The State Worker

California IT director says state will grade vendors

The Consumer Information Center office in the Department of Consumer Affairs building.
The Consumer Information Center office in the Department of Consumer Affairs building. Sacramento Bee 2008 file

California will start scoring information technology contractors, the state’s top IT chief said Monday during a hearing into why another multimillion-dollar computer system is underperforming and over budget.

Department of Technology Director Carlos Ramos mentioned the “vendor grading system” at the end of a joint legislative hearing into the snake-bit BreEZe project, envisioned six years ago as the cheapest way to upgrade the state professional licensing and regulatory work in the Department of Consumer Affairs.

Ramos didn’t say when the state would issue its first round of grades, what criteria it would use or how the information would factor into which companies could do business with the state.

“We went out to the vendor community,” Ramos said to the committee. “We asked questions like, ‘Will (a grading system) keep you from bidding?’”

A draft written with contributions from industry experts and vendors is under review, he said.

Lawmakers hauled Ramos and Consumer Affairs Director Awet Kidane into the Monday morning hearing and peppered them with questions about why the project is on track to cost nearly four times its original $27 million budget. Both men acknowledged a recent report that said BreEZe suffered from poor planning, lax oversight, staffing problems and a contract with vendor Accenture LPC that put undue risk and expense on Consumer Affairs fee payers.

But, they said, lessons have been learned, some fixes are already in place and the department plans to take time to reassess the project’s future.

Accenture has a long history of state-government projects, including CalPERS’ massive IT overhaul, delivered two years late for nearly twice its $279 million budget. The New York-based firm also launched the state’s health-insurance exchange system last year and has taken the lead on California’s ambitious $672.6 million FI$Cal project to unify the state government’s patchwork accounting systems.

Accenture is the lead vendor on Los Angeles’ County’s a $472.4 million project to automate its public assistance programs to a single system.

“Every one of those projects has had challenges. Changes in cost, changes in schedule,” Ramos said, “But that’s not atypical.”

BreEZe has suffered from cost overruns and delays, but an unusual contract negotiated with Accenture made cutting ties too expensive to consider. Accenture, the sole bidder on the project, required the terms as a condition of taking the work. State officials didn’t want to put the contract out to bid again. So they accepted terms – since renegotiated – that could pay Accenture tens of millions of dollars even if it stops working on BreEZe.

“Accenture was able to meet the contractual conditions,” Kidane said. “Unfortunately, that didn’t meet the needs of our business.”

Call Jon Ortiz, Bee Capitol Bureau, (916) 321-1043.