VA Ended the Outpatient Scheduling System Project without Delivering Expected Capabilities and Has Begun a New Initiative

After spending an estimated $127 million over 9 years (from fiscal years  2001 through 2009) on its outpatient scheduling system project, VA has not  yet implemented any of the system’s expected capabilities. According to  the department, of the total amount, $62 million was expended for, among  other things, project planning, management support, a development  environment, and equipment. In addition, the department paid an  estimated $65 million to SwRI to develop the replacement scheduling  application. However, VA and SwRI were not able to resolve a large  number of system defects, and the department terminated the contract in  February 2009. Subsequently, the department determined that the  application was not viable (i.e., did not meet its needs), and officially  ended the Scheduling Replacement Project on September 30, 2009. The department began a new initiative on October 1, 2009, which it refers  to as HealtheVet Scheduling. However, the Scheduling Replacement Project had weaknesses in  these areas that, if not addressed, could derail the department’s current  attempt to deliver a new scheduling system. As a result,  VA increased the risk that it was not selecting a contractor that would  provide the best approach. VA Did Not Ensure Requirements Were Complete and Sufficiently Detailed to Guide Development of the Scheduling System

According to recognized guidance, using disciplined processes for defining  and managing requirements can help reduce the risks of developing a  system that does not meet user needs, cannot be adequately tested, and  does not perform or function as intended. In discussing this matter, the former program manager stated that the  Scheduling Replacement Project complied with the department’s EVM  policies, but noted that the department performed EVM for the scheduling  project only to fulfill the OMB requirement and that the data were not used  as the basis for decision making because doing so was not a part of the  department’s culture. However, while the department had established a process for managing  risks to the scheduling project, it did not have a comprehensive list of  risks because it did not take key project risks into account. That review identified issues,  including significant critical defects in the application and a lapse in a  contract to resolve defects. Impact of Scheduling Replacement Project Failure on HealtheVet Program is Uncertain

While the Scheduling Replacement Project was one of many components  of VA’s HealtheVet initiative, the impact of the project’s termination on the  initiative is currently unclear. According to  officials in VA’s Office of Information and Technology, the department  plans to document the interdependencies, project milestones, and  deliverables in an integrated master schedule as part of a project  management plan that is expected to be completed by June 2010. Finally, while the scheduling system  project was to result in the first component of VA’s larger HealtheVet  initiative to modernize the department’s health information system, the  specific impact of the project’s failure on this initiative is unclear because  HealtheVet plans have not been completed. Recommendations for Executive Action

To enhance VA’s effort to successfully fulfill its forthcoming plans for the  outpatient scheduling system replacement project and the HealtheVet  program, we recommend that the Secretary of Veterans Affairs direct the  CIO to make certain the following six actions are taken:    Ensure acquisition plans document how competition will be sought,  promoted, and sustained or identify the basis of authority for not using full  and open competition. Agency Comments and Our Evaluation

The VA Chief of Staff provided written comments on a draft of this report. In its comments, the department generally agreed with our conclusions,  concurred with five of our six recommendations, and described actions to  address them. Appendix I: Objectives, Scope, and Methodology

The objectives of our study were to (1) determine the status of the  Scheduling Replacement Project, (2) determine the effectiveness of the  Department of Veterans Affairs (VA) management and oversight of the  project, and (3) assess the impact of the project on VA’s overall  implementation of its health information system modernization initiative— HealtheVet.
Why GAO Did This Study

The Department of Veterans Affairs (VA) provides medical care, disability compensation, and vocational rehabilitation to veterans. The Veterans Health Administration (VHA)--a component of VA--provides care to over 5 million patients in more than 1,500 facilities. VHA relies on an outpatient scheduling system that is over 25 years old. In 2000, VHA began the Scheduling Replacement Project to modernize this system as part of a larger departmentwide modernization effort called HealtheVet. However, in February 2009, VA terminated a key contract supporting the project. GAO was asked to (1) determine the status of the Scheduling Replacement Project, (2) determine the effectiveness of VA's management and oversight of the project, and (3) assess the impact of the project on VA's overall implementation of its HealtheVet initiative. To do so, GAO reviewed project documentation and interviewed VA and contractor officials.

What GAO Found

After spending an estimated $127 million over 9 years on its outpatient scheduling system project, VA has not implemented any of the planned system's capabilities and is essentially starting over. Of the total amount, $62 million was expended for, among other things, project planning, management support, a development environment, and equipment. In addition, the department paid an estimated $65 million to the contractor selected to develop the replacement scheduling application. However, the application software had a large number of defects that VA and the contractor could not resolve. As a result, the department terminated the contract, determined that the system could not be deployed, and officially ended the Scheduling Replacement Project on September 30, 2009. VA began a new initiative that it refers to as HealtheVet Scheduling on October 1, 2009. As of April 2010, the department's efforts on this new initiative had largely consisted of evaluating whether to buy or custom build a new scheduling application. VA's efforts to successfully complete the Scheduling Replacement Project were hindered by weaknesses in several key project management disciplines and a lack of effective oversight that, if not addressed, could undermine the department's second effort to replace its scheduling system: (1) VA did not adequately plan its acquisition of the scheduling application and did not obtain the benefits of competition. (2) VA did not ensure requirements were complete and sufficiently detailed to guide development of the scheduling system. (3) VA performed system tests concurrently, increasing the risk that the system would not perform as intended, and did not always follow its own guidance, leading to software passing through the testing process with unaddressed critical defects. (4) VA's project progress and status reports were not reliable, and included data that provided inconsistent views of project performance. (5) VA did not effectively identify, mitigate, and communicate project risks due to, among other things, staff members' reluctance to raise issues to the department's leadership. (6) VA's various oversight boards had responsibility for overseeing the Scheduling Replacement Project; however, they did not take corrective actions despite the department becoming aware of significant issues. The impact of the scheduling project on the HealtheVet initiative cannot yet be determined because VA has not developed a comprehensive plan for HealtheVet that, among other things, documents the dependencies among the projects that comprise the initiative. VA officials stated that the department plans to document the interdependencies, project milestones, and deliverables in an integrated master schedule as part of a project management plan that is expected to be completed by June 2010. In the absence of such a plan, the impact of the scheduling project's failure on the HealtheVet program is uncertain. Secretary of Veterans Affairs direct the Chief Information Officer to take six actions to improve key processes, including acquisition management, system testing, and progress reporting, which are essential to the department's second outpatient scheduling system effort. In written comments on a draft of this report, VA generally concurred with GAO's recommendations and described actions to address them.