Social Security’s new computers still years away

WASHINGTON — Six years ago, the Social Security Administration embarked on a plan to replace outdated computer systems overwhelmed by a growing flood of disability claims. Nearly $300 million later, the new system is nowhere near ready and agency officials are struggling to salvage a project racked by delays and mismanagement.

In 2008, Social Security said the project was about two to three years from completion. Five years later, it was still two to three years from being done, according to a report by McKinsey and Co., a management consulting firm hired by the agency.

In the meantime, people filing for disability claims face long delays at nearly every step of the process.

“The program has invested $288 million over six years, delivered limited functionality, and faced schedule delays as well as increasing stakeholder concerns,” the report said.

As part of McKinsey’s recommendations, acting Social Security Commissioner Carolyn Colvin appointed Terrie Gruber to oversee the project last month. Gruber had been an assistant deputy commissioner.

President Barack Obama nominated Colvin to a full six-year term in June, and she faces confirmation by the Senate. Colvin was deputy commissioner for 3½ years before becoming acting commissioner in February 2013.

The House Oversight Committee is also looking into the program, and whether Social Security officials tried to bury the McKinsey report. In a letter to Colvin on Wednesday, committee leaders requested all documents and communications about the computer project since March 1.

The troubled computer project, is known as the Disability Case Processing System, was supposed to replace 54 antiquated computer systems used by state Social Security offices to process disability claims. As envisioned, workers across the country would be able to use the system to process claims and track them as benefits are awarded or denied, and claims are appealed.

But as of April, the system couldn’t even process all new claims, let alone accurately track them as they wound their way through the system, the report said. In all, more than 380 problems were still outstanding, and users hadn’t even started testing the ability of the system to handle applications from children.

Maryland-based Lockheed Martin was selected in 2011 as the prime contractor on the project. At the time, the company valued the contract at up to $200 million.

McKinsey’s report does not specifically fault Lockheed but raises the possibility of changing vendors, and says Social Security officials need to better manage the project.

Nearly 11 million disabled workers, spouses and children get Social Security disability benefits, a 45 percent increase from a decade ago. The average monthly benefit for a disabled worker is $1,146.

The trust fund that supports Social Security’s disability program is projected to run out of money in 2016. At that point, the system will collect only enough money in payroll taxes to pay 80 percent of benefits, triggering an automatic 20 percent cut in benefits.

Congress could redirect money from Social Security’s retirement program to shore up the disability program, as it did in 1994. But that would worsen the finances of the retirement program.

Social Security disability claims are first processed through a network of field offices and state agencies. There are 54 of these offices, and they all use different computer systems, Gruber said.

If your claim is rejected, you can ask the state agency to reconsider. If your claim is rejected again, you can appeal to an administrative law judge, who is employed by Social Security.

It takes more than 100 days, on average, to processing initial applications, according to agency data. The average processing time for a hearing before an administrative law judge is more than 400 days.

The new processing system is supposed to help alleviate some of these delays.

THE ASSOCIATED PRESS