office of Operations; and written and oral response

by SSA officials to OTA drafts or inquiries. This material was

augmented by or compared with information gleaned from more

than 65 interviews conducted by OTA and its contractors, with

knowledgeable people both within and outside of SSA; congressional hearings and reports; reports of the General Accounting

Office (GAO); and the transcript of an OTA workshop in which

both SSA officials and advisors to OTA participated. The OTA

contractor for this case study was The Educational Fund for

Individual I.iberties, New York City (Alan Westin and Kenneth

I,audon, Principal Investigators).

‘Commissioner Svahn was a former insurance company executive. From 1976 to 1979 he had, however, been employed

by the firm of Deloitte Haskins & Sells (later a major subcontractor on SMP).

for the fact that the district offices had to

serve all of the programs.

SSA had always tended to automate on a

project-by-project or program-by-program basis, which resulted in poor integration at the

service delivery level. This had been institutionalized by the previous commissioner, who

had adopted a “partitioning strategy” that

segmented the several programmatic areas, redesigned them, and procured hardware for

them separately. SMP explicitly rejected this

approach.

The SMP also differed in other ways from

earlier SSA practices. It was designed as a dynamic 5-year plan that would be reconceptualized yearly to account for new developments

in technology. (The published 1982 plan, however, did not say explicitly that it would continue beyond the initial 5 years.) The plan provided explicitly for help from external expert

consultants and contractors. The solicitation

of vendors for a telecommunications upgrade

(later won by Paradyne) was already underway;

it was assumed that this would fit into the

SMP to develop a “data communications utilit y, that is, an efficient conduit for transmission of data between headquarters and field

offices or other points on an SSA network.

The 1982 SMP was focused almost entirely

on delivery of services; internal administrative

systems got little attention, and no provision

was made for developing management information systems. These features were added to

the plan later.

33
34

SMP's PRINCIPLES AND STRATEGY

At a cost of nearly $500 million (which by

1986 nearly doubled, to $990 million) SMP was

one of the most expensive single civilian information systems projects ever undertaken.

The plan set out ‘governing principles, ” which

in reality are generalized aspirations: immediate improvement to avoid disruption of service; improved client service; assured accountability and auditability; improved timeliness

of service; improved productivity and management control; and closing of the technology

gap (i.e., modern systems). Nine principles

were to be followed—these are important elements or descriptors of the systems modernization strategy for purposes of evaluation:

1.

2.

3.

4.

5.

6.

7.

8.

9.

improvements would be “incremental and

evolutionary

systems modernization would be kept

separate from operation and maintenance

of existing systems;

a systems integration contractor would

assure project continuity;

“proven state-of-the-art technology”

would be used;

the effort would “build on existing systems” to salvage past investments and

minimize risks;

design changes would be limited to “critical, user-defined needs”;

system architecture would be reconfigured to take “full advantage of advanced

technology’

acquisitions would be planned to permit

technology upgrading within a “code

compatible architecture”; and

a single group would plan, manage, and

operate the modernization program.

This was a conservative strategy, following

well-established systems engineering practice,

and designed to satisfy SSA’S critics in Congress and elsewhere, while not disturbing its

supporters. SSA’S Office of Advanced Systems, before it was abolished in 1979, had ar-

‘U.S. Department of Health and Human Services, Social

Security Administration, Office of Systems, Systems Modernization Plan: From Survival to State of the ,Art, Publication

No. 41-002, 1982, p. 1-19. Hereafter cited as SMP 1982.

gued for starting fresh, with all new procedures

and systems, but SMP rejected this approach.

The plan calls for salvaging prior investments by building on existing systems. This

means that SSA will look for immediate shortterm solutions that are compatible with longrange goals. SSA has been criticized in the past

both for patchwork fixes to problems rather

than system redesign, and for redesigns that

failed to take into account the critical prerequisites for an orderly transition.

In the past, the same personnel had responsibilities for both systems development and

operations, and there was seldom time for modernization planning. A single organizational

unit, separate from operations, would now be

responsible for planning, management, and

control of the modernization program.

A system integration contractor (Electronic

Data Systems of Dallas [EDS]) was hired to

provide continuity throughout the duration of

the plan, and to coordinate across SMP program areas. Redirection of development efforts

in midstream and frequent turnover at the top

had hampered past efforts.

SSA would not be able to work with manufacturers to develop innovative systems designed to meet its needs, as it could do in its

first decades (see ch. 5). SMP called for proven

state-of-the-art systems from industry. This

meant that no “unproven technology” would

be used. This strategy was reinforced after

SSA suffered from its experience with a telecommunications system upgrade procurement

(the Paradyne contract, to be described inch.

6). The phrase “state of the art, ” on the other

hand, was a signal that SSA would use contemporary software development technology,

and structure and document software in accordance with modern standards.

The plan limited design changes to “critical, user-defined needs, but said that systems

architecture would be reconfigured to take full

advantage of advanced technology. SSA’S assumption was that with relatively simple

reconfiguration of existing computer systems
35

and some purchases of new equipment in the

first phase of its modernization, a large amount

of labor-intensive operations could be eliminated and performance immediately improved.

Upgrading technology in such a way as to

be compatible with SSA’S old computer codes

would be difficult, since the agency had to

avoid both demanding an architecture and software that was compatible with only one kind

of equipment (IBM), as required by the Brooks

Act; and massive reconversions of software.

SMP began in 1982, although it incorporated

some improvement projects that were already

underway. In the discussion below, some rough

indications are provided about the allocation

of resources among and between SMP program

areas, to indicate something about the relative

importance of tasks and objectives. However,

this gives only a very poor indication of the

distribution of effort and resources; some objectives have been shifted from one program

to another between 1982 and 1986. Even the

overall SMP expenditures indicated by SMP

publications are only approximate, since some

projects have been included under SMPin 1 or

2 years and not included in other years, for reasons that are not clear. This is one problem that

complicates any external evaluation of progress in implementing the SMP.

Combined with strong governmentwide emphasis on budget-trimming and work force reduction, the announcement of the systems

modernization effort in 1982 caused SSA employees considerable anxiety. As in any organization acquiring new technology, many workers were concerned about their ability to learn

to use it. At the same time, most employees

were eager to have technology that could help

them overcome the constantly increasing backlogs and recurring crises, and the union was

not opposed to more automation. SSA however failed to keep its employees well informed.

In early documents there was no mention of

the touchy subject of effects on the level of

employment. In a brochure published sometime in 1984,4 SSA states that “an overriding consideration” was that “all current SSA

employees must be assured of job security,

but the promise is not part of the formal documentation of SMP. Only in 1985 did SSA

announce an” aggressive’ plan to inform employees about SMP, and in January 1986 it

distributed to field operations employees a simplified “Field Edition” of the plan. Questions

about job security were still not addressed

directly.

‘U.S. Department of Health and Human Services, Social

Security Administration, S.vstems Modernization Program–

An Overview, no date.

SMP PROJECTS AND PROGRAMS

The 1982 SMP called for four program areas:

software engineering, database integration,

data communications utility, and capacity upgrade. The three chronological phases of the

program were labeled survival, transition, and

state of the art (see figure 2). The survival

phase consisted of actions to survive the immediate crisis, which is described in chapter

6. The transition phase would bring SSA up to

a “contemporary data processing capability. ”

These phases were each to take 18 months, and

to be completed by 1985. The state of the art

phase, the final 2 years, would develop the new

software, new databases, new communications

utility, distributed processing, and the final

hardware configuration to achieve final integration, and the testing and certifying of

the redesigned system. By 1988, with this

achieved, SMP would evolve into a continuing 5-year planning and enhancement cycle.

One important objective of the SMP is modernization of the claims process, which is perhaps the primary point of interface between

SSA and its individual clients.

The Claims Modernization Project (CMP)

This project is in effect a plan, or a depiction of the major desired outcomes of the SMP,

and it is therefore described first. CMP is
36

Figure 2.—An Overview of the Social Security Administration’s Systems Modernization Plan

Software

engineering

Database

integration

Data

communications

utility

Capacity

upgrade

Systems

operation

management

Survival Transition

Software improved

and under control

J

Tape dependency

reduced I

Message backlog

eliminated and

reliability increased

1

Equipment

reconfigured and

workload

requirements met

1

Computer center

move completed

and operating

standards set

I J

Administrative/

management

information

engineering

18 months

Software salvaged

and redesigned

Master files

converted to disk

Equipment upgnaded

and communications

utility designed

Expanded,

capacity

Expanded

automated control

of computer

operations

T

AMIE

program

established

18 months

State of the art

New benefit payment

system implemented

Database management

implemented

Data communications

utility implemented

Advanced system

architecture installed

Production

environment fully

automated

Reliable

admi nistrativeimanagement

information systems

initiated

24 months

aNot Included In original SMp

SOURCE U S Department of Health and Human Servtces, Soctal Security Admlnlstratton, SSA Systems A40dem/zatKm P/an 7985 Update, Publlcatlon No 40-004, January

1985

SSA’S closest claim to a vision of how it wants

to do business, SSA’S version of “the office

of the future. ” Since SMP is a 5-year plan, this

is, however, a near-term future.

At headquarters, the four major programs

(old-age insurance, survivors insurance, disability insurance, and supplementary security

income) are fragmented and spread over 10

functional offices under four deputy commissioners (see figure 3). They come together in

the district offices, where SSA meets its clients. These district offices are now largely

paper-based operations, with cases represented

by file folders. Clients must wait for service

representatives to send messages to headquarters and receive information back about the

client records by way of the one or two SSA

Data and Retrieval System (SSADARS) terminals, manned by a data technician, in the

back office. CMP will make the field offices into

modern, automated offices in which representatives use on-line, interactive systems for both

the initial claims interview and later for case

control. There are prototypes in two field

offices,s where research is being conducted on

“York, PA, and Baltimore, MD.
37 —

Figure 3.–Organizational Chart of Social Security Administration as of Apr. 4, 1986

Focusing on Systems Implementation

,

Office of the

Commissioner

I

I 1

I ●

Deputy Commissioner, Deputy Commissioner,

Management & Deputy Commissioner, Deputy Commissioner,

Operations Systems Program & Policy

‘Assessment

I

J

I

v t

Office of Planning

Support & Integration Director

Office of System Operating

Associate Commissioner

Office of System Requirements

Associate Commissioner

— Regional Commissioners

(lo)

i

Office of System Integration

Associate Commissioner I

- Office of Information Systems

Associate Commissioner

SOURCE Social Security Administration, 1986

This office of the future is still an objective,

not an accomplishment, but by January 1987,

the first phase of implementation will begin.

There is a prototype model office at headquarters, and there are pilot sites in SSA regions.

Two pilot sites are already working with borrowed GSA terminals, of the kind the U.S. Senate is now retiring from Senators’ offices. In

large service organizations of the the private

sector, CMP would not be regarded as an “office of the future’ at best it would seem moderately up to date.

its impact on the labor force. By 1988 SSA expects the system to be in place nationwide.

A claims representative will interview the

client, asking questions prompted by a desktop computer screen. The results will be transmitted directly to Baltimore and will go

through a communications processor located

in one of the six program service centers where

the claim is further processed for earnings information. The results of the interview will also

be printed out locally for the client and for use

in case control.

This will eliminate the need for the claims

representative to queue up for the one or two

office SSADARS terminals as she or he now

does. It will also eliminate most of the Data

Review Technicians, the people who now key

data into SSADARS. (Some will be retrained

as service representatives. )

Eventually, SSA’S batch-processing based

claims system will be fully redesigned and

automated, as will postentitlement control and

audit functions. The first phase of the project,

however, deals with initiating claims. In the

first z years, at least, the interactive terminals

will be used chiefly for tasks related to initial
38 — . —

claims filing. Software for postentitlement procedures will not be ready; the postentitlement

process has yet to be redesigned. SSA’S plan

is to procure all of the interactive terminals

at once (in 1987) so that CMP provides a model

for and a basis of automating other operations.

An alternative would be to procure terminals

now only for some pilot sites, with automation

and modernization of all 13,000 field offices

to be phased in after 1990, or when software

development is complete. The advantages of

automating at least a portion of the work immediately, providing improved service in all

rather than a few communities, giving employees experience in using the equipment, (and for

SSA, locking in the allocation of no-year funding) must be weighed against the costs for temporarily underused capacity, and the uncertainty of relying on software that is not yet

developed. SSA insists that immediate procurement is necessary for smooth progress in

SMP implementation.

In August 1986, GAO recommended that

SSA not proceed with the full procurement until there is a full evaluation of the complete system, although GAO did not clearly specify how

this was to be accomplished.G GAO’s recommendation was based on the grounds that the

agency has extricated itself from the 1982 crisis and ‘these procurements are not supported

by documented deficiencies in current ADP

operations. GAO also said that there were

deficiencies in specifying functional requirements for system components, and in SSA’S

cost-benefit analysis for the procurement. The

GAO report did not, however, place this recommendation in the context of SMP as a whole,

or SSA’S related management problems.

The decision about the procurement should,

however, be made in the context of SMP as

a whole. To argue that because the 1982 crisis

was surmounted (i.e., Phase I of SMP succeeded),

the second phase of SMP is not necessary,

amounts to rejecting the goal of systems mod-

‘U.S. Congress, General Accounting Office, ADP Acquisitions: SSA Should Limit ADP Procurements Until Further Testing is Performed, report to the Chairman, Committee on Government Operations, U.S. House of Representatives,

IMTEC-86-31, August 1986.

ernization that both the Administration and

Congress accepted in 1982. The analysis of the

costs and benefits of this procurement (or

rather, the timing of this procurement) should

include the effects of its timing on other aspects of SMP implementation. The risk of proceeding with the procurement is basically the

risk of incurring the cost of unused telecommunications and computer capacity while software is developed for automating additional

field office services. Delaying the procurement

indefinitely may involve other costs, including foregoing possible productivity gains in

claims processing, plus the risk that reductions

in staff may cause a deterioration in services

to claimants. The August GAO reort did not

address these broader considerations. Strong

corrective actions by SSA, DHHS, OMB, and

Congress may be necessary to resolve persistent SMP implementation problems, but they

should not be driven by this procurement in

isolation from the broader and more important

issues. The option of a cautious go-ahead for

the procurement, with intensified monitoring

and oversight, should be considered.

The Software Engineering Program (SEP)

Software engineering is a new discipline that

aims to improve software through providing

better tools, concepts, and methods for software development and testing, and insisting

on their consistent and systematic use. SSA’S

software engineering program however was de

signed to retain (so far as possible) and upgrade

existing software so that an entirely new code

would not be necessary. It would also develop

requirements for new software and new applications, and reconfigure the database architecture so as to take advantage of new technology. Finally, it would develop standards and

productivity tools for software development.

Special emphasis was to be put on modern program documentation, standardization of programs, and conversion to high-level languages

where possible.

SSA developed a software engineering technology manual between 1983 and 1985, but it

was found to be incomplete and lacking in necessary provisions for quality assurance and
39

compliance, according to GAO; work in this

area is continuing.

There were in 1982 some 12 million lines of

poorly written and undocumented program

code. There were about 6,000 COBOL* programs, 1,500 assembly language code programs, and another 1,000 miscellaneous programs. Over the years SSA had translated old

manual procedures into software using now

outdated programming languages, and then,

converted them line by line to COBOL, preserving the inefficiencies of the older technology. The old code is being cleaned up and rewritten as it is needed, according to SSA.

The software engineering program has fallen

far behind schedule. However, SSA claims to

have accomplished the systematic definition

of its information requirements, for the first

time in SSA history. This was done using topdown Business Systems Planning, a technique

for analyzing an organization’s “business functions’ and defining the needs for software applications. A second technique, Critical Success Factors Identification, was also used.

Establishing the information requirements

was a critical first step to help the agency conceptualize the uses of data in its procedures,

and to lay out a general plan for a systems architecture (the hardware and software that

would be used to modernize and automate

these procedures). Thirty-five SSA analysts

then interviewed over 200 managers and workers throughout SSA to get a detailed picture

of the agency’s business and information requirements and an evaluation of existing software, which was inventoried for the first time.

More than 180 systems-related problems and

needs were identified. This work is continuing,

with groups of users from the field office periodically brought into headquarters to work

with the Strategic Planning and Integration

staff.

There is, nevertheless, considerable doubt

among many SSA systems developers and

expert observers as to the adequacy or qualit y of the functional requirements, as defined,

in some areas; some are still not developed at

 Common Business-oriented Language.

a level of detail that can effectively guide

systems redesign and development. Internal

reviews of specific functional requirements

repeatedly speak of incomplete functional

decomposition, improperly partitioned and

poorly named data categories, ambiguities and

contradictions between data flow diagrams,

and many other technical flaws.

A baseline Software Engineering Technology manual has been prepared. An interim

Debt Management System and a pilot of a

Modernized Claim System are in operation. A

software improvement process has begun.

Over the next 5 years the program will design

and develop Logical Application Groups, described as methods and systems for enhancing security controls and auditing capability.

The redesign of the batch-oriented claims

system to a contemporary interactive system

aims at allowing immediate eligibility and entitlement determinations, automated computations of benefits, and enhanced control and

audit functions. SSA has established in its central office a model district office and a test processing module to evaluate software for district

offices. Data-entry screens have been designed

for district offices and the processing center.

A project is underway to obtain at least 22,000

interactive terminals for district offices (the

claims modernization project, as described

above. ) Field offices are now pilot testing some

interactive systems. These projects will be further discussed below.

The annual wage reporting system was also

to be redesigned, and employers were to be encouraged to report wages on magnetic media

rather than paper. However, this project became unnecessary when new Internal Revenue

Service regulations required that all organizations with more than 500 employees file

reports on magnetic media by 1986, and those

with over 250 employees do so by 1987.

In 1981, SSA had $2 billion in outstanding

debts owed by people who received over-payments. A new Interim Billing and Follow-up

System was put in place in 1984 as a first step

in improved debt management. This is supposed to be replaced by the new Debt Man-
40 —— . —

agement System by the end of 1986, which

should further reduce the average age of receivables and maintain better accountability over

all debt collections. The new system will provide on-line access to information about overpayments, bills and notices that have been

sent, and resolution agreements. It may not

be usable in all program areas by the end of

1986, however. There are problems in completing the design for, and implementing, the new

National Debt Management System, because

it must interface with postentitlement systems

and procedures which are still to be redesigned

and automated; thus the functional requirements for the debt management system are

incomplete.

The automated enumerations screening process, begun in November 1984, gives SSA the

capability to process requests for social security numbers in 1 day; currently only 3 percent

of requests require any clerical intervention.

The 1982 SMP called for existing software

to be “made maintainable and transferable”

and to be fully documented by 1985. This has

not been accomplished. All future development

of software is to use software engineering

technology -e.g., strict rules, procedures, and

criteria to make sure that it can be fully understood, added to, improved, and corrected

when needed. The software engineering technology was supposed to be ready for full “institutionalization” by 1986. It is not complete,

and what has been introduced is not always

strictly enforced. However, SSA is installing

modern techniques to measure compliance,

which should then improve.

The software engineering program was estimated in the 1982 program to cost $103 million, or 21 percent of the total SMP 5-year cost.

In the first 3 years, 28 percent of SMP expenditures went to this program. Its total cost

according to the 1986 SMP will be about $200

million through 1990, still about 21 percent of

the projected total

sional needs expressed in new legislation.7

GAO cited delays in the SMP database management program, and software efforts. It said

that SSA had failed to document existing code

(over 10 million lines) as originally promised

in the SMP and instead had chosen to ignore

this problem while developing entirely new systems in the absence of software standards and

enforcement. While praising SSA for its hardware acquisition program, GAO concluded

that SSA had made little progress “in improving its ability to respond to legislative

changes that require software modifications

to existing systems. ”

Within the executive branch, SMP’S software program has also come under criticism.

In the Department of Health and Human Services (D HHS), the Assistant Inspector General

for Audit, Felix J. Majka, conducted a review

of the claims modernization project from late

1983 through May 1984, and found numerous

deficiencies. The HHS Inspector General,

Richard Kusserow, issued reports in February

1985 and again in June 1985, criticizing SSA

for wasting over $1 million in the procurement

of useless software. Kusserow criticized SSA

for “poor planning and management of a software replacement effort. ” He pointed to the

Claims Automated Processing System upgrade,

saying that software purchased from a vendor was unusable. A similar result occurred

with an upgrade of the Manual Adjustment

Credit and Award Process (MADCAP), and the

conversion of earnings program software.

Critics inside and outside SSA point to the

software program as most behind schedule and

suffering from poor management. In interviews conducted by OTA, critics said:

Senior management has seriously underestimated the difficulty of examining, documenting, and rewriting 10 million lines of code

found in SSA’S major problems.

Standards developed to control software

development are not being enforced.

On August 30, 1985, GAO released a report

to the Senate Committee on Appropriations

7U.S. Congress, General Accounting Office, Social Security

Administration's Progress in Modernizing Its Computer Overconcerned with SSA’S ability to meet congres- ations, IMTEC 85-15, Aug. 30, 1985.
41

The functional (detailed) requirements of

SSA’S major systems have not been produced

on schedule. We are about 18 months behind

here.

The Business Systems Plan was a nice exercise, but it did not lead to redesigning major SSA processes.

These criticisms, and those of GAO and the

Inspector General in 1985, may be too severe

in 1986, since SSA says much progress has

been made in the past year. This claim, however, is difficult to document and relies on SSA

assertions. SSA has discovered, as have many

business organizations, that software engineering is not a scientific formula but a set of tools

for better programming. Installing these tools

does not guarantee that they will be used or

that good code will in fact be produced. Some

private sector studies indicate that even intense application of the tools brings only modest gains in productivity; other experts argue

that it can double productivity. Getting SSA

programmers with 20 years’ experience to use

new tools is indeed a major problem in itself,

but SSA is now improving its monitoring of

how much of the new code is produced in accordance with software engineering standards.

The promise, implied or explicit, to document

10 million lines of old code was probably misguided in the first place, and the “failure” to

pursue this objective rigorously is probably

wise. New operational procedures related to

the claims modernization process will avoid the

need for cleaning up some of the old code, and

the rest can be done as needed.

SSA has made considerable progress in improving its software, but just as clearly this

is the area in which SMP is most behind, and

may be seriously floundering. A critical problem seems to be the need for more expert personnel in this area.

The Database Integration (DBI)

Program

The DBI program has achieved its first and

second phase objectives, essentially on schedule. One objective was to improve the management of over 1 trillion bytes of data per year,

a volume which increases by billions of bytes

each year. In 1982, SSA had limited access to

its most important systems and production

files, which were on magnetic tape. Use of over

500,000 reels of tape required extensive scheduling and a large clerical staff just to file and

move the tapes. Over 30,000 production operations each month required 150,000 tapes to

be handled several times, causing human errors

that were estimated to consume each month

about a quarter of available computer hours.

It was very difficult to determine the number of data elements maintained on the various databases. There was no single formal data

dictionary with standard definitions of all the

data elements.

One purpose of the DBI program was to reduce the use of magnetic tape through the use

of shared Direct Access Storage Devices and

to establish a data administration function (i.e.,

a data dictionary) for logical definition of data

elements and files. This would make it possible

to use available hardware and software technology to create a modern integrated database.

In its first phase, the DBI program placed

the Master Beneficiary Record and Supplemental Security Record master data files onto

disk storage, and provided on-line access to this

data for field offices, through the one or two

Paradyne data communications terminals that

each office already had. SSA says that this

project is on schedule. The number of tapes

in active use has been reduced from 500,000

to 250,000. More than 360 disk drive units have

been installed.

A file management and file access system—

the Master Data Access Method, or MADAM

—was developed to handle more than 500,000

queries a day. Data has been separated from

applications programs, so that it can be used

and updated independently; this is essential

for modern data management. For the user,

MADAM appears to be a modern database

management system; the user asks for data,

and gets it, without knowing how to use various separate software programs. In fact, however, MADAM extracts the data from a variety of separate files rather than from one

integrated database. The other new software
42

program that performs in this way is the critical payment system. The ability to update all

files at once, automatically, must await a more

modern database management system.

The earnings systems, enumeration systems,

and postentitlement claims systems update

the major master files, now on disks, using

batched sequential access. SSA is still working toward modern data administration, with

a completely integrated database.

SSA’S recently developed data dictionary de

scribes over 50,000 data elements. A data dictionary, one of the first steps in data administration, defines the data elements—that is, the

pieces of information—that should go into a

database and dictates the form they will be uniformly given and their labels, or the terms used

to call them up, so that retrieval and processing is easier. Although the new data dictionary is widely cited by SSA as a major accomplishment, it is valuable only if it is rigorously

used. This may not be the case; OTA was told

by some people at SSA that the dictionary was

often not adhered to in writing programs and

“new uses and new data definitions are popping up all over the place. ”

The data dictionary, even if rigorously used,

does not solve SSA’S problem. The agency already has about 80 million records on RSI rolls

and 10 million on SS1 rolls, accumulated over

50 years, with data categories defined in many

different ways over the years. The attempt to

purify or clean up SSA’S data is staggering;

one master file run through a data cleaning program reportedly “produced 3 billion lines of

print and 120 million invalid values. ”

The DBI program has defined a “target database architecture”–that is, the general kinds

of structure, software and hardware, that are

needed for organizing its databases, but it has

not yet worked out what that architecture will

be (see figure 4). When the new database architecture is decided on and implemented, it

should have tools to assure that all databases

can be updated in synchrony; that has not yet

been accomptished.

GAO contended, in a report to the Senate

Appropriations Committee in August 1985,

Figure 4.—The SSA Characterization of the

Database Architecture To Be Used in SMP

Database

handler

1

Application

programs

Application DRMS

interface interfaces

Application DRMS

interface interfaces

DRMS

SOURCE: U S Department of Health and Human Services, Social Security

Administration, SSA Systems Modernizatton Plan 1986 Long-Range

Stategic Plan, Publicatlon No 40-004, October 1985

that SMP is behind schedule in developing an

integrated database because of delays in

procurement.8

In late 1984, a $9.8 million request for proposals for database architecture

development was issued, but only six vendors

bid, and those were judged technically incompetent. The procurement was withdrawn

and canceled in May 1985. The major vendors

did not bid, reportedly, because the venture

was too risky and SSA allowed only 4 weeks

to write a proposal. Some potential vendors

said that SSA asked for an “overly ambitious

architecture, ‘g

and complained that the Request for Proposals was vague and confusing.

SSA throughout 1985 said that it had moved

ahead with developing an architecture on its

own, and had made up the time lost on the

failed procurement.

Yet in 1986 SSA was still struggling to develop a database architecture. In April 1986

SSA told OTA that it had “re-examined” a

database management system produced by

Cullinet, IDMS/R (Integrated Database Management System/Revised), which is already in

use in HHS, and decided that it would adapt

the SSA database architecture to use this soft-

‘U.S. Congress, General Accounting Office, IMTEC 85-15,

op. cit.

UW.S. Congress, General Accounting Office, Social Security

Ati”m”stration Computer Systems Modernization Effort May

Not Achieve Planned Objectives, IMTEC-85-16, Sept. 30, 1985.
43

ware package, which according to SSA is compatible with its existing software, including

MADAM. Whether or not this could solve

SSA’S architecture dilemma is far from certain.

IDMS/R is not one of the newest database

management systems available, but it is widely

regarded as a good system, and it has replaced

IBM database management system in many

large corporations. But some information indicates that SSA is not, in fact, structuring

an architecture that can use IDMS/R but

merely “layering” IDMS/R over MADAM—

that is, using information retrieval and data

management systems to obscure the fact that

it still has no firm plan for database integration. These changing and conflicting reports

provide an excellent example of the near impossibility, for those not inside an agency with

hands-on access to its systems, of distinguishing what is being done in implementing information technology plans from what an agency

reports it is doing.

Failure to settle on a database architecture

in the near future could have severe consequences in terms of lost productivity. Fourth

generation languages operating in a modern

database could save thousands of hours of

programmer time. Many applications could be

written in more efficient advanced languages.

However, existing programs, those already

written, will be compatible with the proposed

database architecture. It is in the area of lost

productivity that SSA would pay a price for

failure to develop a database architecture.

The most controversial accomplishment of

the data integration effort is perhaps the Master Data Access Method, or MADAM, the file

management system that SSA developed when

it converted from tape to disk storage. Many

experts thought that SSA should have sought

or adopted off-the-shelf software for this purpose, which would be maintained by vendors,

rather than developing its own, which it must

maintain (that is, improve, modify, and update). MADAM may well be incompatible with

future mainframe operating systems, database

management systems, and fourth generation

languages. Thus SSA incurs future risks of

incompatibility and long-term maintenance

costs. In the short term, there are also risks

and costs. MADAM is apparently a very complicated and poorly documented system, so

that only a small group of people are sufficiently knowledgeable to operate it, yet it is

the basis of SSA’S data management. This constitutes a peculiar vulnerability to smooth

operations if there is any short-term emergency, sudden work force reduction, or drastic reorganization.l”

The DBI program was allocated about 14

percent of projected SMP costs in 1982, or $65

million. But according to the 1986 Plan, its total cost will be less than $3o million (3 percent

of SMP) although SMP costs as a whole have

doubled. This revision occurred after the failed

request for proposals for a contractor to develop a database architecture, when SSA

decided it would be done in-house; presumably it represents the estimated difference between in-house and contractor efforts. When

the 1985 SMP Update was published, 3% years

into the plan, this program had expended about

$7.8 million, or 4 percent of total expenditures.

The Data Communications Utility

(DCU) Program

The DCU program is to reengineer the three

major telecommunication networks to constitute a data communications utility; that is, a

conduit for transmission of data between and

among processing points. With the existing

SSADAR system, there are only one or two

communications terminals in each office, operated by a data technician, and service representatives have long waits for sending and receiving messages. In its first 7 years, the

SSADAR system failed frequently, and was

1’)As one internal critic said, “If these people get sick, die,

leave, or just get mad, then all of SSA on-line operations could

go down. ” Another official charged that “the people who built

MADAM . . . refuse to gi~’e management the schematic diagrams and documentation on how MADAM works. All the~

give us is the commands and a users manual. ” Se\’eral SS.4

officials concurred in the conclusion that a few people ha~’e used

their exclusive knowledge of MA I)Ahl to resist efforts to de-

\.elop a database architecture without MADAM, and that

hlADAM will hake to “be built around” in designing the architecture. 1 n short, MADAM has become a focus of internal

tension and dispute as well as external criticism.
44

sometimes inoperable for long periods. During the first half of 1981, it was ‘down’ about

11 percent of the time, or about 1 hour of each

working day, on the average. The most immediate objective was to increase the reliability

of communications (“the mean time to failure”)

by 20 to 30 percent, and to reduce the amount

of “downtime.”

Communications software improvement began within the first year of SMP. The objectives were: 1) to eliminate the daily return message backlogs; 2) to achieve an acceptable

response time, even if the 1982 volume of daily

transactions doubled; and 3) to be able to serve

the needs of all SSA users (including those

using the new interactive terminals).

The two host computers (IBM 370/ 168s) were

replaced in 1983, trunk lines were added, and

telecommunication monitors upgraded. These

immediate improvements significantly reduced

or eliminated long communications backlogs.

The 1982 plan was that by the end of 1985,

communications software would be improved

to make it “maintainable and transferable, ”

replacement concentratorsll and processors

would be installed, the concentrators’ software

would be converted, local intelligence would

be installed at district offices, and specifications would be completed for the final data

communications utility (i.e., communications

lines, etc.).

The general design of the communications

utility has been completed, and in 1987, three

very high-capacity machines will increase teleprocessing capacity by seven times over. This

will be essential as the on-line claims modernization project, already described, comes to

fruition.

The DCU program is essentially on time. It

is expected that contracts for procurement of

the 22,000 to 39,0001 interactive terminals

1’Concentrators are the minicomputers which receive data

and query messages from field office terminals, through modems;

and then condense, edit, and reformat the messages and send

them on to two main host computers. The concentrators also

send response messages to the proper field office terminal.

“The procurement is to be for 22,000 terminals with an option for an additional 17,000; with peripherals, etc., about 60,000

devices will be procured.

will be let by late summer of 1986, and that

installation will begin in the fall of 1986.1s

But critics have raised serious questions about

whether this program should proceed as planned.

There are in fact two separate controversies

surrounding the program: whether the basic

strategy is sound, and whether SSA’S pacing

of its implementation is reasonable. In regard

to the basic strategy, two questions are often

raised:

1. Should SSA be planning to decentralize

its processing rather than to rely on interactive communication between field

offices and processing computers at headquarters?

2. Can SSA be sure that the traffic between

district offices and field offices can be

handled?

The 1982 SMP strategy is basically one of

creating a highly centralized system. This runs

counter to a strong trend for large organizations to decentralize their operations as much

as practical, in both the private sector and the

public sector; for example, the State of Utah

began to move toward distributed processing

for government operations in 1979, well before

the SMP was formulated.

Distributed data processing was in fact a

part of the SMP strategy as first announced

in 1982. How the SMP strategy came to be

one of complete centralization of processing

is somewhat mysterious. The 1982 SMP included “installing] local intelligence at all District Office terminals. ” This was a response

to GAO criticism in 1979 of SSA’S planned

procurement of Paradyne (dumb) terminals,

which predated the SMP. In order to satisfy

GAO’s criticism and still proceed with that

procurement, SSA agreed, in 1980, that the

Paradyne terminals would be enhanced in

memory capacity at some time after they were

installed, to allow distributed processing. Be-

}{The schedu]e calls for award of a contract in August 1986

(competition closed in January 1986), installation of a test site

in the National Computer Center in September, and beginning

of installation at 20 pilot sites (claims field offices) in October.

All terminals must operate without fault for at least 30 full days

out of 90. On acceptance, 500 will be installed the first month,

1,000 the second month, and 1,500 each month thereafter.
45

cause of persistent problems with the Paradyne terminals the vague plan to upgrade the

terminals was dropped. (This situation is described in ch. 7.)

After 1982, mention of distributed processing was quietly dropped out of SMP descriptions. Strangely, this decision—or nondecision—seems almost to have gone unnoticed.

At late as January 1985, the HHS Inspector

General, in a memorandum to Acting SSA

Commissioner McSteen, said:

We also found [in a review ending May 1984]

that SSA had decided to centralize computer

processing even though the original SMP

called for local processing (decentralized).

Documentation to support this decision, however, was not available . . . SSA said that the

basis for deciding to process centrally was documented, however, we have not been able to

obtain this documentation.14

SSA officials now say somewhat vaguely

that they are studying the distributed processing option and will ‘move in this direction’

in future planning. They claim, however, that

to add ‘local intelligence’ would cost approximately $25,000 per field office, or about $40

million, and that both technically and economically their strategy is the more defensible

choice. The agency has, to this point, held to

a belief that centralized control is necessary

to protect the integrity and security of its data.

SSA systems planners argue also that distributed data processing would force them to

choose between:

1. maintaining seven or more compete databases in regional centers, with the difficulty of assuring that they are simultaneously updated and rigorously consistent;

or

2. dividing the beneficiary files between regions, with the difficulty that beneficiaries

are highly mobile and may turn up at unexpected locations for service.

‘ ‘U.S. Department of Health and Human Services, Office of

Inspector General, Memorandum to Martha A. McSteen, Acting Commissioner of Social Security, ACN 15-52654: Audit

Report– SSA Redesign of the Claims Processing System Under the Systems Modernization Plan (SMP), Jan. 30, 1985.

Neither of these are insurmountable difficulties, given modern data-processing and telecommunication capabilities. However, this

does not necessarily mean that SSA’S choice

of centralized data processing is wrong or unreasonable. It is true that there are limits to

the efficiency of enormously large databases

dependent on a few central computers. Centralization increases the vulnerability of nationwide operations to a breakdown at the hub,

while decentralization would provide some redundancy and limit the effects of regional interruptions or failures. On the other hand,

centralization allows for more management

controls, better security, and greater redundancy, or better backup systems. Most large

financial corporations, in fact, are not decentralizing their data-processing operations. This

is one of the many points on which experts disagree, and SSA’S decision does not fly in the

face of accepted professional practice.

