BOTCHED PUBLIC SECTOR IT IMPLEMENTATION

By Jim Halios

Case Studies

Healthcare.gov State of California payroll system State of Pennsylvania unemployment

compensation system

Healthcare.gov

What is it? Healthcare.gov is a government website that will

allowing individuals to sign up for Obama care. Who uses it?

The users of Healthcare.gov are the buyer (Department of Health & Human Services), states that opted to be part of the healthcare exchange and their residents who qualify for the program.

Who implemented it? Of the 55 contractors who worked on the

Healthcare.gov website CGI International was the primary contractor. (DePillis, 2014)

Healthcare.gov

CGI was responsible for developing an IT solution that was “adaptable and modular to accommodate the implementation of additional functional requirements and services” according to CGI Senior VP Cheryl Campbell. In layman terms they knitted all off the different functions together. (DePillis, 2013)

What happened? Several factors: some say the system was

underfunded, others point to the Department of Health and Human Services who took years to develop the final specs thus giving CGI little time for development & implementation

Healthcare.gov

What was the project budget? CGI was awarded a $93.7 million contract for

the development and implementation of the Healthcare.gov website. (DePillis, 2013)

What was the actual cost? According to the latest government estimates

the cost for computer systems for Healthcare.gov cost $836 million. (Wayne, 2014)

California state payroll system

What is it? The upgrade of the California state payroll systems was

indented to overhaul and unify a decades old payroll system.

Who uses it? Payroll preparers across 160 state departments,

agencies, boards and commissions (some 240,00 employees) (Megerian, November 2013).

Who implemented it? Original contractor Bearing Point was fired in 2009 after

being paid $26 million for their work. Second contractor SAP restarted the project in 2010 and was subsequently fired in 2013 (the company was paid $50 million).(Megerian, December 21 2012)

California state payroll system

What happened? The payroll system still has not been

implemented to this day. A report by the California Senate Office of

Oversights and outcomes found that both the contractors and state officials were at fault. The report citied the following: Lapses in due diligence by state staff Failure to resolve core issues raised early and

often Unrealistic expectations(Megerian, August 12 2013)

California state payroll system

What was the project budget? The initial projected project cost was $84

million. (Megerian, December 2012)

What was the actual cost? When the project was halted in February 2013,

$254 million had been spent with no system in place.(Megerian, August 12 2013)

State of California has filed a lawsuit against SAP.(Megerian, November 21, 2013)

State of Pennsylvania unemployment compensation computer system

What is it? Modernization of state’s 40 year old

unemployment compensation software system.

Who uses it? Pennsylvania Department of Labor & Industry

Who implemented it? Project was awarded in 2006 to IBM and was

set to expire in 2013.(Charette, 2013)

State of Pennsylvania unemployment compensation computer system

What happened? The project was 42 months behind and no where

near ready for the anticipated 2013 completion date.

The state decided to end the contract after spending $800,000 on an assessment by the Software Engineering Institute (SEI). The SEI study surmised that the software developed so far was incapable of accurately processing and calculating claims and benefits. SEI also noted “that the software doesn't exist, and apparently, there is no agreement when, if ever, such a capability will exist.”(Charette, 2013)

State of Pennsylvania unemployment compensation computer system

What was the project budget? The initial projected project cost was $106.9

million. (Charette, 2012)

What was the actual cost? When the contract was not renewed the final

price tag was $166 million. Not including the $800K for the study to tell the state the system would not work.(Charette, 2012)

Common Issues

The projects are too large in scope. Unrealistic expectations from end user. State / Federal bidding requirements

reduce competition and increase costs. Focus on data conversion and not on

system integration. Lack of oversight from the governing

body.

Works Citied

Charette, Robert N. “Pennsylvania Won’t renew IBM’s Contract for Botched Project" www.spectrum.ieee.org . N.p., 2 Aug. 2013. Web. 25 Feb. 2015.

DePillis, Lydia. “Meet CGI Federal, the company behind the botched launch of Healthcare.gov" www.washingtonpost.com . N.p., 16 Oct. 2013. Web. 25 Feb. 2015.

Megerian, Chris. “Overhaul of California government payroll system at risk of collapse” www.latimes.com. N.p., 21 Dec 2012. Web 25 Feb. 2015

Megerian, Chris. “Upgrade to state payroll system hurt by lax oversight, report states” www.latimes.com. N.p., 12 Aug 2013. Web 25 Feb. 2015

Megerian, Chris. “California sues SAP over payroll system failures” www.latimes.com. N.p., 21 Nov 2013. Web 25 Feb. 2015

Wayne, Alex. “Obamacare website cost exceeds 2 billion, study finds" www.bloomberg.com. N.p., 24 Sept. 2014. Web. 25 Feb. 2015.