Updated

Some homeland security experts and lawmakers are wondering how a post-Sept. 11 promise to improve the nation’s intelligence-gathering capabilities hit a monumental snag this month as the FBI (search) announced it is scrapping a $170 million computer overhaul after nearly four years in the making.

"If you can't get the simple things right and on time, what does that say about your ability to deal with the larger problem of defending the country against terrorists?" asked Charles Pena, director of defense policy studies at the Cato Institute in Washington, D.C.

The FBI said it plans to scrap the multi-million dollar Virtual Case File (search) project, which was built to create a massive, integrated software system for agents to access and share case files and other resources.

The agency's inspector general announced in February that the program just isn't capable of delivering. FBI Director Robert Mueller (search) ultimately took responsibility for the debacle, even though he told congressional members he blames, in part, the contractors who worked on the job and internal managers.

"Our ability to handle a project like that was not what I thought it was," Mueller told the House Appropriations Committee on March 8. "It's my fault for not having put the appropriate persons in position to review that contract and assure it was on track."

Virtual Case File is the last and largest of three phases in the FBI's "Trilogy" project, which was started before the Sept. 11, 2001, terror attacks to upgrade the FBI's communication networks, hardware and software. The last component — to replace the agency's antiquated investigative applications to allow agents to access and share case information — was greatly enhanced after the attacks.

But after many fits and starts and despite hopes to get it on track, Virtual Case File — which critics say was a key element in addressing intelligence-sharing concerns outlined by the Sept. 11 commission (search) — still did not function three-and-a-half years after its genesis.

"How do you get to the point where you spend three years on something as vital as this to national security only to figure out that it's not going to work?" Pena asked. "When you hear things like this it is just so disheartening."

Mueller said the agency will go forward with the network overhaul, but it will be a different program, and won't necessarily use the current Virtual Case File contractor, Science Applications International Corp., a major federal government contractor based in San Diego.

Members of the House and Senate Appropriations Committees say they are disappointed that so much money was spent — much of the $170 million was an increase over initial projections — with nothing to show for it, and vowed to keep closer tabs on the new project.

"My disappointment with the extreme waste of taxpayer dollars — over $100 million — is surpassed only by my frustration over the fact that we now do not know when the FBI will have this critical case management system in place," said Sen. Judd Gregg, R-N.H., chairman of the Senate Appropriations Subcommittee on Commerce, Justice and State, the Judiciary and Related Agencies, which held the initial hearing on the FBI fiasco in February.

"Apoplectic would be too mild a description of my reaction to the unraveling of the Trilogy project — or the Tragedy project, as some FBI agents have taken to calling it," Sen. Patrick Leahy, D-Vt., said during the subcommittee hearing. "Our highest priority must be to protect the American people. To do its job effectively, the FBI must have state-of-the-art technology that works."

In its defense, SAIC contractors told Congress the project suffered from constantly shifting mission changes, which SAIC attempted to keep up with, as well as an aggressive timetable to get the final phase operating. It was further hindered by a lack of consistency in management oversight within the bureau, a fact the FBI fully acknowledged hobbled SAIC's efforts.

Steve DelBianco, vice president of public policy at the Association for Competitive Technology, and a former owner of a small information technology firm that designed pilot programs for system overhauls much like the FBI's, said the agency seemed to have jumped into this massive endeavor without prototypes that would have helped prevent the mess.

"Unfortunately, if you go straight from design to implementation, where then is the logical point where you say this isn't really going to solve our problem?" he asked. "I think they put the cart before the horse."

That kind of behavior is typical for government, said Tom Schatz, president of Citizens for Government Waste, which has documented several recent aborted system overhauls in the federal government.

"Some of them are difficult to put together, some are overly-ambitious and many of them are poorly managed," he said. "The problem is more endemic in government because of the lack of a bottom line and the lack of concern in general about how much money is being spent, and the lack of accountability."

James Carafano, national security expert with the Heritage Foundation, said this proves the FBI "shouldn't be in charge of information-sharing" among the intelligence community. However, Carafano said he believes this latest disaster shouldn't have a huge impact on the ability of the FBI to get urgent business done.

"Where there is a will, there's a way. There's information-sharing all over the FBI," he said. "A lot of it is by phone and fax and carrier pigeon, but it's being done."

Mueller told Congress that the agency is far from relying on carrier pigeons. Since Sept. 11, the agency has developed the ability to receive and disseminate intelligence electronically within the FBI and to the intelligence community and allows agents access to standardized intelligence information reports online.