For the present, field offices will by means

of communicating terminals be given the same

functions, capabilities, and access that they

would have with distributed logic, according

to SSA. The communications network will be

be capable of accommodating processing at

any of the communications node, and so will

not be a hindrance to any future decentralization of processing capability.

As to the manageability of traffic under

SSA’S plan, some critics point out that the

SSADAR system was designed in 1974 to handle 20,000 messages and 80,000 data transactions per day, and that within 1 year the host

computer capacity was saturated, while since

then the transaction loads have increased over

500 percent. They argue that the system could

again become overloaded as the traffic from

up to 39,000 terminals is phased in. Just as

highway improvement often encourages additional traffic and ultimately results in more,

rather than less, congestion, the use of the communications network could exceed expectations.

SSA is confident that it has adequately projected and modeled traffic on the system for

the foreseeable future. Basically, it has determined the maximum number of transactions
46

.

Figure 5.—Available Computer Capacity and Projected Workload Requirements

of SSA’S Computer System, as Projected in 1982

10 ‘

9

t

6

---- -

● — 9

Projected workload

Critical workload

Available capacity

SMP

- I -

I I I I I I I I 1 I I

1977 1978 1979 1980 1981 1982

SOURCE U S. Department of Health and Human Services, Social Security Admin

No 41-004, February 1982

that a service representative can complete per

hour, and planned a system that would accommodate all field office personnel making maximum use of the system at the same time

(which assumes that the number of field offices

and service personnel will not be increased).

The second controversy about the program

has already been discussed above, under the

claims modernization project; it concerns the

timing of the procurement of the interactive

terminals.

The DCU program was originally estimated

at $160.5 million or one-third of total SMP

costs. By September 1985, it had expended

$12.9 million, or 7 percent of SMP expendi1983 1984 1985 1986 1987 1988 1989

Year

istration System Modernization plan from From Survival State of the Art, Publication

tures. Big investments are scheduled for fiscal years 1987 and 1988 ($184 million). By

1990, this program is projected to cost $273

million, about 28 percent of total SMP costs.

The Capacity Upgrade (CU) Program

The CU program directly addressed the crisis under which SSA in 1982 could no longer

meet the elementary, basic demands of its programs for computing. Figure 5 illustrates the

historic growth and projected workload of SSA

computers. In 1982 SSA estimated that it

needed 5,000 CPU (central processing unit)

hours per month to handle its workload plus

its backlog, and that its installed capacity pro
47

vialed only 3,000 CPU hours, which was effectively reduced to 2,000 by “insufficiency of

operations staff. ” The CU program was to

reconfigure and consolidate the computing

sites distributed around SSA headquarters, to

acquire much higher capacity and more modern computers, eliminate magnetic tape files

and switch over to direct access devices, develop a local computing network for high-speed

data transfers, and enhance the peripheral

equipment (such as printers).

The programmatic systems computers have

been upgraded and a separate test and development facility was purchased. Computers

that averaged only 270 hours “mean-time to

failure” (MTF) were replaced with machines

that average 19,000 hours MTF. National Advanced Systems telecommunication processors

have been installed, as have smaller systems

for decision support, development, and management of the larger systems. Additional

hardware upgrades are planned in 1987, at

which time capacity will be far in excess of

workloads anticipated in the SMP.

By 1986 computers at the National Computer Center, used for programmatic, administrative, and test work, had all been replaced

and modern disk storage had been largely

achieved, although SSA still has an enormous

library of tapes in active use. Operating systems software has been modernized, laser

printers installed, and several terminals added

for software program testing.

The computers in the six Program Service

Centers still must be replaced. Four of these

are IBM 360/65s that are obsolete by any reasonable criteria. They have smaller capacity

than many personal computers, but are still

running major program activities, although

constantly threatening a breakdown.15 The

1982 plan called for this replacement to be accomplished by the end of 1985, but a procurement contract award was protested under the

Competition in Contracting Activities law, ”

‘

;The Deputy Commissioner for Systems sa~w wryly that

‘‘only SSA and a few Third World Countries still use these computers. ”

A potential supplier protested because the specifications

did not make allowance for reconditioned equipment. SSA was

which has delayed the replacement. In general,

however, hardware acquisition and capacity

upgrading is on schedule.

New hardware and system software must

also be acquired for the National Debt Management System, and the Logical Applications

Groups. The Test and Time-Sharing Facility

must also be upgraded.

The CU program was planned in 1982 to account for 28 percent of SMP, $132.5 million.

By September 1985 it had spent $72.7 million,

or 41 percent of all expenditures to that time.

Other large procurements are planned for 1987.

By 1990, $237.8 million will have gone into capacity upgrade, or 24 percent of the expanded

SMP budget.

The System Operation and

Management Program (SOMP)

The SOMP was not in the original SMP, but

was added to develop automated tools and procedures for managing computer operations. It

has implemented automated job scheduling at

the National Computer Center, as well as computer monitoring, training, and an integrated

control facility. The small program is projected

to cost $27.6 million by 1990, or less than 3

percent of total SMP costs, is on schedule.

The Administrative/Management

Information Engineer -

ing (AMIE) Program

AMIE was added to SMP in 1984. The SMP

originally focused on data-processing needs to

carry out primary program responsibilities,

and gave little attention to managing SSA’S

resources or providing executives and managers with information needed for decisionmaking and policy. Recognizing that SSA badly

needed a management information system,

faced with accepting the possibility of using reconditioned equipment which meets its specifications but would put SSA several

years behind state-of-the-art technology, or rewriting the specifications to require some newly developed features, which would

not only further limit competition but would significantly delay the acquisition. It chose to revise the request for proposals

to allow vendors to offer reconditioned equipment.
48 —

Acting Commissioner Martha McStean in

April 1984, added this program to develop

management information systems software,

automate and modernize administrative practices, and encourage end-user development of

new applications.

An agencywide survey was completed to determine management information needs. An

information center was developed to spur

microcomputer applications; microcomputers

have been piloted in 20 field offices to study

their uses. A Financial/Administrative Integrated Management System was installed

using fourth generation database language

(IDMS/R). This led to the belated recognition

that it may be possible to use IDMS/R for

SSA’S overall database management, as already discussed.

The AMIE was allocated $311.4 million or

over 37 percent of SMP in the 1985 Update

of SMP; the 1986 version scaled this back to

$197 million or 20 percent. The cost might have

been considerably less if management information needs had been integrated into the

original plans.

PLANNING AND INTEGRATION

SMP is a rolling 5-year plan, meant to be updated each year. Both the planning and the effort to integrate SMP across programs is the

task of the Office of Strategic Planning and

Integration, within the Office of Systems. This

OSPI has a staff of 100. There are weekly meetings between representatives of the SMP programs described above, with the integration

contractor. In addition, efforts are being made

to involve operations people in systems planning, since they are the ultimate users of the

systems. Some critics, in fact, argue that operations considerations are determining the

directions for SMP, and that this guarantees

that the emphasis will be on rocking the boat

to the least extent possible; that is, minimum

change in SSA procedures and customs rather

than deriving maximum benefit from advanced

technologies. This may, however, be a rational

choice for SSA at present.

Other critics, including people within SSA,

maintain that little or no integration is occurring, and that the integration contractor is

often diverted to other tasks. It should be

noted, however, that ‘‘integration’ is a loose

and relative term, and can only be demonstrated by long-term results of SMP implementation.

The integration role contract will be recompleted when it expires in the fall of 1986 and

provision has been made for a 3-month overlap with the old contract, so that there will not

be a lapse in this function should a new contractor be selected.

EVALUATING THE PROGRESS OF SMP

It is difficult to measure precisely the

progress of a very large organization in a near

billion-dollar effort over 8 years (1982 to 1990),

an effort with multiple goals, strategies, and

areas of effort. One measure is increased productivity, or to be more accurate, achievement

of work force reduction goals. Other indicators

of progress are more qualitative or judgmental.

This study relies on inspection or analysis of

several hundred documents, supplemented

with more than 50 interviews with current and

former SSA employees at all levels, with congressional committee staff people; with officials at the General Accounting Office, the

General Services Administration, and the Office of Management and Budget; with computer vendors and contractors; and with other

well-informed observers.
49

There were significant differences in assessments of progress to date, between critics of

SSA and its defenders, between representatives of various oversight and monitoring

groups, and within SSA management. It

should be noted that while SSA claims to have

made great progress in solving some of its

problems, much of that progress appears to

have been made within the past 6 to 9 months,

while this study was underway. For example,

SSA has recently shown signs of moving to

improve management procedures and to change

its corporate culture; it has initiated new training programs, recruited highly trained new

programmers, started new management planning activities, and consulted outside experts.

Some of the skeptics may not be well informed

about developments during that period. At the

same time it should be noted that all of the

information about these developments necessarily comes from an interested party, i.e., SSA

management.

Staff Reduction

Among Administration goals for SMP (cited

earlier in this chapter) was increased productivity, for which work force reduction is often

used as an indicator, although it is an input

measure and not an output measure. In its

1986 budget request SSA formally announced

the plan proposed earlier by OMB to reduce

the work force by 17,000 full-time equivalents

(FTEs) or 21 percent of its 1984 staff, by 1990.

This was to be achieved largely through systems modernization and privatization of some

activities.

GAO concluded in March 1986” that the

agency was “essentially on target with its

planned cumulative FTE reductions. ” In part,

however, this resulted from the fact that expected increases in agency workload did not

materialize (e. g., anticipated inquiries about

taxation of benefits); work-year savings from

systems and procedural changes were 24 percent less than expected. GAO reported (on the

‘-U.S. (-on~~ess, General Accounting office, Socia~ Securit~r:

.lct ions aJ)d I)lans To Reduce Agenc>’ Staff, briefing report to

con~r~’s~ional requesters, II RD-86-76BR, March 1986.

basis of SSA performance data) that claimsprocessing times and backlogs decreased.

GAO said that “the evidence is inconclusive’

as to the effect on service to the public. Union

representatives and field office personnel said

(both to GAO auditors and to OTA) that service declined; they reported longer waiting

times, a “less caring attitude” on the part of

employees, and increased error rates. SSA said

that service improved, but GAO said that SSA

performance data was incomplete. For example, SSA does not collect data on waiting times

for clients, or on client satisfaction.

SSA Claims

SSA managers point to the SMP as the first

long-range, dynamic plan for meeting SSA’S

information-processing needs, and say that the

goals and strategy of the plan are now closely

integrated into operations. The Acting Commissioner, as early as 1983, claimed significant

benefits from the plan, in terms of decreased

processing time and other quantifiable output

measures.’” In addition, she spoke of “qualitative enhancements, ‘‘ including a general rationalizing of SSA procedures.

SSA points to a number of surveys of both

the general population and beneficiaries, which

indicate that the public continues to hold SSA

service in high regard, as both courteous and

efficient. In a GAO survey, 78 percent of a sample of SSA clients rated service as good or very

good, and only 7 percent said it was poor; 51

percent said its performance was somewhat or

much better than that of other agencies.

SSA’S top managers argue that SMP is a

complex, multifaceted program that is now institutionalized within SSA and has had a pro-

‘“Prepared statement of Acting Commissioner Martha A.

McSteen, U.S. Congress, Social Securit.v: How Well IS lt Serving the PuM”c? Hearing Before the Special Committee on Aging,

U.S. Senate, 98th Cong., 1st Sess., Nov. 29, 1983, pp. 8-12.

‘

gU.S. Congress, General Accounting Office, Sociai Securit.v:

Quality of Services Generafly Rated High by Clients Sampled,

HRD-86-8, January 1986. The report also noted, however, that

18 percent found SSA mail difficult to understand, 30 percent

found explanations unclear or “somewhat clear, ” and 58 percent had some negative comments about SSA service (e.g., long

waiting times, many telephone busy signals).
50

found impact on SSA’S organizational culture.

They point to a number of initiatives not described in SMP documents that are vital to

its efforts at renewal. Among these efforts are:

●

●

●

development of a strategic planning function that will drive the development of information technology;

enlargement of training programs in the

systems area to assure that new software

tools receive wide acceptance and new

standards are actually utilized; and

development of new ways of handling conflicts between operations and development, disagreements among organizational

subunits, and organizational conflict.

Whether these three points represent current determined efforts, aspirations to be tackled at some future time, or merely lip service

paid to critics, cannot yet be determined. Privately, some SSA observers say that they depend entirely on the attention and insistence

of a few key people and that they began to fade

as soon as it was learned, in early 1986, that

a change in top leadership and in internal organization is to occur. Whether or not this is accurate, the future strength of these essential

conditions will depend in large part on the policies and the capability of the new Commissioner.

Critics of SSA and SMP

Many critics of SSA are convinced that SMP

will fail, not because of the technology nor the

ambitious objectives, but because of SSA’S

“organizational culture, ” its long history of

mismanagement, interference from outside, po

litical pressures, and its sheer size. Those who

have generally been critical of SSA in the past

are usually skeptical of the possibility of SMP

improving agency performance. Past supporters of SSA tend to be optimistic about SMP.

The strong critics include some former

managers brought into the agency in the late

1970s and early 1980s, who failed in their efforts to change information processing at SSA;

as well as outside observers not associated with

the agency directly but familiar with its problems and critical of its behavior. Two other

kinds of critics are noteworthy: higher monitoring authorities in the executive branch, officials of OMB and HHS; and Members of Congress and staff concerned with SSA oversight,

who have come to distrust its statements over

recent years.

Many of the most adamant critics, however,

admit that their knowledge of events at SSA

is outdated by 12 to 18 months, so that they

have no direct knowledge with which to evaluate SSA’S strong claims of recent progress. The

critics’ positions should be viewed in the context of SSA’S statements, summarized above.

One of the major themes of critics was that

SSA as an organizational culture was incapable of bringing about the kinds of change represented by SMP, because of the hostility of

SSA management to newcomers and the fact

that powerful SSA senior managers are recruited from within, and promoted up the

ranks, in long insider careers. While this creates loyalty and dedication, it also creates a

strong antipathy to criticism, however well

meant, and often an inability to learn from it.

Critics felt it also creates a culture that does

not value innovation, and as a result, outside

consultants and advisors are ignored or avoided,

and internal conflicts are resolved in favor of

those who resist change.

SSA as an organization is said by the critics

to lack a modern, analytical approach to management problems. The early decision in SMP

to salvage 65 to 70 percent of the 10 million

lines of COBOL code, for instance, never had

any analytical support, it “was drawn out of

thin air. ” An SSA contractor complained of

having “our work ignored. They [SSA managers] steer us away from important problems. ” Contractors complain of slow decisionmaking, fallback of up to 2 years in the SMP

schedule, and sluggishness because of the sheer

size of SSA. As one noted, “there isn’t a club

big enough to beat SSA. Below the level of

Commissioners you can’t get an answer from

anyone. ” Many critics describe an alignment

of internal interest groups opposed to change.
51

As a plan of action, SMP is widely perceived

to:

● be primarily oriented towards hardware

acquisition, and

 fail to provide a vision of how SSP will

do business in the future.

A continuing theme of SSA critics is that

the in-place systems personnel are a principal

impediment to successful implementation of

SMP. A former employee notes that “in-place

systems workers have impeded efforts to reform systems and have a stranglehold over new

projects.

Many SSA employees are critical of the implementation of SMP. For example, the (AFGE

union) Local 1923 Report has carried a number of stories about the failure of SSA to bring

workers into decisions related to SMP, and to

require that managers be trained along with

workers in the new techniques and procedures

necessary with the modernized systems. The

union newsletter of March, 1986, commented:

. . . in the whole SMP, not a dime has been

spent on the process of managing the human

side of change in (Operations). If the right

questions don’t get raised, if the necessary dialogue and consideration of reality and quality

are not brought into the process, SSA will

never have an adequate system for building

the data processing system on which so many

Americans depend.

Leaders in the Local welcome the new emphasis on training, but are critical of some of

the ways it is being carried out. They claim

that training opportunities have been determined by generic job type rather than by the

individual’s needs, that there is little or no opportunity for project teams to be trained together, that there is little or no training in how

to manage projects using new technology, and

that managers have received, at best, only cursory training about the new technology and

that where such opportunities have been offered, managers have been reluctant to attend.

On the other hand, outsiders frequently perceive that SSA is spending too much time and

resources on retraining employees rather than

hiring new young workers from outside. One

vendor notes:

Imagine what it’s like–everyone started

out there and ends up there. Bank systems

people come and go, insurance and airline systems people switch jobs frequently. But not

at SSA. They never get new ideas and procedures carried in on the backs of people.

How Well Has SSA Performed?

SSA’S performance in the first years of SMP

looks considerably more promising than many

of its critics will allow. There remain major hurdles to be surmounted if success is to be

achieved. But the struggles that SSA is having in modernizing its systems are not unique;

they are similar to problems that other large

organizations in both the public and private

sector have had, or are now having.

The history of the Social Security Administration illustrates some general principles of

organizational behavior. Organizations do not

innovate in areas of strategic importance unless there is some substantial environmental

change; they innovate when they are driven

to it by serious and persistent problems or by

crises. In nearly all organizations, there are

substantial forces resisting change, rooted in

prevailing values, norms, and interest groups.

Organizational innovation must involve more

than adopting new technology. To use it effectively requires changes in habits, behavior,

values and norms, and power relationships.

Technological change nearly always brings

fights over who gets, and uses, the technology

to what purposes. Effective managers can take

advantage of external circumstances to solidify power, disarm internal opposition, and tilt

the internal conflict among groups towards

successful use of the technology. Ineffective

managers may be thwarted by those who

quietly but stubbornly refuse to adapt work

processes and procedures to make use of new

technological capability.

The problems that SSA faced and faces in

innovating are particularly difficult. Few private firms have a business environment of com-
52

parable size, complexity, or operational demands. The few private firms that have

achieved the level of software sophistication

needed by SSA, or that have successfully integrated all elements of their systems development, deal in much simpler environments.

Large organizations operating in complex environments, such as multidivision companies,

typically have a hodge-podge of systems developed at different times by different people

and using different languages. This is the case,

for example, with General Motors, which is trying to pull together its many data processing

“baronies” and expects this effort to take a

decade to accomplish. Some other large government agencies, such as IRS, have, in undertaking systems modernization, made mistakes or suffered problems that for a time

seriously compromised their mission.

It seems clear that SSA has been handicapped in undertaking the SMP by the aftereffects of years of instability or lack of experience in its top layer of leadership, an

organizational culture that emphasizes reliability and regularity in daily operations but

resists change and innovation, failure to attract and hold new recruits in some critical

professional categories, and most importantly

by the immense size and complexity of the

operations. Because it is a government agency,

it had little control over changes in its services or the volume of its operations, and was

not free to take risks in technology investments; at the same time, as a government

agency, it and its managers are insulated

against the full penalties of failures and of unproductive behavior, and some of that behavior

is allowed to persist.

About some of the basic decisions and strategies in the plan itself, there is room for considerable doubt and debate among systems experts. However, for the most part these are

areas where there are no clear and certain

“right answers, and almost any decision

would have vigorous critics.

As will be seen in the case history, in Part

III, some of the greatest hurdles that systems

modernization at SSA face are not deficiencies

in the plan but long-ingrained suspicions and

hostility between operations components and

systems development components, between

newcomers and oldtimers, and between career

people and political appointees, all of whose

efforts will be necessary if modernization is to

succeed.

IMPERATIVES FOR SSA

The opportunities for improvement in SSA’S

management of information technology in the

next few years would be enhanced by: ●

●

●

●

pacing work force reduction to match real

gains in technological capability; i.e.,

avoiding abrupt reductions that disrupt

or threaten smooth operations and pro- ●

duce excessive resistance by workers and

managers to further automation;

a period without major changes in SSA ●

programs and adrninistrative responsibilities, or, if such changes are mandated,

provision of ample time to plan and implement the changes; ●

absence of major reorganizations other

than those that reflect and support rationalization of the work flow to accommodate

changes in processing systems;

enhanced capability to recruit competent

and well-trained systems designers, managers, and programmers (which probably

depends now on pay and classification

schedules);

continued funding for SMP itself, and for

SMP-related support functions, such as

technical and management training;

strong commitment by top leadership to

achieving the goals of SMP and to building a cooperative relationship between

managers and workers;

insistence by top leadership on real cooperation between operations and systems

development personnel;
● an emphasis on continued strategic planning, and assurance of resources dedicated

to this activity; and

● early resolution of the issue of independent agency status for SSA.

These desirable conditions imply certain

responsibilities for SSA leadership, for the

Administration, and for Congress. For all parties, they would require placing long-term objectives ahead of the desire for immediate realization of the benefits sought through systems

modernization. Congressional oversight will be

most effective if it is directed toward insisting that the agency and its executive branch

monitors strive to create the necessary conditions for progress, rather than focusing on assignment of blame for problems in the past.

SSA is changing as SMP is implemented,

although these changes may not be quite as

rapid, nor as deep and smooth, as SSA suggests. Most congressional staff people have not

had the opportunity to be well informed about

53

recent and current progess in SSA. SSA excessive defensiveness, attempts to deny any

and all failures, and resistance to outside advice encourages its critics to suspect and expect the worst. In the past, there has been

strong tension between the institutional drive

to secure the resources to make much needed

changes, and the defensiveness of those people who are struggling to cope, not always successfully, with day-to-day problems. This has

at times distorted or obscured the picture that

is presented to Congress. These distortions—

whether in the past or in current efforts to rewrite history-are now important chiefly to

alert Congress to the need to probe deeply and

target questions carefully in order to assess

reliably the degree of improvement in service

delivery. Much improvement is clearly possible through the use of new information technology, and is the best way of justifying the

significant resources invested in SMP from

1982 to 1990 and beyond.
Chapter 3

Systems Modernization and

Related Issues, 1986-90
Contents

Page

SSAand Congress: Accountability and Responsiveness . . . . . . . . . . . . . . . 57

Monitoring and Oversightof SSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

SSA’s Ability To Implement Changes Mandated by Congress . . . . . . . . 59

SSA and Its Employees: Labor-Management Relations . . . . . . . . . . . . . . . 61

SSA and Its Clients: Issues of Debt Collection

and Financial Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

SSA and the Administration: Independent Status and Privatization . . . . 66

Possible Independent-Agency Status for SSA. . . . . . . . . . . . . . . . . . . . . . 66

Privatization of or Contracting Out Major SSA Operations . . . . . . . . . . 69

SSA and the Public: Issues of Data Privacy and Security . . . . . . . . . . . . . 71

New Information Policy Directives for the SSA . . . . . . . . . . . . . . . . . . . . 71

SSA’S Data-Sharing Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

SSA’s Computer-Matching Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Future Information Systems and Possibilities for Abuse . . . . . . . . . . . . 76

Security of SSA Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Table

Table No. Page

2. SSA Computer-Matching Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Figure

Figure No. Page

6. Cumulative Percentage Reduction of Full-Time Equivalent

Employees From 1984 to 1990 in the Social Security

Administration Staff by Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Chapter 3

Systems Modernization and

Related Issues, 1986-90

The likelihood of success in systems modernization for the Social Security Administration depends in part on the support of its employees, its clients, its overseers in Congress,

and other institutions with which it interacts.

To the extent that SSA succeeds in modernizing both its information systems and its management, this will change the way the agency

does its business, and will affect its relationships with Congress, its clients, its employees,

and with other institutions, such as State government. This chapter explores some of these

relationships now and in the next 5 years.

It surveys, first, two issues in SSA relationship to Congress: the monitoring and oversight of SSA, and SSA’S ability to respond effectively to changes mandated by Congress in

social security programs, coverage, and benefits. Next it considers SSA’S relationships with

its own employees, in the context of systems

modernization. Third, it considers SSA’S response to a major Federal initiative, improved

debt collection and financial management,

which significantly affected SSA relationships

with its clients.

Fourth, the chapter discusses SSA relationships with the Administration and with the

private sector, in terms of possible major

changes in SSA status, such as making it an

independent agency, or privatizing part of SSA

operations. Finally, the chapter looks at a

growing issue in SSA’S relationships with the

general public: concerns about the confidentiality and security of data as affected by advanced information technologies and current

practices of data-sharing and computer-matching, capabilities that are likely to be facilitated

by systems modernization.

SSA AND CONGRESS: ACCOUNTABILITY AND RESPONSIVENESS

Monitoring and Oversight of SSA

SMP has already had both positive and negative impacts on SSA relations with Congress

and the White House. SMP has been regarded

by most Congressmen as good news and Congress has responded with generous funding.

However, there is continuing concern over the

wisdom and cost-effectiveness of some of the

basic SMP decisions, and over SSA’S procurement procedures. In addition, there is congressional concern over whether SMP-related employment reductions and office closings will

result in poorer service to clients. Congressional oversight committees have been particularly critical of SSA apparent lack of assessment of the impacts of systems modernization

on service levels. Finally, there have been serious charges of irregularities and improprieties

in at least one SMP contract award. ’

1 U.S. Congress, liearings: (’oncra(t Irr(’gularitiesand .?lismanagement Plague SS.4 ‘.s b’.ixten].< ,jlodernization 1@q-an2,

I.egislation and National %curit~r Subcommittee of the I louse

Committee on Go\’ernment operations, No\’, 6 and No\T. 20,

1985.

Recently a General Accounting Office in~estigation alleged

that the Commissioner who initiated SNIP, John S\’ahn, inlproperly allowed employees of his own former emplo~er. I]eloitt,e

Ilaskins & Sells (DHS) to use SSA office space next to his own

office for a number of months just when Shl P contracts we’re

being de~’eloped, in which DHS had an interest as potential contractors. S\’ahn was also accused, along with other SS,4 employees, of improperly accepting restuarant meals from Ikloit te

Haskins & Sells during this period. Deloitte Ilaskins & Sells,

a Ilig Eight accounting firm, has since become the largest subcontractor in the Shl P Program and was a major force in recommending F] 1)S as the major integration contractor.

57

61- 085 - 86 - 3
58

Because of SSA’S size and importance, and

the large share of Federal expenditures that

it administers, a small army of people is committed to monitoring and auditing SSA to assist either Congress or the Administration in

oversight. A significant amount of SSA management time is spent in answering detailed

requests for information from oversight bodies. SMP has added to the volume and complexity of these activities.

There are inherent difficulties involved in

congressional oversight of a program like

SMP. Several committees have an interest in

different aspects of it. The House Committee

on Government Operations maintains a stern

eye on information technology procurement

and other aspects of its management. The

House Ways and Means Subcommittee on

Social Security has broad responsibility for

administrative performance, but does not have

the technical expertise to evaluate information

systems and their management. Other committees focus on service delivery, and the interests of special groups in society such as the

aged and disabled.

This tends to separate consideration of technological issues from consideration of service

quality issues. In addition, the critical problem of software development or procurement

has probably received less attention than other

aspects of information technology use and

management.

The difficulty of achieving effective oversight is one factor in a growing movement to

split SSA off from the Department of Health

and Human Services (DHHS) and make it a

separate, independent agency. (This option will

be examined further below.) Many Congressmen and staff people suspect that they do not

get complete or accurate information from SSA

about its resource needs, particularly on questions of its ability to respond effectively to

changing legislative mandates and changes in

benefits programs, because the agency’s answers must be “vetted” through DHHS and

the Office of Management and Budget (OMB),

which may manipulate them to suit the Administration’s policies and priorities (i.e., budgetary control). Thus emerging problems like

those of the 1970s can become unmanageable

before Congress is able to come to grips with

them.

Some political scientists and some computer

enthusiasts have argued that computer technology will facilitate congressional oversight

by making information more readily available,

and by allowing Congress to demand reports

tailored to its oversight needs. However, it appears at least equally likely that computerization of data may make oversight more difficult. In the short term, it is very difficult, for

example, to compare SSA’S performance today

with that of several years ago; as work is reorganized and automated, measures of performance have necessarily been redefined. More importantly, and in the longer term, oversight

becomes more difficult because administrative

decisions become more highly technical and involve issues of technological capability, multiyear investments, and systems management

strategy that laymen—which includes most

congressional representatives and their staff—

find difficult to understand. Seeking and comparing the judgments of technical experts and

working to comprehend these evaluations is

extremely demanding of time, effort, and attention; it is all the more difficult because systems experts constitute a highly concentrated

community of people with a great many potentially overlapping vested interests in the

actions of SSA, a major purchaser of computer

systems.

The temptation—some would argue, the

duty (given the imperative of administrators

for institutional suMval and maintenance) -to

select and manipulate data related to organizational performance when justifying programs

and budgets, is and has always been strong

for agency officials. When those budgets include multiyear and no-year investments in

equipment for which a favorable return on investment is years away, and for which there

are many irreducible uncertainties in costbenefit analysis, that temptation is much

stronger. When the performance data is embedded in voluminous computerized databases
59

and can be endlessly recategorized, combined,

and disaggregated by sophisticated management information systems, it becomes much

easier to present a favorable picture—or an unfavorable one, if the object is to demonstrate

a need for further modernization of systems.

Thus the task of oversight of a huge organization whose mission performance is entirely

dependent on advanced technology that is

seemingly describable only in esoteric language, becomes much more difficult.

This difficulty is also a problem for agency

officials, who must struggle to explain their

technological resource needs to congressional

committees in ways that do not oversimplify

and distort them and yet do not conceal the

technological and administrative problems

involved in meeting congressional mandates.

Responding to a large volume of oversight inquiries also reduces the time that administrators can spend in solving problems within their

organizations.

SSA’S Ability To Implement Changes

Mandated by Congress

Social Security as a national program was

born in a period of strong party cleavages over

having such a federally managed function in

our society, but over the next five decades, social security achieved a virtually nonpolitical

and bipartisan status. Since the late 1970s,

however, there have been a series of debates

over the size, scope, and organization of Social Security. It is likely that this debate will

continue during the next 5 years, both before

and after the 1988 elections.

Some believe that current budget deficits

and economic limitations make it essential to

cut back on the system of Federal retirement,

disability, and welfare programs. Suggested

solutions range from turning social security

over to the private sector or creating a worker

option to select among competing private and

public retirement plans, to cutting programs

back in scope, benefits, and costs. Others see

the Federal program of retirement, disability,

and income-support as the hallmark of a just

social order and seek to expand social security

into areas such as national health insurance,

a wholly nationally administered disability

program, or a Federal program for covering

catastrophic health care of the elderly. These

positions are not necessarily related to party

affiliation. Some additional responsibilities

have been considered for SSA; for example, a

role in proposed immigration regulation.

Most national policy makers, however, probably expect that Social Security will be maintained generally in its present form during the

next 5 years, with at most some relatively minor changes in programs or some realignment

of SSA’S various administration responsibilities for non-SSA programs. The spectrum of

possible changes that might be required of

SSA, ranging from no change to radical change

in agency status, and their relationship to

SMP. are discussed below.

Moratorium on Program Changes

or Adjustments

One option is to conclude that SSA needs

a breathing spell in its operational and

systems-development work. As recently as

September 1985, a GAO report concluded that

SMP software development was not yet improving SSA’S ability to implement legislative

changes in programs,: although this may no

longer be true, since SSA has at least reduced

or eliminated most of its backlogs. It has been

suggested that Congress avoid making changes

for the next 2 years, or until systems modernization is further advanced.

This option is not likely to be acceptable to

those who believe that substantive changes are

necessary. As one experienced congressional

aide put it:

We gave SSA a huge bundle of money for

SMP precisely so that it could handle the

changes that Congress is going to make in

basic social programs. We expect the agency

to keep up with us; that’s what ‘ ‘modernization” is all about.

‘U.S. Congress, (;eneral Accounting Of ficet Social .!+curit~

..idministration“.5 Comput(’r fi)’stems ,Ifockrnization ~;ffort Ala,}

\Tot .4chie\e i}lanned objecti~’es, (;A() 1 X! TI;C-85-16, Sept. 30,

1 9/+5,
60

Another aide added:

We don’t forego tax reform because IRS

may have computer problems, and we aren’t

going to lose timely opportunities to improve social security just because SSA has

a backlog.

It should be noted that SSA has not asked

for such a legislative moratorium. The agency

says that progress with SMP has already significantly increased its capacity to fulfill legislative directives.

Program Simplification

Major and minor program simplifications are

possible that could make both computer and

field operations easier; for example, simplification of the formulas for recomputing benefits or changes in the earnings test for eligibility. SSA has been working for several years

on concepts for formula readjustments to simplify benefits calculations, but is not ready to

suggest them. One problem is that they might

require compensatory or transition payments

to soften the losses to various categories of beneficiaries. Proposals for program simplification

changes may however surface in the next 5

years.

Program Modifications

Several congressional and administration

sources provided a “shopping list of program

modifications that various interest groups or

Members would like to see enacted. These included restoring eliminated benefits to student

dependents of deceased, retired, or disabled

workers; expanding retirement coverage to

State and local employees; including partial

disability under SSA coverage or expanding

rehabilitative or work-reconnection efforts; addressing women’s equity problems through

measures such as earning-sharing between husband and wife; and correcting the “notch” or

‘‘inequity’ problem that arose between beneficiaries born pre- and post-1916, as an unanticipated consequence of formula changes

made by the 1977 amendments. Such new or

expanded programs would produce a temporary burst of additional work to make necessary changes in benefits formulas, and might

delay ongoing redesign of processes or require

further redesign. Each proposed change should

be carefully studied in advance to determine

what resources SSA would need to make the

changes, in the context of already scheduled

work force reductions.

One major program change recently under

discussion is that of complete federalization

of disability programs, instead of the current

arrangement under which States make disability determinations.;; State determination of

disability (Disability Determination Services,

DDS) shows great variability in quality and

accuracy, in procedures and organizational

structure, and in physician participation. In

the recent effort to purge disability rolls (see

below) some States refused to do reexamination under SSA guidelines. GAO has advised

the Congress’ that:

From a purely operational perspective, a totally federal structure for disability determination appears to be the preferred option.

It would give SSA direct control and accountability; eliminate State political influence; provide greater organizational uniformity; assure

standardized salary and qualifications for personnel; eliminate the time spent in negotiating with States on compliance; allow closer

working relationships between district offices

and determination units; and allow SSA to select the number, location, and size of offices.

GAO has advised Congress that federalization of determinations would be likely to add

a large number of employees to Federal rolls

(11,000, according to GAO assumptions about

productivity). It could also cause the loss of

some trained and experienced examiners who

chose not to work for the Federal Government,

and would make the determination process vulnerable to Federal hiring freezes or other budgetary measures. Claims processing might be

‘

f Under the Disability Insurance Program of 1954 and the

Supplemental Security Income Program of 1972 Congress mandated State responsibility for determinations of disability, with

oversight by SSA.

“U.S, Congress, General Accounting Office, Current Status

of the Federaf/ State Arrangement for Administering the Socia) Security Disability Programs, Report to the Honorable Jim

Sasser, U.S. Senate, HRD-85-71, Sept. 30, 1985.
61

disrupted during the changeover period, and

a new policy and system for purchasing medical services might have to be developed.

GAO did not address the possibility of incorporating the determination process into existing SSA field offices, rather than maintaining separate facilities; thus it did not speak

explicitly about the effects of federalization of

the process on the level of demand on SSA computer and telecommunication systerns, or the

effect of these systems capabilities on productivity of determination examiners and support

personnel. These questions would have to be

addressed in further analysis of the effects of

this program change on SSA technological and

personnel resources, and on the quality of future disability determination services.

Non-Social Security Program Developments

SSA could be asked to take over administrative responsibilities for new non-SSA programs, as has happened repeatedly during its

history. Under national immigrati~n reform,

for example, employer access to SSA for verification of job applicant identities could be

mandated. lf SSA were given this role, there

would be pressure to enhance the accuracy of

SSA records, such as matching accounts with

death records to detect invalid accounts, and

identifying accounts used by more than one

person, This could represent a significant volume of additional work for SSA, especially

without an integrated database in place; it

would probably require the development of entirely new software systems.

