Killing Costly Web Contracts

Lawmakers are looking to scrap the awarding of expensive IT contracts for custom-built software after a series of failures

May 15--State lawmakers are looking to scrap the awarding of expensive IT contracts for custom-built software and instead rely on proven off-the-shelf products after a series of high-profile failures including the botched rollout of the state's Obamacare website.

"Why would we take on this extraordinary expense and create new products when, in most instances, there are off-the-shelf solutions?" said Sen. Brian Joyce (D-Milton), chairman of the Senate Committee on Bonding, Capital Expenditures and State Assets, which held a hearing yesterday on a $854 million IT bond bill. "We need to own up to the reality that the IT procurement process has been, in many instances, a debacle."

Lawmakers pointed to several botched IT contracts including:

--A $46 million online unemployment system built by Deloitte Consulting that was $6 million over budget, was delivered two years late, and delayed, reduced or cut off weekly benefits to thousands of people.

--A Department of Revenue tax system, also built by Deloitte, that was abandoned after three years and $55 million because of serious glitches.

--The Health Connector website, built by now-fired developer CGI, that left thousands without insurance and forced state officials to process applications on paper. That's now being scrapped in favor of a system from hCentive used in other states. House lawmakers yesterday defeated a Republican-led effort to withhold Health Connector Authority funding until the Patrick administration provides a rundown of the costs of the failed rollout, which have been pegged at more than $500 million.

Joyce's solution is to compel state agencies to buy software that is widely used instead of paying to custom build it.

"For the life of me I can't understand why we weren't doing this more in the past," Joyce said.

The bond bill that will be reported out of committee will promote the "buy not build" mentality, Joyce said.

"It's about time they look at all options," said Joshua Archambault of the Pioneer Institute. "The M.O. should always be the best value for taxpayers."

Bill Oates, the state's chief information officer, said the state doesn't have the resources to automatically go with custom-built software.

"We don't have the capacity to build these things, to maintain these things," Oates said. "It should be a very rare thing when we have to build a system on our own in 2014."

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