Outsourcing of Va.'s IT system hits snags

The Virginia Information Technologies Agency has been promising that the state's transition to a centralized IT system for government agencies was going to be seamless.

Some of the stitches in the seams are coming undone.

The $2 billion outsourcing of Virginia's IT system to Northrop Grumman is likely to miss the June 30 deadline for modernizing the government's computer and communications infrastructure.

"In a project this size, there are bumps in the road," said VITA chief Lemuel C. Stewart Jr. Nonetheless, he said, "We'll be on budget and very close to the time period we have scheduled."

Despite his assurances, the state government is worried about those transformation deadlines. Virginia's IT system is fundamental to doing the public's business today, Stewart noted.

But "a number of agencies . . . are at risk of not meeting the June 30 goal," Gov. Timothy M. Kaine's chief of staff, Wayne Turnage, wrote state agencies in a September internal memo. This would result in "limiting Virginia's ability to meet our goals, particularly in securing sensitive information."

In fact, according to a report by the legislature's watchdog agency, almost half of the state's 85 agencies face some risk of not wrapping up the transformation on time, and 12 of them are unlikely to meet the schedule, according to state officials.

Turnage is to meet this week with VITA, Northrop Grumman and state Secretary of Technology Aneesh Chopra to check on the IT transition's progress, said Kaine's press secretary, Gordon Hickey.

"The governor and chief of staff and secretary of technology think it's important and intend to make that deadline," Hickey said.

VITA also provides information technology services in partnership with Northrop Grumman to about 1,000 local government customers.

"Service delays are not only expected," Stewart told the state's Joint Commission on Technology and Science this month, "they are often a sign of progress."

Contributing to the infrastructure delay, the partnership between the state and Northrop Grumman still doesn't know how much it has in the way of IT assets -- such as desktop and laptop computers -- though the number of pieces of equipment is more than 200,000 at 2,000 different sites.

So far, Stewart said, the state and Northrop Grumman have tried to make four inventories of Virginia's government information technology infrastructure. Now Northrop Grumman is making a fifth try at counting all the equipment.

Determining the extent of its technology infrastructure is important because that's the basis VITA uses to bill state agencies for IT services as well as to figure out whether Northrop Grumman is doing its job properly.

And how much the departments, commissions and boards have to spend on IT affects how much money they have to provide public services.

"Inventory, no doubt, has become one of our most complex challenges," the state's chief information officer said. "It's counting every phone, every circuit, every communication link.

"You also have to have the actual purchase price of the asset and how it's funded," Stewart said. "All that makes a difference in what you charge."

Northrop Grumman wouldn't make public how much the latest inventory is costing it, but company spokeswoman Juli Ballesteros said the wall-to-wall accounting will be finished by the end of March.

Further delaying the modernization, 25 state agencies refused to accept new system-monitoring software used for maintenance and billing, worrying that the program could jeopardize the security of their data. VITA says only six agencies object to the new system.

The software doesn't degrade security, Stewart said, and Virginia's computer security system is rated No. 1 in the nation by the National Association of State Chief Information Officers. "It's really a nonissue now," he said.

However, "It has not been placed on our system," Virginia State Police spokeswoman Corinne Geller said, "and we are in discussions with VITA and Northrop Grumman concerning this matter.

"We have a great deal of sensitive information that we've got to make sure is protected," said Geller. "We're trying to work to ensure that our levels of security are met and [the state IT system's] needs for update and inventory are met."

According to the state report, VITA's administrative costs and Northrop Grumman's management fees make up 20 percent to 32 percent of what state agencies pay for IT services.

Stewart said the report mistakenly included costs, such as help desk and technician services, that are not true administrative expenses.

"My real administrative costs are 10 percent," he said, "and Northrop Grumman's is 7 to 10 percent," for a total of 17 percent to 20 percent.

Contact Peter Bacqué at (804) 649-6813 or pbacque@timesdispatch.com.