FBI's troubled case-file costs soar
For months now, FBI Director Robert Mueller has been struggling to contain the damage from the bureau's failed efforts to create a computerized case-management system. In March, Mueller finally officially pulled the plug on the software package known as Virtual Case File, at a reported cost of $104 million. The Virtual Case File saga has already been a major public relations and financial disaster for the bureau, but U.S. News has learned that it may get worse—more than seven times worse.
Mueller's goal had been to allow FBI agents in the 56 field offices, hundreds of smaller regional offices, and dozens of liaison offices at U.S. embassies abroad to store and share case information and efficiently search government databases. But Mueller said in February that the software package designed by Science Applications International Corp. (SAIC)—four years in the making and plagued by delays and cost overruns—was already outdated and would not fulfill his ambitious goal of replacing the bureau's antiquated paper-based records management system.
Mueller told angry and surprised congressional overseers—who had received literally hundreds of optimistic briefings from FBI officials about VCF—that of the $170 million budgeted for the project, taxpayers would absorb an estimated loss of $104 million as a result of its demise. The balance of the funds, Mueller said, was either unspent or used to purchase hardware that could be adapted to future applications.
But U.S. News has learned that the ultimate cost of the VCF catastrophe may be much higher. In a series of recent planning meetings for the fiscal 2007 budget, FBI officials in the bureau's information technology division—headed by Zalmai Azmi—have estimated that the cost of creating a successful new case-management system is $792 million. Those officials have also concluded that the bulk of the VCF hardware—which Mueller told Congress could be reused—will quickly become obsolete. "It's mostly lost," one FBI official says.
At one of the budget planning meetings, on April 25, sources say, three of Azmi's deputies—Sanjeev "Sonny" Bhagowalia, Dean Hall, and Jerome "Jack" Israel—reported that the bureau would essentially have to start its quest for a new system from scratch; they also listed requirements for the new system. When Joseph Ford, the head of the bureau's finance division, added up the tab, it totaled $792 million—and created quite a sticker shock in the meeting. Sources say Ford responded in consternation that the figure was unacceptable. The Justice Department, Ford warned Azmi's people, would kill that budget request in a heartbeat because of the furor it would create.
For Mueller, the whole effort has been a nightmare. The director stuck with the VCF project despite early indications that the software was designed in such a way as to be totally incompatible with the agents' investigative and analytical needs. Mueller and deputy Bruce Gebhardt exhorted field office bosses to train their agents on VCF in the face of clear evidence that the project was on life support. U.S. News has learned that when agents began taking the tutorials, the program kept crashing.
A recent report by the House Appropriations Committee's surveys and investigations staff [Related PDF] concluded that the FBI could have cut its losses early in the game, but forged ahead for two more years, despite having identified 400 glitches with early versions of the software—glitches it never resolved with the contractor. There were 10 different VCF project managers, who changed the contract 36 times, during the lifespan of the ill-fated software development.
Now, even as the bureau tries to figure out how to sell its bosses at Justice and on Capitol Hill on the new price tag, the FBI's financial gurus are trying to figure a way to soften the blow. They've asked all division heads to release a substantial percentage of their funds from the remainder of the fiscal 2005 budget (which ends September 30), and get out of 60 to 70 contracts bureau-wide so they can use that money to begin the process of putting out requests for proposals for a new software program they're calling Sentinel; Sentinel will largely rely on off-the-shelf software, as opposed to the custom-designed package in VCF. However, this has placed the division heads in a bind because they had previously been told to commit all of their fiscal 2005 funds by June 15, and most have done so.
"This continues to be smoke and mirrors with Mueller saying it's not that bad, and his people way down below saying 'it's horrible,' " says one official. "He either doesn't get it or he doesn't want to say it out loud."
Cassandra Chandler, assistant director of the FBI's Office of Public Affairs, told U.S. News in a written statement that despite the failure of the broader VCF project, pilot testing of the Virtual Case file run out of the New Orleans field office gave the FBI "invaluable information about its current and future approach to information technology." Chandler added that "as a result of VCF, the FBI is better situated to roll out successful IT initiatives in the future." Chandler said that although "at this time, there is no complete cost estimate for the full Sentinel program," the new software venture "goes well beyond the envisioned capabilities for VCF."