SSA AND ITS EMPLOYEES: LABOR-MANAGEMENT RELATIONS

SSA began its SMP with hostile labor relations, in large part due to the deteriorating

working conditions and heavy overtime demands of the 1970s. In the early 1980s labor

and management refused to negotiate a contract for 18 months, and ultimately accepted

some compromises (December 1981) only with

great bitterness on both sides. Since then,

the union has filed up to 800 unfair labor practice charges each year. Until 1983, the labor

relations management of SSA would not even

call the union, for fear of being misquoted or

maligned.

Both SSA and its union agree that SMP will

lead to new levels of productivity. The question is whether this will be used to enhance

service levels, improve the quality of worklife,

and raise the skill levels of workers; or whether

the productivity gains will be used solely to

reduce the size of the work force, speed up

work, and lower skills requirements and status

of jobs.

This debate is not merely between SSA and

the union. Also involved are Administration

policies, congressional interests, the stakes

that other unions have in office automation issues, the interests of SSA’S contractors and

vendors and those who would compete for

awards if SSA operations were contracted out,

and the interests of those who depend on SSA’S

services—the beneficiaries.

The relationship between the union and SSA

is buffeted by the maneuvering of all of these

parties. OMB pressure on SSA to drop 17,000

employees over 6 years, and to privatize operations equivalent to 8,600 jobs, as discussed

below, are good examples. As SSA managers

readily acknowledge, in the recent past, only

the extraordinary efforts and commitment of

SSA workers have allowed the agency to surmount repeated crises in its operations. But

SSA must of course respond to the Administration and Congress as they look for a return

on what will by 1990 be the billion dollar investment in SMP. Under these circumstances

the management is under great tension, and

many employees are resentful and suspicious.

A union official estimated as early as mid1984, that SSA workers were facing a net reduction of 10,000 field office jobs, one-third of

this work force, with virtual elimination of

the position of data review technician and

changes in the claims representative job (some
62

managers were calling for its elimination and

replacement by clerical staff).s

These expectations proved justified; the net

job loss in 1985, as reported by SSA field

offices to GAO, was 949 full-time equivalent

jobs, or 2.4 percent of all 1984 jobs’ (see figure 6). This included 297 data review technicians, 275 clerical positions, 329 claims representatives, 86 service representatives, and 140

nonceiling employees or other positions. This

was a total of 1,127 jobs eliminated, but 178

“other positions” were created, including 123

joint data review technician/service representative positions.

On the other hand, it was also predicted that

many of the 1,386 SSA field offices would be

closed. SSA is reviewing the status of these

offices, but as of February 1986, the 228 reviews that had been conducted had not resulted in any closings.

“According to a letter from John Harris, Special .Assistant

to the National President of the American Federation of Government Employees (A FGE), July 1984.

“U.S. Congress, General Accounting Office, Social Securit~:

Actions and Plans To Reduce Agency Staff, briefing report to

congressional requesters, HRD-86-76BR, March 1986.

Figure 6.—Cumulative Percentage Reduction of

Full-Time Equivalent Employees From 1984’ to 1990

in the Social Security Administration Staff by

Fiscal Year

1985 1986 1987 1988

Fiscal year

a ln 1964 there were 83,588 employees in SSA

1989

SOURCE U S Congress, General Accounting Off Ice, Social Security Actions and

Plans To Reduce Agency Staff, USGAO/HRD.8(-76BR, March 1986

Under the Civil Service Reform Act (CSRA),

management retains the right to introduce new

technology and to change jobs and work methods. The union cannot force SSA to bargain

on technology adoption or work standards. But

the CSRA does require management to announce its plans and give the union an opportunity to bargain over the means and conditions of proposed changes. The union can force

management to pay attention to working conditions, health and safety concerns, retraining,

skill levels, and job classification.

Some observers say that this gives the union

a way to slow down, impede, and even prevent

SMP from proceeding if it so chose, at least

long enough to stir up the ire of Congress and

the public and bring the whole project down.

On the other hand, the union has not opposed

new technology nor does it want SSA to fail.

Workers have generally not complained about

the advent of new technology; rather, they

complained about the terrible workloads imposed by new programs for which the agency

was unprepared, the lack of technology with

which to handle this workload, and the demands on workers to work overtime.

These tensions led management and labor

to try a new approach, in the common recognition that both union and management need

to make SMP a success. In 1985 SSA and the

union reached an unusual agreement, which

mirrors the recent agreement between the

UAW and General Motors in GM’s Saturn Car

Division in Tennessee. The similarity is more

than superficial; key advisors to SSA and the

American Federation of Government Employees were also key advisors to UAW and GM.T

“The Joint Statement of Common Purpose, ”

was signed at SSA in September 1985. Its objectives are to avoid the degradation of work,

to enhance the quality of working life, and to

create a three-tiered management-labor structure for future shared decisions. It explicitly

avoids trying to change the statutory requirements of the relationship between manage-

‘They were: Irving Bluestone, retired Vice President of

UAW; and Dutch Landon, retired Quality of Work Life Director at General Motors.
63

ment and

envisage

this level.

labor, although the CSRA did not

labor-management cooperation at

In other words, the agreement will

permit both collective bargaining and cooperation of a new kind.

As the union president described the

agreement:

. . . both sides put away “business as usual”

and go into a partnership, a joint action based

on common interests and objectives, to look

at what is going to happen to the workplace,

the work, and the worker as this automation

is brought about. . . . [W’]here collective bargaining is the best remedy to the problem, we

shall do it. But we will seek in the main to sol~’e

our problems together as co-equals and not as

adversaries. 

The three-tiered structure consists of an executive committee level (which will include the

SSA Commissioner and the head of AFGE,

a project level, and a workplace level.

The Joint Policy Committee agreed on the

following guidelines:

the process (development, implementation, and oversight) will be joint and

co-equal,

employee participation at the workplace

level will be completely voluntary,

innovations that result from the joint

process will not result in the loss of job

or pay of any employee,

the joint process is independent of the labor agreement and is not a replacement

for collective bargaining or the grievance

procedure,

training and resources will be provided,

the joint process will not be used as a bargaining chip, and

either part y may withdraw from the joint

process.

The policy committee chose three projects

to work on immediately; including the effects

of the claims modernization process, issues related to use of visual display terminals (VDTS),

ergonomic furniture (i.e., desks and chairs especially designed for comfortable support while

working), and related workplace issues. Each

of these projects was to be developed

project team with links to working teams of

management and labor at the operating level

and to make recommendations to the policy

committee.

Most observers feel that the success of this

agreement is essential to carrying out SM P.

But in spite of the agreement, the union expects “displacement and disruption to be the

norm in the implementation of SM P. A union

official notes that:

A rupture of the work force such as widespread

job loss or reassignment can be avoided. But

only if a comprehensive program is adopted

tore-design field offices, one which starts with

the premise that all workers will be given useful jobs with similar skills or will be retrained

and no one will be laid-off or downgraded. With

such a program the phasing in of automation

will be conducted with the worker in mind, not

as an after-thought. . . . This is the greatest

challenge to the union and management because it puts both into a new relationship at

a time when neither trusts the other. 9 (Emphasis added.)

It is clear, however, that this objective, interpeted literally, conflicts directly with the

objective of reducing the work force to justify

investment in information technology. The

joint agreement could in theory provide a

mechanism for compromise on this issue while

cooperatively working toward other goals such

as improved quality of the workplace. But by

May of 1986 the joint agreement appeared to

be breaking down. According to workers, announcement of appointment of a new commissioner weakened the influence of managers who

supported the mechanisms and thereafter

there were no meetings of the committees.

Union members believe that the appointment

signals a new determination by OMB to force

drastic job eliminations, and they charge SSA

managers with “passive acquiescence. ”

“Letter of Kenneth Blaylock, President, to the union locals,

,June 3, 1985, quoted by permission. “Harris, letter, op. cit.
64

SSA AND ITS CLIENTS: ISSUES OF DEBT COLLECTION

AND FINANCIAL MANAGEMENT

SSA’S relationships with its clients, and its

public image, have been adversely affected by

its response to the government initiative for

improved debt collection and financial management. As information technology allows the

agency to become more efficient in this area,

more judicious management techniques will be

necessary to avoid unnecessarily eroding the

trust that beneficiaries still have in the

agency’s operations.

In 1981, the President ordered tough enforcement of the Disability Amendments Act of

1980, which led to summary termination of

over 1 million disability beneficiaries, causing

a huge backlog of work for SSA. Rigorous enforcement, by the Administration, of this act

and the later Debt Collection Act of 1982 subjected SSA to bitter criticism in the press and

among its constituents and traditional supporters. Continuing and future efforts to improve debt collection and financial management, and reduce fraud and waste, are likely

to be affected by the resentment that resulted

from this initiative.

During this period the political climate for

SSA was complicated by the fact that the two

Houses of Congress were controlled by different parties, and thus oversight committees emphasized somewhat different priorities and

directives. Members of some oversight committees were pressing for greater assurance

that service levels would be improved as a

justification for investment in systems modernization. Members of other committees

wanted greater assurance that no effort was

being spared to reduce costs. Members of both

parties and both Houses emphasized the need

for better management, greater efficiency, and

strict accountability. These pressures affected

SSA’S response to the President’s initiative,

at a policy level; at the operational level, there

were further difficulties. While the Disability

and Debt Collection Acts were increasing the

workload, a hiring freeze was imposed on SSA,

as well as other agencies, in 1982.

Under Public Law 96-265, Social Security

Disability Amendments of 1980, the Secretary

of HHS was required to review the status of

all nonpermanently disabled DI beneficiaries

every 3 years, beginning in 1982. Until then

SSA had reviewed only a small percentage

(about 150,000) each year, primarily those expected to recover from their disability and

those voluntarily reporting either improvement or gainful employment. But GAO had

estimated that as many as 20 percent of those

on the rolls might not meet the legal definition of disability .10 The Administration therefore ordered stringent actions to purge the

rolls.

In order to spread the workload on the States

(which make the original disability determinations), SSA began implementing the reviews

9 months earlier than the statute required. Of

1.2 million cases reviewed, 500,000 beneficiaries were summarily dropped from the rolls.

This brought about a flood of protests and appeals, which only increased when 200,000 of

the 500,000 were reinstated by appeal to

administrative law judges, the first level of appeal. Many congressional hearings were held

to consider these developments. ’ 1

Those who had been dropped from the rolls

stopped receiving benefits, until Congress

passed stopgap legislation in 1982 (Public Law

97-455) to allow them to continue receiving benefits while they appealed. About two-thirds of

those who had been dropped from the DI rolls

were eventually reinstated. The courts, and the

“’l’or background, see Social Security Administration, office

of I,egislative and Regulatory PolicJr, Social 5’ecurit~~ Disabilit~’ Amendments of 1980: I.egislati\’e liistor.~’ and Summar.\’

of Pro}risions, Social Security Bulletin, April 1981; and “Social

Security Disability Benefits Reform Act of 1984: I.egislative

llistor~’ and Summary of Pro\’ isions, ” Social Security Bulletin, April 1985 (both listed as SSA Pub. No. 13-1 1700); HHS

News Release of Apr. 13, 1984, no title; and ,Vew }’ork Times,

Dec. 6, 1985.

11 Most recendy: U.S. Congress, Go\rernment Representati~’es: Ad\zwates or .Ad}’ersaries:) I Iearing Before the Iiouse Select Committee on Aging, 99th Cong., 1st sess., hlar. 18, 1985,

Roston, MA.
65

States, raised serious concerns about the criteria used for “medical improvement, ” and

especially the criteria used in mental impairment cases and in evaluation of pain. The

Administration adopted a policy of “nonacquiescence” in certain cases; in other words,

SSA would not apply court decisions about its

criteria and procedures in other judicial clistricts but defended its pradices district by district, case by case. (This policy was rescinded

in early 1985. )

By 1984, the disability review process had

all but collapsed, with half of the States either

refusing to administer the reviews or under

court order not to do so. In April, HHS Secretary Margaret Heckler ordered suspension of

the disability reviews ‘until new disability legislation is enacted and can be effectively implemented. ” She also ordered SSA to resume

benefit payments to those in the process of appealing.

SSA had suffered a severe blow to its esteem

with the public. An internal SSA memo acknowledged that “the agency’s credibility before the Federal courts is at an all-time low. ”

The official SSA position is that the harshness

of its administration of the amendments was

inadvertent and a startup problem; it says:

. . . a great many admii~istrative changes were

made beginning in 1982 to deal with these criticisms. Thus the disability legislation as finally

enacted, in 1984, reflects, in part, the evolution of the CDIl administrative process since

1981.11

The congressional response to the problem

was the Social Security Disability Benefits Reform Act of 1984 (Public Law 98-460). It per-

—

] ‘Social Securitjr Administration, office of IJegislati\’e and

Regulator I’olic>r, ‘‘Social SecuritJr I)isahilitJ Benefits Reform

Act of 1 9/+4: I.egislati\re I ii~torJ and SurnrnarJ of Pro\rision\,

Social Security Bulletin, April 1985, SS:\ I>utj, N(). 13-11 i’{l(J.

mits termination of Disability Insurance benefits only if there is ‘‘substantial evidence of

medical improvement sufficient to allow the

beneficiary ‘‘substantial gainful activity, ” or

new medical evidence that vocational therapy

or technology makes him or her able to work,

or that the original impairment was not as disabling as it was originally considered, or the

original determination of eligibility was in

error. 13

In 1983, similarly tough enforcement of the

Debt Collection Act led to withholding all social security payments to beneficiaries Who had

received overpayments, as opposecl to the accustomed procedure of withholding no more

than 25 percent of benefits until overpayments

were repaid. In addition, the U.S. Treasury

used direct electronic debiting of beneficiary

bank accounts with no prior notice (’ ‘Treasury

recovery’ ‘). This could seriously jeopardize recipients with no other resources.

These actions kept telephones ringing in congressional offices as beneficiaries complained,

and the flood of inquiries and protests to SSA

district offices resulted in reduced attention

to servicing other clients. It also caused distortion in SSA management behavior, because

local administrators were given pay raises or

promotions based on the amount of debt they

collected.

The controversy over these enforcement procedures appears to have added to the fierceness of the controversy over systems modernization, even though there is little logical

relationship between the two. Critics repeatedly point to these episodes as illustrating a

commitment to efficiency at the cost of socially

desirable service to the public.
66

SSA AND THE ADMINISTRATION:

INDEPENDENT STATUS AND PRIVATIZATION

Possible Independent-Agency Status

for SSA

On July 22, 1986, the House of Representatives voted 401-0 to make SSA an independent agency, as it was in its first few years of

existence ( H.R. 5050). This bill was referred

to the Senate Finance Committee 2 days later.

Making SSA an independent agency with

only the core functions of retirement, disability, SSI, and possibly Medicare was recommended by the National Commission on Social

Security in 1981. The National Commission on

Social Security Reform, in 1983, called for a

congressional study of how this could be accomplished, and a panel headed by former

Comptroller-General Elmer Staats conducted

a study of this recommendation for Congress.

In June 1984, the panel outlined a design for

a new Social Security agency, which would

have SSA headed by a single administrator appointed for 4 years, with a nine-member bipartisan advisory board, The administrator and

board would have greatly strengthened management authority, including delegated authority over personnel, facilities, and computer

systems.

Hearings on the Staats Plan were held in

July 1984. Support for the plan came from

some influential members of Congress, AFGE

union leaders, SSA local and regional office

managers and pro-social-security interest

groups. Opposition was registered by Acting

Commissioner Martha McSteen’ and former

SSA Commissioner Ross. In late 1984 the independent agency proposal appeared unlikely

to pass. But unexpected political impetus for

the proposal arose in the House in the summer of 1985, in reaction to the Administration’s proposed reduction in the SSA work

force and the closing of some local offices.

‘ ‘Former 11 I+;\fr S~~c’retar?r W’ilhur Cohen cx)n~n~ented that hc~r

position was “‘that of ()\l B, not necessaril}r her own.

Hearings were held on H.R. 825, a bill to

make social security “off budget” and place

it within an independent agency, in September 1985.]

’

) (The Social Security Trust Fund

has since been moved off budget. ) Advocates

of an independent SSA argued that independence would help shield SSA from the full force

of OMB demands for a cutback and help it

resist demands for excessive contracting out

of work. Some hoped that the threat of such

legislation would itself soften OMB pressure,

since removing SSA from DHHS would take

away about 60 percent of DHHS’S budget and

staff and leave some social programs related

to core SSA functions in DHHS without coherent administration.

An “independent SSA” bill with 165 cosponsors was reported out by the House Ways and

Means Committee and unanimously passed by

the House in late July of 1986. (The measure

is now before the Senate Finance Committee. )

This Budget and Administrative Reorganization Act differs only slightly from the Staats

Panel recommendations. It would separate

SSA from DHHS; the agency would be governed by a three-member Board, nominated by

the President and confirmed by the Senate. The

boar-d would be responsible for the Trust Fund,

make budget recommendations to Congress,

and make policy recommendations to Congress

and the President. The members of the board

would serve staggered 6-year terms, and no

more than two could be of the same political

part y.

There would be a similarly appointed Commissioner as chief operating officer, who would

serve a 5-year term, and who would be specifically charged with developing and implementing a long-range plan for advanced automated

data-processing systems. There would also be

an Inspector General, and a Public Ombudsman to represent client/beneficiary interests.

-. ——

] ‘[1. S, Congress, Back LO Basics: Social Securit.}. off-!lud~y~t

and Independent, 1 Iearing I]eforc tht’ I I(JUSC’ Select (’ommittee

on ~lging. 99th (Tong., 1 st sess., Sc’pt. 9, 19H5,
As the Staats Panel recommended, the proposed SSA would (initially for an 18-month

demonstration period) have broad delegated

authority over personnel management, facilities management, and ADP contracting and

management. SSA would carry out only its primary programs: old age, survivors and disability insurance, and supplemental security income programs.

Opponents of independent-agency status for

SSA say that it is unnecessary since Congress

has now helped clarify SSA responsibilities and

provided solid appropriations for SMP. SSA,

they argue, needs a period to consolidate organizational changes, provide personnel stability, and restore the confidence of beneficiaries and account holders in SSA services,

Cutting Medicare and Medicaid loose while access to SSA records remains vital to determinations of eligibility, would be disruptive. Taking SSA out of DHHS, according to opponents,

would:

1.

2.

3.

remove policy coherence for the different

Federal social-welfare programs;

deprive SSA of representation and advocacy within the Cabinet; and

by removing essential oversight from

DHHS and the General Services Administration (GSA), potentially allow SSA to

drift back to its old “hardware orientation.

Supporters see independent status as a

means of recognizing social security’s special

status as a trust program, and giving SSA

management freedom from alleged DHHS interference, GSA neglect, and OMB constraints

that do not accord with congressional priorities. With “extraneous” social welfare programs removed, SSA would be able to concentrate on its major programs the professional

resources that have frequently been tapped to

support “non-Social Security programs. ” A

bipartisan board could concentrate on longrange planning, policy development, and liaison with Congress and the executive branch,

while the Commissioner concentrates on administration and information systems.

The strongest motivation for some supporters of independent status for SSA is their

suspicion that information about SSA resource

needs, progress in modernization, and abilit~~

to carry out congressional mandates, is filtered

through executive branch agencies that want

to justify budget cuts, possibly at the cost of

reduced services. They argue that independent status would make possible more effecti~~e

congressional oversight,

Meanwhile, the whole concept of independent agencies has come into renewed dispute

as an indirect result of the Gramm-RudmanHollings Act and the February 7, 1986, ruling

by the U.S. Court of Appeals. The Court struck

down key provisions of the act on the grounds

that:

. . . the powers conferred upon the Comptroller General . . . are executive powers, which

cannot constitutionally be exercised by an officer removable by Congress. . . .

This has been interpeted by some commentators as applying to independent agencies, particularly since the court observed in passing

that:

It is not as obvious today as it seemed in

the 1930’s that there can be such things as

genuinely “independent” regulatory agencies,

bodies of impartial experts whose independence from the President does not entail correspondingly greater dependence upon the

committees of Congress to which they are then

immediately accountable; or indeed that the

decisions of such agencies so clearly involve

scientific judgment rather than political choice

that it is even theoretically desirable to insulate them from the political process.16

1[’[Jnited States District (’our-t for tht’ I )istrict of (’f)lumhia,

order filed Feb. ’7, 1986, in Ci\il Action \ () S,-)-l!j 15 ant] (~t h~~rs,

p. 40.

The first independent agencj’ was th[’ I nterstatt> (Tt)mmercw

Commission, in 1887; since then a number of agt~n[i(~~, primarily of a regulatory nature, have been created with this status.

Although executive branch agencies, they report to I)oth the

President and Congress, and their heads serve fixed terms, and

can IN rcrno~ecf onl}! ‘‘for wrongdoing, Their constit ution:ll -

i t } wa~ uph[~ld in 19;1;1 (11 umphr(’~’ 1+; xe(.utor]. The ( )fficw of

IA~g:Il Counsel, in thc~ I )[~part mtjnt of tJusticw, has se~era] t irne+

rai s[d t ht~ is SU[’ of L he cons L i tu t iorral i t J. of independent t ag(~n-

(contlnued on next page)
68

The District Court did not say that all independent agencies whose heads have fixed

terms and are not removable by the President

were unconstitutional. It based its ruling on

the fact that the law governing the Comptroller General’s removal from office before the expiration of his fixed term says that it may be

done by joint resolution of Congress (for certain listed causes), as well as by impeachment,

which applies to all U.S. officials. Nevertheless, this ruling, if confirmed by the Supreme

Court, will probably strengthen the opposition

to independent status for the Social Security

Administration, a nonregulatory agency which

clearly performs executive (administrative)

duties. (Under H.R. 5050 both the Social Security Board and the Commissioner are to serve

for fixed terms and cannot be removed by the

President. )

Regardless of the outcome of this issue, the

questions will remain as to:

1. the justification for giving independent

status to SSA,

2. whether this would make congressional

oversight more or less difficult, and

3. whether it would solve basic management

problems within SSA.

Independent-agency status would not solve

the problems associated with systems modernization and congressional oversight. First,

some factors or constraints would remain, or

be only partly removed. OMB would still exercise oversight on behalf of Presidential policies. Recruitment of expert staff would still

depend on improving the professional climate

for programmers and systems staff, and as

civil servants they would still be subject to

Federal pay scales. Legislation designed to assure competitiveness in procurement would

still apply.

——.—.—- —

(continued from previous page~

cies. Theodore olson, who headed this office during President

Reagan ”s first term, has filed suit challenging the constitutionality of the Federal Trade Commission. These challenges turn

on the point of the constitutional principle of separation of

powers and the President’s inability to dismiss the heads of

independent regulatory agencies although they are within the

executive branch. 1 n 1976 the Supreme Court ruled that ~he

composition of the Federal Ijlections Commission was unc(Jnstitutional for this reason.

Secondly, Congress would not necessarily be

assured of better information about SSA information technology management, since executive branch constraints on SSA statements

to Congress have not been the only factor in

oversight problems, as already discussed.

It is clear from SSA’S recent history that

the extreme instability of leadership during the

1970s contributed greatly to SSA’S difficulties in solving its internal problems; it is less

clear that frequent changes in leadership (and

the frequent reorganizations related to them)

caused the problems. They could be viewed,

alternatively, as unsuccessful efforts to solve

those problems. At least as strong a case can

be made that the long stability, insularity, and

defensiveness of SSA’S middle and upper management caused SSA to fall behind in meeting the technological imperatives with which

all large data-handling organizations were

struggling.

It is also clear from SSA recent history that

it has suffered from conflicts in priorities, if

not policies, set by the Administration on the

one hand and Congress on the other; and to

some extent from conflicts in priorities of the

various oversight committees. This is however

a problem that is inherent in our form of government (indeed, was deliberately built into our

Constitution), and it becomes acute for nearly

every agency at some time or other. Independent status cannot be practical as a general solution, and in each specific instance it carries

with it the risk of introducing unnecessary incoherence and irrational variation in policy formulation and administrative procedures. SSA

may also have suffered from lack of a strong

direct voice in Administration policymaking

(since DHHS must speak for many disparate

and quasi-independent components); independent status would not solve this problem but

instead would worsen it.

Finally, at times, SSA communications to

Congress about problems or resource needs

were constrained by considerations of Administration policy and political initiatives.

However, this has not been the sole source of

oversight problems. SSA defensiveness and

fragmented congressional oversight responsi-
69

bility have also played a part, as have the in- The size of the social security programs is

herent uncertainties in technological develop- also a concern. Relati\~ely few contractors

ment. Under these circumstances, it seems might be in a position to successfully deli~er

that independent status for SSA would not in systems/capabilities of this magnitude; anci

itself greatly facilitate the oversight process. therefore the level of competition might be low.

However, Congress may conclude that reduction of SSA work force andior closing of

field offices at this stage of systems modernization would degrade service to clients to an

unacceptable degree, or would cause the reappearance of the problems of the late 1970s,

or would render SSA unable to respond satisfactorily to congressional mandates–any of

which outcomes would discredit the Systems

Modernization Plan and discourage further efforts to carry it to completion. In that case,

independent status would be a more attractive

option.

Privatization of or Contracting Out

Major SSA Operations

The Administration is currently pressing executive agencies to implement OMB‘s policy

directive, Circular A-76, instructing agencies

to contract to private sector organizations

those Federal operations that could be done

more cheaply outside of government. 1 n a

memorandum dated ,July 25, 1985, DHHS directed SSA to develop a plan to contract out

the equivalent of 8,600 full-time positions.

Those under consideration include the processing of Annual Wage Reporting now done at

SSA Data operation Centers; the filing and

mail work done in handling SSI folders: and

the operations of SSA’S National Computer

Center where the central beneficiary records

are maintained.

There are serious management issues to be

considered. It is likely that much time and

money would be needed for a private firm to

learn the operations and functional requirements of the SSA system. Particularly with

functional requirements still poorly defined,

computer services firms would incur a significant risk in bidding without assured funding

up front for startup operations. Government

contracts must be recompleted regularly, and

any change in contractors would mean an adThe union that represents SSA workers,

AFGE, is of course bitterly opposed to the concept and is calling on labor organizations to

oppose any such ‘despoiling’ of the public social security system. Adding further to the

strong perception of job insecurity}’ would further erode morale among SSA employees and

increase management problems.

There is a broader concern over whether the

competence and the commitment of SSA

workers can be matched by those of contractor organizations. The valuable experience that

SSA workers have built up over many years

has often been the saving grace that allowed

the agency to cope with a suddenl~ expanded

volume of data processing or repeated systems

failures. In a crisis, SSA often calls on loyalty

and dedication over and above the call of duty

to get the work done, and dissal of these

Federal workers now would be unwelcome to

many in Congress, as well as to many S.SA

managers.

There are major concerns about the wisdom

and long-term effects of having an essential

and highly visible Federal function such as

administering the SSA database in private

hands. Turning over sensitive and privacy act

protected records on 160 million Americans to

a private contractor would probably be sharply resisted by bipartisan groups in Congress

who see the social security system as a public

trust and would not trust these records in private hands. SSA is responsible for a significant fraction of all Federal expenditures—

roughly 15 percent. The question of public

trust in the accountability of the Administration of these expenditures must be considered,

as well as the quality of services that can be

assured, when the temptations of for-profit

operations are combined with the possibilities

for fraud inherent in government contracting.

On the other hand, OMB and GAO have

ditional learning period. found that in many cases privatuzatition of gov-
70

ernment services results in significant savings

to the taxpayer and/or improved services.

OMB Circular A-76 requires that a function

that is not inherently governmental must be

put into a description capable of being bid on

by private companies. In some cases, the government agency is able to show that its costs

for providing the services is as low as, or lower

than, those in the private sector, in which case

the services are not contracted out. This necessity has provided a new and powerful incentive for government agencies to make their

operations cost-effective.

SSA’S management maintains that applying Circular A-76 to SSA operations will not

necessarily result in contracting out these services, because the systems modernization has,

or will eventually, make the agency’s performance so highly efficient that SSA could become

the lowest possible bidder. SSA officials profess not to believe that they would lose a competition for carrying out their data center, program service center or National Computer

Center operations, and thus do not see the requirement of conducting an A-76 exercise as

leading inevitably to contracting out. Some observers, however, fear that some companies in

the private sector, paying low wages and anxious to get SSA operations as a high-visibility

advertisement, would underbid SSA.

It has recently been proposed that determination of disability status, which is now done

not by SSA directly but by the States, be privatized. GAO found that privatization of Disabilit y Determination Services (DDS) would make

the determination process less vulnerable to

budgetary restrictions and hiring freezes,

would improve Federal control and eliminate

State political and governmental influences,

and provide greater flexibility in selection of

location and size of offices.17 These functions

—— —

‘Tsee U.S. Congress, General Accounting office, Current Status of the Federal/State Arrangement for Administering the

Social Securit.v Disabilit~’ Programs, Report to the Honorable

Jim Sasser, U.S. Senate, HRD-85-71, Sept. 30, 1985. In establishing the Disability Insurance Program, in 1954, and the Supplemental Security Income Program, in 1972, Congress provided

that the States should make determinations related to disability (Disability Determination Ser\’ices, or DDS). There has always been great variability among the States in terms of rates

would also probably cost less than alternatives

(either the current arrangements, or complete

federalization), if the productivity levels of the

10 most productive State DDS organizations

were assumed to apply. However if the average State productivity now is assumed to apply, personnel costs would be $13 million

higher than current costs.

In addition, GAO pointed to some disadvantages: the time necessary to get contracts

planned, awarded, and operational, the possible loss of expertise developed by (current)

DDS examiners, and possible disruption of

claims processing during the changeover. Finally, GAO noted that there is a potential conflict of interest if a contractor also administers

private disability plans tied to SSA determinations; and that it may be difficult to find

competent contractors who are not already administering such plans. If more than one contractor were involved—for example, a different one for each State—there would inevitably

be disparities in costs and quality of performance. Further, the necessity of recompleting the

contract periodically would imply recurring

periods of potential discontinuity, disruption,

changes in procedures and very likely in quality, and investment in contractor learning and

experience.

GAO did not, in this report, address the

question of whether the level of competition

for such contracts would be adequate to assure high performance and achievement of

other congressional objectives, although the

GAO report did ask, but did not attempt to

answer: “Are there enough private entities able

to process the disability cases?” GAO also

raised but did not discuss the significant policy question: “Should a major federal program

with a very complicated process and the obligation to pay about $23.5 billion a year in benefits, be operated by the private sector?’

—

of accuracy, medical consultative examination procedures, ph~’-

sician participation, employee standards and salaries, etc. During the initiative to purge disability rolls (described above, also

see ch.7), some States refused to cooperate. The Social Security Act of 1980 strengthened SSA control and oversight of DDS.

There have subsequently been proposals both to fully federalize it and to pri~’atize it.
These issues argue that the question of seen as a matter of social policy, rather than

whether SSA operations should remain in the as a narrow question of competitive bids and

public service or he contracted out should be cost-effectiveness.

SSA AND THE PUBLIC: ISSUES OF

DATA PRIVACY AND SECURITY

SNP P has not had had a direct effect on

privacy or on freedom of information, but it

raises many issues for the immediate future,

and exacerbates some older issues. Congress

and the Administration are currently emphasizing the efficient collection and sharing

of information to reduce fraud and waste. SSA

accordingly is participating in many data-sharing and computer-matching programs. It is anticipated that SMP, when implemented, will

affect these programs by: 1 ) increasing their

number, by making them easier or less costly;

2) encouraging their use for front-end verification (that is, original determinations of eligibility for benefits programs); and 3) facilitating the electronic exchange of information,

including “hits’ or successful matches, over

long-distance wires, cables, or satellite transmissions. Civil livertarians are concerned because data-sharing and computer-matching

capabilities increase the opportunities for inadvertent or deliberate violations of privacy,

and could be misused for governrnent surveillance of individuals.

Throughout its history, SSA has had an excellent record of respect and care for the

privacy of its clients. Recently. however, the

increased emphasis on reduction of fraud and

improved debt collection sometimes comes into

conflict with the letter or the intent of legislation designed to protect the privacy of citizens.

For example, the privacy of tax information

is protected by the Internal Revenue Code, Section 6103, 26 [J. S, C., which permits disclosure

only by consent of the individual, and clearly

spells out the meaning of consent as ‘ ‘voluntary action. ‘‘ The following notice, taken from

an SSI application form, peremptorily demands from the client tax information to be

used in making Supplemental Security Income

benefit determinations:

You have a choice about signing t his form. But

we must have accurate in format ion about -your

income and what you own to pay your Supplemental Security Income check. If you do not sign

the form, your Supplemental Security Income

Checks may be affected.

The provision of this information, under the

implied duress, is of greater concern to civil

libertarians because of the data-sharing and

computer-matching activities described below’,

which means that the information (and errors

that it might include) can become widely disseminated, through channels and to destinations that the citizen does not even know about.

New Information Policy Directives

for the SSA

During the 1970s three major themes governed Federal information policy: defining the

privacy rights of individuals, defining rights

to government information, and defining the

rights of individuals to access to and participation in government decisionmaking through

eight major piece. - of legislation. 18

’

The information policy’ legislation of th~~

1980s is concerned with different concerns and

subjects: reduction of fraud in Federal programs, efficient management of information

resources, and reducion of debt owed to government by releasing information to debt collection agencies.

The computer-matching activities of SS.4,

and the continual sharing of SSA data with

other Federal agencies and with State agen-
72

cies, reflects these new priorities. These procedures are a departure in spirit if not in law

or administrative procedure from SSA’S traditional policies regarding personal data, set out

first in 1935, as described in chapter 5. While

these traditional rules allowed data-sharing

under some circumstances at the agency’s ‘discretion, ” SSA historically did so only rarely

and with reluctance until recent years. 19

The Privacy Act included an ambiguous provision that agencies should share information

only for a purpose compatible with the purpose for which it was originally collected–the

‘‘routine use clause. The implied limitation

against sharing data was never seriously enforced by OMB.

In the 1970s, GAO reports tended to reflect

congressional concerns with invasion of privacy; by the mid- 1980s GAO reports encourage the sharing of information among government programs at Federal, State, and local

levels in order to reduce fraud, waste, and

costs. Six major GAO reports recommended

use of computer-matching and tax return information to reduce fraud and abuse in Federal entitlement and benefits programs (these

reports did not focus exclusively or directly

on SSA).20 The sharing of information among

agencies was encouraged by OMB interpretation of the routine use clause as covering any

use published in the Federal Register. The

President Council on Integrity and Efficiency

(PCIE) and the Grace Commission were established in 1980 to assure that Federal agencies

-—......—. —

“hlany E’ederal agencies ha~e felt the pressure for increased

sharing of dat,a and lessened emphasis on prit’ac~’ and security

concerns; but for a contrasting ~riewpoint, see Sherry CourtIand, “Census Confidentiality’. Then and Now, ” Go~rernnlent

information Quarterljr 2:4, 1985, pp. 407-418.

‘

f

’U. S. Congress, General Accounting office, Federal information h’.vstems Remain Highlj’ \’ulnerable to Fraudulent,

I$rasteful, .4 bu.~i\re, and Illegal Practices, NASA D-82- 18, April

1982; .1 ction.q $reeded To lieduce, Account for, and Collect O\’erpa~”n]ent.~ to Federal lietirees , 4FNID-8;?-29, June 1983; Comput~r ,lla[ches ldcntift Potential Uncnlplqjrnwnl Benefit (h’erpa~’ment, (;(; 1)-/+3-99, August 1983: [;.30 obser~”ations on the

[ [s~, of ‘f’a<y ]i(~turn lnforl]l:~tion for \’edification in Entitlement

l’rograms, t{ 1{1)-84-72. ,June 1984; Better ll”age-,$lat(>hing S~rstem.~ and Procedures 11’ould l+;nhance Food Stamp Program 1n-

(egrit~’, R(’E 1)-84-1 12, September 1984: and 1+,’iigibilit.kr \’erificat ion and Pri~’ac.\’ in Federal Benefit Programs: .4 Deli(’a te

ilalan(.e. 11 1/1)-/+5-22, hlarch 1985.

use modern business methods to reduce costs.

