Pennsylvania lurches from one software boondoggle to another

The phones stopped working again at Pennsylvania's unemployment-compensation offices Tuesday. "Due to vendor-related technical issues," the Department of Labor and Industry said.

The same department has had to rely on what state auditors in May called "antiquated" software, written in the COBOL language used by punch-card programmers in the 1970s, since spending more than $160 million on a replacement system that failed.

Elsewhere in Harrisburg, the Department of Human Services paid benefits to a couple of thousand dead people after computer systems failed to flag them as ineligible, auditors found last year. At the Department of Environmental Protection, the last full audit found water-quality reviews used "decades-old" reports updated by hand, before DEP apps this year began speeding data collection.

And after contractors were paid $800 million over the years, more than four times its projected cost since the 1990s, the Pennsylvania Statewide Radio Network still doesn't work as designed.

"Look at the information-technology issues we've had, from unemployment compensation to the emergency phone system," State Rep. Seth Grove (R., York County) told me. "We do not know how much money we spend on information technology. How many projects are out there? Are they on budget? Are we meeting their timeline?

"We don't know what's happening," Grove added. "IT people are buried throughout the agencies. And we don't know how much they are spending on consultants. There are so many consultants. We hire consultants to watch the consultants."

So Grove is sponsoring House Bill 1704, which would combine most state departmental IT offices and their short- and long-term planning, procurement, and cyber-security protection into a single Office of Technology. It would be part of the governor's Office of Administration, under a director with the power to kill or suspend projects that run over budget or below standards.

Pennsylvania IT contracts need "better controls" and "stronger clawback mechanisms" (performance bonds), so taxpayers can get their money back when the systems they buy don't work, elected Auditor General Eugene DePasquale, a Democrat like Gov. Wolf, said at a Nov. 14 hearing on the bill. "There are similar concerns with all state contracts."

But Wolf's appointees worry that the new office could "duplicate" and "conflict with" current procurement rules, Curt Topper, Wolf's Department of General Services chief, told Grove at the hearing before State Rep. Daryl Metcalfe's Government Affairs Committee.

Sharon Minnich, who runs Wolf's Office of Administration, said the governor has spent many months developing a "shared services" IT procurement improvement initiative, like those Michigan and other states have implemented. The Wolf administration wants legislators to "give us time" before passing a new IT-contracting law, Minnich told me later.

But Grove said he's tired of watching procurement practices shift and shift again under successive governors' appointees — Pennsylvania needs better systems for tracking where taxpayer IT spending goes. For example, he said: Departments rely on "staff augmentation" contracts to bring in short-term IT workers, sometimes foreign nationals from countries that train more engineers than the U.S. has available.

"We think this saves us a lot on short-term employees," Grove said. "But some have been with us now for 10 or 15 years. Some are for purposes so specific they only contract with Corrections, or with PennDot." Should those be permanent state employees?

Labor suppliers rake off high margins for each hour worked, depending on a contract employee's stated experience and training. IT contractors at state agencies should be subject to at least the same conflict-of-interest restrictions as state employees, Kailash Kalantri, president of Blue Bell-based Acclaim Systems, a state IT contractor that last year received the Governor's Achievement Award, testified at the Nov 14 hearing.

Stricter contractor review would "avoid abuse of power" and "prevent conflicts of interest," Kalantri added. He questioned whether the current verification system does enough to avoid falsification of resumés, which can add to the bill for IT jobs.

Grove praised Kalantri as a rare contractor willing to talk publicly about conflicts of interest.  "IT is a foundation of government," Grove told me. "I got tired of the cost overages, of projects not getting done. I ask about those projects, I get no answers. … The departmental secretaries, God bless them, I don't think they see the day-to-day things that go on."

The proposed reform isn't about cutting costs, he added. It's more "about financial transparency, so we can better see what we're buying. …" The idea is to fit together a steady stream of incremental, workable projects that update and improve state services as part of clear goals and long-term plans — instead of  "these large $200 million projects that always fail."