Office of Debt Collection Management’s Implementation
of the Collection Litigation Automated Support System

Report No. 01-15
July 3, 2001
Office of the Inspector General

Background

The federal government guarantees loans and lends money to citizens through many financial programs, including loans to students and small businesses. When the debts are in default and cannot be collected through conventional means, creditor agencies (agencies owed the debt) refer the debts to the Department of Justice (Department) for collection. As the federal government's principal litigator, the Department sues the defaulting debtors and obtains and enforces judgments against those debtors.

Litigation and debt collection authority for the debts are assigned to the 94 United States Attorneys Offices (USAOs) and other litigating divisions within the Department, such as the Civil Division and Tax Division. The USAOs litigate the majority of referred cases and collect the largest amount of delinquent debts, fines, penalties, and forfeitures. Additionally, the Federal Debt Recovery Act of 1986 authorized a pilot project for the Department to contract with Private Counsel offices in seven judicial districts to supplement the efforts of the USAOs by collecting outstanding debts in smaller dollar cases. The majority of cases assigned to the Private Counsel offices are Department of Education loans. As of September 30, 1999³, the balance of civil debts to be collected by the Department totaled about $3.2 billion, as shown below.

In past years, the Department components have used multiple automated systems to track and manage civil debts. At times, even different offices within the same component used different automated systems to manage and track civil debts. For example, most of the USAOs used the Tracking Assistance for the Legal Office Network (TALON) system. The Private Counsels and some of the USAOs used a system named COLLECTOR to manage and track civil debts. History has shown that the Department has had a poor record of managing debts using these systems. Accordingly, in 1996, the Department focused its debt collection efforts with regard to the use of automated systems to manage and track civil debts.

The Department was faced with the options of: (1) re-engineering a mechanized system already under deployment, (2) building a proprietary system from scratch, or (3) purchasing an existing system and modifying it to meet the needs of the Department. Late in 1996, the Department contracted with KEANE Federal Systems to provide an independent analysis of the three options. The contractor’s report, issued in December 1996, concluded that the most cost efficient and least risky option to meet the Department’s mission critical requirements was to purchase an existing system and modify it, the third option. The Department selected this option.

In July 1997, the Justice Management Division’s Procurement Services Staff issued a request for proposals for an automated debt collection management system to track and manage referred debts. The Department required the new system to have, as its centerpiece, a computer system with a database containing information about debts owed to the federal government that have been referred to the Department for litigation. The system also had to be capable of communicating electronically with all USAOs, the Department’s litigating divisions, and all associated Private Counsel offices. In May 1998, the Department awarded a contract to CACI-IMS, Incorporated (CACI) to provide an automated debt collection management system. The system that was selected uses London Bridge Software Solutions’ Recovery Management System (RMS), an “off-the-shelf” software program widely used by the credit and collections industry. CACI was to work with London Bridge to customize its RMS software to meet the majority of the data management system requirements. CACI would meet the remaining requirements by creating individual modules that would interface with the RMS. The Department named the full system the Collection Litigation Automated Support System (CLASS). CLASS was to replace the civil debt collection systems within the USAOs and Private Counsels, and ultimately within all Department components.

The contract required CACI to implement CLASS in two phases, with a third phase optional. During phase I, CACI was required to implement and test the system within 7 USAOs and 18 associated Private Counsel offices. The contract required phase I to be completed by November 30, 1998. During phase II, CACI was required to implement the system in the remaining 87 USAOs. The contract required phase II to be completed by March 31, 1999. If CLASS proved successful in managing the civil debts in the 94 USAOs, a phase III option would expand the system to the Department’s litigating divisions, additional Private Counsel offices, other Department users, and other agencies external to the Department, such as the Administrative Office of the United States Courts.

Our audit assessed the status of CLASS’s implementation.

Prior Audit Reports

No prior audits have been conducted on CLASS.

3. As of January 22, 2001, the September 30, 1999 data was the latest available.