PCIE was, in particular, designed to increase

the use of government computer matching

programs.

These new initiatives have put pressure on

SSA to engage in aggressive debt collection

practices, and caused SSA to move strongly

to establish a Federal parent locator system

and a series of data exchanges with other Federal and State programs.

Concerns about privacy, confidentiality, and

freedom of information are likely to grow in

the next 5 years, although at present they are

overshadowed by concerns about efficiency

and productivity, with a resulting emphasis

on sharing of Federal data. Legislative proposals to protect due process rights of individuals who are the subject of Federal computermatching programs and related programs are

nevertheless a possibility, within the next 5

years. The need for security, data quality control, and system integrity will continue to

grow, and may well be made more acute by

the threat of political terrorism. New legislation in this area is possible, especially if there

are significant lapses in security or discoveries

of fraud.

The major thrust of information policy in the

near future, however, may be additional requirements for SSA to share information with other

Federal, State, and local agencies. Active political support in both parties for maximizing

government use of information will put additional demands on SSA information systems.

SSA’S Data-Sharing Programs

SSA has important reporting and data exchange relationships with States and localities,

other Federal programs and institutions, and

private insurers (through its continued administration of Medicaid/Medicare). These relationships are a function of policy and statutorily defined programs. SSA’S major datasharing relationships are:

● The Beneficiary and Earning Data Exchange (BENDEX), created in 1968 to provide Title 2 information to States for administration of the AFDC programs. This
73

is a monthly batch system with transmissions occurring at the request of specific

States (not all States are members of the

system). There are on average 3 million

inquiries per month.

The State Data Exchange (SDX), developed in 1974 at the time of implementation of Title 16 (the Supplemental Security Income Program), to advise States of

the amount of SSI payments, eligibility

for Medicaid, and other information to assist in administration of income, health,

and food programs. Data is exchanged

(usually by magnetic tape) weekly or

monthly depending on agreements with

a State. There are about 2 million exchanges per month.

The State Income and Eligibility Verification System (SIEVS). The Deficit Reduction Act of 1984 required the States

to develop a verification system for administering federally assisted programs

such as unemployment insurance, fod

stamps, Medicaid, and AFDC. SSA will

provide data to the SIEVS from SDX and

BEN

TDEX and will respond to State requests for assistance. SIEVS will also be

used in social security number \’erification. SSA in turn will be able to receive

information from the States to aid in administration of SSA programs and avoid

overpayments.

The Tennessee Data Exchange (Model

Program). This is a pilot on-line data exchange between a Tennessee State welfare

agency and SSA; it was designed to speed

the provision of SSA data to the State for

eligibility determinations.

The upgrade of the SSA systems so far has

substantially increased the ability to respond

to batch requests from State agencies. Whether

in the future SSA capacity will be sufficient

to support on-line response to State agency inquiries is still uncertain. The SIEV program

in particular will place an additional workload

on SSA; when fully implemented, SM P will increase SSA efficiency in meeting the requirements of this system.

SSA’S Computer-Matching Activities

In modern society, most persons leave a trail

of transactions with various institutions—

governmental, retail, financial, educational,

professional, criminal justice, and others- as

discussed in a recent OTA report on surveillance.:] Before the widespread use of conlputer-communication systems, linking various

kinds of transactions was very difficult, if not

impossible, since transactions were paper

based and the cost of matching or linking paper records was prohibitive. In addition, the

time delay inherent in paper linkages would

negate much of the potential surveillance

value. The advent of large fully’ computerized,

easily accessible databases, and the ability to

exchange and compare data between them, creates a much larger risk of violations of privacy.

At present, some government uses of data for

purposes other than those for which they were

collected, albeit for legitimate governrnent

functions of law enforcement and investigation, are being challenged.

Because SSA collects, stores, and uses a

large amount of data about individuals—earnings and income, employment records, dependents, home and work addresses, etc.–and

matches these data with data about the same

individuals from o{ her sources (e. g., State

prison systems and welfare agencies), its policies and procedures with regard to individual

privacy are of special concern.

Computer-matching is a technique whereby

a computer compares two databases to identify overlaps, e.g., individuals for whom both

databases have records. The rolls of recipients

under one public assistance program, for ex-

‘

] Pri~acy, security, and surveillance issues ar(’ a primarj’ ftJcus of a series of OTA assessments known collect i~elj’ as t,he

Federal Government Information Technology’ Assessments.

Three reports from this study hate been published: F;lectroni(

Sur\’eiilance and Civil Liberties, October 1985; Tfanagement,

Securit.v, and Congressiomd O\ersight, February 1986: and fi;fectronic Record S~’stems and indi~’idual Pri\ac>’, (June ] 986. ‘1’he

next few paragraphs draw liberally on these reports, and on

responses to a Federal Agen(~’ [)ata Request which was sent

(Jut to assist the OTA staff in collecting information for use

in these assessments
74

ample, may be matched with the rolls of

another such benefits program to identify people who are getting multiple benefits. Both

databases may include several kinds of information about the person; the match will or can

aggregate this information, thus potentially

allowing the user to know or deduce a great

deal about the subject person. Although the

purposes of computer-matching are generally

legitimate and justifiable, it also opens the door

for misuses of such personal information by

government, or by persons who have access

to the information and may use it for unauthorized purposes.

There are several questions to be asked about

such programs, in addition to the broad issue

of whether they are inherently an unjustifiable intrusion on privacy or an unacceptable risk

to civil liberties. These include:

How are computer-matching programs authorized and who is responsible for their

use?

Is the data used strictly and solely for the

purpose for which it was collected, as required under the Privacy Act?

Are these activities cost-effective?

What assurance is there that the matches,

or ‘‘hits, are valid, that is, accurate and

verifiable?

What safeguards does the individual ha~~e

against incorrect “matches” that penalize him or her in some way’?

SSA makes liberal use of computer-matching

techniques. These matching programs are not

specifically mandated by law, but are often recommended to SSA by GAO to increase the accuracy of its determinations of eligibility and

benefits amounts. In other cases SSA allows

its data to be used by other agencies—Federal

or State—for their own purposes. Table 2

shows the major computer-matching programs.

SSA computer-matching is undertaken under OMB guidelines and the conditions are

spelled out in written agreements with the cooperating (matching) Federal or State agency.

When SSA allows other Federal or State agencies to use its data for matching, these agreements typically contain a set of safeguards:

the files that are used remain the property of

SSA and must be returned or destroyed, as

appropriate, after use; they may not be duplicated or disseminated without written permission; they must not be used to extract information about ‘‘nonhit individuals’ (i.e., those

who appear only on SSA records); they must

be used only by authorized employees under

supervision, and those users must be explicitly

informed about Privacy Act requirements and

OMB guidelines as to protection of privacy.

As can be seen in table 2, SSA generally uses

computer-matching to verify the status of claimants or their dependents with regard to benefits programs or to determine whether an individual is collecting a paycheck or another

form of assistance. For example, is a beneficiary’s surviving dependent in full-time attendance at a legitimate school or university,

in order to qualify for students’ benefits’? Is

a recipient of disability benefits in prison (in

which case benefits are suspended)? Under a

pilot program, SSA is matching data with

State agencies about interest payments from

financial institutions, to assess individuals’ income and resources, for use in Supplemental

Security Income determinations. SSA data,

conversely, is shared with several Federal and

State agencies, including IRS, the Veterans

Administration, and the State of California.

SSA does not, as yet, use conlputer-matching in the original determination of eligibility

for a program for new applicants (“front-end

verification”). It may do so in the future; no

decision on this point has been reached as yet.

The computer-matching programs, it can be

argued, are a significant departure from the

spirit if not the letter of SSA’S famed Regulation No. 1, issued in 1935, which expressed the

agency’s commitment to safeguarding the confidentiality of personal data (see ch. 5). There

have, however, been no court challenges to

SSA on the grounds of privacy in computermatching.

SSA has not done any formal cost-benefit

analysis of the computer-matching programs,

either before or after the matching is run. However, there is usually a pilot run, which gives
—

75

Table 2.—SSA Computer-Matching Activities

SSA data “matched for SSA purposes:

(continuing, annually, unless otherwise indicated)

Agency matched with Type of data

U.S. Department of Education

U.S. Department of Education

U.S. Department of Defense

U.S. Office of Personnel

Management

Railroad Retirement Board

U.S. Veterans Administration

Various State and Federal

agencies

Federal and State prison

systems

U.S. Office of Personnel

Management

U.S. Department of Labor

Various State agencies

State and Federal agencies

U S. Internal Revenue Service

Full-time attendance status

Student marital status

Military payments

OPM payments

RRB payments

VA payments

Workers’ compensation,

State pensions, AFDC,

general assistance

benefits

List of felons

OPM payments

Black Lung reports

Annual interest income

from financial institutions

Workers’ compensation

Income data

SSA data matched by other institutions for their purposes:

User agency Data

U.S. General Services SSA master files –

Administration

U.S. Internal Revenue Service SSA data

State of California SSA data

U.S. Veterans Administration SSA data

aAs needed

b

Twice a year

c

Three times a year

‘Quarterly

‘One time

‘Monthly

SOURCE Off Ice of Technology Assessment, 1986

some indication of whether the matching will

be productive, and there is a calculation of systems costs in running a program. The agency

says that in preparation for expanded computer-matching when its systems modernization

has progressed further, procedures are being

developed for systematic prerun and postrun

cost-benefit analysis.

For SSA determination

Eligibility for student benefits

Continuing benefits

SSI overpay mentsa

SSI computation

SSI computation

SSI computation

Benefit computational

Precluding payments of

benefits (Public Law

96-473)’

Prevention of overpay mentsb

Overpayment of Part C Black

Lung benefitsa

Overpayments from underreporting of income/

resources (pilot)a

Overpayments (pilot)a

Overpayments because of

unreported income/

resources

Agency’s purpose

Social Security number

validation e

Administration of Elderly Tax

Credit a

Eligibility for Medicaid

benefits e

VA offset of SSA Black Lung

payments f

Some individuals do lose their benefits, or

have them reduced, as a result of computermatching; otherwise there would be no benefit to the agency (and OMB) in using the technique. SSA goes to some length to verify

“hits”; they are checked against the original

data on SSA’S tapes or disks, and the subject

individual, who has not of course given con-
76

sent to or been notified of the matching procedure, is given an opportunity to challenge and

refute the results.

Benefits that an individual may “lose” as

a result of these computer-matching activities

are (assuming that the information is accurate)

unlawful benefits, that is, benefits to which he

or she was not entitled. The real concern of civil

libertarians is the possibility that such techniques, and the databases on which they operate, might be used for other purposes, such as

surveillance.

Future Information Systems and

Possibilities for Abuse

In 1985, OTA issued a report on the use of

computer and telecommunication technology

by the Federal Government for surveillance

and monitoring of individual behavior. zz The

report said that many new and emerging electronic technologies can be used for monitoring individual behavior, and the use of other

electronic technology, such as telecommunication systems, can be easily monitored or

recorded for investigative, competitive, or personal reasons. The existing statutory framework and judicial interpetations, OTA pointed

out, do not adequately cover new electronic surveillance applications; the law has not kept

pace with technological change.

The basic public law for protection of oral

and wire communications is Title III of the

Omnibus Crime Control and Safe Streets Act

of 1968, which predates most of these technologies. Digital communications between computers is not covered by existing statutes, and

policy on database surveillance—the monitoring of transactions on computerized record systems and data communication linkages is not

clear. The courts have on several occasions

noted that the law has not kept pace with these

technological changes. Congress in legislating

in this area attempts to strike a balance between civil liberties and the needs of domestic

‘<U.S. Congress, office of Technology Assessment, Electronic Sur\eillanre and CiviI I.iberties (Washington, DC: U.S.

(;c)lt’rnment Printing office, octoher 1 985).

law enforcement and various investigative

functions of government.

The technologies that OTA considered include for example, satellite communication systems, digital switching and transmission technology, computer databases, electronic mail,

and integrated services digitil networks, many

of which SSA uses or will be using. Others are

less likely to be of use to SSA, although their

use at some time in the future is possible. 23

SSA expects to use, but does not now use,

teleconferencing, expert systems, voice mail,

and optical disks. There are pilot projects now

underway to explore some of these techniques.

SMP does offer the potential, in the future, of

giving people access to their own SSA records

through home computers. SSA is not planning

for this but several States are considering such

plans with selected State record systems.

SSA is not an enforcement or investigative

agency, but it is responsible for certain functions such as entitlement determination and

debt collection, that could involve surveillance,

as well as for safeguarding its data and its

transactions, which involves monitoring the

use of its equipment and the behavior of its

employees. Much sensitive SSA data will flow

over leased lines between headquarters and interactive terminals in field offices when the new

claims modernization project becomes operable. Satellite communication links are also

possible. The new systems that SSA plans to

develop to assure the integrity and confidentiality of its data are not yet fully developed.

Security of SSA Systems

Data in computers and telecommunication

systems are vulnerable not only to misuse but

to inadvertent loss through systems failure,

to theft, or to manipulation or destruction

through sabotage or terrorism. The security

of information systems against internal or external violations is of primary importance.

——.—

J ‘Electronic eavesdropping technology, optical/imaging technology for visual surveillance, sensor technology, civilian band

radios and vehicle location systems, polygraphs, ~’oice stress

analyzers, t’oice recognition, laser interception, and cellular radio.
77

The security procedures at SSA’S National

Computer Center are those common at most

large ADP centers. Physical security for the

facility and for separate rooms and floors is

thorough; and data security is safeguarded

with standard techniques of personnel screening, restrictions on dial-up access, passwords,

and audit trails. Backup battery power and

generators are available to keep the computers

going for 3 days in case of power outages. SSA

says that all records are backed up.

The DHHS Inspector General warned SSA

in early 1984 that:

SSA is not prepared for a disaster in the

NCC. . . . SSA’S ADP systems are highly centralized in its NCC and operate without adequate backup in the event of critical damage,

or worse—a catastrophe. Although there have

been attempts made to plan for contingencies,

efforts to date have been inadequate. Further,

off site backup of data and software is incomplete and untested.24

The audit report said that responsibility for

contingency planning had not been focused at

a high level, SSA had not performed necessary

risk analyses, and SSA components ‘‘whose

expertise is necessary to develop a workable

plan” had not contributed to the effort. Subsequently SSA agreed to establish a new security planning work group and assign greater

importance to contingency planning. A risk

analysis study for the National Computer Center had been done in 1982; but subsequently

there have been several additional contractor

studies of risk as well as top secret access procedures and audit controls.

None of these security measures apply to the

use of microcomputers, outside of the National

Computer Center, for example in headquarters

and operations buildings, and there are no

established security policy or procedures for

microcomputer users. While the integrity of

data is fairly well assured, privacy may not be.

~ ‘[; .S. I)epartment of I Iea]th and I]uman Ser~rices, office of

I nspect~)r (~ener:il, Nlemorandum to Martha A. NlcSteen, Acting (“f)m missi{)nc~r of .Sc)cial Securitjri ‘‘ Audit Ilpport — .$s.~!s

l’l:inning for (’ontingt’n~”ie> in t h~> N(’w Computer (’enter, ,4(’N

1 ,-)-lY62i, \l :ir. 22, 1 9k 1,

As interactive terminals and personal computers are added to field offices, these concerns

will become pressing. Access controls are being reviewed and revised as part of SMP, but

this work is not complete.

There have been a number of cases of internal sabotage and computer-related crime at

SSA, as is perhaps inevitable.’:) SSA says,

however, that no known instances of computer

crime involved data processors; they occurred

earlier in the work process. A typical case is

a field office employee inventing a fictitious

claimant, or altering information about a beneficiary or a payment amount.

SSA has long been criticized for having inadequate safeguards against unauthorized

access to its data. Specifically, it has lacked

programmer security controls, internal access

controls, and audit trails. Though no computer

programmer at SSA has ever been found guilty

of fraud against the agency, it has been quite

possible for programmers to make changes to

pay themselves benefits; unauthorized people

could log onto systems; data review technicians in District Offices could enter claims for

themselves without leaving an audit trail.

The SMP will: create an audit trail for computer program changes, assign personal identification numbers to claims representatives

and local workers, create an audit trail for all

transactions, and employ a central security

systems package like those used by the military to handle log-on commands and records.

However the very rationalization of SSA procedures and the existence of schematics and

diagrams mapping the system, pose a threat

to security that does not exist now, in that

more people may be able to discover how to

get into the databases.

~“’In the 4 years before the SMP beg-an, there were at least

46 known cases of vandalism inside secure data-processing areas,

and former SSA officials told Congress of other threats of sabotage that had been received. See U.S. Congress. illisrna.nagement of SS’A Computer S’>’sterns Threatens Social Securit>r

Programs, 33d Report b> the l~ouse Committee on Go~’ernment

operations. Sept. 30, 1982, p. 9. The SSA response to OTA

F’ederal Agencj Data Request acknowledged some (presumably recent ) ‘‘known instances of crime and abuse’ but specified

that they did not in~ol~e data-processing people.
Chapter 4

The Future: The Necessity of

Long-Range Technology Planning
Contents

Elements in SSA’S Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SSA’s Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Placement and Structure of the Agency . . . . . . . . . . . . . . . . . . . . . . .

Staff Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Trends in Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Software Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Hardware Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SSA’s Continuing Uncertainties: Decisions are Necessary . . . . . . . . . . . . .

Table

Table No.

3. New and Potential Technology forSSA Functions . . . . . . . . . . . . . . . . .

Page

81

81

82

82

82

83

83

85

86

8’7

Page

83
Chapter 4

The Future: The Necessity of

Long-Range Technology Planning

The Social Security Administration badly

needs well-developed and effective long-range

planning capability. The Systems Modernization Plan deals primarily with technology, and

secondarily with technology management. It

will be most effective if it is implemented and

extended in the context of an institutional longrange plan that provides insight about how the

agency mission will change over time, alternative ways of performing that mission, the

resources that will be available, and the capabilities that will be needed.

Technology is an essential element in SSA’S

future. But technological forecasting and

assessment, even if greatly improved at SSA,

will not constitute a long-range planning capability. Factors other than technology will influence the organization’s future, such as

changes in its mission, resources, and relationships with other institutions; and these factors shape the purposes and goals for the technological systems. Some of these factors are

within SSA’S control, and some are not; but

continuing monitoring and analyzing of such

factors can allow the agency to be prepared

for changes and make a smooth transition to

new ways of fulfilling its mission.

ELEMENTS IN SSA’S FUTURE

SSA’S Mission

SSA’S basic mission is unlikely to change

significantly over the next decades. There will

almost certainly be congressionally mandated

changes in coverage, entitlement provisions,

benefits, etc. Some of the programs now administered by SSA could be removed, or other

responsibilities added, with additional requirements for data collection and handling. New

social programs that might be assigned to

SSA, however, usually have long gestation

periods, and the assignment can be anticipated

by agency planners.

SSA’S mission therefore is, and is likely to remain, more stable, coherent, and routinized than

that of many government agencies. This is a

significant advantage for long-range planning.

The objective for planners, in this situation,

is to help the agency define its goals and priorities in carrying out its mission, and to help

it set reasonable standards of performance in

terms of quality, timeliness, and costs of service delivery. At present, the agency is unable

to respond with credibility to either the Office

of Management and Budget, Congress, its employees, or its critics on questions related to

the realization of productivity gains, the most

manageable rate of work force reduction, and

the appropriate timing of further procurements, largely because it has not explicitly defined its goals and milestones in a way that

can be credibly justified. Looking beyond the

nexts years, a long-range plan should provide

alternative technological and institutional

mechanisms for service delivery in the context

of evolving needs of the clients and future capabilities and costs of information systems.

The functions essential to carrying out

SSA’S mission involve:

data collection;

data processing;

data protection (privacy and security);

service delivery;

accountability and information dissemination (providing information needed by

the Administration, Congress, and the

public); and

81
82

● coordination with other Federal and State

agencies.

Each of these is subject to change. New

kinds of data may have to be collected, new

services may be mandated, law and public policy may set new standards for data protection

and accountability, and new technology will

change both the available techniques for and

the costs of performing all of these functions.

The Placement and Structure

of the Agency

SSA might at some time be separated from

the Department of Health and Human Services and be given the status of an independent

agency. The most important changes in management and reporting responsibility would in

this case be mandated by law. The most likely

structure of agency leadership is already apparent from legislative proposals before Congress,

and should therefore not take the agency by

surprise.

Internal reorganizations are a more immediate and more likely possibility, and have significant implications for long-range planning.

Information systems development and planning to be most effective must reflect and support the flow of work–i.e., the movement of

information and the sequencing of steps in its

processing —through the organization. A longrange planning process that enabled the agency

to define its goals and priorities could provide

a valuable guide to organizing the agency for

greatest effectiveness. It would allow the phasing in of desirable changes in a logical and orderly manner, providing at the same time a

rationale and justification for the changes to

managers and workers. Conversely, the relationship between programs (OASI, SSI, etc.),

between operations and systems development

components, and between field offices, Regional Commissioners Offices, Program Services Centers, the National Computer Center,

and headquarters staff, should be considered

in establishing a planning unit and determining its responsibility, location, role, and reporting processes.

Staff Changes

This may be the most immediately challenging and least adequately considered element

in SSA’S future. Technological change, congressional budgetary decisions, and Administration policies are pressing toward significant

changes in SSA’S work force, but the agency

is responding in a largely reactive rather than

proactive mode. A rational and persuasive plan

for reconciling and mediating these pressures

could allow the agency to shape and influence

decisions that will finally be made or sanctioned outside the agency.

The groundwork was laid for an innovative

approach toward cooperative labor-management adjustments to change, but there are indications that this promising start is being allowed to wither. Unresolved questions involve

recruitment, training, job classification, compensation adjustments, promotion, relocation,

working conditions, labor-management relations, and retirement policies. All apply to

managers, professional staff, and clerical staff,

but there are different needs and constraints

for each group. These needs and constraints

are intimately related to changes in technology, and to Administration policies, the two

factors with which long-range planning will be

primarily concerned.

Clients

While SSA’S mission is basically simple and

stable, there will be changes in the demographic makeup of its clients over the next two

decades, which will or should affect the way

in which the mission is performed and the criteria for excellence in performance. For example, the age distribution, educational level, ethnicity, language problems, technological sophistication, and family resources of beneficiaries and their survivors may change significantly. Some of the problems which occurred

with implementation of the SS1 program illustrated the way in which changes in client needs

and expectations determine the effectiveness

of traditional SSA procedures.
—

83

TRENDS IN INFORMATION TECHNOLOGY

New advances in information technologies

and related management tools, beyond those

envisaged in SSA’S 5-year Systems Modernization Plan, are available now or are reasonably certain of becoming available in the near

term, and can be rationally anticipated and

planned for (see table 3). They will be the standards by which experts will evaluate SSA systems and management in the 1990s. Unless

SSA begins now to systematically prepare for

modernization beyond a 5-year horizon, it may

again find itself falling far behind the “stateof-the-art” at which SMP is aimed.

SSA has historically emphasized heavy-duty

computing needs of the core administrative

functions-the processing of enumeration,

earnings, and the master beneficiary file. Other

uses for computing will be increasingly important.

Some new developments in information technology will be useful chiefly for advanced scientific research, at least in the near future, but

such capabilities are generally soon adapted

to the more prosaic operations of corporate and

government institutions. Monitoring these developments and trends as they emerge will be

necessary if SSA is to plan to use new technical capabilities when they become reliable and

cost-effective.

Other technical capabilities are already available and in use in leading private sector organizations and in some government agencies.

Some of these do not, however, yet appear in

SSA’S Systems Modernization Plan, or are

only incorporated as eventual enhancements

rather than as pivotal points of leverage for

making optimum use of information systems.

For example, to use information technology

to the fullest in improving its management of

operations, SSA will need to develop more

powerful administrative processing and management information systems, designed to access transactions information and manipulate

it to answer managers’ questions. These management information systems could also aid

Congress in oversight of SSA, although as

Table 3.—New and Potential Technology

for SSA Functions

Function Technology

Communications . . . . . . . . . . Local area networks

Electronic mail

Private branch exchanges

Digital switching and

transmlssion

Fiber optics

Communications satellites

Cellular mobile radio

Data encryption

Integrated Services Digital

Networks (ISDN)

Voice mall

Teleconferencing

Two-way cable

Data collection ., . . . . . Home computers

Client-operated devices

(similar to ATMs)

Data input ., ... . . . . . . . . Optical character recognition

Voice recognition

Data output and

presentation ., ... ... Computer graphics

Voice synthesizers

Data processing . . . . . . . . Minicomputers

Relational databases

Query-by-Example

Multi-use super-micros,

application SOftWare

packages

Supercomputers: multiple

instruction multiple data

(MI MD) processors, vector

processors, data driven

processors, FORTRAN

programs

Parallel processing

Associative processors

Entitlement evaluation,

adjudication . . . Spreadsheet applications

Expert systems

Storage ., . . . . . . . . . . . . . Magnetic bubble devices

Wafer-scale semiconductors

Optical disks

Smart Card

SOURCE Off Ice of Technology Assessment 1986-

pointed out above, they could also be used, unfortunately, to select and present only favorable indicators and benchmarks.

Software Trends

Software development has historically

lagged behind hardware development, but it

is now a major focus of information science research and development in the United States
84

and in other nations, and can be expected to

move rapidly over the next decade. Major

trends in software that could be better utilized

by SSA are:

Enhancements to Systems Analysis and

Design: These tools, called “interactive requirements analysis tools, ” are designed

to codify data, reduce errors, and improve

the documentation required when establishing the requirements for a large information system. They fall into the larger

family of tools called “structured analysis, design, and programming techniques. ”

New ones use forms-based systems to

achieve uniformity of documentation and

design, by prompting the designer with

questions and blanks. They improve compliance with programming and design

standards, which has been one of SSA’S

problems. Others help the systems analyst to put the systems design in a particular format or notation that can be fed

into a code generator for key parts of a

computer program. These software design

tools can in the future be incorporated into

larger automated design tools.

Code Generators: These are computer programs that assist programmers in quickly

producing third-generation language programs, for example, COBOL programs.

One is Quick-Code, which generates

DBase II programs; others are Quick-Pro,

the Producer, and Genasys. Some reports

have shown productivity gains approaching ’75 percent with the use of these code

generators.

Development of Fourth-Generation Languages: These are computer languages

that use English-like vocabulary and syntax, and are useful for the development

of administrative and management information systems. The distinction between

fourth-generation languages and database

management (software) systems is in fact

becoming ambiguous, and often depends

in part more on who will be using them

(systems developers or systems end-users),

than what they can do. For programmers,

these computer languages can m-educe

●

order-of-magnitude increases in productivity; it is estimated that most fourth-generation languages result in 10 times greater

productivity than COBOL. Most of these

languages are not yet capable of being

used for sophisticated applications but

they are likely to be so in the future. In

the area of management information systems, they are now capable of providing

responses to most kinds of questions

needed for reports. Examples are FOCUS,

RAMIS, SQL.

Relational Databases: These database

structures (ways of organizing data) permit great flexibility yin the ways of asking

for information, and they use English-like

fourth-generation languages in addition

to being compatible with COBOL and

other third-generation languages. Examples are Univac’s Mapper, Culinet’s

IDMS, and IBM’s DBase-II. Relational

databases are now a small but rapidly

growing portion of the data storage and

retrieval market. For high-volume applications they are still too slow; as of yet they

cannot be used with very large, heterogeneous databases with many thousands

of records, but very powerful computers

may in the future enable SSA to take

advantage of them.

Developing and maintaining software is now

the dominant cost of creating and operating

large computer systems. Advances in microelectronics have steadily reduced the cost and

improved the performance of hardware, but improvements in the productivity of programmers has been much more difficult to achieve.

Software engineering, techniques for improving the productivity of programmers and designers, is increasingly important. Research

in this field includes highly theoretical work

directed at fundamental understanding of the

nature of programs and “proof,” in some mathematical sense, that they will work as intended.

At the other end of the spectrum, it includes

behavioral science research on the ways in

which people interact with computers (the

‘‘man-machine interface’ and techniques for

management of programming tasks.
85

Artificial intelligence is a field of research

concerned with extending the ability of the

computer to more nearly match human mental capabilities, such as recognizing and understanding speech and visual images, reasoning, choosing among options, or deciding, and

spontaneously communicating. The first significant commercial applications of artificial

intelligence, after at least 25 years of research,

are in the area of expert systems. These are

‘‘intelligent information retrieval systems designed for use in tasks requiring expert knowledge, such as insurance underwriting, medical diagnosis, weapons control, or business

decisionmaking. Expert systems store not only

data, but rules of inference that describe how

an expert would use the data to make decisions.

The expert systems’ rules of inference are derived from analysis of the decisions of many

experts, and can therefore make a user’s decisions more comprehensive, more rigorous, and

more consistent than those of a typical user

who is not in the top echelon of experts in the

field, and at least in theory better than the decisions of any one expert might be. Since insurance underwriters are already using expert

systems, applications for SSA claims representatives, or State determiners of disability,

are an obvious possibility to be explored.

Hardware Trends

In order to run sophisticated languages and

relational databases, faster and cheaper machines with new capabilities are needed. The

faster and cheaper the machines become, the

easier and more economical it is to use languages which are less efficient but more suitable for use by nonspecialists. The following

developments should be helpful for SSA:

● Database Machines: In order to operate

relational databases at reasonable speed,

it is necessary to use parallel processing,

so that several operations can be done at

once. A database machine is several orders

of magnitude faster than other machines;

some are on the market that can execute

10 million instructions per second and

speed up database transaction processing

10 to 20 times, reducing the cost of these

operations.

● Increased Power: It is likely that in the

next toyears the cost per unit of computing power will continue to decrease and

the speed increase, as they have in the recent past. Supercomputers—or advanced

architecture and parallel processing-may

become available to very large organizations like SSA; allowing processing at

much higher speed and much lower unit

cost. The need for sophisticated costeffectiveness comparisons of systems in

the future will be of increasing importance.

● Mass Storage Technology: Magnetic disk

storage technology continues to improve

incapacity and cost, but laser optical disk

technology offers storage of up to 2.5 billion bytes on one 12-inch disk, several

orders of magnitude more density than

possible on a magnetic disk. There are still

a number of technical problems related to

the use of optical disks for organizations

with immense databases like SSA’S; for

example, improved computer-controlled

indexing systems are needed, and there

are unanswered questions about their archival ‘shelf life. Until very recently, optical disks could not be used in a read-write

mode; since they could not be changed

once data was recorded, they were useful

only for permanent storage. Several firms

are now working on erasable optical disks.

Some commercial applications are available and others are nearly ready for market. Access time for erasable optical disk

systems may continue to be a problem because of the enormous volume of data they

can hold, but they clearly promise superior

performance in comparison to existing sequential-access magnetic tape systems.

● Communications: SSA does not have

much in the area of local area networks

(LANs), PBXS, and wide-area networks

(WANS) to link computers in buildings,

cities, and counties. Failure to take advantage of these technologies will prevent it

from developing efficient office automation and enhancing productivity in local

district offices.
86

● Optical Character Recognition Technology (OCR): OCR is now undergoing a

spurt of rapid development. Typed or

printed material can be read into the computer 40 to 50 times faster than it can be

keyboarded. State-of-the-art OCR equipment can read up to 23 different fonts with

an error rate smaller than that of an accomplished data-entry clerk, and some of

the devices can also handle simple handprinted notations, such as numerals. Within the next few years, OCR should have

the capability to recognize, isolate, and

read or copy specific bits of information

within a larger volume of data.

New concepts of computer architecture now

being explored in the laboratory will provide

two waves of innovation: highly specialized,

low-cost computer modules that do specific

types of tasks at extremely high speeds, and

future generations of supercomputers. ’

Because computer hardware has in the past

been expensive, users have tried to allocate its

cost over a variety of applications and uses,

with general-purpose mainframe computers.

But as the costs of hardware drops, some computational tasks, involving high-volume standardized data, may in the future be done on inexpensive, special-purpose hardware with the

general-purpose computer used as a routing

switch, sending a computing task to one of several different specialized processors.

The term supercomputers is used for the

most powerful computers available at any one

time. The next generation of supercomputers

is likely to have a radically different “architecture. ” Computer architecture is the internal

structure of a computer, the arrangement of

the functional elements that carry out calculations and manipulation of data. Since their

invention, computers have basically followed

one model, the von Neumann sequential processing architecture. The limits of computational speed that can be achieved with this

‘Much of the material in this chapter is based on an earlier

OTA report, Information 7’echrzolo~ R&D: Critical Trends and

Issues, OTA-CIT-268 (Washington, DC: U.S. Government Printing Office, February 1985).

design are being approached, and further increases in computer performance may require

parallel processing architectures. That is, operations performed on the data would be decomposed into tasks that can be simultaneously

carried out by many computational units working in parallel.

Very large-scale integrated (VLSI) circuit design facilities, using the most powerful computers, are being used to develop and test new

architectural designs. Three U.S. companies

(CRAY, Control Data Corp., and Denelcor) are

developing “next generation’ supercomputers,

as are several Japanese companies. Japan has

embarked on major supercomputer projects

that may challenge U.S. leadership in supercomputers. One, called the Fifth Generation

Computer Project, is aimed at producing a

computer using artificial intelligence, or reasoning functions similar to human thinking

processes.

Management Tools

SSA has adopted new software engineering

techniques such as project management systems, automated documentation systems, report generators, screen editors, database management systems, etc. Already, however, some

private sector organizations are moving from

this software engineering technology approach

to methodologies such as prototyping the enduser development (some of these new tools were

described above under software trends). SSA

should test and evaluate these newer technologies as soon as it has a database on which

they can operate.

Federal agencies are required by the Paperwork Reduction Act to introduce information

resource management (IRM) as a concept and

organizational tool. This includes the creation

of a data administration function and a data

administrator’s position at a high level in the

organization. The concept of IRM is still controversial and poorly implemented in most

Federal agencies and in private organizations.

Nevertheless, it is important that SSA take

a fresh look at the implications of this concept.

It will need, for example, to put greater em-
87

phasis on development of organizational devices such as Information Centers, to help and

support end-users.

If SSA is able to adopt new technologies,

a large shift in data-processing skills will be

required, from traditional complete reliance on

COBOI. programming toward greater capability to work with fourth-generation languages.

There are vast differences in the skills required.

There will be an increased need for database

designers and administrators, code optimizers,

structured analysts, prototypes, data comnlunication network specialists, and decision support specialists. A large number of professionals will have to be recruited or retrained

to produce the required labor force by the

1990s. Since many experts estimate that the

stock of useful knowledge which a program~-

mer has is depleted by one-half every 5 to 7

years, SSA’S technical training programs will

be increasingly critical in terms of upgrading

technical knowledge on a continuing basis.

SSA’S CONTINUIN~ UNCERTAINTIES:

DECISIONS ARE NECESSARY

SSA’S response to its 1982 problems must

be understood in terms of the technologies that

were available. Much of the criticism of SSA’S

Systems Modernization Plan rests on the perception that SSA did not, in 1982, pay enough

attention to the wide diversity of options available to it; and in the intervening 4 years it is

not clear that SSA has developed an understanding of the rapidly developing and diversifying technological options that it will have

in the future.

By 1982, it was no longer necessary for an

organization to arrange the entire computing

function in a large, centralized, information

systems department; machine intelligence

could be distributed throughout the organization wherever needed. In addition, microcomputers, mainframes, minicomputers, and peripheral devices can be tied together with

PBXS or LANs.

The 1980s is also a period of tumultuous

change in the organization and marketing of

telecommunication equipment and services.

Many large organizations are bypassing local

telephone companies by using their own fiber

optic or microwave intracity telecommunication networks. The deregulation of the telecommunication market has led to an explosion of

offerings of new telecommunication services,

and rapid reduction in the price of both longhaul and local telecommunication costs.

Managers must take more responsibility for

making key decisions about protocols, organization, and maintenance, which heretofore

the telephone companies had assumed.

