RICHMOND, Va. -- Virginia's embattled info-tech contractor, Northrop Grumman, says it's willing to begin mediation to settle the controversy that threatens to derail the state's richest-ever privatization pact.
Jorman Granger, a Northrop Grumman lobbyist, and state computer chief George Coulter said this morning that supervised talks could salvage the $2.3 billion contract and avert a lawsuit.
However, Granger said Northrop Grumman is looking for additional cash from the state -- perhaps approximately $40 million. That, Granger said, could "resolve some of these issues."
Coulter said the state may have no choice but to sue Northrop Grumman over continuing gaps in IT services, but such a decision rests, in part, with the board that oversees the agency that hired Northrop Grumman, the Virginia Information Technologies Agency.
Mediation may not amount to much because under the NG-VITA contract, neither side is bound by the settlement. So, a lawsuit appears to remain a possibility.
Prospects of a legal fight and a mediated solution to the NG-VITA imbroglio emerged as the General Assembly's investigative arm wrapped up a two-year study of the state's shift to a privately run computer network.
(This is a breaking news update. The earlier story is posted below. Check back for further updates)
General Assembly investigators aren't sure Virginia's info-tech contractor, Northrop Grumman, can complete a computer refit for state agencies by a new deadline of July 2010.
The company was given another year to finish work that supposed be done by this past July. But holdups attributed, in part, to a continuing quarrel between NG and the state over prices, spotty billing and erratic service forced Virginia to give the company more time.
This morning, the Joint Legislative Audit and Review Commission, the investigative arm of the General Assembly, is wrapping up a two-part study of Northrop Grumman's 10-year, $2.3 billion contract with the Virginia Information Technologies Agency.
Among the findings of the latest inquiry: The new deadline to install computers, routers and other gear may be missed because of "schedule conflicts and disagreements." Further, there is "no clear penalty" in the contract should NG fail to meet the new deadline.
JLARC also points out that it "may have been unrealistic" to expect the company to complete the so-called transformation by the first deadline. That's because neither NG nor VITA fully understood the obstacles to modernizing IT equipment in more than 80 state agencies.
The controversy surrounding Virginia's richest-ever privatization contract -- signed in 2005 as a legacy of the Warner administration -- is expected to spill over into the next governor's term.
Republican Gov.-elect Bob McDonnell is on record in support of stricter management of the VITA-NG deal. That would include allowing the governor to hire and fire the state's computer boss.
Currently, the chief information officer works for the board that oversees VITA. But that means the governor has no direct authority over the individual responsible for providing computer services to agencies controlled by the chief executive.
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