Cost of 2008 GI Bill claims processing system doubles

Development costs for the Veterans Affairs Department's automated system for processing education benefits claims under the 2008 GI Bill have more than doubled from original estimates, according to figures in a new report from the Government Accountability Office.

VA in 2008 predicted the claims system, scheduled to be finished this month, would cost $95 million. But the project is running behind schedule and total costs have increased to $207.1 million through fiscal 2011, GAO said in a report released on Wednesday.

The technology, which the Space and Naval Warfare Systems Center-Atlantic developed for VA, uses rules engine software that works through a complex set of permutations to determine the level of aid veterans are entitled to.

VA has deployed it in stages through an agile and iterative software development process. This fall officials had completed enough of the system to allow examiners to process claims automatically, rather manually as they did for the fall 2009 semester.

But VA fell behind in developing software to link the new claims processing technology to legacy financial systems to automate payments to veterans, and in establishing a Web interface for veterans to manage their claims, GAO said. The department did complete the connection with the legacy systems earlier this year, but the Web interface -- scheduled to be done in 2010 -- has been pushed off until next year.

Auditors noted agile development helped VA roll out the earlier stages of the claims processing system quickly, but they faulted the department for not setting measurable goals or common standards for completed work, which contributed to the delays. GAO also said deficiencies in testing hindered the department's ability to identify critical system defects.

In an unusually sharp reply to the report, VA Chief Information Officer Roger Baker questioned whether the watchdog agency even understood agile software development -- rarely used in the federal government. He said the technique resulted "in a stunning and unpredicted success" in deployment this fall of what he called a "flawless" claims processing system.