By the 1980s, database technology has allowed a shift in thinking about data from ‘‘information as a cost” to ‘*information as a resource. ” In the 1970s, information was usually

highly fragmented among different levels of

the organization, different specialized functions, and different computer programs. It was

difficult for specialists in one division to share

data with those in another division. Database

management in the mid- 1980s means:

codification of data elements to define

common meanings and to catalog origins

and uses (a data dictionary);

reorganization of data elements from thousands of computer files into a single pool

or “database”;

separation of application programs from

the data elements, by use of a database

application development language; and

reorganization of data elements to permit

greater flexibility in responding to inquiries.

It must be recognized, however, as has been

stressed throughout this report, that SSA’S

performance and problems are not greatly

different from those of other organizations attempting to catch up with and stay abreast

of broadening technological capabilities. The

implementation of true corporate and govern-
88

mental databases is 5 to 10 years behind the

idea, because existing software has to be amortized, there are significant organizational costs

involved, hardware must be upgraded, and top

management is often not convinced that the

large costs are actually justifiable.

The principle themes in software today are

higher level languages, user-friendly languages, automatic code generation and software engineering. Information now plays a

strategic role in the operation of many organizations. The nonspecialized general user has

become more important; computer specialists

no longer have a monopoly on data processing. There are more hardware, software, and

services options. Organizations are less bound

by the limitations of their data-processing staff

and can develop systems faster and in a more

rational, planned manner. There is increasing

recognition of the close connection between

systems and organizational structure, and of

the fact that relatively large changes in organizational structure may be necessary to

take advantage of new technologies.

In 1985, debate about social security issues

has receded, and congressional attention has

been focused primarily on SSA’S continuing

attempt to modernize its technology and its

management. This attempt is making progress, but its promise is limited by SSA insistence on looking only 5 years ahead.
Part III

The Case History of Information

Technology Management at the

Social Security Administration

Created in 1935 to provide retirement insurance for American workers, the

Social Security Administration (SSA) grew through four decades to serve an increasing number of beneficiaries in a variety of social programs. SSA’S data-collection and management responsibilities from the beginning dwarfed those of any

private sector insurance company or of other government agencies. This agency

was from 1935 through the 1960s a pioneer in the adoption, utilization, and management of information technologies. Yet by the end of the 1970s, SSA’S dataprocessing systems could no longer meet the requirements of SSA policies and

programs. How did a leader in one era of technological change become threatened

with obsolescence and failure in the next phase? How adequate is SSA’S current

response to the overwhelming problems that became obvious in the late 1970s

Chapters 5 and 6 describe SSA history between 1935 and 1981. Chapter 7 describes how the SMP was developed and initiated. It discusses in detail the factors that led to serious problems with the Paradyne procurement of 1982 and their

effects on SMP management. Chapter 8 lays out the structure of monitoring and

oversight mechanisms for SSA in both the executive and legislative branches of

government, reviews major oversight actions related to SMP, and identifies some

oversight problems likely to affect the monitoring of all complex agencies using

very large advanced technology systems.
Chapter 5

Years of Service

and Satisfaction,

1935-71
Contents

Page

The Birth of the Social Security Administration . . . . . . . . . . . . . . . . . . . . . 93

Tools of the Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Management in the Early Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Healthy Growth, 1940-71. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Programs and Resources (1940-71) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Management (1940-71) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Labor-Management Relations (1940-71) . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Technology and Procurement Policy (1940-71). . . . . . . . . . . . . . . . . . . . . . 98

Emerging Problems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Figure

Figure No. Page

7. The Organization of the Social Security Administration

in the Early Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
--

Chapter 5

Years of Service and Satisfaction, 1935-711

BIRTH OF THE SOCIAL SECURITY ADMINISTRATION, 1935-39

When the Social Security Act was passed

in 1935, a three-member board was created and

given a modest lead time to set up the program.

Old age insurance account numbers were to

be issued by January of 1937, and the first benefit payments were to begin in 1942. A first

year’s budget of $1 million was proposed by

the board and accepted by Congress.

The autonomy that SSA senior management

had in their first 3 years of organization and

operations was considerably more than most

Federal agencies enjoyed. Although social security was considered a New Deal program, the

first Chairman of SSA was a Republican. The

strong support of the President, the fact that

SSA did not have to report through a Cabinet

officer, and the absence of any interagency rivalries over the mission or program boundaries

gave the first two chairmen very broad discretion in setting up the agency (see figure 7).

1 Information in this chapter, where not otherwise Cited is

drawn from a contractor report, prepared for OTA by the Educ~-

tional Funds for Individual Rights, Inc., New York City, August 1985. The contractors conducted many interviews with

former and current SSA executives, congressional staff members, Federal executive branch officials, union officials, technology vendors, and scholars of SSA. They also drew extensively on published materials. Many references and citations

not included in this chapter are provided in the contractor report and can be supplied if needed.

Staffing the agency was one of the first and

most important tasks of the board and senior

staff, and the way it was done was to have a

profound and long-term effect. The act required

employees to be chosen through Civil Service

“except for experts and lawyers. ’ Top management made liberal use of the ‘expert designation to choose highly qualified persons not

then available through the Civil Service, and

in that Depression era they had no trouble

recruiting well-educated and highly qualified

workers. At the clerical levels management

was also able to pick the cream of the crop,

including clerks who had worked in recordkeeping operations at the FBI and Census

Bureau.

As a result SSA started with an unusually

well-qualified work force, imbued with a missionary spirit of dedication to social insurance

concepts and a “client service” outlook.2 These

concepts were reinforced in the training programs set up for all new employees, especially

training in courteous dealing with the public.

‘Located in Baltimore, which had a large black population,

the SSA had from the beginning a policy of hiring substantial

numbers of black clerical employees, a markedl~’ different policv from that of the Federal Government at the time. Marvland

then had legal racial segregation.

Figure 7.—The Organization of the Social Security Administration in the Early Years

-

I

Division of the Actuary Division of Bureau of Hearings

Program Research & Appeals

+ +

I I v I I

Bureau of Children’s Bureau Bureau of Old Age & Bureau of Federal

Public Assistance Survivors Insurance Credit Unions

SOURCE Social Security Admlnlstratlon 1986

93
94

.— —

By 1939, SSA had a competent and highly

motivated work force, led by shrewd and dedicated headquarters executives; a large staff of

technical experts in actuarial, accounting, and

social-welfare operations; and afield corps committed to the practical delivery of helpful service to “entitled” clients.

Tools of the Trade

SSA soon developed into the largest insurance organization in the world, in terms of numbers of persons covered, the number of persons

receiving benefits, the amount of benefits paid,

and the character of hazards insured.3 The

technology then available to SSA was largely

manual, mechanical, or electromechanical.

Data was stored in hard copy—ledger sheets,

punched cards, carbon-paper forms, and file

drawers. Data processing depended on manual operations and some early electric accounting machines, such as the Hollerith system

first developed for the Census Bureau in 1890.

Data communications depended on trucks, the

mails, and sparing use of the telephone.

SSA had to develop specifications for new

types of recordkeeping and informationhandling technology, and to call on leading

manufacturers to design new machinery or

adapt existing machines to new tasks. Three

examples of such specification and innovative

responses were the development of the collating machine by IBM for SSA use; adaptation

of the “Soundex” system for phonetic arrange

ment and retrieval of names to large-file management; and application of early microfilm

processes to SSA recordkeeping and data processing.4 By 1940 SSA technical staff and expert consultants were stretching the state of

the art in information technology. They could

do so by foreseeing future technological needs

and motivating manufacturers to meet those

functional requirements. In 1935 to 1939 there — — —

‘

] Arthur J. Altmeyer, The Formative Years of Social Securitv (Madison, WI: University of Wisconsin, 1968), p. 6.

~Ibid p 71. Jack S. Futterma, The Future SSA pmCess:

., . ,

An Apprm”sal for the AFGE of Its Impacts Upon Social Security Administration Employees and Employment, May 1979

(unpublished), pp. 4-5.

were no significant procurement constraints

on SSA in seeking out manufacturers to design new products or adapt existing machines

for the agency’s special needs.

Management in the Early Years

The Social Security Board found no models

in the private sector in setting up its procedures, since the insurance industry did not

have the enormous database, the need for frequent updating, and the history-based entitlement process that characterized the old age

insurance program. While Census, FBI, and

the military had large recordkeeping and accounting operations, none of them had developed procedures that could be applied to SSA’S

needs. SSA brought in outside consultants and

also began hiring and educating experts of its

own, building up an in-house expertise that

was, down to the early 1960s, at the leading

edge of recordkeeping and data-processing

science.

The 1935-39 period saw several traditions

established that would persist at least until

the late 1960s. The top managers were personally interested in and spent a great deal of

time on information management. Prompt enrollment of new beneficiaries and getting payments out on time were given top priority. SSA

adopted a deliberately incremental approach

to technological innovation; at the same time,

however, a cadre of experts was always at work

looking for new machines and new techniques,

and such activity was valued by the top leadership. There was tension between operations

people, who generally wanted to continue to

use the machinery they had, and the systems

people who wanted to push new approaches,

but this tension was usually mediated in the

Commissioner’s office.

SSA was in these years an example of strong

administrative efficiency and program effectiveness, and the agency gave that highly

favorable picture wide publicity. Its cost of

maintaining a worker’s account was then 20

cents a year, and the administration of the
95

trust fund and programs was done for slightly

over 2 percent of each dollar collected.:)

There was one public controversy over administrative matters, when reporters Drew

Pearson and Robert Allen reported that there

were millions of unidentified ‘John Doe’

records.() SSA figures showed that these were

less than 1 percent of total wage reports and

the agency had an active program to investigate and post them. In those days, attacks on

SSA’S recordkeeping usually reflected political conflicts rather than administrative inefficiency. In this era, SSA had a reputation in

Washington for administrative agility and imaginativeness, and enjoyed significant autonomy. It had a reputation with the public for

excellent service to clients. Within the agency,

information management was seen as a central, high-priority concern.

Concerns about potential misuse of personal

information by the Federal Government surfaced as soon as social security was proposed.

The President had responded with public assurances that all personal information would

be confidential and used only for program

administration.~ This guarantee was not written into the 1935 law, but the first regulation

issued by the SSA Board dealt with confidentiality. It did not forbid all disclosures of emF’~r ~~mp~rison, ~dministr~ti~’e expenses for the major SS,I\

programs in 1984 as percent of henefits paid, were 1,1 percc~nt

for old-. Age and Surti~ors Insurance, 3,3 percent for I)isahility Insurance, and 9,4 percent for Supplemental Securit~ 1 ncome.

“Altmeyer, op. cit., 196X, pp. 123-12 I.

‘I bid., pp. 58,70.

ployee or beneficiary information but left disclosure up to the discretion of the agency. ’

Disclosures were however approved very sparingly. Legislative amendments in 1939 gave

statutory weight to the board’s own confidentiality rule.

The board instituted physical security procedures from the outset. Published literature

records no instances of outside penetration or

inside misconduct in the 1935-39 period.

It became the agency’s policy not only to

allow old-age insurance account holders to examine their records but to actively solicit such

inspections. Rights of inspection for account

holders were publicized and a sizable volume

of inspections took place each year. The agency

saw this as a useful way to increase file accuracy, identify problems in their procedures,

and to enhance public confidence in the system.

The 1939 amendments also provided a full

set of due process rights for retirees, widows,

and dependents; findings of fact and rulings

of the board could be challenged by the claimants, ‘‘reasonable notice and opportunity for

a hearing’ had to be provided by the board,

and the board’s decisions could then be appealed to Federal district courts. These were

not onerous requirements in an era of low claim

levels and “entitlement” relations with clients,

as well as high judicial deference to administrative expertise.

— ——

‘Alan Wrestin and hlichael A. Baker, Data barIks in a }’”rt’t’ .%)-

ciet~’ (New York: Quadrangle ]Iooks. 19’721. pp. :16-:18.

HEALTHY GROWTH, 1940-71

Between 1940 and 1972, SSA enjoyed a com- The economy expanded and with it came

bination of favorable external and internal fac- steady expansion of social security. Political

tors. These 32 years were marked by sweep- elites, financial experts, and the public were

ing social change, and included three wars, generally confident that the social security syscultural and ideological changes, the first tern was fiscally sound. Challenges to this beRepublican Administration (1952-60) in SSA’S lief in the late 1940s and early 1950s were dishistory, and organization of a union at SSA, tinctly minor dissents.

also for the first time. This was one of the first

unions for Federal workers. Collective bargain- Social security moved from a program creing was legalized in the Federal service after ated by the Democratic party opposed at its

1962. creation by the mainstream of the Republican
party, to a very broadly supported bipartisan

program. It acquired a large constituency of

beneficiary recipients; over 25 million retired

workers, dependents and survivors, and their

families, were receiving social security payments by 1971.

Programs and Resources (1940-71)

After 1950, major changes were made in the

scope and nature of SSA programs:

●

●

●

●

●

●

The Social Security Amendments of 1950

extended compulsory coverage and added

optional coverage; benefits were increased

by an average 77 percent, the wage base

was authorized to rise, and the tax rate

was allowed to rise to 1.5 percent.

Expansions of the old age system became

a regular practice, occurring seven times

between 1951 and 1965, including four increases in benefits.

A new Disability Insurance cash benefits

program was enacted in 1956 and the age

limitation on disability benefits was removed in 1960.

Medicare was added in 1965.

In 1969 Congress gave SSA administration of claims related to Black Lung

disease.

In 1972 there was a 20-percent increase

in benefits, the wage base was increased,

and an automatic cost of living (COLA)

system was added. The Supplemental Security Income (SSI) program was also

enacted but did not start until 1974.

These program changes called for substantial increases in SSA workloads: in opening

files for newly covered workers, calculating revised benefits, and administering payments,

and in the case of Medicare, dealing with thirdparty providers. But at least until 1968 there

was general expansion of the Federal work

force and a continuing supply of good employees. As a result SSA leaders saw no real problems for the agency’s administrative responsiveness in continuing growth of the social

security program.

SSA remained quite successful in obtaining

from Congress and the executive branch the

appropriations and personnel authorizations

that it needed to keep up with the expanding

workload, and was therefore able to handle

these changes effectively.

Beginning in 1953, however, there were some

early indications of what could happen when

Congress made program changes that increased the workload, with a highly compressed deadline and without additional personnel and material resources to carry out

these mandates. As a result of amendments

to the Social Security law in 1950, many new

claimants waited until July 1, 1952, to file their

claims, in order to take advantage of more liberal benefits computations. The workload for

new claims increased by 39 percent. In addition, because of further amendments in 1952,

changes had to be made in the benefits amounts

for 4.6 million people already on the roles, and

these changes had to be made between July

18 and the issuance of September checks. In

spite of this workload, the Eisenhower Administration taking office in January 1953 sharply

curtailed the budget for the last half of the fiscal year that had begun in July 1952, making

it impossible to add staff to catch up with the

backlog. In 1953 this resulted in a temporary

decline in the quality of administration and reduction in service to the public.’

No such crunch took place after the Eisenhower Administration concluded that SSA was

a well-run operation not requiring further budget cuts, until 1968. In that year the Revenue

and Expenditure Control Act resulted in SSA’S

full-time work force declining by more than

2,000 persons in 2 years, while the workload

went up by 10 percent. President Nixon then

ordered total Federal employment to be reduced by 5 percent, and all Federal agencies

to reduce the average grade level of their employees.

During this crunch, computers allowed SSA

to cope with rising workloads; in 1971 systems

improvement “saved” the equivalent of 2,022

employees and $19.9 million for SSA. However

the resource limitations of 1969 to 1972 were

to leave the agency in what turned out to be

‘

) Altrneyer, op. cit., 1968, p. 201.
97

a seriously weakened position for the expanded

operating demands and the reduced ADP

(automatic data processing) support that were

to unfold in the middle to late 1970s.

Management (1940-71)

A series of broad organizational changes had

taken place in these years. The three-member

board had been abolished in 1946 and its functions transferred to a single commissioner

under the Federal Security Administration. In

1953 SSA was incorporated into the Department of Health, Education, and Welfare (HEW).

Public assistance and Children’s Aid programs

were removed from SSA in 1963, leaving it

with the Old Age and Survivors Insurance Program and the Disability Insurance Program.

Two years later SSA was reorganized, when

it was given responsibility for the new Medicare Program.

Between 1946 and 1972 there was steady

growth in executive branch oversight of SSA

operations and plans. The relocation of SSA

first to the Federal Security Administration

and then to HEW began to limit SSA’S previous degree of autonomy. The saving condition

—secretary-level satisfaction with the agency’s

administration-was only as good a shield as

SSA performance was strong. When that faltered, after 1973, secretarial protection could

evaporate swiftly.

After the 1965 reorganization, SSA still had

a mixture of program and functional units.

Four bureaus operated the four major programs: Retirement and Survivors Insurance,

Disability Insurance, Health Insurance, and

Federal Credit Unions. A single centralized

recordkeeping organization handled databases

and data processing for all programs, and had

both systems analysis and operations components. ’” Specifications for new systems came

from the program bureaus, and systems coordination and advanced planning were in the Office of Administration. Ten Regional Commis1f)Jack S. Futterman, The Social Securit.v Administration “s

Recent Reorganizations and Related Administrative Problems,

report to the National Commission on Social Security, July 28,

1980 (unpublished), pp. 9-13.

sions were created, not as line managers, but

to serve as “the Commissioner’s eyes and

ears. 1

Labor-Management Relations (1940-71)

Most of the successful elements of agency

administration remained largely intact from

1940 to 1971. SSA remained a lifetime career

service for most of its employees; at headquarters, SSA had a lower turnover rate than in

any other Federal civilian agency and much

lower than in private industry. Staff quality

remained high, and mission dedication strong.

Field operations maintained smooth and pleasant client relations. Disability determinations

were done by State agencies, and disappointed

claimants did not therefore generally see SSA

employees as their adversaries. Through these

years, customers were always right, and the

customers and the taxpayers were considered

to be the same people.

By the late 1960s, however, there were some

signs that the “pioneer period” of dedicated

employees was shifting into a new, more complex phase of employeeemployer relations. The

permanent work force almost tripled from 1959

to 1972. For a time at least many old-line SSA

employees feared that the new recruits would

not share the agency’s deep-seated public service ethic. The influx of new employees made

it harder to give intensive, personalized training. New social values, including suspicion of

large organizations, were widespread in society. Employees were becoming more assertive

about their rights and more demanding in

terms of working conditions. In the long run,

however, SSA has tended to have a high degree of employee loyalty and commitment compared to other public and private sector organizations.

A 1962 Kennedy Executive Order authorized collective bargaining in the Federal service. Previously the American Federation of

Government Employees (AFGE) had represented fewer than 5 percent of SSA employees. After 1962 AFGE had 2,500 members out

“Ibid, p. 13.
98 — —

of 11,000 headquarters employees, and by 1971

40,000 of SSA’S 52,000 employees were covered by union contracts, although probably

only a quarter of them were union members.

The union began raising issues of adverse

working conditions, sex and race discrimination, and technology impacts.

SSA’S top management saw itself as prounion, based on SSA’S strong alliance on social security policies with the labor movement.

However stresses in labor relations surfaced

by 1965 that were harbingers of later fissures.

A comprehensive article in the Baltimore

SUZZ12 in 1966 identified these problems:

c bad working conditions, especially overcrowding;

● changes in work force dedication, and loss

of missionary spirit about social security;

c disaffection among clerks, who constituted half of the 11,000 headquarters

staff, and particularly among women and

the 21 percent of clerks that were black

(a fact that SSA, which had been a leader

in hiring blacks for office work in the

1930s, had difficulty in realizing); and

● concern over automation—many clerical

and production employees felt they were

“economic units” who served the machines.

Technology and Procurement Policy

(1940-71)

From 1940 to 1954 there were only modest

enhancements of electrical accounting machinery and microfilm capabilities for SSA to consider. Then came the EDP (electronic data

processing) revolution, beginning in the early

1950s with first-generation computers, moving into second-generation computing in the

late 1950s, and reaching third-generation machines in the 1960s. With the revolution in central data storage and processing capacities

went major related changes in data collection

and input-output mechanisms, and in the soft-

‘ ~A&m Spiegel, ‘*The Giant in Woodlawn,” l)arts I-I\r

, l;altimom %n, Apr. 25-28, 1966.

ware that was needed to program and operate

the new EDP systems. Data communication

capabilities also expanded, as teletype systems

came on the market, and then on-line input and

retrieval of data through telecommunications.

Finally, microfilm printing became available,

with major possibilities for a massive manualrecords-based account-number operation.

By the end of the 1960s and early 1970s management of all large organizations were presented with a group of key decisions:

for which files was it cost-effective and organizationally important to automate;

whether to go from batch processing to

interactive, on-line systems for highvolume operations;

whether to concentrate mainframe computers in one data center or create regional

data centers; and

whether to create a communication network or stay with mixtures of telephone,

teletype, and physical transportation.

SSA had a number of technological choices

and decisions to make:

●

●

●

to stay with the dominant IBM system,

or adopt competing systems, which could

mean extensive reprogramming;

to retain SSA early tape media or move

to new higher density and higher speed

storage, which required new tape drives

and some changes in job control language,

but was not an enormous task;

when to move from early software programming such as COBOL, to higher order languages, which had advantages but

would be expensive to reprogram; and

how to keep state-of-the-art systems and

programming staff.

What needs stressing is how much such decisions were a matter of art rather than science. In the 1950s and 1960s many Federal

agencies mastered that art and were at the fore

front of successful information technology applications: the military, the FBI, the Census

Bureau, the Internal Revenue Service, and

SSA, which was still among the leaders in EDP

applications.
99

In this period there were major changes in

procedures for procurement of Federal computers. The securing of budget authorization

for large EDP acquisitions had come under

HEW, the Office of Management and Budget,

and congressional scrutiny by the early 1960s,

as the costs of equipment became substantial.

But these reviews generally extended only to

determining the need for and timing of expenditures. SSA was able to define its needs and

then enter into special relationships with leading vendors in the accounting machine, computer, and microfilm industries. The vendors

were not only anxious to get the high-volume

business, but also to have the prestige and publicit y that came from having their equipment

selected by SSA.

A special relationship had developed between IBM and SSA in the first years, 1935

to 1939, and became even more important from

1940 to 1965. IBM was the leading vendor of

punch card systems, and worked to provide

special applications for SSA. From 1950 to

1965 IBM was the dominant vendor of first-,

second-, and third-generation computers. Federal agencies were often “90 percent IBM.

For SSA, IBM provided first-class briefings

and plans and justifications with which to approach Congress on expenditures.

As more and more IBM computers were installed at SSA, assuring the compatibility of

new computer acquisitions with existing operating systems became a key procurement need,

leading to the adoption of still more IBM computers. IBM’s interest was not in conflict with

SSA’S independent technical judgment. The

custom software programs written in SSA to

handle their specialized operations were still

adequate. The concept of large data-processing

facilities centralized in one location was the

prevailing wisdom as the best way to maximize

the utilization of expensive hardware. SSA’S

approach was paralleled by what leading insurance companies and banks were doing. As

of 1965, then, SSA centralized, batch-processed data operation both met SSA’S needs

well and also suited IBM marketing strategy.

In 1965, Congress enacted Public Law 89-

306, usually called the Brooks Act. Because

of concern about the overwhelming dominance

of IBM in Federal computer purchases, the act

required full competitiveness in hardware acquisitions and attempted to limit sole-source

purchasing. The General Services Administration (GSA) was designated to supervise and

monitor EDP acquisitions. Under certain conditions, GSA could give an agency Delegated

Procurement Authority for large procurements. SSA was then almost completely an

IBM shop, although there was one RCA-301

in the Central Office and one in each of the six

program service centers; thus SSA would soon

have to justify continued acquisition of IBM

computers to skeptical scrutiny.

SSA was still a user of leading edge information technologies throughout most of this

period. Successful innovation was possible because management placed high priority on accurate recordkeeping, advance planning for

new technology was well institutionalized,

there was an effective technical staff, and there

was a generally sound balance between pursuit

of new technology and attention to operational

performance. The agency was sensitive to the

human-factor impacts of new systems, and

generally had employee, and union, support.

Some examples of SSA adoption of new information systems during this period were

first-generation EDP equipment in 1955 for

posting, benefit computation, reinstating incorrectly reported earnings items, and statistical work; the development of the microfilm

printer (linking computer and microfilm technology) in 1959; and automatic card punching

equipment, in 1963.

The need for systems integration was recognized by the late 1950s. SSA was able, based

on its good service performance and popularity in Congress, to have its case for continued

acquisition or upgrading of its IBM computer

stock accepted by GSA and the Brooks Committee. It did move into purchases of several

UNIVAC computers for administration, and

to General Telephone & Telegraph for a very
100

large communication acquisition, which moderated its total reliance on IBM.

SSA profited from making its systems operations highly visible to the public. This tradition of good work, well advertised, served SSA

well with three major constituencies: the public, as taxpayers and program participants;

Congress and the White House; and its own

work force.

As of 1972, SSA did not yet have what would

today be called a computer system. It was still

a paper operation assisted by EAM (electronic

accounting machines) and EDP machines. File

folders and microfilm records of account applications were the primary source of determinations and responding to inquiries. SSA, in

its Golden Age, was still a well-organized, wellstaffed, and well-led machine-assisted people

system.

Emerging Problems (1965-72)

During the “Great Society” years of the

1960s, the Johnson Administration relied

heavily on SSA to implement social welfare

programs. Strong emphasis was put on establishing “an SSA presence” close to the client,

to make it easier for the aged and disabled to

talk with SSA representatives face-to-face. The

number of SSA field offices increased by about

50 percent during these years.

When the workload rose heavily and steadily, in the late 1960s, advance planning often

became a casualty of the need to keep operations from falling behind. The timetables for

starting new efforts could never be kept.

The reliance on “homegrown” programmers

and systems experts also began to have costs

in this period. Because of constant operational

demands there had been no substantial reprogramming of software. In the early and middle 1970s, in private firms and some Federal

agencies, substantial resources were devoted

to revising software as new techniques of software engineering emerged. SSA did not do this.

By 1972 SSA was well behind the leaders in

both the private and public sectors in that increasingly critical aspect of total EDP management.

This growing weakness was not yet apparent outside the agency. Through the heroic use

of accumulated people, and organizational and

systems resources, SSA’S service delivery still

met program demands and client expectations.

However, SSA was falling steadily behind in

anticipation of systems overload, peoplemachine balances, technical procurement work,

and top management actions.
Chapter 6

Deepening Problems, 1972-81
Contents

Page

The SSI Crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Expanding Programs and Congressional Oversight . . . . . . . . . . . . . . . . . 103

The Supplemental Security Income Crisis, 1973 . . . . . . . . . . . . . . . . . . . . 104

The Political Environment and SSA Resources . . . . . . . . . . . . . . . . . . . . . . 106

Work Force Problems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Technological Choices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11O

Privacy and Security Concern s....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Disruptive Reorganizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

The 1975 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

The 1977 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

The 1978-79 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Deficiencies of Information Technology Management . . . . . . . . . . . . . . . . . 115

Figures

- N ~ Page

8. Growth inthe Social Security Administration’s Workload From 19’75

to 1983 As Defined by the Beneficiaries Per Staff Year . . . . . . . . . . . . 108

9. The Organization of the social security Administration Circa 1972 . . 112

IO. The Organization of the Social Security Administration

Following the1975 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

11. The Organization of the social security Administration

Following the1977 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

12. The Organization of the social security Administration

Following the1975 Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Chapter 6

Deepening Problems, 1972-81

Between 1972 and 1981, the Social Security get (OMB); the General Services AdministraAdministration reached a state of crisis. Thi_s

term was used, and flat statements that primary operations were faltering, were voiced

publicly at the end of the decade by: SSA management, union leaders, overseers in Congress;

the General Accounting Office (GAO); the Department of Health, Education, and Welfare

(DHE W); the Office of Management and BudTHE SS1

Expanding Programs and

Congressional Oversight

There were three major streams of action by

Congress pertaining to SSA between 1972 and

1981. First, there were 15 new laws making

changes in the I?etirement and Survivors Insurance Program and Disability Income Program; four of them made significant alterations

in determination of entitlements and benefits.

Secondly, Congress gave SSA a major new program to administer: the Supplemental Security Income Program, which took three Federal/State programs formerly administered by

the States (payments for the aged, blind, and

disabled poor) and converted them into a federally administered program. Finally, SSA was

given additional support and assistance programs to administer (such as the energy and

refugee programs).

Following the tradition begun in 1935 to

1939, Presidents and Congress continued to

reject the concept of universal flat benefit payments such as many other nations used, with

minimum administrative complexity, in favor

of a mixed insurance and welfare system, with

highly complex entitlement and benefit formulas. After 1972 benefit levels embodied both

automatic cost of living adjustments (COLA)

and periodic adjustments and readjustments,

such as the Social Security Amendments of

tion (GSA); Presidential commissions; the National Research Council; and a multitude of

experts, consultants, and clients. What they

shared was a common judgment that SSA was

in near collapse as an effective government

agency, and that the disheveled state of the

ADP (automated data processing) systems was

at the heart of that perilous condition.

CRISIS

1980,1 the Reagan debt collection initiative of

1981,’ and the Omnibus Reconciliation Act of

1981, all of which meant that reprogramming

was necessary for calculation of benefits. To

implement the Cost of Living increase in 1981

required changes in 600 software programs,

because as written they could not accept four

digits (that is, any benefit amount of over

$999). The adjustments required by the 1980

Disability Amendments meant that changes

had to be made in over 880 programs.”

When it was impossible to do the calculations through EDP (electronic data processing) procedures, SSA was forced to do them

manually, at heavy costs. There was, according to a Senate report, “constant shifting of

management priorities and the coming and going of new policy initiatives. $

‘The 1980 amendments mandated disahil~t> reint’t~~t ig:itions, producing large-scale rernok’als of disahlllt!’ clit,nts and

a flood of judicial appeals, which e~entu; ill}’ nullified most of

the exclusions.

~The Administration insisted on aggressi~e collt~c.ti{)n of c’rroneously made payments, as descritwd in ch. :1.

‘U.S. Congress, The Social Securit~’ .4 utomated l)ata Ih-otessing S~rstern Crisis, a report prepared h~’ the staff of t hc~ Sul)-

committee on Sociaf Security, House Commit& on li’a)s and

Means, 97th Cong., 1st sess., May 22, 1981, p. 6; hereafter cited

as I louse Subcommittee on Social Securit~ (title, datel.

‘U.S. Conh7ess, .Sociaf Securit~r: How U’eli 1s It $+r~ing t ho

Public? I I earing Before the Semite Special Committee on ?i~ting,

98th Cong., 1st sess., h’o~r. ’29, 1983, p. 138; hereafter cited as

Senate Special Committee on Aging (title, date).

103
104

The time provided by Congress for SSA to

make changes in programs or institute major

new programs proved again and again to be

inadequate. Sometimes SSA commissioners

were following stem Administrative directives

when they told Congress that they could take

on new programs or changes; sometimes they

had underestimated what it would take to accomplish the new work on time, while maintaining basic services and accurate performance. Partly this tendency to accept unrealistic

deadlines without demur was a function of the

commitment of SSA leadership to social security programs and to meeting what they saw

as acute needs, and the SSA tradition of getting nearly impossible jobs done through heroic manual efforts. Partly, it represented a

weakness in advance assessment of work requirements.

But the situation also reflects two generic,

or structural, problems in congressional oversight. The statements that executive agencies

can make to Congress about their resource

needs or their management problems must always be vetted by the Administration and pass

through the filter of Presidential policy and

OMB directives. In addition, some congressional committees and their staffs may lack

the knowledge and experience to understand

the limitations of and the resource demands

posed by highly complex operations and highly

complex technological systems.

The Medicare Program, added to SSA in

1965, had been handled successfully. Most of

those who had to be enrolled were already

beneficiaries of the retirement program; the

biggest task was working out procedures for

deducting the Medicare Program from their

benefits and for delivering payments to a service provider. Although these were complicated

tasks the agency adjusted relatively smoothly.

This was not the case, in 1973, with the Supplemental Security Income Program.

The Supplemental Security Income

Crisis, 1973

The same act that in 1935 established the

SSA also created a program of old-age insurance administered by the States, although

partially funded by the Federal Government.

Federal social security benefits were to be determined by past earnings; the State-administered programs were to distribute public

assistance on the basis of need. Other insurance and assistance programs for the blind and

for the disabled were created by the 1935 act

and later amendments. The assistance received

by the needy varied considerably from State

to State, in spite of Federal contributions, and

in some States their income remained far below poverty levels.

In 1972, amendments to the Social Security

Act repealed these State-administered assistance programs for the aged, blind, and disabled and replaced them with a new Federal

program, Supplemental Security Income (SS1),

which became effective on January 1, 1974,

to be administered by SSA. SS1 was intended

to be a basic national income maintenance

system, administered in a manner comparable to the way in which the Retirement and

Survivors Insurance, now called Old-Age, Survivors, and Disability Income Program, was

administered. 5

Under the States, monthly payments to an

individual with no other income varied widely,

from $75 to $250; the new SS1 program was

to provide a flat minimum income, originally

set at $130. Eligibility requirements had also

varied; SS1 was to have minimum barriers to

eligibility except for lack of capability to earn

other income, and to have fairly generous provisions for disregarding other forms of income

such as help from one’s children. This “flat

grant” approach encouraged Congress to suppose that the new program could be administered much like existing SSA programs.

But since the Federal grant would be less

than some recipients were getting in some

States, States were allowed to continue (or to

choose to give) supplements to the basic grant.

SSA would administer and deliver the State

5SW us ConWeSS, The Supplemental Security Income Pro-

. .

gram, a report of the staff to the Senate Committee on Finance,

95th Cong., 1st sess., April 1977; hereafter cited as Senate Finance Committee (title, date).
105

supplements, since they had to have the same

criteria for eligibility as the Federal basic

grant, and would therefore be only add-ens.

Taking over this program turned out to be

a traumatic shock for SSA, and a dozen years

later some employees and some outside observers think that morale at the agency never

fully recovered. There were two kinds of closely

related problems—systems problems and public relations problems, and together they shook

the confidence of, and in, the agency.

SSA had 14 months to set up the SS1 program after the 1972 legislation, although the

grandfather clause (assuring that no one lost

eligibility for assistance because of the changeover) and other amendments were added almost at the end of this time. The agency had

decided that the new program could not simply be integrated into its existing processes,

but required a more highly automated communication system to link district offices, which

would deal with clients, to headquarters, where

their participation in other Federal insurance

programs would have to be checked. The new

system (SSA Data Acquisition and Retrieval

System, or SSADARS) was inaugurated at the

same time as the new program, which was

probably a mistake. Before, field offices had

not used interactive terminals at all; claims

data were sent to headquarters by teletype.

With SSADARS there was on-line query and

response, but the one to four terminals per office were operated in the “back room” by dataentry technicians, and their machines were

often down for several hours, or for a day at

a time. The communication terminals quickly

became a bottleneck in processing the claims.

There were severe startup problems, and in

addition the new system was quickly overloaded. This resulted in long waiting lines at

district offices, massive backlogs, and high

error rates. Claimants often waited for hours

only to be sent home at closing time, to return

another day. The need for highly trained personnel for the system had been grossly underestimated. Staff overtime skyrocketed.

A Senate Finance Committee reportG concluded that:

(The) initial problems far exceeded the normal concept of start-up difficulties. . . . The capability (of SSA) to adapt its existing mechanisms and procedures to the new program was

greatly overestimated. As a result, the resources that were provided—both human and

material-proved inadequate to the task. The

time allotted between enactment and implementation proved insufficient. . . .

