Money in Politics

Government Technology Horror Stories

This post will provide a regularly-updated running list of publicly-funded technology contracts gone awry, in which taxpayers spend millions of dollars for poor-quality software. Something is clearly wrong with public sector procurement and/or project management.

Massachusetts Child Care Financial Assistance System, 11/20/2015
Computer woes delay child-care subsidies

About 1,600 low-income children remain stuck on a waiting list for subsidized child care because a computer system built by the state government has been beset by problems for four months. The Department of Early Education and Care launched the new, $5.05-million system on July 1, despite concerns about its readiness raised by the child-care providers who rely on it to get paid.

California BrEZe Professional Licensing System, 2/13/2015
California’s Licensing Project Expected to Cost $96 million

An online licensing and enforcement system initiated in 2009 – called BrEZe – was expected to cost $28 million. The project has now cost the state $37 million, and the Department of Consumer Affairs expects the project will ultimately cost $96 million if seen through to completion. Of the original 19 licensing and regulatory boards and commissions that had intended to use the system, about half are actually using it.

Since the project began, glitches and problems have interrupted the normal flow of business in the state. In 2013, Consumer Affairs moved many boards and commissions for health professionals onto the BreZEe system, which caused delays and led to the misplacement of test data that set back some nursing school graduates three months. Read More »

Minnesota Health Benefit Exchange, 3/12/2014
What Went Wrong With Minnesota’s Insurance Exchange

Behind MNsure’s upbeat façade was a swamp of management failures and technical glitches that crippled the more-than $100 million website. …The [leadership] wasn’t thinking deeply enough about the technological nuts and bolts of the project, and the same was true of the state employees leading the effort, said task force member Dannette Coleman, chief for individual and family business for the Medica health plan.

When MNsure went live, its technical flaws emerged quickly. Some people were locked out of their applications, while others struggled to find out if they were eligible for financial assistance. MNsure didn’t run well on certain web browsers, and many users were confronted with frozen screens.

MNsure officials might have known about many of these problems if they had tested the site with consumers prior to Oct. 1. But, as agency officials rushed to make their deadline, they say they didn’t have time to do what IT consultant Michael Krigsman calls a cardinal rule of technology development. Read More »

Maryland Health Benefit Exchange, 2/24/2014
Maryland fires contractor that built troubled health insurance exchange

Maryland has fired the contractor that built its expensive online health insurance marketplace, which has so many structural defects that officials say the state might have to abandon all or parts of the system.

The Maryland Health Benefit Exchange voted late Sunday to terminate its $193 million contract with Noridian Healthcare Solutions. Columbia-based Optum/QSSI, which the state hired in December to help repair the flawed exchange, will become the prime contractor, and Noridian will assist with the transition.  Read More »

Massachusetts Department of Labor, 2/12/2014
$46 million jobless benefits system has over 100 defects

More than seven months after its rollout, the $46 million computer system for managing unemployment benefits for tens of thousands of jobless workers still has more than 100 defects, representatives of the consulting firm that built the system told a state Senate panel on Tuesday.  Read More »

Massachusetts Department of Children and Families, 2/10/2014
State ranks low in children’s welfare

When it comes to protecting children in foster care or potentially abusive homes, the state has languished closer to the bottom for years, according to an assortment of federal data. Massachusetts officials said their computer system does not capture enough information to calculate how long it takes to meet with someone who can provide information about [an] allegation [of child abuse] — even though 45 other states provided the data and the federal government asks Massachusetts for the information every year. Read More »

Massachusetts Health Connector, 1/10/2014
Outside review ordered for state’s failed insurance website

Progress on the site has stalled and the state late last year stopped paying on CGI’s $69 million contract, because the firm failed to deliver pieces of the website and necessary fixes on time. Governor Deval Patrick has said the state must consider legal action against the company, which also was a major developer of the federal health insurance exchange. Read More »

Oregon Health Exchange, 12/15/2013
A sad song for Cover Oregon

Oregon made an enormous and high-risk bet on California-based Oracle, handing over the lion’s share of the developmental responsibility to the giant software firm and paying it to date $90 million. In return, the state got substandard software code, repeated broken promises and perhaps the least functional exchange site in the country.

The poor coding work meant bugs — including 157 of the most serious “blocker” variety — continued to plague the site as recently as Thanksgiving. Nevertheless, Oregon has been good for Oracle. Between the OHA and Cover Oregon, the state has paid Oracle more than $90 million over the last two years and could pay the company another $30 million or more. Overall, the project has cost more than $160 million so far. Read More »

Florida Department of Labor, 12/12/2013
Deloitte fined in Florida for benefits system problems

Deloitte Consulting was fined $1.5 million this week by Florida labor officials after numerous problems in a new unemployment benefits system it created for the state, similar to the one Deloitte unveiled this summer in Massachusetts. Both systems have been riddled with technical glitches that left some unemployed people without benefits and unable to pay bills. On Wednesday, Jess Panuccio, executive director of the Florida Department of Economic Opportunity, told the Florida Sun Sentinel newspaper that the state recovered $1.5 million in “financial restitution” from Deloitte, which created the flawed $63 million siteRead More »

California Controller, 11/21/2013
California sues SAP over payroll system failures

California began trying to upgrade its decades-old payroll system for 240,000 public employees in 2004, and the effort has run years behind schedule while tripling in cost. Despite spending more than $266 million out of the total $373 million cost of the project, “the state’s need for an updated human resources management and payroll system remains unmet,” according to a Wednesday report from the Legislative Analyst’s Office. Read More »

Massachusetts Department of Revenue, 10/4/2013
$54m later, state fired computer contractor

The commissioner of the state Department of Revenue, Amy Pitter, vividly remembers her employees’ reaction during a disastrous test run last year for a $114 million computer system that was supposed to revolutionize the way Massachusetts residents file tax returns. The system couldn’t print forms or calculate interest and penalties, despite the fact the state had already paid $54 million on the project. Read More »

California Department of Motor Vehicles, 2/14/2013
Half-finished $208-million DMV technology overhaul canceled

The project was intended to revamp the process for registering vehicles and issuing driver’s licenses, with the entire overhaul scheduled to be finished this year. But state officials said they were canceling the vehicle registration component because little progress was being made… The state has spent $135 million total on the overhaul so far. DMV spokesman Armando Botello said officials are not sure what the final price tag will be now that the project’s scope is being scaled back. Read More »

California Department of Motor Vehicles, 3/28/2012
California courts scrap $2 billion tech project

One of the largest public technology projects in California history is history. Faced with mounting criticism about the cost, the state Judicial Council … voted to pull the plug on a $2 billion computer upgrade for California’s 58 trial courts. The decision ended a 10-year quest to electronically unify the nation’s largest state court system, a goal that ballooned in price as California hit its worst budget crisis in years. … California taxpayers have sunk more than $500 million into the project.

A state audit last year blasted the project for mismanagement and ballooning costs. Another audit released last week did caution that courts across the state will still have to spend significant amounts of money to improve their technology, whether CCMS is used or not. Read More »


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