It's good to know Uncle Sam doesn't give up; he just stops for breath. Then again, maybe the Social Security Administration was ahead of its time with its first big plan to automate disability claims.

More than a decade after the Social Security Administration took its first stab at overhauling the disability claims process -- a doomed effort that cost $71 million and took seven years before being abandoned in 1999 -- the agency is at it again.

This time, Social Security Administrator Jo Anne B. Barnhart has vowed to go paperless by 2005 by creating electronic folders for the millions of people who apply for disability benefits each year. The idea is to let the far-flung agencies and doctors that handle the mountains of claims documents do so using common folders online. The agency hopes the effort will save money and ease the crushing case backlogs that have plagued the national disability insurance program for more than a decade.

Barnhart's plan is on the frontier -- some might say the cliff -- of a movement inside big corporations and government agencies to exploit newer technologies allowing greater data-sharing over networks.

The agency has hired IBM to help it build a mammoth 52-terabyte electronic repository that can be accessible to 65,000 users around the country.

"They have undertaken one of biggest content management systems in the world," said IBM vice president Brett MacIntyre.

Indeed, the plan is so ambitious that the General Accounting Office issued a report this year concluding that the agency was moving too quickly, starting a national rollout in January without doing adequate pilot testing first or resolving several technical challenges. Because the Social Security Administration is introducing its five-part system in stages, starting new parts before others are fully built, the agency "lacks assurance that the interrelated components will work together," the GAO told Congress in March.

Yet the Social Security Administration appears undaunted. It is charging ahead with a project it estimates to cost about $800 million over seven years in hopes that the effort will save $1.3 billion in reduced costs for paper-handling, mailing and folder storage.

"A lot of people didn't think it could be done or that we could accomplish what we did by January 2004," said William E. Gray, the agency's deputy commissioner for systems.

Gray said the agency did extensive planning and testing, even though a decision to accelerate the project made it impractical to wait until every piece was finished before starting the rollout. Barnhart told Congress that waiting for the "end-to-end" testing that GAO wanted would have delayed the project by three years.

The new paperless claims system consists of five big technology pieces, all revolving around a new electronic folder.

In the past, everything about a claim either arrived at the agency on paper or subsequently got printed on paper. All documents were stored inside folders that grew to be five or six inches thick. Folders were mailed around to hearing examiners, medical consultants, appellate judges and others -- and often got lost. Manual photocopying was common, along with the time-consuming task of renumbering documents in each folder for appeals.

In the new system, every document gets stored as a digital file in a central repository. Documents can be transferred as electronic copies to the state agencies that process claims or over the Internet in encrypted form to outside medical experts. Staffers can also copy file collections onto disks and mail them, Gray said. The agency has set up a private Web site and gives special passwords and identification numbers to medical health professionals to submit digital files, such as X-ray images.

In addition, appeals hearings will be recorded and stored as digital audio files in each applicant's electronic folder.

Elaborate software programs are being created to track the digital documents at every stage of the claims review. Unlike regular databases, the information in this repository is stored in many formats and will be accessed with various software programs.

Among the agency's new programs are systems to electronically capture and store incoming information about each applicant's claim, to allow that data to be shared among the many people handling the claim, and to provide custom interfaces for state agencies and hearings offices.

All the programs have to work together smoothly for the system to function, which is no easy feat. Much of the new software is being provided by IBM, which has bet its future on an ability to integrate large repositories of data stored in different formats.

In January, the Social Security Administration started implementing key pieces of its paperless project in certain states. Many states, however, still have to replace their old computers with new machines. So far, 18 states are receiving electronic downloads of claims data, and eight are using the electronic folders, according to Gray. For more than a year, the agency also has been letting people file disability claims at least partially online.

Gray said the agency expects to slice at least 100 days off the time it takes to process claims, which can take two to three years if an appeal is filed.

Already, efforts to digitize data collection have cut five days off the average time required to get an initial ruling, which recently dropped to 97 days.

One challenge, Gray said, is giving staffers speedy access to the data, because moving files over computer networks can be slow. Equally daunting is winning over the people handling claims.

"For 70 years in Social Security we have been working with paper folders,'' Gray said. "For the last seven months, they have been working with electronic folders. It's a change they have to get used to."

The disability project is a bellwether for both electronic government and the software industry's push to offer greater interoperability among programs that previously operated as stand-alone silos -- a big barrier to automation.

"Governments are pushing hard in this direction -- not just federal agencies, but at the state and local level, too," said Connie Moore, research analyst and vice president at Forrester Research. "We are seeing a resurgence of these types of projects at all levels because the technology has continued to advance."

Andrew Warzecha, senior vice president for the Meta Group, agreed that the Social Security Administration has a better chance to go paperless now than in the 1990s, when data-sharing technology was still clumsy: "It is only recently that this category of software has been architected to do these kinds of things."

Of course, who hasn't heard that before? Any way you look at it, the project bears watching for the clues it can offer on whether big vendors like IBM will be able to deliver on their promise to take data-sharing to truly massive levels.

Leslie Walker's e-mail address is walkerl@washpost.com.