Why did this happen? The Senate report said

that at the time of the legislation,

. . . it did not . . . appear to be an unreasonable burden. Representatives of the Social Security Administration . , . indicated no doubt about their ability

to do the job.7

SSA leaders had wanted for some time to

see federalization of this program for the needy

aged, blind, and disabled. SSA district offices

in hundreds of communities and SSA’S advanced computer operations were arguments

for federalizing the administration of the program. SSA had, well before the legislation, created two staff units to plan for and facilitate

such a transfer from the States.s The planning units developed a concept of “assistance

centers” to be located throughout the country. Another option was for an interactive communication system which would allow existing field offices to function as ‘‘assistance

centers’ by having fast access to claimants’

or applicants’ social security records. This

planning was however almost completely ineffective because SSA did not have the resources, nor provide the authority, to develop

or test either option until the legislation was

passed, and in fact, there was considerable

doubt that the legislation would pass until the

very end of the congressional session. Suddenly

it did, and SSA had 14 months to get ready.

‘Ibid., p. 27.

‘Ibid., p. 26.

‘Ibid., p. 26. According to SSA there was an ABDA (Aging,

Blind, and Disabled) Planning Staff in Baltimore, and a Yt’elfare Reform Planning Staff in Washington.
106

The implementation of SS1 was in any case

a massive undertaking, made more difficult by

factors beyond SSA’S control. As late as 2

weeks before the program was to begin, nearly

a dozen States had not decided whether to provide State supplemental payments, which SSA

would be obliged to administer. As it was, even

with its backlog growing and long lines of waiting claimants, SSA was criticized for inadequate outreach because the number of applicants was smaller than earlier estimates.

The public relations problem, and the employee morale problem that resulted from it,

were perhaps as predictable but more unavoidable than the systems problems. The expectation that SS1 administration would be like that

of other SSA programs and could be handled

with traditional efficiency was unrealistic. The

program was very different from other SSA

programs in the demands it placed on the agency.

Retirement and survivors benefits were matters of earned right and were set by formulas

based on lifetime earnings. SS1 benefits were

set through individual determinations and required SSA to ask a number of personal questions. The assumption had been that claimants

would be predominantly needy elderly, much

like SSA’S other clients. But the proportion

of assistance beneficiaries made up of the disabled had been growing rapidly before the shift

to a Federal program; so that 80 percent of applications came from (and 70 percent of new

awards went to) the disabled, who then made

up nearly half of the total beneficiary population. Claims processing for the disabled is

much more complex than that for the aged,

requires a higher level of expertise, and is more

subject to challenge and controversy. A quote

from a high-level SSA officialg is illuminating

here:

People came in, sat down, and negotiated

how much they were going to get. And that

really wasn’t what we were about. Our motto

had been. . . “you get every penny that coming to you, not one cent more, not one cent

less. ” But the clients-they were coming out

of an environment. . . where they had a negotiated benefit. And in January 1974 they

would come into an office that has a supposedly fixed benefit structure . . . but it could

vary on forty-five different variables, plus

mandatory State supplement. . . .

So SSA representatives found themselves, in

effect, negotiating. SS1 claimants by definition had no other source of income, and were

often in desperate straits, needing and demanding emergency funds, and in no mood or condition to be patient with bureaucratic delays,

however inevitable.

The authority for granting benefits had to

be left almost entirely in the hands of field office employees who interviewed the applicants,

with quality assurance resting on review of a

small number of the cases. There was a rash

of lawsuits challenging SSA procedures. Some

observers believe that SSA was so traumatized

by the introduction of SS1 in 1974, under inadequate staff resources, that its operations

would have been badly shaken even if computer and systems failures had not also taken

place.

‘From the proceedings of a workshop held by OTA during

the course of this study, Mar. 5, 1986.

THE POLITICAL ENVIRONMENT AND SSA RESOURCES

As one congressional committee put it in

1981, the key questions were what had caused

the SS1 crisis, and why nothing had been done

about it by SSA over the years that the likelihood of such a situation was developing. One

also needs to ask whether the problems and

the failure to attack them effectively, were

solely failures of SSA management, or whether

external factors forced SSA into a corner. For

example, did OMB or cabinet-level policies contribute to the debacle? Were congressional

directives or oversight procedures at fault either in contributing to the problems, or failing to bring them to light before they became

severe? Answers to these questions could disclose generic problems in the management of
—

government agencies in a period of continuing technological change. The answers necessarily involve political, social, and resource

factors.

From 1973 to 1981 periods of “stagflation”

and a series of recessions produced cutbacks

in basic industries, significant blue-collar unemployment, and mounting national budget

deficits, which reduced resources for financing

social programs at the same time that there

were rising needs for such services. Increased

utilization of benefits and a growing imbalance

between current users and paying supporters

had created fundamental questions, by the late

1970s, about the financial soundness of the

Social Security Trust Fund system and the capacity of the Social Security System to continue paying its own way. The bipartisan consensus under which SSA had operated since

1937 came under serious challenge.

Under Presidents Carter and Reagan, Federal agency requests for appropriations and

staff authorizations were cut back, ways were

sought to curtail the expansion of program benefits, agency operations were monitored more

closely, and campaigns were initiated to curtail “fraud, waste, and abuse” in Federal operations.

In spite of this, SSA programs continued to

expand in coverage and benefit levels, and new

programs were assigned to SSA. Even when

changes were made limiting SSA programs,

in 1980 to 1981, these further increased administrative demands on SSA. American society

had become accustomed to swift and sophisticated information-handling capacities and

SSA as an “advanced user” of information

technology was expected to achieve a high level

of service.

It was widely believed in the 1970s that organizations applying the new office technologies

would not have to layoff large numbers of

workers, but could direct them into other expanding operations. But by the early 1980s foreign competition began to force business managers to use automation to shrink work force

size as sharply as possible. There was a parallel approach by government leaders. Cutting

107

—

back the government work force was seen as

a necessity for sound fiscal policy and effective government administration.

Further, in the 1970s, emphasis on humanizing and enriching work began to collide with

the efficiency thrust of many automation efforts. After 1979, this was to become a powerful concern of the union representing SSA’S

employees, an issue about which union leaders

would increasingly seek to become involved.

Shortage of resources was a key factor in

both the operational weaknesses and the poor

ADP performance between 1974 and 1982.

SSA was already weakened by the 1969 to 1973

cuts in personnel levels and budget, with field

staff and headquarters staffs strained to the

limit.

When it was given the SS1 program in 1972,

SSA received approval to increase its field personnel, but these resources proved to be wholly

insufficient. It was estimated, SSA officials

remember, that the States had together 32,000

people employed, whose work was to be shifted

to SSA. It was assumed that 10,000 temporary

hires would suffice for SSA, since about 70 percent of the claimants would already be on the

social security rolls. 1’

) The results were delays,

gross overpayments and other high error rates,

confusion in operations, and general disarray

in the field offices. Both employees and outside

critics maintained that SSA had completely

misestimated the amount of labor required to

work the system. But SSA requests for more

people had been repeatedly refused. ’

On top of this came two successive highdemand assignments from Congress: the 1977

Social Security Amendments and the 1980 to

1981 legislation. In between, Congress, in a

1978 attempt to reduce paperwork for em1OT~e~e ~iWre~ ~e]y on the memory of the responsible SSA

officials, but they are at least approximately correct.

1 I For ~xmp]e, one SSA employ~ told OTA~ ‘‘It (OMB) totally underestimated the labor intensiveness of the SS1 program-how much work that it would really involve. And I would

submit that still to this day they do not understand and do not

estimate correctly the labor-intensity of delivering personal services to clients. ” A DHHS high-level official remembers that:

.,

. . . OMI? kept coming back and saying, ‘Cut personnel, ’ and

. . . ‘Drop personnel and we’ll worry about that later, “
108

ployers, mandated a change from quarterly report of earnings to annual reporting. For SSA

this meant a change from a quarterly cycle in

its workload to an annual peak early in the

year, which was harder to manage. The earnings reports are central to the computation of

benefits, and if they are not posted promptly,

other work tends to back up. Eventually SSA

had a 3-year backlog of unposted earnings.

SSA again failed in a series of key efforts

to obtain adequate resources. ]2 A request for

12,000 new permanent positions resulted in approval for only 10,000 temporary jobs. In 1977

Congress voted on the personnel resources

SSA sought, a 2 percent rise in total staff, but

the Civil Service Reform Act just then levied

a complete personnel freeze in the Federal service. SSA’S work force shrank by 7 percent from

1977 through 1980 and the proportion that

were part-time and temporary workers rose

slightly. ]3

In spite of the governmentwide personnel

cuts and freezes of 1981 to 1982, SSA’S work

force was, by 1983, 5 percent larger than in

1980. But the ratio of beneficiaries to staffyears had grown by 15 percent (figure 8). Congress consistently authorized higher staff levels than OMB and the Department of Health

and Human Services permitted. If there had

been a marked improvement in ADP and communications support, the increased workloads

would not have resulted in heavy “burnout”

pressures for staff or in degraded service to

clients. But the combination of inadequate personnel and inadequate or even counterproductive ADP systems were compromising basic

delivery of services.

There is considerable disagreement as to

where the blame for this situation lies. Congressional staff tend to assert that SSA consistently misestimated or inadequately projected

the resource requirements of new programs or

lzs~~~te speci~ committee on Aging, swid *curity: How

Well 1s It Serving the PubZic? 1983, p. 131.

‘“At the end of 1977 SSA’S total work force was 87,500, of

whom 7,300 were part-time/temporary workers, At the end of

1980, the total was 81,700, with 7,200 part-time/temporary. Senate Special Committee on Aging, Social Security, How Well Is

It Serving the Public? 1983, p. 131.

Figure 8.—Growth in the Social Security

Administration’s Workload From 1975 to 1983

As Defined by the Beneficiaries Per Staff Year

28 -

26 -

24 -

g 22 -

g 20 -

3 18 -

16 .

14 -

12 -

\

\

\

\ %% ~ e

~-. .

(right workload)

--- Disabilit y

(left workload)

- 830

- 810

- 790

- 770 u(u

- 750 :

8

- 7303

- 710

- 690

. 670

1 1 I I 1 1 1 1 i 1 I

1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984

Year

SOURCE: Kenneth Laudon, “SSA Management and Use of Information

Technology the Current Period. 1982 -1988,” contractor report for

OTA, 1985.

legislative changes; SSA veterans claim that

they consistently begged for more people and

were refused. It appears that throughout this

period OMB applied heavy pressure to agencies to reduce their work forces. There were

however serious weaknesses in SSA’S top management between 1973 and 1981, as discussed

in the next section.14 Whatever the reasons,

SSA was always running hard to get its work

done. . . and falling. The agency pushed its people in ultimately self-defeating ways to make

up the difference, and lost the quality staff it

.

once enjoyed.

Congressional and executive branch confidence in SSA’S management clearly eroded.

Weak program delivery, poor quality, doubts

about fraud and waste, and bungling of ADP

activities brought efforts in the executive

branch and congressional committees to

remedy these problems. ]5

ADP facilities were still another troubled

area; the computer facilities in SSA’S Operations Building suffered from inadequate-elec-

“1bid.

‘5U. S. Congress, Mismanagement of SSA Computer Systems Threatens Social Security Programs, 33d report by the

House Committee on Government Operations, 97th Cong,, 2d

sess., 1982; hereafter cited as House Committee on Government

Operations (titIe, date).
.

109

tricity and air-conditioning, limited fire protection, and overcrowding. A new computer

center in Baltimore was authorized by the Ford

Administration on SSA’S promise to formulate and implement a plan for ADP development. No such plan was implemented, but between 1976 and 1980 a new computer facility

was constructed. In 1978a move into the building under construction was approved on condition that a plan to facilitate competitive

procurement had been developed. From 1979

to 1980 the work to move old computer hardware into the new building caused implementation of new ADP systems to be tabled, and

in May 1981, SSA told the House Ways and

—

Means Committee that the move was a year

behind schedule due to construction problems. lG However, the move was completed

during 1981 with no serious disrution of dayto-day operations.

‘6Written response to questions, from Richard S. Schweiker,

Secretary of Health and Human Services, May 28, 1981, to Congressman Pickle, Chairman of the Subcommittee on Social Security, following Hearings, U.S. Congress, Automated Data Processing Systems, Hearing Before the Subcommittee on Social

Security and the Subcommittee on Oversight of the House Committee on Ways and Means, 97th Cong., 1st sess., May 22, 1981,

p. 51; hereafter cited as House Committee on Ways and Means

(title, date),

WORK FORCE PROBLEMS

Personnel problems became troublesome in

these years. For 15 years, SSA had promoted

into computer and systems jobs former claims

clerks and computer operators who were given

minimal training and lacked the fundamental

knowledge and skills needed to stay abreast

of changing technologies. 17 Then, for reasons

to be discussed later, SSA was unable to attract sufficient newly educated programmers

and systems experts to upgrade its staff, and

suffered heavy attrition from the most talented

of those it did hire, as they encountered adverse working environments, heavy overtime,

low pay scales, and assignments on antiquated

systems that offered no possibility of professional growth or satisfaction.

By the late 1970s, middle managers in the

Office of Systems were typically former claims

clerks who had learned on the job but had no

formal training in advanced systems. ’8 In the

— —

‘TU. S. Congress, Viabih”ty of the Social Security Admim”stration Computer Systems, Hearings Before a Subcommittee of

the House Committee on Government Operations, 97th Cong.,

1st sess., Sept. 23, 1981. (This was the Subcommittee on Legislation and National Security, chaired by Rep. Jack Brooks.) Hereafter cited as “Brooks Committee” (title, date).

1~House Committee on Government Operations, Mismanagement of SSA Computer Systems Threatens Social Security

Programs, 33d report, 1982, p. 9, which quotes Dr. Jan Prokop,

former SSA Associate Commissioner for Systems. His testimony appears in Brooks CornmI“ttee, Viabti”tyof the Social Security Administration Computer Systems, 1981, pp. 127 ff.

Office of Systems Development, no division

chief had a college degree, and of 400 professionals in the division, only two dozen had advanced degrees, none in relevant subject

areas. ’g A former Associate Commissioner for

Systems told Congress that in this situation,

“retraining is not the answer. 20

Many of those who had only on-the-job training were highly competent at their jobs, but

this did not necessarily equip them for conceptualizing new approaches to highly complex

technological problems, or give them the

knowledge necessary to foresee emerging technological possibilities and ways of pushing forward the state of the art. SSA had developed,

or fallen into, a policy of giving promotions

strictly on the basis of seniority, rather than

training, credentials, or merit.21 This policy

had, and probably still has, the effect of building in those who rise through the ranks to decisionmaking positions, a fierce loyalty to the

agency. However, it tended to frustrate the attempt to attract and hold bright and ambitious

lgTestimony of Rhoda M~chur, former Director Of the Office of Systems Development, SSA, in app. 111, of the House

Committee on Government Operations, 33d report, cited in footnote 18.

‘Dr. Jan Prokop, in testimony quoted in the House Committee on Government Operations, 33d report, cited in footnote 18.

*lAccording to congressional testimony by Dr. Prokop and

Ms. Manchur, cited in footnote 18.
110

people more recently trained in computer science and eagerly sought by industry, where

they got not only higher salaries but the opportunity to work on state-of-the-art systems,

to continue to build their skills, and to advance

rapidly in their profession.

Commissioner Svahn testified before a congressional committee that he was “under no

significant artificial impediments to hiring, ”

but had serious problems in recruiting and retaining professionals. Svahn blamed this on

serious morale problems arising from “six-day

work weeks for six months at a time, ” rather

than on SSA’S promotion policies or its obsolescent systems. zz

A congressional report noted another factor,

that SSA: “cannot hire enough qualified per-

————. . . . ~~p~~p~ed statement by John A. Svahn, Commissioner of

Social Security, for the Subcommittee on Legislation and National Security of the House Committee on Government Operations, Sept. 23, 1981. See Brooks Committee, Viability of the

Social Securit.v Administration’s Computer Svstems, 1981.

sonnel to work on its systems because that

would entail a huge displacement problem and

consequently would be unacceptable. “23

The fear of this displacement, or of being

downgraded, was pervasive among SSA staff

after the reorganization of the Office of Systems in 1979. With the Reagan Administration’s budget-cutting initiatives in 1981, the

Office of Personnel Management directed that

many ADP positions be reviewed for possible

reclassification-that is, for reduction in grade

level and salary. The possibility of adverse

personnel actions magnified the already serious problem of job uncertainty and low morale, as acknowledged by another congressional report.24

%:lHouse CommittW on Government operations, 33d rePort~

1982, p. 9.

“U.S. Congress, The Social Security Automated Data Processing Crisis, a report prepared by the staff of the Subcommittee on Social Security, House Committee on Ways and Means,

97th Cong., 1st sess., May 22, 1981, p. 9; hereafter cited as House

Subcommittee on Social Security (title, date).

TECHNOLOGICAL CHOICES

Most large organizations during this period

grew to depend heavily on ADP systems for

their basic daily operations, and the capability of resorting to manual backup grew weaker.

Aging computers from the 1960s, less efficient

than newer systems, were a common problem,

and when they were replaced, it was necessary

to undertake the software conversion of databases and instructions. Organizations had

more options in designing their information

systems; but this was also a period of rising

expectations as to what information systems

should be able to do in the near future.

Private sector insurance companies were automating their procedures during this period.

Studies of this industry” indicate that from

———.

‘bEileen Appelbaum, Technology and the Redesign of Work

in the Insurance Industry, Institute for Research and Educational Finance and Governance, Stanford University School of

Education, Project Report No. 84-A22, November 1984; Barbara Baran and Suzanne Teegarden, Women Labor in the Insurance Office, University of California, Berkeley, Department

1969 to 1973 insurance companies were investing heavily in technology, and their work forces

were also growing. Employment in the insurance industry showed strong growth during

the 1970s; insurance companies were diversifying their products and expanding their markets, while at the same time they were just

learning how to use the technology to increase

productivity. Beginning about 1979, these

productivity gains began to show up in lower

unit costs of service delivery, in constrained

work force growth, and more recently in work

force reductions.

Researchers agree, however, that the companies that were most successful in using

advanced systems tended to be: 1) relatively

.—

of City and Regional Planning, 1983; Barbara Baran, Technolo~”ctd Innovation and Deregulation: The Transformation of the

Labor Process in the Insurance Compa.v, Berkeley Roundtable

on the International Economy, Contract No. 433-3610.0, prepared for the Technology and Economic Transition Project, Office of Technology Assessment, U.S. Congress, January 1985.
111

small companies, and 2) those that took a “bottom-up” approach to planning and implementation. SSA, with its mammoth size and workload, compounded its problems by holding to

a thoroughly “top-down” approach to planning

and decisionmaking.

Organizations had to be increasingly adept,

anticipative, and technically well-staffed and

well-led to stay abreast, and the costs in dollars and performance of falling behind were

growing heavier. The choices involved hardware, data storage, software, and communications.

IBM mainframes dominated the large systems market, but IBM began to stop maintaining older systems. More IBM-compatible

mainframes became available to organizations

that had IBM software. In the mid to late

1970s organizations could move from tape to

new disk storage, but changes had to be made

in job control language and in applications programs. Software was the critical element; the

development of modern database management

depended on separating programs from data,

that is, making the database independent and

usable by multiple programs.

In communications, the late 1970s and early

1980s saw the arrival of free-standing packet

switching networks with their own host computers, separate from the database processors.

Processing capabilities could be distributed

according to varying loads and priorities. The

networks constituted a utility by which transactions and messages could be shipped around.

Managers in most organizations had to be

convinced by technical experts that it was necessary to hire systems and programming staff

with the new software engineering knowledge,

upgrade staffs, retrain supervisors, bring in

consultants, and spend substantial amounts

of money to apply these resources to software

conversions. For Federal ADP shops operating under a combination of civil service and

personnel classification controls and budget

limitations on large-scale software projects, the

decision to modernize older computer systems

did not come easily.

Throughout this period, SSA was falling behind. The extent of this slippage will be illustrated later, but SSA failed to keep up with

the private sector in hardware, and more importantly, in software development.

PRIVACY AND SECURITY CONCERNS

By the mid-1970s Americans wanted and

gradually got regulation over the way information about individuals was handled by private and public organizations. From 1973 to

1981, SSA faced a growing set of requirements

for

●

●

●

protecting data from misuse:

Privacy and Confidentiality: The Federal

Privacy Act of 1974, amendments in 1975

and 1982; OMB circular A-108; the Tax

Reform Act of 1976; the Paperwork Reduction Act of 1980.

Freedom of Information and Public Access: The Freedom of Information Act

amendments of 1974, 1976, 1978,

Security: OMB Circular A-71 and Federal

Information Resources Management Regulations; GSA regulations.

Integrity: Internal quality control and audit

requirements; computer-matching projects (since the late 1970s) to deal with

fraud or waste in benefit programs.

Due Process: Federal court decisions setting information and procedural requirements for SSA determinations, particularly in the disability area.

Information Management: Paperwork

Reduction Act of 1980; Information Resource Management requirements under

OMB supervision.

To meet these requirements an organization

had to be in effective command of its ADP systems in terms of both operations and advanced

planning; such management command of ADP

was simply not present at SSA in this period.
112

As will be seen, there were repeated occur- complaints of violations of privacy related to

rences of computer-related fraud and sabotage social security data.

at SSA. However, there were no significant

DISRUPTIVE REORGANIZATIONS

In 1972 to 1981 frequent changes took place

in top leadership and unsuccessful agency reorganizations. In the first 38 years SSA had

six commissioners, with an average tenure of

6.5 years; and two men led the agency for 27

of the 38 years. From 1973 to 1981, SSA had

seven commissioners or acting commissioners,

for an average tenure of 1.1 years. None of the

confirmed commissioners had experience within SSA or was directly knowledgeable about

it. The senior staff was also shaken up repeatedly as many of the new commissioners

brought in their own senior people. As former

Associate Commissioner for Administration

Jack Futterman noted in a report for the National Commission on Social Security in

1980, 26 the direction of SSA by its Commissioner could never be the same as in earlier eras.

No new Commissioner could, from personal experience within the agency, know the whole

organization and its “enormous range of programs, administration, management [and]

technology. ” All Commissioners would be

“more dependent on key subordinates” and

“would need to make large delegations of authority. “ The sheer increase in size had taken

a toll.

Two commissioners in the mid to late 1970s

decided that fundamental reorganization of the

agency was the way to gain control (see figure

9). SSA had in fact three major reorganizations: in 1975, by Commissioner James Cardwell; in 1977, as part of a general HEW departmental reorganization; and in 1979, by

Commissioner Stanford Ross. Every major

analysis of SSA’S performance in this period

stresses the disruption and adverse effects

that these reorganizations had on agency operations.

26 Futtermm , Op. cit., 1980, P. 13

Figure 9.—The Organization of the Social Security

Administration Circa 1972

k t # 4 b

r 1

Office of the Actuary

i

Office of Research

& Statistics I

Bureau of

Disability Insurance

&

i

Bureau of

Health Insurance I

i

Bureau of

Administration I

i

Office of Public Affairs I

i

Bureau of Hearings

& Insurance I

i

Bureau of Retirement

& Survivorship I

SOURCE” Social Security Administration 1966

The 1975 Reorganization

Commissioner Cardwell, who had no SSA experience, concluded that there was insufficient

accountability for program operations, that the

Commissioner was forced to resolve too many

conflicts between programs, and that diffusion

of responsibility was a major source of trouble. The 1975 reorganization therefore eliminated the separate line organizations for the
113

Figure 10. —The Organization of the Social Security Administration Following the 1975 Reorganization

#

Advanced Operating Office of the

Systems Staff 4 Commissioner

*

I

I

I I 1 I I

Associate 7 ? Associate

r

Associate Associate

Commissioner Commissioner Commissioner Bureau of Bureau of

Management and Program Policy Commissioner Program Health Insurance Hearings

Administration and Planning External Affairs Operations and Appeals

I

I T I 1 1

Bureau of

Retirement and Bureau of Bureau of Bureau of

Disability Field Supplemental Bureau of

Survivors Insurance Operations Data Processing

Insurance Security Income

b

SOURCE Social Security Admlnlstratlon, 1986

Retirement Security Income, Disability Income, and Supplemental Security Income programs and merged these, along with the staffs

from the former Bureau of District Office Operations and the offices of the 10 Regional Commissioners, into one large Office of Program

Operations (OPO). This reduced the number

of senior staff reporting to the Commissioner.

A special Office of Advanced Systems (OAS)

was created to develop better computer systems; this unit reported directly to the Commissioner (see figure 10). A Policy Council

made up of the heads of first-line units was created to recommend new policies.

Fundamental problems arose with this organization between 1975 and 1979. The Futterman report cited above, based on extensive interviewing of SSA people, concluded that the

reorganization was never completed; large

numbers of employees were never reassigned,

or were left in jobs that no longer existed, and

issues about the jurisdiction of senior officials

were never resolved. The new Office of Program Operations (O PO) established a large new

level of staff superimposed on and duplicating the staff of the three former program bureaus. Neither the OPO staff nor the bureau

staff could be effectively held accountable for

results and performance.

The 1977 Reorganization

In 1977 the Department of Health, Education, and Welfare, which included SSA, was

reorganized. Medicare and Medicaid were

merged and put under anew HEW Health Care

Financing Administration for which SSA took

on important recordkeeping functions. SSA

was now to administer the Aid to Families with

Dependent Children (AFDC) and the Refugee

Assistance Programs, and the Commissioner

of SSA was designated as director of Child

Support Enforcement. AFDC was assigned to

a new SSA Associate Commissioner for Family Assistance (OFA), which meant that SSA

field offices now reported both to him and to

the Office of Program Operations. The Commissioner now had to resolve boundary disputes and resource issues between the two

offices 27 (see figure 11).

The 1978-79 Reorganization

In 1978 Commissioner Ross was appointed

with instructions to tie SSA more closely to

HEW policy direction. There was another

sweeping change in the agency organization.

The Commissioner’s Office was reorganized

‘-Ibid.
114

Figure 11 .–The Organization of the Sociai Security

Administration Foiiowing the 1977 Reorganization

Figure 12.—The Organization of the Social Security

Administration Foiiowing the 1978.79 Reorganization

Office of Office of the Office of

Advanced Commissioner Chiid support

Systems Enforcement

I8

Associate Commissioner for

Program Operations -

Associate Commissioner for

■ Management & Administration

Associate Commissioner for

■ Program Poiicy & Pianning

i

Associate Commissioner for

Externai Affairs I

Director

“ Bureau of Hearings & Appeals

.

i

Associate Commissioner for

Famiiy Assistance I

? t

m Bureau of Data Processing

t

Bureau of Retirement and

Survivors insurance

Bureau of

m Disability insurance

Bureau of Suppiementai

-

Security income

} J

SOURCE Social Security Administration, 19SS

Regionai Commissioners

4

and two Deputy Commissioners (for Operations and for Program Policy Issues) were installed. The rest of SSA was rearranged into

a new “functional structure, ” with 10 offices,

each headed by an Associate Commissioner.28

The 10 Regional Commissioners were retained,

reporting directly to the Commissioner. The

Office of Advanced Systems was abolished,

leaving SSA with no independent systems

planning effort (see figure 12).

SSA operations were thus grouped around

general administrative functions rather than

around major programs, so that all of the same

.—~HTh~Y ~e~e: Policy, Management, Budget, and personnel;

Public Affairs, Governmental Affairs, Assessment, Systems,

Operational Policy and Procedures; Central Operations, Hearings and Appeals, Family Assistance.

Office of the Commissioner Office of Chiid

Deputy Support Enforcement

Deputy

Commissioner Commissioner

for Programs for Operations

Associate Commissioner,

Public Affairs I

Associate Commissioner,

Government Affairs I

Associate Commissioner,

Policy

I

I 1

Associate Commissioner,

Assessment

i

Associate Commissioner,

Systems I

i

Associate Commissioner,

Hearings and Appeais I

i

Associate Commissioner,

Family Assistance I

Regional Commissioners (lo)

Associate Commissioner,

Central Operations I

SOURCE. Social Security Administration
115

— — -—— —

kinds of administrative procedures would be

conducted by a specialized unit for all SSA programs. This ran counter to 40 years of SSA

experience, by dividing up program segments

even more than had the 1975 reorganization

and scattering them through functional offices.

The Futterman report said, “It became almost

an impossibility . . . to render a current

accounting of the status of RSI, DI, or SS1.

. . . “ However, it paved the way for agencywide

automation and system redesign in the 1980s.

Now it was up to the Commissioner to coordinate a dozen Associate Commissioners and

10 Regional Commissioners who reported directly to him. An additional feature of this reorganization was that Commissioner Ross deliberately overrode internal career-promotion

lines in selecting top managers, reaching down

to promote staff and bringing in outsiders.

DEFICIENCIES OF INFORMATION

TECHNOLOGY MANAGEMENT

Information management is not different in

kind from general administration; it is still fundamentally dependent on the overall direction

of ideas, people, material resources, and organizational structures and processes. Between 1972 and 1981, SSA had experienced

a profound change of mission and operating

culture with the onset of the SS1 program.

Then came an on-line system (SSADARS),

with high-pressure, fast-turnaround requirements, which was a dramatic and often resented change in the basic work system. As

already noted, SSADARS did not work well.

New performance measurement pressures on

field staff further worsened morale, by most

accounts.

The internal awareness of SSA’S deepening

problems, and the strong sense of comitment

and loyalty to the agency that SSA had long

enjoyed, unfortunately combined to produce

an extreme defensiveness on the part of many

SSA people toward any outside criticism. To

those in oversight roles and to other external

observers, it often appeared that SSA people

“circled the wagons” and fended off any suggestions for basic changes, maintaining that

glacial incrementalism was the only feasible

way to improve patchwork systems.

The charge was and frequently is made by

SSA’S critics that the operations staff in the

late 1970s and early 1980s consistently were

hostile toward outsiders brought into develop

modernization plans, and relied repeatedly on

a form of organizational blackmail: “only we

know how to run old programs, ” and “give us

what we want or we can’t get the checks out

next month. ”

While this criticism may be slightly exaggerated, vestiges of these attitudes are still

clearly discernible; many long-time SSA managers still react with strong emotion to official assessments of SSA performance that were

presented to Congress by the Commissioner

and his management team in 1981-82, saying

heatedly that “things weren’t that bad” and

that backlogs and error rates were overstated

and exaggerated.zg Whether or not this is

true (and all evidence indicates that the situation was indeed very bad and worsening, regardless of the accuracy of certain indicators

presented to congressional committees), the

dispute points again to the increasing difficulty

‘Whe descriptions of the state of affairs in the late 1970s and

early 1980s are based in large part on SSA documents, especially the 1982 Systems Modernization Plan, and on testimony

by SSA officials at congressional hearings during that period.

These descriptions were confirmed by many people inside and

outside of SSA who were consulted by OTA. But in written

comments to OTA on an early draft of this case study and in

many discussions, SSA officials repeatedly disputed statements

taken from those documents. In explanation, some pointed out

that the documentary statements in question were assembled

and used in 1982 ‘‘by the new management team’ in defending

requests for appropriations for systems modernization, ‘‘over

the bitter protests” of those at SSA who had been “satisfactorily coping with the problems, ”
116

and complexity of effective oversight of very

large data-handling operations.

Accepting the fact that SSA was having severe problems in carrying out its mission, the

tasks of top management in this situation

were:

●

●

●

●

to improve the existing systems, and to

get or hold on to efficient equipment and

effective personnel;

to carry out the planning of major new systems, developing a rationale for reorganizing jobs, people, and structures;

to institutionalize this planning and systems development in such a way that

would not be frustrated by, and would not

on the other hand interfere with, the heavy

daily requirements of carrying on operations; and, therefore,

judiciously to allocate resources between

operation~ needs and new system development and resolve conflicts over that allocation.

Top management did not accomplish these

four tasks. According to people within SSA

at the time, Commissioners were frequently

told by senior staff that changes “just weren’t

possible. ” With frequent changes and short

tenure, commissioners lacked the depth of

knowledge of operations to challenge those

statements. Teams of outside specialists were

hired and then defeated by insiders. Plans were

made but not implemented. No effective system was developed for specification of user requirements. System development groups could

not discover the basic functional requirements

they needed to work with. Budgeting for ADP

was not done in a way that specified the relationship of expenditures to operations and missions or to meeting specific information policy requirements.

SSA’S mission had greatly expanded in the

1970s and its staff had grown from 50,000 to

75,000 people between 1970 and 1975. It had

reached a cross-over point, at which it could

no longer be run effectively with manual processes, even aided by computers and older electromechanical equipment. By 1975, and certainly by 1981, only an effective and integrated

ADP system supported by staff professionals

could make SSA work. Yet budgeting and planning within SSA treated hardware, software,

and telecommunications not as the core need,

the structural necessity for doing the work, but

as a peripheral service supporting “operations.

Sustained management interventions would

be needed to regain top management control

of an organization in which bureaucratic pathologies had taken hold and were dominating all reform efforts.

Though it never failed in these “crisis years”

to get the monthly beneficiary checks out—

which was accomplished by heroic efforts by

SSA staff, given the disarray of manual and

computer systems—serious problems had developed with the quality and timeliness of SSA

services. This had produced areas of significant client dissatisfaction. Privacy Act requirements for “accuracy, timeliness, and complete

ness . . . to assure fairness, ” were not being

met. Court-defined requirements for due process in hearings and appeals were often not

forthcoming. Key information needed on a

timely basis for disability hearings was often

not available. Security and integrity procedures

were found by executive and congressional audits to be weak or nonexistent. Procurement

policies and compliance with procurement

monitoring were seriously weak and key

procurements had gone awry. Morale in the

field, district offices and service centers had

fallen seriously, and key units at central headquarters felt similarly demoralized by the successive reorganizations, leadership shifts, and

project failures or abandonments.

As a result, SSA by the end of 1981 had lost

the reputation for excellence in performance

that had been its hallmark from 1935 to 1972.

With its well-publicized problems came a loss

in confidence in SSA at DHHS, OMB, GSA,

the White House, GAO, and key congressional

committees. By having failed to use information technology effectively to cope with serious problems in its external and institutional

environments between 1973 and 1981, SSA’S

basic ability to carry out its assigned missions

was now in jeopardy.
The

Chapter 7

Beginning of the Systems

Modernization Plan, 1982
Contents

The Dimensions of the Crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Developing the Plan . .

The Data Processing

The Paradyne Affair..

“Environment:: :::::::::::::: :::::::::::::: :

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Paradyne Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Failures inthe Paradyne Implementation . . . . . . . . . . . . . . . . . . . . . . . . .

SSAFailures in Managing the Paradyne Project . . . . . . . . . . . . . . . . . . .

Other Factorsin the Paradyne Contract Problems . . . . . . . . . . . . . . . . . .

An Unfinished Story. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aftereffects and Implications forSMP . . . . . . . . . . . . . . . . . . . . . . . . . . .

Table No.

4. Si.ze ofWork Forceof

Table

Social Securitv Administration, 1975-84 ..,.... w

Page

120

121

121

126

126

127

129

129

130

130

Page

.124
Chapter 7

The Beginning of the

Systems Modernization, Plan 1982

By fiscal year 1982, the Social Security Administration (SSA) had 260 million names in

its account number files, and was maintaining 240 million earnings records. It was paying $170 billion annually to 50 million beneficiaries. It had 88,000 full-time, part-time, and

temporary employees, 1,344 field offices, 10

regional offices, 32 teleservice centers, 6 program service centers, 3 data operations centers,

the Baltimore headquarters complex, and a

new computer center under construction. ]

SSA programs included:

● Income Support Programs:

—Retirement and Survivors Insurance

(RSI),

–Disability Insurance (DI),

–Supplemental Security Income (SS1),

and

–Aid to Families with Dependent Children (AFDC).

● Other Social Service Programs:

–Black Lung Disease Claims (BL);

–Health Insurance (Medicare), shared

now with the Health Care Financing Administration;

–Food Stamps (for SS1 participants);

—Low Income House Energy Assistance;

—Refugee Assistancez; and

–Child Support Enforcement.”

● Administrative Services for Other Federal

Agencies’:

–Assistance to Selective Service for draft

registration,

‘Social Security Administration, Annuai Report to the Congress for Fiscal Year 1981; also Social Security Administration,

Office of Systems, Systems Modernization Plan: From Sum”val

to State of the Art, SSA Pubs. No. 41-002, Baltimore, MD, 1982,

hereafter cited as SSA: 1982 SMP. Another source, the Social

Security Bufletin, 1984-85, tables 14, 69, 174, 175, says that

in cafendar year 1981 SSA paid $124 billion annually to 36 million OASI beneficiaries plus $6.5 billion SS1 payments to 4 million beneficiaries.

‘This program reimburses State and local governments for

refugee programs.

,?A ~ro=m t. collWt payrnent9 due for child suPPort.

‘These programs constituted about 10 percent of total SSA

workload.

–Income Survey for the Department of

Health and Human Services on Federal

program participants,

—Recordkeeping of vested rights in private pension benefits,

—Information for the Internal Revenue

Service on employer annual reports for

income tax enforcement, and

–Other minor responsibilities.

The magnitude of SSA operations was impressive. SSA was in 1982’:

maintaining 240 million records on persons with an active social security account, or their survivors;

paying monthly benefits to over 50 million people;

issuing 10 million new Social Security

cards annually;

posting annually 380 million wage items

reported by employers;

receiving 7.5 million new claims applications each year;

processing 19 million postadjudicative

transactions annually, including 2.5 million benefit recomputations; and

handling more than 120 million bills and

queries from private health insurance intermediaries, carriers, and providers.

SSA was, however, by its own admission in

1982, only “marginally capable of performing

critical program functions. In nearly all

areas there were serious problems. Both SSA

and Congress now realized that action must

be taken, and soon.

fU, S. Congress, Social Securit-y: How Well Is It Serving the

Public? Hearings Before the Senate Special Committee on Aging,

98th Cong., 1st sess., Nov. 29, 1983; hereafter cited as Senate

Special Committee (title, date). Testimony by the General

Accounting Office, pp. 38-39.

‘SSA: 1982 SMP, p. I-4.

119
120

THE DIMENSIONS OF THE CRISIS

There were major problems in service delivery and in making operations cost-effective.

In terms of service delivery7

:

●

●

●

●

●

●

●

●

●

●

●

●

issuance of new numbers and cards now

took 4 to 6 weeks;

SSA was 3 years behind in recomputing

retiree’s benefits to credit them with additional earnings, and backlogs had grown

to half a million items;

claims processing operations were behind

schedule 50 percent of the time and payments and notices to beneficiaries were

delayed;

SSA was 3 years behind in posting the 380

million annual wage items reported by employers, and over $69 billion in unposted

items had accumulated by 1982;

checks totaling $60 million were mailed

to 8,000 people who had been dead for at

least 2 years;

there was a 3 month backlog of data

needed to notify employers about incorrectly reported employee earnings;

annual cost-of-living increases processing

forced suspension of all other processing

for 1 week each year;

large backlogs in processing Medicare

claims caused payments for services to be

badly delayed;

systems security failed to meet minimum

standards for Federal agencies;

SSA was over 2 years behind in enforcement operations to detect overpayments;

computer procedures to detect potential

fraud were not able to be done regularly;

and

overwork and alienation of workers was

high, tapes were deliberately destroyed

and equipment sabotaged, with 46 acts of

willfull vandalism reported between 1977

and 1981.

7HOUSe Cofitt=on Government Operations, Mism~agement of SSA Computer Systems Threatens Social Security

Programs, 33rd report, 1982, p. 4.

SSA operations were no longer cost-effective:

●

●

●

it was having to meet most legislative

changes in programs through manual

processing, often overtime, and at serious

costs to other operations;

to implement Cost of Living Adjustment

(COLA) increases required 20,000 hours

of computer processing, day and night

over a period of 4 monthsa

;

SSA itself argued, using GAO estimates,

that using programmable terminals in

only 4 of the 10 labor-intensive functions

that it was hoping to automate would result in “savings of over 1,000 years, representing $133 million in savings, after

taking into account the costs of adding

these additional processing capabilities.”9

Problem elements in the data-processing systems in 1981 involved hardware, data storage,

software, data communications, personnel, and

facilities; in short, all elements of the system

were in trouble, as will be described in the following section. Procurement practices were,

at best, inept. SSA’S practice had been to express its mission requirements in terms that,

in effect, made IBM the only competitor. GAO

advised Congress that SSA did not have the

expertise to develop sound procurement strategies based on mission requirements. In 1978,

at the request of the Brooks Committee, GSA

put a hold on SSA’S computer acquisitions until they could be reviewed; subsequently 300

out of 500 were canceled.10

8SSA: 1982 SMP.

‘Ibid., p. 1-19.

1°House Committee on Government Operations, 33rd report,

1982, p. 11. See also U.S. Congress, General Accounting Office, Solving Soa”al Security’s Computer Problems: Comprehensive Corrective Action Planning and Better Management 1s

JJeeded. A report by the U.S. Comptroller-General to the Chairman of the House Committee on Government Operations, HRD82-19, Dec. 10, 1981. Hereafter cited as GAO (title, date).
.—

121

DEVELOPING THE PLAN

1 n anticipation of asking Congress for nearly

$150 million to rebuild SSA’S information

systems, SSA’S new Commissioner, John V.

Svahn, painted a dire, bleak public picture of

its situation. Some who had been SSA managers for a long time now say that the situation was never as bad as it was portrayed, but

that in order to build support for a large modernization program it was necessary to go

along with the public posture that disaster was

near. To some extent, the extraordinary defensiveness of SSA since 1982 to outside criticism

can be attributed to these tensions.

Those who were struggling with the problems on a day-to-day basis understandably

want to emphasize that SSA continued to cope.

Those who were determined to make a new

start may even have misrepresented some details; from the outside, it is not possible to pin

all of these down, In some sense, these details

are now unimportant; the situation was clearl}

bad, and the critical questions for government,

and particularly for Congress, were why did

it become so bad? and how can this situation

be prevented in the future for SSA and for

other governmmt agencies’?

In the rest of this section, therefore the emphasis is on three questions: 1 ) why was SSA

in a crisis’? 21 how did it get in that situation?

and 3) who was m a position to know- was

Congress warned that the situation was developing”?

The Data-Processing Environment
122

in SSA expending two-thirds of its computer

resources (230 work-years annually) on software maintenance-not redesign but changes

in old codes in order to fulfill new information

requirements.

Only a handful of SSA people knew how a

large number of the computer programs operated; as these people retired or left SSA a significant amount of the code was no longer

maintainable by the remaining staff.

These problems also bedeviled many large

private sector organizations in the mid-1970s,

but SSA was about 5 years behind private industry in making important technological transitions.

Hardware

In 1982, SSA was operating outdated, unreliable, and inadequate hardware. Of the 26

large-scale computers, 23 were supporting

program-related operations and 3 processed

administrative workloads. SSA operated 11

IBM 360/65 systems in its Program Service

Centers (PSCS) and central offices, and two

UNIVAC 1108 systems in Baltimore. The

UNIVACS had not been manufactured or marketed for 10 years; their operating costs were

more than $3 million, compared to $1 million

for more modern equipment. The IBM 360/65

systems were first produced in the 1960s. SSA

also operated an IBM 370/165 and an IBM

370/168, which were 10 years out of date and

no longer manufactured or marketed.ll

Since this hardware was no longer supported

by the manufacturers, SSA had to contract for

costly third-party maintenance. This hardware

contributed to about 25 percent of the production jobs having to be done over, wasting approximately 30 percent of the available computer processing power.

A great deal of labor was required to load,

unload, and catalog the magnetic tapes. Each

month, 30,000 production jobs required manual handling of 150,000 tapes. About one-third

1 ITe~timony of Commissioner Svahn, in 1981, in Brooks

Committee, Viabih’ty of the Social Security Administration

Computer Systems, 1981.

of these did not have internal standard labels

to allow the computer to check on whether the

proper tape was being run. This increased the

level of errors.

Many of the major production jobs were designed to operate on only one specific computer

or were too large to run on other computers.

The lack of adequate hardware meant that very

little computer time was available for testing

and development of new programs.

SSA failed to meet its computing requirements 45 to 75 percent of the time, each month

in 1982. According to Svahn, SSA estimated

that its gross computing capacity requirements in 1982 approached 5,000 central processing unit (CPU) hours per month. The maximum capacity of the computers was 3,000 CPU

hours per month, and staffing levels would support only 2,000 CPU hours. Program analysts,

operators, and managers operated systems on

an overtime basis to process critical workloads,

while backlogs continued to mount.12

Telecommunications

Field offices need timely access to data

stored and processed at the central computer

facility to take claims for benefits and to process changes. The telecommunications system

had evolved over the previous 15 years, since

SSA entered into an interagency agreement

with the General Services Administration

(GSA) in 1966 to be a prime user of its Advanced Records System (ARS), a teletype network. The SSA telecommunications system of

1982 included:

●

●

three types of data-entry terminals: ARS

teletypewriter equipment, SSA Data Acquisition and Response System (SSADARS),

and interactive video display units in local offices, plus other key-to-disk recording equipment in the program service

centers;

concentrators (telecommunications minicomputers which receive data and query

messages and send them to a main host

computer);

“SSA: 1982 SMP, p. 1-3.
●

●

●

●

●

modems and local communication lines

connecting SSADARS terminals to the

concentrators;

high-speed trunk lines connecting the communicators and front-end processors;

front-end processors that interface between trunk lines and host computers and

translate between them;

the host computers, already described;

and

SSADARS software (communications

and applications programs).

When built in 1974, SSADARS consisted of

two IBM 370/165s, and was designed to handle 20,000 inquiry-response transactions and

80,000 data transactions per day. It was saturated a year later and required updating to

370/168 computers. Since then teleprocessing

has grown by 500 percent.

By 1982, SSADARS had old, inadequate

concentrators, insufficient communication circuits, and obsolete front-end processors. It

suffered overload, frequent failure, absence of

manufacturer support, unavailability of replacement parts, and extended outages. During the first half of 1981, the system was down

11 percent of working hours and 88 percent

of the downtime was due to hardware failure . Field office staff had to come in on

weekends to key in data that SSADARS was

too overloaded to accept during the week. By

1982 there was little capacity remaining in offpeak periods to handle current workloads. In

other words, workload could not be shifted to

off-peak hours; high traffic peaks occurring in

peak load time had to be backlogged, and entire streams of communication were frequently

lost, requiring rekeying, which meant that

transmission time was lost while messages

were rekeyed. This resulted in printing backlogs ranging from 10,000 to 100,000 messages

at a time.

Database

Methods used for the storage and organization of fundamental SSA data were about a

decade behind the times, in 1982. Data was

IJSSA: 1982 SMP, p. 2-16.

123

on 500,000 reels of magnetic tape stored in a

vault on portable pushcarts; tight scheduling

and a great deal of labor (200 people, or more

than a third of the operations staff) were dedicated just to handling the tapes and getting

the reels into use. Physical disintegration of

the tapes, plus human error, caused a high

number of failures and subsequent reruns.

About 24 percent of CPU hours were lost in

this way each month.

Data was stored on tapes at 1,600 bytes per

inch (bpi), a very low density compared to commercially available 6,250 bpi drives. It was

organized by programs, with many data elements repeated from one program to the next,

and there were more than 1,500 separate programs. There was no formal data dictionary

with standard definitions of all data elements

comprising the SSA databases. The same data

elements (e.g., earnings) were labeled and described differently indifferent programs, which

made for confusion.

These transaction processing systems are

the foundation for higher level systems, which

in many large organizations include management information systems and decision support systems. The former are systems designed

to support middle and senior-level management by providing routine reports on operations. In modern organizations, information

needed for management is often routinely copied from transaction files into a management

information system file that allows managers

to access it through personal computers or

some network arrangement. In SSA, the transaction data was not generally available to

managers because it was on magnetic tape, and

all requests for reports had to be funnelled

through central processing. There might be de

lays of up to several years in the production

of reports needed to manage decisionmaking

and control. There was no management information system and no plans to develop such

a capability.

Personnel

There was constant pressure from OMB

under several Administrations to constrain or

reduce the size of the work force (see table 4).
124 —

Table 4.—Size of Work Force of Social Security

Administration, 1975.84

— —

Full-time permanent ‘

- ‘-

Staff on duty Temp;rary and

Fiscal year end of yeara

part-time Total

1975 b 

. . . . . . . 78,400’ 7,300 85,600–

1976 b . . . . . . . . 78,400 7,300 85,600

1977 b ... . . . . 80,300 7,300 87,500

1978 b . . . . . . 78,600 7,100 85,700

1979b . . . . . . . . 76,300 7,600 83,900

1980 . ., . . . . 74,500 7,200 81,700

1981 . . . . . . . . 74,600 9,700 84,200

1982 . . . . . . . . . 74,800 11,300 86,100

1983 d . . . . . . . . 76,000 9,900 85,900

1984 d 

. . . . . . . 75,800 8,000 83,800

aFlgur~~ ma; not acjcj across due tO rounding

b Repre s e n t approxima t e Ievels of employment Derived from subsequent Year’s

appropriations’ justfftcatton

clncludes 6000 employees who had 2-year term appointments at that time

dThese are ~stlmates derived from 1984 appropriatlons’ justification

NOTE This table provides actual and estimated levels of employment for the Soc Ial Security Admln lstration, and does adjust for various reorgan Izations

and shifts In agency responslbllity, e g , the transfer of Medicare respon.

stbilttles to the Health Care Ftnanclng Admintstratlon and adoption of

AFDC and child support enforcement program functions

SOURCE Alan Westtn

Both Congress and OMB reasoned that investment in automation should be justified in

terms of increased productivity, defined as a

saving in labor costs. By about 1980, private

industry (e.g., the insurance industry) had begun to realize these gains in lower labor costs

per unit, but these gains showed up only some

years-at least a decade—after the companies

first began to build a modern data management infrastructure. That infrastructure was

not yet in place at SSA.

Perhaps even more important was the failure of SSA to maintain and upgrade the skills

of its computer specialists relative to the rapidly advancing state of the art of computer science, or to attract the best of the crop of new

graduates in this field. There was no adequate

program in SSA for replacing experienced pro

w arnmers who were about to retire, or for training new staff. In 1981, the agency lost 112 of

its 560 experienced programmers14; they took

ld&.cording t. the SSA: 1982 SMP, p. 1-15. However, SSA

now disputes this (in written communication to OTA) saying

that: “In 1981 total losses in the 334 series (which includes computer prograrnm ers and systems analysts) was 71, not 112. This

is one below the average yearly loss for the period 1981-1985.

In 1981, new programmer trainees totalled 155, higher than in

any subsequent year. ” It is possible that Mr. Svahn exaggerated, but SSA was certainly feeling the scarcity of competent

programmers in 1981-82.

with them much of the knowledge of the patchwork software. Only 21 of them were replaced.

SSA’S 1982 System Modernization Plan (SMP)

noted that:

The full impact of ADP staffing losses is

more serious because the knowledge of patchwork software is lost due to the Iack of documentation. New recruits cannot be prepared

adequately for the maintenance of undocumented programs and systems using archaic

programming techniques.

SSA says that in 1981 entry-level programmers got 6 weeks of training; some remember

that it took about a year for them to learn

enough to perform adequately.

Computers had also changed the work of the

rest of SSA’S staff. Over one or two decades,

the amount of material a claims representative had to master had enormously increased.

As one employee said:

Now I am (expected to be) not only an expert with respect to retirement and survivors’

benefits, and disability benefits, but how to

make all those work in a computer system.

From a Claims Manual of three volumes, that

I started from, now (I have) no less than 20

volumes, half of which are systems instructions. . . . Claims reps have long since given

up trying to keep track of rules and regulations and law. Now you are only dealing with

instructions.

Labor relations were, according to both management and labor, at an all time low. In 1979,

the American Federation of Government Employees (AFGE) proposed a consolidated bargaining unit and SSA agreed. The parties bargained for 18 months over a contract which

finally went to arbitration. After 23 days, an

agreement was signed, in 1981. According to

management, labor was using charges of unfair labor practices to stall improvement in

operations —in 1 year, AFGE filed over 800

charges of unfair labor practices. According

to labor, management failed to take into account the interests of the workers when designing and implementing new systems, especially

quality of worklife issues and employment impacts. Both management and labor agreed that

unless there were drastic changes in the climate of distrust that prevailed in 1982, the de-
velopment of new information technology

would intensify the strife.

Security

Privacy protection, physical security, accountability, prevention of abuse and fraud,

and backup and recovery capability had also

suffered from lack of coherent management.

SSA had poor physical control at its facilities

and few audit trails to determine who in the

agency initiated actions, either on paper or by

computers. There was no systematic method

for communication among various programs,

so that an individual could obtain multiple benefits under multiple programs without overpayments being detected. The 1982 SMP document noted that due to computer processing

backlogs and faulty programs, duplicate payments were often made, and “the computer

backlog has reached the point where SSA cannot carry out its earnings enforcement operation (a primary overpayment detection mechanism) nor employ automated means to detect

conditions indicating potential fraud. “*5

Another sign of poor management control

was the inadequacy of systems backup and recovery plans, which were limited to storing copies of master files in an offsite storage area.

An SSA document in 1982 warned:

. . . SSA’S systems operate without any

backup in the event of critical damage, or

worse—a catastrophe. . . . Although backup

files are available to some extent, they are not

duplicates. The destruction of a large number

of key tapes would probably result in an inability to produce payment tapes. . . . Should

a major disaster occur, untold billions of dollars could be lost as a result of SSA’S computer

and communications systems being out of

commission for up to a year. 16

1~SSA: 1982 SMP, p. 1-7. SSA says that it did have an annual operation called MAFDUP which identified potential duplicate Title I I payment situations and alerted processing center

personnel to review the affected folders.

‘hSSA: 1982 SMP, p. 1-18. SSA, however, now says that it

maintained backup copies of all master files in a secure storage

area; these backup files were not in fact duplicates; and restoring master files would ha~’e been difficult, expensive, and timeconsuming.

125

-—

The 1982 SMP also warned that because of

deficiencies in controlling access to records and

to the telecommunication network, SSA was

vulnerable to fraud, abuse, and sabotage. It

noted that there had already been “limited

instances of fraud and abuse perpetrated by

its employees . . ." and that ‘‘some instances

of sabotage causing the destruction of equipment and tape files have occurred in the past,

and could be repeated by disgruntled employees working under increasing workload

pressures. . . .”

Planning and Management

SSA’S most critical weakness was its inability to gain management control over information resources and systems. SSA itself recognized that it:

. . . had not yet undertaken the management

initiatives necessary to insure adequate controls over the development, operation, and

maintenance of its systems. ...17 

SSA had an explicit and well-institutionalized advanced systems planning group in the

1940s. But by the mid-19S0s, each program

bureau was independently working on plans

and development of its own systems, without

regard to agencywide considerations. In the

late 1950s, another central systems planning

unit was formed, with a broad charter to develop concepts for advanced system and investigate the technology to move the agency

toward that system. This appeared to be working fairly well until the mid- 1960s. 18 But during the late 1960s advance planning was usually sacrificed to the need to deal with recurring

crises. A former SSA official recalls that:

The heads of the two main program bureaus

would withdraw people from systems planning

and put them into current operations work. , .

since those jobs just had to get done, I tried

to keep the advance planning staff working

ahead as much as possible, but there really was

a kind of blackmail at work—Operations needed

‘TSSA: 1982 SMP, p. 1-14.

‘hJack S. Futterman, The Social Security Administration

Recent Reorganizations and Related Adxninistratit’e Problems,

report to the National Commission on Social Security, July 28,

1980, unpublished.
126

people to get the changes done and the checks

out, and we couldn’t deny them the resourcesolg

The planners, in any case, had no resources

to begin to implement any of their concepts;

those resources would have to come from operations budgets, and the operations people were

never willing to make this contribution. There

has always been an inherent dilemma in systems planning and implementation in very

large and complex organizations such as SSA.

Bottom-up planning and implementation gives

a better fit to the needs of users, and is more

likely to succeed than a top-down approach because the users have a vested interest in it.

But bottom-up planning is also likely to result

in a lack of integration and a failure to address

the long-term needs of the organization as a

whole, esecially if that implies a significant and

fundamental change in the way the organization conducts its day-to-day business.

The Office of Advanced Systems was created in 1975 in an attempt to gain management control over the planning and development of information systems, and buffer it

from the demands and assumptions of the operations side of SSA. But in the 1979 reorgani-

‘gJack S. Futterman, “Administrative Developments in the

Social Security Program Since 1965, Social Security Bulletin,

April 1972, pp. 3.9.

zation this office was decimated. GAO

recommended20 that the planning for information systems be assigned to a separate, independent component reporting directly to the

Commissioner (as the Office of Advanced Systems had done).

Shortly after Commissioner Svahn was appointed in 1980 he began to try to reintroduce

a strategic information systems planning group

apart from the operational systems personnel;

this became the origin of the SMP. Multiple

reorganizations had failed to separate system

operation from system planning and development.

SSA then undertook two major initiatives

to address its systems problems: the Paradyne

project and SMP. The Paradyne project was

initiated to replace the old GTE equipment

that was then beyond its estimated system’s

life and was failure prone and expensive to

maintain. It is usually said to predate SMP,

since planning for it began in 1979, but because

the two initiatives are closely related, and because the outcome of the Paradyne project has

had significant effects on the way SMP is being conducted, it will be described here.

mu s Conwess, Gener~ Accounting Office, The smj~ *u-

. .

rity Adrm”nistration Needs To Continue Comprehensive LongRange Planning, HRD-79-118, Sept. 10, 1979.

THE PARADYNE AFFAIR

The Paradyne project was one of the largest

single government civilian information systems upgrades ever undertaken. The original

contract was for $115 million, the largest ever

let for information technology by SSA. It became a management disaster, even though in

some technical respects the effort worked.

The Paradyne Contract

On March 27, 1981, SSA awarded a communications terminal replacement contract to the

Paradyne Corp. of Largo, Florida. Paradyne

was to supply the agency and its field offices

with approximately 1,850 programmable microcomputer systems with an anticipated life of

8 years, plus related software.

Initially this was to be a one-for-one replacement of SSA’S deteriorating and obsolete

SSADARS data communications terminal

equipment, located in District Offices. Before

SSA issued its terminal solicitation in June

1980, GAO and GSA had reviewed the plans.

Both objected to the simple, original plan for

purchasing dumb terminals that were not programmable and could not easily be adopted to

future changes in requirements, and that restricted the network architecture to the current method of operation, precluding local office data processing. SSA had simply thought
127

about the existing SSADAR system and how offices must have speedy access to data to isto make it more efficient, rather than reconcep- sue social security numbers, maintain earnings

tualizing the entire information processing sy~- records, accept claims, and process changes.

tern. This was to be a fatal weakness through- Before the Paradyne purchase, the network

out the Paradyne affair.

When GAO recommended (with strong congressional support) that the terminals be expanded to allow distributed processing, SSA

agreed in concept that eventually the agency

would require programmable terminals in local offices. But they argued that obtaining such

equipment would have to be deferred. The

memory capacity of the terminals would be enhanced after they were installed. In January

1980, GAO agreed to this approach.” This

project was now envisaged as a major part of

SMP’S proposed Data Communications Utility Program.22

The equipment was simple in concept. Each

installation was to include a programmable

controller.’ s Access to SSA’S main computers

would now be distributed, by a series of addons to the existing telecommunication network. The Paradyne terminals would later be

enhanced from dumb terminals to something

very much like a microcomputer, having local

storage and data-processing capability and the

ability to produce reports, draw graphs, make

lists, and store high peak load data for transmission later. This would be an early and major component in the multiyear SMP. SSA

planned a phased installation of the equipment

between June 1981 and July 1983.

SSA depends heavily on its data communiwas composed of a variet y of incompatible and

outdated equipment going back to the 1960s

and early 1970s. The primary components were

three types of data-entry terminals (including

the SSADARS, as described earlier), a collection of modems,24 and local communication

lines to connect the terminals to concentrators

(minicomputers). The modems and local communication lines operated at low speeds of

about 1,200 bits per second (bps). The concentrators combined, condensed, edited, and reformatted messages and sent them on to frontend processors, which are communication computers attached to the mainframe computer

in Baltimore by high-speed trunk lines.

SSA also wanted the Paradyne network to

eliminate the key-to-disk terminal equipment

in the Program Service Center, which could not

handle on-line inquiries or editing. Instead of

operating three expensive, out-of-date, and inefficient telecommunication terminal subsystems, SSA would then have a single terminal

system.

Failures in the Paradyne

Implementation

As already noted, SSA initiated the Paradyne procurement before SMP was implemented, but later made it an integral part of

SMP. SSA planned to have installed the Paracation network to perform its mission. Field dyne terminals by September 1983, and to

have completed the hardware and software en2’U.S, Congress, General Accounting Office, Social Security

Administration Data Communication Contracts With Parad.vne Corporation Demonstrate the Need for Improved Management Controls, IMTEC-84-15, vol. 33, July 9, 1984.

ZZA data ~ommunications utility iS a communications ‘etwork in which all remote terminals and a central host computer

are connected by a common “back bone’ capable of supporting

a large variety of data communication requirements and

equipment.

~~A control device through which terminals and other peripheral equipment such as printers, card readers, and off-line storage devices are comected to a single communications line; hence,

a single programmable controller could control several printers

for outputting data, and also be connected to a card reader or

terminal for inputting data, and could handle these loads ‘(online, ” i.e., simultaneously.

hancements for local processing, and also to

have begun designing user applications (such

as benefit payment computation or preparation of claims applications) to be automated

locally using the enhanced equipment. SSA

hoped by September 1984 to begin using these

applications so that operations could be completed at the local level and public service

would be improved. By March 1986, accord-

‘~Devices that interface and translate between a digital computer and an analog telephone line.
128

ing to the plan, SSA would have installed its

new data communications utility, providing

a high-speed communication network that

would integrate the Paradyne terminals and

other local office equipment into the centralized national databases and computer systems.

But from the very beginning, the Paradyne

equipment had severe operational problems

and breakdowns. SSA began acceptance testing of the first 16 systems on April 30, 1981.

All 16 failed to successfully complete 10 days

of continuous testing.

SSA made a major contract modification and

changed key operating standards so that the

terminals would pass the test. Significant performance problems continued. Acceptance

testing was suspended and the requirements

were modified. During the first 16 months,

Paradyne made repeated changes to the terminal controller in attempts to solve system

performance problems.” Paradyne did not

begin to consistently meet contract performance requirements until April 1983.

GAO later found that:

SSA did not use benchmarking techniques

in an effort to minimize costs to vendors

in qualifying for contract consideration,” but instead used “operational capability demonstrations” as the precontract award testing mechanism. These

were supposed to demonstrate processing

and printing speeds and general operational capabilities; and

SSA did not, however, enforce the operational capability demonstrations provision—i.e., did not ask vendors to demonstrate actual equipment or document the

testing, or provide programs or workload

file mixes, but instead allowed each vendor to structure its own demonstration

‘“1’hey included four hardware changes, four versions of the

operating system soft ware, five vesions of the hardware, in

21 different combinations, As late as August 1982, 17 differentt

versions of the cent roller were being used by SSA. GAO, op.

cit., IMTEC-84- 15, p. 16

-“Contrary to GSA guidelines, which strongly recommend

that agencies use bench mar-k tests, in which agency computer

programs and workloads are run on vendor equipment to validate system performance.

and to submit ‘written analysis for actual

tests” if certain hardware components

were not available.z~

By December of 1982, SSA had installed

1,600 of the 1,800 Paradyne terminals. It had

given Paradyne a contract for software to enhance the transmission capabilities by changes

in the operating system. It had issued a competitive solicitation for applications software

to begin automating field office operations.

SSA awarded a sole source software contract

of more than $2.5 million to Paradyne on September 8, 1982, to enhance the data transmission capabilities of its terminals by modifying

the terminal software. More than $1.8 million

of this was for documentation of all terminal

software and developing a workplan for constructing the software modification and documentation.

But given the performance problems, SSA

began in April 1983 to rethink the role of Paradyne terminals. The SMP was more and more

focused on a strategy of centralized processing, which would eliminate the need for local

intelligence in the terminals. The sole source

software contract was canceled (April 29). By

then SSA had paid Paradyne $550,000 under

that contract and Paradyne had delivered one

product—a workplan for conducting the modification and documentation. (Paradyne submitted a final bill for an additional $252,000

in July 1984.28)

By 1982 SSA had purchased the 841 leased

Paradyne terminals already installed in SSA

offices, and had a lease on the other 1,000 terminals. As of mid-June 1984. SSA was still considering whether to buy, or continue leasing,

the remaining 1,000 terminals, although it was

unclear how they could be used, since the Paradyne equipment was no longer part of the future district offices under the SMP.

The Paradyne terminals ultimately did work

as planned although they had severe startup

——.—

-;(; AO, op. cit., IMTF:C-Wi5, p. ]J1.

~ “1’his was ~ittacked as an “$800,000 w [)rkplau’ note, how-

~’~rt’r, that it maj’ hate co~’er-c’d work betwwln Sept R, 1982 and

Ipr. 29, ] 9k3, 9 months rr}t re])r(’sentt’(1 b~r the ~r(wkplan.
problems and excessive down time. They will

be replaced, beginning this year, with desk-top

termininalsl as described in chapter 2.

SSA Failures in Managing

the Paradyne Project

1. faulty system development practices,

2. faulty procurement practices, and

3. underlying structural weaknesses in the

procurement oversight procedures.

GAO said that expressing requirements in

terms of general equipment performance specifications for individual terminal components,

as SSA did, may have biased the solicitation

toward particular vendors. Moreovert this

method does not allow vendors to address overall systems processing requirements but instead forces them to address specific subrequirements.

Having failed to analyze its requirements

sufficiently, or to fully conceptualize how an

other Factors in the Paradvnc

Contract Problems

The 1982 restructuring gave primary responsibility for planning and managing ADP/data
130

communications procurements to the Office of

the Associate Commissioner for Systems Integration, merging the functions of specifications development into one office—the Office

of Systems Engineering. This also lowered the

level within SSA at which judgments are made

about the adequacy of proposed developments.

It was under these conditions that implementation of the Paradyne contract proceeded and

the sole source software contract for $2.5 million was given to Paradyne.

The Department of Health and Human Services (DHHS) is responsible for monitoring SSA

computer acquisitions through its Assistant

Secretary for Management and Budget. DHHS

did review the SSA procurement request and

conducted a postaward review of the terminal

replacement contract with Paradyne but did

not become involved in key phases of the

procurement such as definition of requirements, development of the solicitation, preaward testing, acceptance testing, or measuring of performance. In effect, according to

GA0, 33 DHHS “in accordance with its normal practices, re-delegated management and

oversight authority for these activities to SSA.

. . . As a result, SSA received little, if any guidance from HHS. . . .“

An Unfinished Story

In early 1983, SSA began developing a new

technical approach described in detail in chapter 2, for providing field office claim representatives with terminals for direct interaction

with the public, but not for distributed data

processing.

SSA’S dealings with Paradyne became the

subject of litigation in both civil and criminal

courts. The Securities Exchange Commission

(SEC) filed a civil suit against Paradyne in

March 1983, charging the firm with violations

of the Securities Acts.34 SEC alleged that

Paradyne, in the preaward operational capability demonstration tests, used dummy equip3 3GA0 ~P. cit., IMTEC-84-15, PO 7.

]~%cu~itie~ Act of 1933 a9 amended, 15 U.S.C. Par. 770(A)~

1976; Securities Exchange Act of 1934, as amended, 15 U.S.C.

pars, 78J(B) and 78 M(A).

ment made by a competitor and altered to appear as Paradyne’s; that it altered other

equipment so that it falsely appeared to meet

the processing rates required; that it falsely

represented that its microcomputer would

meet SSA needs; and, in short, that the tests

were rigged and that Paradyne sold SSA a pro

totype rather than the off-the-shelf terminal

SSA thought it was buying.

In February 1984, the former Director of

SSA’S Office of Data Communications (which

played a key role in the contract award) was

charged in criminal court with attempting to

extort more than $400,000 from a California

software company in return for assurances that

the firm would be selected as a subcontractor

on a $4 million data communications software

contract to be awarded to Paradyne.

In March 1984, Sigma Data filed a civil complaint asking $70 million in compensatory and

punitive damages from Paradyne, claiming

that it (Sigma Data) would have received the

SSA contract had Paradyne’s misrepresentations been identified earlier.

In September 1985, SEC and Paradyne

agreed to an out-of-court settlement on charges

of commercial fraud. Criminal investigations

of SSA and Paradyne personnel, and several

civil suits, are continuing. The settlement required no admission of wrongdoing by Paradyne but simply the promise to comply with

Federal securities laws in the future.35 But on

December 12, 1985, Paradyne, eight current

and former executives, and one former SSA

official were criminally indicted for bribery,

conspiracy, and lying to government investigators concerning the 1981 contract with

Paradyne. The former SSA director of telecommunications allegedly accepted a $500,000 contract for software developed from Paradyne.

Aftereffects and Implications for SMP

The Paradyne case was a severe blow to

SSA’S reputation just at a time when outside

support was needed to assure funding of the

35’’ SEC Settles With Paradyne, ” Computerworlcf, Elept,. 16,

1985.
731

Systems Modernization Plan. Hindsight suggests that there were three basic flaws in SSA

procedures:

1.

2.

3.

SSA had not thought through how it

wanted to do business, and had not systematically defined its information requirements;

SSA probably did not have the onsite personnel capable of making a thorough

study of its requirements and translating

that into a full modernization plan;

the merging of the specifications development and review functions was a mistake,

compounded by failure to bring in external consultants capable of criticizing the

procurement; this widened the possibility

that SSA personnel could be fooled and

defrauded bv vendors.

The perception of these deficiencies account

for much of the skepticism with which SSA’S

critics view SMP. They question whether SSA

now has any more rigorously examined objectives than it did in 1979 to 1981; whether its

systems personnel are more capable now than

they were then; and whether the reviews and

checks on the system are now more likely to

catch mistakes or detect fraud. Moreover, the

criminal indictments of SSA personnel have

not been reassuring. SSA, in addition, has

probably been made even more conservative

and cautious, more likely to stick to short-term

solutions and nonrisky options—for instance,

its insistence on “proven technology’ for SMP,

which may make its decisions worse rather

than better.

.
Chapter 8

The Oversight of SMP, 1982-86
Contents

Page

Oversight Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

GAO Audits of the SMP Effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Congressional Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

1981-82 Hearings: How Accurately Was Congress Informed?.. . . . . . . . 136

Hearings Since 1982: How Well DidSSA Report to Congress? . . . . . . . 137

Executive Branch Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Inspector General Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

OMB Directives.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Chapter 8

The Oversight of SMP, 1982-86

OVERSIGHT INSTITUTIONS

In the executive branch, the Social Security

Administration (SSA) is within the Department of Health and Human Services (DHHS),

and like all agencies is subject to directives

from the Office of Management and Budget

(OMB). Information systems procurement and

management receives additional oversight.

GSA has final authority to purchase automated data-processing (ADP) equipment but

can delegate purchasing authority to agencies.

OMB is responsible for overall policy. The National Bureau of Standards provides technical resource support.

The principal congressional oversight bodies concerned with SSA are four House Committees and four Senate Committees. In the

House these are the Committees on Appropriations, Ways and Means, Government Operations (sometimes called the Brooks Committee), and the Select Committee on Aging. The

active Senate Committees in recent years have

been the Committees on Finance, Appropriations, and Governmental Affairs, ] and the

Special Committee on Aging.

The 1965 act governing procurement of Federal ADP equipment (the Brooks Act) seeks

to assure competitive and fair procurement,

and sets forth central management responsibilities for ADP. The Brooks Act restricts the

capability of an agency to carry out a sole

source procurement for large systems (that is,

to order a system from one vendor without

competitive bidding). The agency must establish functional and technical requirements for

the system or equipment it needs, and invite

1 In 1985 the Senate Committee on Governmental Affairs and

the House Cornmi ttee on the Judicary, Subcommittee on Courts,

Civil Liberties, and the Administration of Justice requested an

OTA assessment of Federal Government Information Technology, which contained a series of three reports released in 1985

and 1986. The Senate Committee on Governmental Affairs subsequently requested this SSA case study, as an additional probe

of the kinds of generic problems that had been identified in the

earlier and broader assessment.

a large number of vendors to submit competitive bids satisfying those requirements.

The Competition in Contracting Act of 1984

seeks to strengthen the Brooks Act; among

other provisions, it permits unsuccessful bidders to go to a Board of Contract Appeals,

within GSA, which can suspend all procurement during the appeal. (SSA’S current telecommunications procurement is tied up by protests from potential vendors who thought that

SSA’S specifications were unduly restrictive.)

In practice, the effect of the procurement

process requirements has usually been to emphasize least initial costs rather than broader

lifecycle concepts, which also include the costs

of software, maintenance, and manpower. The

initial hardware cost usually drives the procurement decisions.

Even before passage of the Competition in

Contracting Act, the process of systems procurement was a lengthy one, as is almost any

process involving formal procedures necessary

to assure accountability and fairness. According to many Federal Information Resource

Managers z this often results in a major system being far behind state of the art by the

time it is installed. The Competition in Contracting Activities law has added a protest procedure, which some Federal procurement officers say can be abused to the detriment of

orderly procurement procedures. SSA officials,

for example, privately say that:

● vendors have protested procurements

solely to damage the financial standing of

the winner by delay3

;

2Proceedings of an OTA Workshop on Federal Information

Resources Management, September 1984.

sThe winner of the contract award, may for example ‘ave ‘mediately ordered equipment and material or engaged workers; even if the contract is likely to be upheld, that is, does not

have to be recompleted, the contractor has suffered a cash drain

that could threaten its financial stability.

135
136

● have withheld information about technological capabilities when potential responders were given opportunity to comment,

prior to a formal request for proposals, only

to protest subsequently that the specifications in the request for bids do not allow

them to offer this improved capability;

● or have protested on the final day of the 45-

day protest period in order to delay the

process long enough to complete the development of their proposed system.

These tactics can delay a procurement for

8 months or more. Some States, to avoid similar problems, are requiring protesters to post

bonds. There are many critics of Federal procurement procedures who maintain that they

result in control of equipment purchases being separated from consideration or knowledge

of the activity to which it will be applied, and

sometimes add years to a major procurement.

But the Brooks Committee has clearly been

responsible for bringing rationality, professionalism, and accountability to Federal information systems procurement.

The effectiveness of all congressional oversight is, however, only as good as the information that Congress gets about Federal agency

actions, and there are serious structural problems in assuring that quality.

All of the congressional committees are assisted in their oversight role by the General

Accounting Office (GAO), which continually

studies and audits SSA, having a continuing

onsite presence at SSA for this purpose. Special studies are conducted from time to time

by the other congressional support agencies,

the Congressional Budget Office, the Congressional Research Service, and the Office of Technology Assessment. But GAO’s detailed audits, with the benefit of immediate access to

SSA operations, are particularly essential,

since none of the other congressional support

agencies can mount the resources to study SSA

at the same level of detail; nor do they have

the inside access that GAO has, so that they

are largely dependent on SSA spokesmen for

some kinds of information.

However, even the GAO audits have sometimes not been sufficient to make Congress

aware of basic, deep-seated problems with

effects that are persistent, cumulative, and

relentlessly destructive. The tightly focused,

highly detailed nature of GAO reports, which

allows them to answer congressional questions

with pRecision, may at times prevent them

from revealing larger patterns of management

weakness. GAO reports are also focused primarily on the question of whether existing legislation and policy guidelines have been followed, rather than raising questions about

whether they are appropriate for achieving

desired objectives.

GAO is, however, currently carrying out a

major management review of SSA, one of a

series of GAO reviews of management of Federal agencies undertaken to support implementation of the recommendations of the Grace

Commission. These management reviews are

broader than traditional GAO audits and represent a new initiative, begun in 1982, to review the overall management of Federal departments or agencies in terms of effectiveness

in achieving their missions. Recognizing that

good management is essential to achieving policy objectives, the GAO management reviews

are intended to demonstrate that:

Past insufficient attention to management

has led to chronic, unresolved problems in program delivery and administrative management, including financial and information

resources management; (and) inadequate management structures or systems have often led

to crisis management or darnage control rather

than real progress.4

All congressional oversight is ultimately dependent on information made available to it

by Federal officials. As noted repeatedly at

points in this report, agency officials are often

unwilling or unable to call attention to emerging problems, or are required to shape their

estimates of resource needs to fit the direction

of Administration policy and priorities.

‘From a description supplied to OTA by the General

Accounting (Mice [GAO), June 1986. GAO management reports

have been issued on the Departments of Housing and Urban

Development, Labor, and Justice, and on the Defense Logistics Agency; others are being completed on the Department of

Transportation and SSA, and are underway at a number of other

agencies.
137

GAO AUDITS OF THE SMP EFFORT

management.

GAO also identified as indicator-s of serious

problems:

● a 15 percent attrition rate in systems personnel in 1980 to 1981,”

‘ I J.S. (’ongmss, ( ~ener-a] :lc(ol]ntin~ offic’(~, .$~I]J jng Soc’]ul

Securit.}r Computer Problen].q: Comprehensi\t> Correc(i\’e.4 c

tion Planned and Better Alana~remenr ,Veeded. r[~port of the [ J.S.

(’ontroller-(;eneral, 111?1)-$+2-19. I)ec, 10, 19H1

(’l)mmisslon[~r NlcStecn told the I{ouw Appropriate ions

( ‘onlmitt[~e in ] 9H5 that t h(, norn~al attrition rat t is 4 to 6 per-
138

● the low level of skills of systems personnel, and

● 45 recorded acts of sabotage or vandalism between February 1977 and February 1981.

From 1982 to the present, GAO reports have

emphasized errors caused by ADP systems,

poor field office management, and poor contracting procedures in purchase of telecommunications and ADP equipment; and were increasingly critical of SSA planning for systems

modernization. 8 GAO found that SSA was

...— —

{continued from previous page)

cent. However, the average annual turnover rate for full-time

permanent General Schedule employees in nondefense Federal

agencies in 1984 was 11.8 percent (U.S. Congress, Congressional

Budget Office, Employee Turnover in the Federal Government,

special study, February 1986, table 1).

%ee GAO reports: Social Security Fieki Office Management

Can Be improved and M*”ons Can Be Saved AnnU&y Through

Increased Productivity, HRD-82-47, Mar. 19, 1982; Complete

and Accurate Information Needed in Social Security’s Automated Name and Number Fdes, HRD-82-18, Apr. 28, 1982; Examination of the Scw.ial -“ty Admi.m”stration Systems Moderm”zation Plan, HRD-82-83, May 28, 1982; Social Security

Administration’s Data Communication Contracts With Paradyne Corporation Demonstrate the Need for Improved Mana~ment Controls, IMTEC-84-15, July 9, 1984; Ad&”tionai Information on the Social Secudy Ati”stration Management

of Data Communication Contracts With Para&”ne Corporation,

IMTEC-84-83, Aug. 27, 1984; Review of Two Proposed Automatic Data Processing Procurements by the Socitd Security

Adm”m”stration, IMTEC-85-7, Apr. 10, 1985; Social Security

underestimating the magnitude of corrective

actions necessary in software improvement

and data validation.

SSA estimated that 65 to 70 percent of the

12 million lines of code then in use could continue to be utilized, but had done no studies

to validate this estimate. The System Modernization Plan calls for data verification and file

cleanup to be done within 3 years; GAO doubted

whether this could be accomplished.

In spite of these problems, GAO concluded

in early 1982 assessments that SMP is a definite turnaround step in the right direction, and

gave it a strong green light. More recent critical

reviews of the SMP by GAO indicate that SSA

has been able to solve many of its hardware

problems, but that in the areas of software and

databases serious deficiencies remain.g

Adm”m”stration Progress in Modernizing Its Computer Operations, IMTEC-85-15, Aug. 30, 1985; SSA Computer Systems

Modernization Effort May Not Achieve Planned Objectives,

IMTEC 85-16, Sept. 30, 1985; Income Security: Selected Disabih”ty Payments, HRD-86-47FS, December 1985; Issues Relating to Agency Field Offi”ces, HRD-86-71BR, March 1986; Current Stat us of the Federal-State Arrangement ts for

Adrm”ru”stering Social Security’s Diability Programs, HRD 85-

71, Sept. 30, 1986.

‘U. S. Congress, General Accounting Office, SociaJ Security

Adrni”ru”stration Progress in Modernizing Its Computer Operations, IMTEC-85-15, Aug. 30, 1985.

CONGRESSIONAL HEARINGS

1981-82 Hearings: How Accurately been “alerted to the magnitude of the systems

Was Congress Informed? problem by the earlier testimony of three

former SSA commissioners, ”

In May 1981, the House Ways and Means’

summed up in

a report prepared for subcommittee use by the

Subcommittee on Social Security and Subcom- staff.11

mittee on Oversight jointly held hearingsl” to --

“begin identifying some of the problems that In September 1981 the House Committee on

are facing the SSA in the management of its Government Operations also heard from ComADP Systems. ” They heard newly appointed missioner Svahn, and others.12 In these and

Commissioner John A. Svahn talk about what

Chairman Rangel called SSA’S “state of cri- 1 lu s Con=eSS, The soci~ Security Ad~”nistrations Data

sis. ” The Subcommittee on Social Security had Processing System Crisis, a report prepared by the staff of the

Subcommittee on Social Security of the House Ways and Means

Committee, 97th Cong., 1st sess., May 22, 198i.

1°U.S. Congress, Automated Data Processing Systems, 1 2U s ConWegg , vja~~.ty of tjhe Social Security Ad~”m”straHearing Before the Subcommittee on Social Security and the

. .

tion Computer Systems, Hearing Before a Subcommittee of

Subcommittee on Oversight, House Committee on Ways and the House Committee on Government Operations, Sept. 23,

Means, 97th Cong., 1st sess., May 22, 1981. 1981, 97th Cong., 1st sess.; this was the Brooks Committee.
139

—

other hearings Svahn presented a dark picture

of an agency in real danger of collapse. Long

lists of delays, backlogs, and critical problem

areas were presented, and appeared again in

SSA’S 1982 SMP.

There was no way for the congressional committees to challenge these statements and

figures presented in support of SSA’S plan to

salvage its operations with a 5-year systems

development effort. Indeed there was little reason for them to do so, since both critics and

supporters of SSA agreed that the situation

was bleak.

Yet there was tension and resentment within

SSA, between Commissioner Svahn and his

aides and consultants, who put together the

testimony and the 1982 SMP, and the longtime SSA managers who had been struggling

to cope with the problems and to keep checks

coming out on time. The latter resented having their performance pictured so unfavorably.

Five years later, with Mr. Svahn gone, many

of these managers heatedly dispute the figures

used in 1981 to 1982 to measure error rates,

lost time, backlogs, and vulnerability to security violations and disruption of procedures.

If these performance or quality measures are

in dispute, however, then SSA’S own measures

of improvement and progress since 1981 also

can be disputed. It is reasonably clear that

some of the ways of measuring or counting errors and time expended have changed. Possibly these changes are necessary because of the

changed systems, but SSA is not careful to

point this out to its oversight committees.

These contradictions are not important now

except to illustrate the general possibility that

congressional oversight can be misled by information presented by organizations in support of or in defense of their actions or of executive branch policies and directives. This

problem has always existed. It is made worse

by advanced information technologies that

make performance data more difficult for the

layman to grasp or to question. Evaluation of

agency decisions related to design, procurement, and management of systems requires

more highly technical knowledge. Measures of

progress, or of risk, are more diverse, less obvious, and less accessible when they are hidden in mammoth databases. The temptation

to selectively pick and present such measures

is stronger as the resources needed for (or already sunk in) systems become greater. The

flow of work and the definition of discrete

tasks or operations changes as the technology

changes, so that it is difficult to compare performance at different periods. Thus, even an

onsite auditing capability, such as GAO has,

may be frustrated by the difficulty of defining and tracking real progress.

Hearings Since 1982: How Well Did

SSA Report to Congress?

There have been six major sets of congressional hearings relevant to SSA information

systems since 1982.13 The 1983 and 1985

House Appropriation Hearings, and Hearings

Before the Senate Special Committee on Aging

in 1983, were especially important.

In the 1983 Appropriations Hearings, the

focus was on future solvency, the impact of

budget cuts on SSA activities, and SSA Commissioner Svahn’s presentation of the SMP.

The Committee members were, in general, in

favor of SMP and ready to provide funds to

carry it out.

The hearings before the Senate Special Committee on the Aging in 198314 built on a sophisticated, critical staff background report

combining analysis of external events affecting SSA and internal management actions.

lsHemings Before the House Committee On Appropriations,

Subcommittee on Labor, HHS, Education, and Related Agencies, 97th Cong., Mar. 9, 1982; Hearings Before the Senate Committee on Appropriations, Subcommittee on Labor, HHS, Education, and Related Agencies, 97th Cong., Mar. 10, 1982;

Hearings Before the Special Committee on Aging, U.S. Senate,

98th Cong., Nov. 29, 1983; Hearings Before the House Committee on Appropriations, 99th Cong., 1985; Hearings Before

the House Committee on Ways and Means, Subcommittee on

Social Security, 99th Cong., Apr. 3 and 11, 1985.

“U.S. Congress, Socitd Security: How Well Is It Serving the

Public? Hearing Before the Special Committee on Aging, Senate, 98th Cong., 1st sess., Nov. 29, 1983.
140

Several areas were cited in which management

problems had exacerbated systems problems:

staff cutbacks of 5,000 positions between

1977 and 1984, and internal promotion

and retraining practices that lowered the

overall quality of personnel;

measures of work performance that rewarded initial claims processing and data

collection but not quality of service to beneficiaries;

complexity of instructions and forms that

the staff had to use

newly aggressive enforcement of debt collection and disability redetermination,

which added to the workload just when

the staff was being reduced; and

three internal reorganizations since 1975,

with no visible benefit.

The message of the Committee to SSA was

that Congress would measure SMP’S success

not in terms of its technical sophistication but

in terms of its improvement of services to beneficiaries. The committee staff report also questioned the “marginal strategy” of seeking to

preserve most of the existing software instead

of developing new software.

The 1985 House Appropriations Hearings,

after Commissioner Svahn’s departure, gave

Acting Commissioner Martha McSteen the opportunity to announce her management goals

and also to announce the first improvements

in service delivery as a result of SMP. She

pointed to a number of improvements in processing time and reductions of backlogs between 1982 and 1985.

The SMP had been projected, in 1982, to cost

$449 million over 5 years. In 1985, only $101

million had been spent, although the 1982 SMP

had projected that $293 million (61 percent of

the total) would be expended by that time. The

total projected cost, however, had risen to $863

million, so that less than 18 percent had been

expended.

‘“An SSA office in San Francisco was said to have received

an average of 28 pages of instructions per day in the fall of 1980,

which tests showed would require 17 years of education to understand, as compared to 11 -years for the W’al) Street Journal.

SSA then requested an additional $125 million as a reserve fund in 1986 because of the

unanticipated costs related to automation and

the implementation of the Disability Benefits

Reform Act of 1984. However, Commissioner

McSteen pointed out that these costs did not

reflect badly on SMP progress; SSA was requesting 2,308 fewer work-years for 1986, as

a result of “automation improvements and pr~

cedural changes. ”

Many Congressmen appeared less interested

in these measures of progress than in the startling discussion in the Washington Post (Feb.

19, 1985) of alleged plans to close 200 SSA district offices and reduce the work force by nearly

a quarter (17,000 positions). It was feared that

this would, for constituents, decrease both access to SSA service representatives and the

quality of the services provided. The Commissioner responded that this reduction would be

made possible largely by systems modernization, i.e., automation. She argued that it could

be done without degrading service delivery and

largely without firing workers, since the normal attrition rate of 5 to 6 percent would account for about 4,000 workers each year, and

5,000 part-time workers would be dismissed.

Other displaced workers were to be retrained

and relocated. She added however that an “imbalance of staff” would be SSA’S greatest problem, i.e., matching people to the right job.

Normal attrition is of course unlikely to occur selectively in just the jobs that are being

eliminated by automation, but Commissioner

McSteen did not offer any estimates of the

amount of relocation and/or retraining that

would be necessary if SSA relied on attrition.

Questioning of Commissioner McSteen revealed that OMB had originally demanded a

reduction of 19,000; SSA had negotiated this

down to a goal of 17,000 SSA workers by 1990.

Some Congressmen were incredulous; some

protested the absence of any SSA studies of

the potential effects on clients of the proposed

closings and reductions. Congressman Natcher

asked:

Don’t you know as well as 1 do, that this is

not going to work?. . . last year. , . we added

the $60 million to maintain a staffing level at
the 1984 level We were very specific in the

report. Tell us again, if you will, Mrs. McSteen,

why your current plans me to support 2,180

fewer employees than the Congress directed

for the current fiscal year. 16

Congress had authorized 80,253 full-time

equivalent (FTE) positions for the agency in

both fiscal years 1984 and 1985. At the end

of fiscal year 1984, SSA actually had only

79,951 FTEs, and at the end of fiscal year 1985,

it had 78,038, about 3 percent under the authorization. The President’s fiscal year 1987

request cal!.s for 73,270 FTEs, or a reduction

of 6,681 (8 percent) over 3 years. A continued reduction of 3 percent per fiscal year

would mean about 13,000 fewer jobs in fiscal

year 1990 than in fiscal year 1984. The goal

of 17,000 fewer jobs could be reached in fiscal

year 1992 at the present rate of shrinkage.

Despite the Washing-ton Post story that disturbed Congressmen, it is not clear that OMB

directly ordered SSA to close 200 field offices.

The original proposal was reportedly to close

arly offices with fewer than 25 employees (a

large proportion of the field offices), and SSA

gave Regional Administrators the power to

close offices within those criteria, without further authorization. GAO reported in March

1986 that 228 reviews of field offices had been

conducted by .SSA in the past year, but no

offices had been closed as a result, and it was

‘‘unlikely that many offices will be closed when

the reviews of all offices are completed by December 1987. GAO noted that the effect of

the Emergency Deficit Reduction and Balanced Budget Act of 1985 could change that

forecast. It is possible that SSA could be unable to keep some offices staffed. Because of

the Gramm-Rudman-Hollings Act, SSA is now

under tight restrictions on both hiring and internal personnel transfers, ’x so that offices

that lose staff through attrition may not be

restaffed,

“ 1985 Appropriation\ Hearings, p. 915 (9ee no(d 13J.

‘

- Numtwrs supplied bj congressional committee staff.

1“Staff memo of Feb. 13. 1986, from Dr. Otis Howen, Secretary of HHS, to Heacis of operating Divisions. etc.; and staff

memo of Feb. 16, 19/36, fr{)m .S,SA Acting L)eputv Commissioner

for Management and Assessment to other SS,4 I)eputy, Associate. and Regional (’commissioners,

In the 1985 Appropriation Hearings, the

committee members generally had praise for

the social security program, and for Commissioner McSteen as a manager. The~’ hoped that

the SMP would improve SSA operations. On

the other hand the Brooks Committee was now

highly critical of SMP because it emphasizes

hardware problems and appears less satisfactory in addressing software problems. All

of the oversight committees have raised serious questions as to whether the efficiency and

rationalization promised by SMP will also

bring about a reduction in service, especially

in rural areas, or a reduction in face-to-face interactions between SSA employees and clientele. Many are highly critical of OMB policies.

In particular, OMB policy makes it difficult

to spend money on training and retraining,

which is much needed at SSA.

From 1983 to 1986, the acting commissioner

was a long-time career employee and former

regional commissioner who had a high level

of approval within SSA and in Congress. In

March 1986 a new commissioner was named,

who was until then a Deputy Secretary of HHS

but is a newcomer to SSA. Based on OTA interveiws, there were indications of foreboding and

dismay in SSA, its union, and its oversight

groups at the prospect of further policy shifts

or internal reorganizations.19

For about two decades, and especially since

the SS1 crisis of 1973, many people in Congress

have been disturbed by the apparent misestimates of the adequacy of SSA resources to

carry out congressional mandates for changes

in social security benefits, procedures, or programs. There is continuing and recently renewed uncertainty as to whether these misestimates result from failure by SSA officials

to estimate realistically, or the failure to communicate these needs to Congress in a way that

is clear and credible, or from conflicting pressures and directives imposed on SSA by its

——.——

“’I+’or example, Rep. Rol’bal. Chairman of the House Select

(’ommitt,ee on .4ging, issued a press release warning that “n~anagement of such an import ant agency should be more stable,

and that ‘‘from a public policy’ standpoint it would be pr~ferable that, the agenc~”s chief administrator have at least a fev

?Tt,ars of hands-on experience.
142

multiple congressional oversight committees, policies such as budget reduction. In regard

or from constraints placed on SSA in regard to SMP each of these factors appears to have

to its communications with Congress by DHHS operated at different times; the latter may be

and OMB, in the interest of Administration of increasing importance at present.

EXECUTIVE BRANCH REVIEWS

SSA’S representations to the Administration

as well as its communications with Congress

must go through its parent agency, the Department of Health and Human Services, which

has many components and programs to defend.

The budget examiners within OMB—who act

as the President controller, closely involved

in developing the budget, controlling the

money flow, and monitoring expenditures—

thus play a powerful role in relation to SSA.

DHHS itself of course must review and approve many SSA actions, such as major procurement plans and personnel actions; although the force with which this supervision

is exercised varies over time. Anew oversight

mechanism, the Inspectors General, also provides monitoring and oversight for Federal

agencies, including SSA.

Inspector General Reports

Congress created, in 1978, a new position or

institution, “Inspectors General, ” to aid in the

oversight process. zo Inspectors General, in

every major agency, are especially concerned

with seeing that funds appropriated by Congress are properly used; they report both to

Congress and to the agency.

In the Department of Health and Human

Services, the Assistant Inspector General for

20The first Inspector General (IG) post was created by statute in HEW in 1976. IG posts were created in 1978 first for

the Department of Energy and then for 12 other major departments and agencies. The Department of Defense was added to

the list in 1982. Nonstatutory IGs had existed earlier in the

Department of Housing and Urban Development, in NASA,

and in DOD. IGs can initiate audits and investigations of suspected fraud, abuse, or management deficiencies. Reporting both

to Department heads and to Congress, they can also bypass

department or agency counsels and take problems directly to

the Criminal Division of the Department of Justice. John D.

Young, “Reflections on the Root Causes of Fraud, Abuse, and

Waste in Federal Social Programs, Public Adm.im”stration ReVieW, July/August 1983, p,366.

Audit, Felix J. Majka, conducted a review of

the Claims Modernization Project from late

1983 through May 1984, and found numerous

deficiencies. The DHHS Inspector General,

Richard Kusserow, issued a report on January 30, 1985, calling attention to problems with

the

●

●

●

Claims Modernization Project of SMP:

a formalized planning process was not

completed, the scope of the project was

not clearly defined, and interfaces with

other systems had not been defined (as of

May 1984).

adequate minimal standards were not in

place to guide the systems development

process; the most critically needed standards were data definition, documentation,

and planning; and

although much has been done to identify

potential control weaknesses in claims

processing, SSA did not yet have a formal methodology for identifying new system vulnerabilities and implementing

controls. 21

In the same report-memorandum, however,

the Inspector General noted that:

Our recommendations were generally concurred with by SSA and have either been implemented or are in the process of being implemented.

Another report horn the Inspector General

the following month criticized SSA’S administration of a contract with a software vendor

for obtaining “modern automated software

tools, ” and said that the software tools installed (for $24 1,916) did not filly meet the re21U.S. Department of Health and Human Services, Office of

Inspector General, Memorandum to Martha A. McSteen, Acting Commissioner for Social Security, “Audit Report-SSA’s

Redesign of the Claims Processing System Under the Systems

Modernization Plan (SMP), ” ACN 15-52654, Jan. 30, 1985.
143

quirements defined by SSA, did not improve

operational programs, and were no longer being used.22 The effort of the vendor to convert

and improve 150,000 lines of COBOL code (at

the cost of $150,000) was also unsatisfactory.

Again in June 1985, the Inspector General

criticized SSA for wasting over $1 million in

the procurement of useless software.23 Kusserow criticized contractors for delivering prociucts late and untested, the GSA for faulty oversight, and SSA for hasty preparation and poor

quality of the specifications and for poor

project management. He pointed to the Claims

Automated Processing System upgrade, saying that software purchased from a vendor was

unusable. A similar result occurred with an upgrade of the Manual Adjustment Credit and

Award Process (MADCAP), and the conversion of earnings program software. Assistant

Inspector General Majka told OTA in mid1986 that because software development “is

the most difficult systems area with the most

failures, and because it receives relatively less

focused attention from congressional oversight

authorities than does hardware development,

his office “will continue to concentrate our

SMP reviews on software. ”24

OMB Directives

OMB’S role with regard to SSA has been exercised chiefly through its budgetary functions, i.e., efforts to constrain and reduce the

agency’s work force, rather than through direct monitoring of systems modernization or

information technology management.

——--——

~2U. S. Department of Health and Human Services, Office of

Inspector General, Memorandum to Martha A. McSteen, Acting Commissioner of Social Security, “Audit Report—SSA’s

Use of a Contractor To Improve Software, ” ACN 15-52649, Feb.

6, 1985.

‘W.S. Department of Health and Human Services, Office of

Inspector General, Memorandum to Martha A. McSteen, Acting Commissioner of Social Security, “Audit Report—SSA

Needs To Redirect Its Software Improvement Efforts, ” ACN

15-51662, June 13, 1985.

“Letter from Assistant Inspector General Majka to OTA

project director, June 24, 1986.

The Paperwork Reduction Act of 1980 (Public Law 96-511) promulgated the concept of

information resources management, or integrated management of all basic informationhandling activities and functions within an

agency. It charged OMB, assisted by GSA,

with periodically reviewing information resources management by each agency (in practice, OMB delegates this task to GSA). OMB

is to provide guidance on all matters of budget allocation and procurement for information technology, through its Office of Information and Regulatory Affairs (OIRA). This

office has not, however, played a strong role

in review or guidance. It was not reauthorized

in 1983, but has continued to exist within

OMB. Representative Jack Brooks, now Chairman of the House Government Operations

Committee, in March 1986 asked the House

Appropriations Committee to refuse funding

for OIRA because it has “concentrated its efforts on the President regulatory reform program rather than the functions assigned to it

under the (Paperwork Reduction) Act. ‘ZS

OMB’S Office of Federal Procurement Policy

also has played only a minor role.

Major OMB budgetary initiatives with regard to SSA, some of which have been noted

throughout this report, are summarized here:

●

●

●

efforts to reduce disability roles by severe

enforcement of the Disability Amendments of 1980;

insistence on reducing the debt carried by

SSA due to overpayments or erroneous

payments; and

staff reduction demands, originally a reduction of 19,000 in 3 years,- negotiated

downward to 17,000 in 6 years, and pressure for closing some district and branch

offices.

~5According to news reports; see “Brooks Slams OIRA for

Not Doing Its Job, ” Government Computer News, Mar. 28,

1986, p. 5.
*
.—

Glossary of Technical, Institutional, and

Legislative Terms Used in This Reportl

A-76: An OMB Circular that directs Federal agencies to privatize, or contract out, government

operations under some circumstances (see ch. 3).

ADP: Automated data processing; see information

technology.

AFDC: Aid to Families with Dependent Children;

a program first established by the Social Security Act of 1935, that provides matching grants

to States for financial assistance to dependent

children in families in need because of the incapacity, death, continued absence, or unemployment of a parent. Administered by SSA.

AFGE: American Federation of Government Employees (AFL-CIO), the union which represents

many SSA employees (see chs. 3 and 5).

Artificial intelligence, or AI: A field of research concerned with giving computers some human mental capabilities, such as “understanding” speech

and visual images, choosing among options, etc.

Expert systems are an early commercial application of a rudimentary version of such capabilities already in use (see ch. 4).

Black Lung Program: A Federal program administered by SSA that provides monthly cash benefits to miners (and their dependents or survivors)

disabled by pneumoconiosis caused by occupational exposure.

Brooks Act: Public Law 89-306, passed in 1965,

which regulates Federal information technology

procurements to assure that they are competitive (see chs. 5 and 8),

Brooks Committee: An informal name often used

for the House Committee on Government Operations, which oversees implementation of the

Brooks Act (see above); chaired by Representative Jack Brooks of Texas (see chs. 6 and 8).

COBOL: Common Business-Oriented Language; a

computer language used by SSA (see ch. 2).

COLA: (Automatic) cost-of-living adjustments in

social security benefits, to compensate for inflation; first legislated in 1972.

Competition in Contracting Act, 1984: Strengthens

the “Brooks Act” (see above) governing Federal

procurements of information technology; provides an appeals process for losing bidders to assure that competition has been fair.

Computer-matching: A process by which Federal

agencies (including SSA) electronically check

‘References to chapters identify the primary or most full discussion

of the subject matter, not necessarily the first use of the term or phrase.

data that they have collected against data collected by other Federal or State agencies, to identify overlaps. This allows SSA to determine, for

example, whether beneficiaries are receiving payments under more than one assistance program.

CMP: Claims Modernization Project, part of the

Systems Modernization Plan, designed to automate the filing of social security benefits claims

in SSA’S field offices (see ch. 2).

Data dictionary: A comprehensive set of definitions

of the data elements that are in a database, controlling the form they are given and the terms

used to call them out of the computer’s memory

(see ch. 2).

Database architecture: The plan or framework defining the structure of an information-handling system, the software and hardware used, and the

relationships between them (see ch, 2).

Database integration: The systematic combination

of all sets of data or information used by an organization, so that they can be accessed, through

the use of common terms, by many users and

systems (see ch. 2).

DDS: Disability Determination Services; States

carry out the determination of disability of applicants for Disability Insurance. OMB has proposed that these services be privatized (see ch. 3).

Debt Collection Act, 1982: Financial management

legislation that led to withholding all social security payments from beneficiaries who had received overpayments (see ch. 3).

DHHS: The U.S. Department of Health and Human Services, of which SSA is a part; formerly

the U.S. Department of Health, Education, and

Welfare (HEW).

EDP: Electronic data processing; see ADP and information technology,

Fourth-generation languages: Advanced computer

languages that use “everyday” (English) vocabulary and syntax, and are useful particularly for

administrative and management information

systems not used by computer specialists (see

ch. 4).

GAO: General Accounting Office; a congressional

agency that monitors and audits government

programs and operations and makes recommendations for improving their effectiveness and

efficiency (see ch. 8).

Grace Commission: The President’s Private Sector

Survey on Cost Control in the Executive Branch

of the Federal Government, established in 1982

147
148

(Executive Order 12369), consisting of 161 highlevel industry executives and chaired by J. Peter

Grace; some Administration policies such as

those aimed at Federal work force reduction, are

derived in part from recommendations of this

commission or task force (see ch. 3).

GSA: General Services Administration; the executive branch agency that monitors and manages

government procurements, including procurement of computer systems (see chs. 5 and 8).

Independent agency: An agency that is not part of

the Executive Office or a Cabinet-level department; such agencies, usually regulatory in nature, report to both Congress and the President

and their heads do not serve at the will of the

President but have fixed terms of office; the Federal Trade Commission and the Federal Communications Commission are examples. It has been

proposed that SSA become an independent

agency (House of Representatives Bill 5050) (see

ch. 3).

Information technology: Computers, telecommunications, and electronic databases; other technological devices or systems used for automated

data handling.

Inspector(s) General: A post created by Congress

in 1978 for all major Federal departments; Inspectors General carry out audits, investigate

fraud, and generally aid the oversight process;

they report both to the department head and to

Congress, and can carry a charge of wrongdoing

directly to the Department of Justice.

IRS: U.S. Internal Revenue Service, which issues

the benefits checks authorized by SSA.

MADAM: Master Data Access Method, a software

program developed, used, and maintained by

SSA for extracting data from its many databases (see ch. 2).

Management information systems: Software/hardware systems and databases used for administrative and management purposes rather than primary daily service operations or research (see

chs. 2 and 4).

Medicaid: A program established by the Social

Security Act, Title XIX, that provides matching funds to participating States (now all but Arizona) which provide for the cost of medical care

and services to low-income persons through direct payments to care providers. See Medicare.

Medicare: Established by the Social Security

Amendments of 1965; the contributory Medicare

program includes compulsory hospitalization insurance and voluntary supplementary medical

insurance to persons 65 or over (and since 1972

amendments, to certain severely disabled persons under 65). Administered by SSA.

OASDI: Old-Age, Survivors, and Disability Insurance, popularly referred to as social security; provides monthly cash benefits to replace income

lost by retirement, disablement, or death of a

worker. Covered employees (nearly 95 percent

of American workers) pay social security taxes

on their earnings; these are supplemented by employer taxes to finance benefits. Established in

1935.

OCR: Optical character recognition, or optical scanning; a technology that allows paper-based data

to be read and stored by a computer without being rekey boarded (see ch. 4),

OMB: Office of Management and Budget; part of

the Executive Office of the President (see chs.

3 and 8).

Optical disks: A new technology for storing data,

using lasers to write on disks, and offering orders

of magnitude more density, or storage capacity,

than magnetic disks used in most computer systems today (see ch. 4).

Oversight: The exercise of congressional power to

monitor and investigate the performance of executive branch agencies in carrying out laws and

expending public monies. Oversight is performed

by designated congressional committees, through

hearings and through studies and audits by congressional support agencies (see ch. 8).

Paradyne: The 1979 to 1981 Paradyne procurement

of terminals (supplied by the Paradyne Corp.)

was to replace the aging SSADARS equipment

(see below) that provided data communication

between SSA field offices and headquarters. The

procurement was highly controversial, and finally resulted in indictment of some SSA officials (see ch. ‘7).

PCIE: The President’s Commission on Integrity

and Efficiency, established in 1980, to advise

President Reagan on improving government financial management (see ch. 3),

Privatization: The policy of contracting-out traditional government services and operations to be

performed by private sector organizations (see

ch. 3).

Relational databases: Ways of organizing large

amounts of data that allow great flexibility in the

ways of asking for information; they use fourthgeneration computer languages (see above), and

make it easy for those not highly trained in information sciences to use a database (see ch. 4).

SMP: The Systems Modernization Plan, first announced in 1982, for thoroughly improving or
149

replacing SSA’S information technology systems

(see chs. 2 and 7).

Software engineering: A set of techniques, tools, and

standards for use in software development and

testing; a software engineering program is a major component of the SMP (see ch. 2).

Social Security Act, 1935: established the Social

Security Administration, then an independent

agency (see ch. 5).

Social Security Disability Amendments Act, 1980:

Public Law 96-265, a law for purposes of Federal debt collection and financial management,

requiring a review of the status of nonpermanently disabled recipients of benefits, which resulted in the dropping of many recipients from

the SS1 rolls (see ch. 3).

SSA: Social Security Administration; now a component of the U.S. Department of Health and

Human Services (see ch. 5).

SSADARS: SSA Data Acquisition and Response

System, a telecommunication system instituted

in 1972 to provide interactive communication between headquarters computer operations and

data technicians in field offices (see chs. 2 and 6).

SS1: Supplemental Security Income; one of SSA’S

major programs; it provides monthly cash benefits to aged, blind, or disabled persons whose

other income is less than a specified amount

($4,032 in 1986). SSI was established in 1972 to

replace categorical State assistance programs

(see ch. 6).

Supercomputers: A term often used for the most

powerful computers available at any one time,

generally used first for scientific research. While

today’s computers use sequential processing, the

next generation of supercomputers will probably

use parallel processing (see ch. 4).

Title II benefits: Retirement and disability monthly

cash benefits.

Unemployment insurance: State programs, under

Federal standards, to provide benefits to those

involuntarily unemployed but able and willing

to work. The Social Security Act provides tax

offsets and grants to induce States to maintain

these programs. Administered by the States.