Jeff E. Schapiro: An IT mess in 3 acts plays out
Published: July 19, 2009
Mike Moore, former head computer guy for San Diego County, knows that doing business with Northrop Grumman requires giving the giant company the business.
Moore, now in the private sector as a peacemaker on info-tech management deals gone sour, says the county was nervous in 2005 about paying Northrop Grumman nearly $700 million over seven years for computer services.
The fear, realized but remedied by hard-noised nickel-and-diming of Northrop Grumman: The firm didn't have the bench to simultaneously fulfill IT contracts with San Diego County, Indianapolis-Marion County, Indiana, and -- are you sitting down? -- Virginia.
Moore's ex-employers -- the San Diego taxpayers -- eventually got their money's worth, with Northrop Grumman, among other things, staffing up to fully serve its West Coast customer.
Were it only that simple in Virginia. The state is nearly four years into a 10-year, $2.3 billion contract with Northrop Grumman. Lawmakers and state employees increasingly fret that it is the equivalent of a car crash in slow motion: costly, messy, but gripping.
There appear to be three problems; none easily solved:
- Performance: Northrop Grumman consistently misses targets and deadlines, often for basic tasks.
Perhaps the best-known muff-up: failure to complete an inventory of IT equipment across the bureaucracy. Without that, Virginia -- through highly paid proxy Northrop Grumman -- can't begin modernizing computers, servers, networks and other gear.
The state surrendered an important weapon -- the checkbook -- for bringing Northrop Grumman to heel when interim computer czar Len Pomata OK'd a nearly $14 million payment just days after the firing of his predecessor, Lem Stewart, who alleged rip-offs by Northrop Grumman.
- The contract: At 151 pages, not including addenda, it appears mottled with holes originally intended to ensure the state maximum flexibility, according to legislative officials and IT contracting experts.
Written by a Chicago boutique law firm that is now part of McGuireWoods, seat of Virginia's shadow government, the contract instead is causing confusion and conflict between the state and Northrop Grumman.
And contributing to cost.
So far, according to documents obtained by the General Assembly, the state has revised the contract 55 times, adding $10 million to a venture that's also behind schedule.
But could another driver be that Northrop Grumman underbid to beat out IBM for Virginia's business?
- Management: Because outsourcing is taking place under a divided government, so, too, is the enterprise's governance.
There are few un-muddied lines of authority in a system rigged around a chief information officer hired by an oversight board, whose members are accountable to Republican legislators given to micromanaging and a Democratic governor who wants a free hand.
Junking the contract may not be an option, if only because of expense. The state would have to pay Northrop Grumman $474 million if it canceled after Dec. 31. Then there's the undetermined, but no doubt hefty, cost of an alternative to Virginia's awkward dance with Northrop Grumman.
Talk about stepping on toes.
Contact Jeff E. Schapiro at (804) 6496814 or
. Watch his video column Thursdays on TimesDispatch.com. Listen to his analysis Fridays at 8:33 a.m. on WCVE (88.9 FM).
Reader Reactions
Having retired from a long career in Information Technology, Jeff Shapiro’s piece, rather than being a “hit piece” as one commenter characterized it, seems to be a reasonably good summary of the situation. At one point in my career, my responsibilities included participating in reviews of the degree to which a nationwide IT organization was in compliance with contractual requirements. Suffice it to say, that organization (not Northrop-Grummann) produced “slick”, expensive, and voluminous documentation in an attempt to demonstrate compliance. The problem was that when we attempted to reconcile that documentation with the realities of the hardware/software/staffing it purported to represent, we were unable to do so. In many cases, they produced documentation for many items that simply did not exist. Based on nearly 30 years experience in the IT field, I do not believe that set of circumstances was a one-time isolated occurrence with only one major vendor.
Another sample of a standard Schapiro recipe hit piece: Regurgitated muck, laced with a hint of scandal, with a pinch of half-truth for flavor. Example: that “Chicago boutique law firm” referred to in the article was considered the preeminent expert in technology law. And why didn’t you name them Jeffie; afraid of being sued?
Another example, Michael Moore, the former San Diego CIO, was consulted by the team evaluating the Virginia contract.
And since you’re such an expert on the topic, Jeffie, why don’t you propose a solution? Roll up your sleeves and offer to help out. All your breathless scandal-mongering is doing is diverting time and attention away from the solution and making it harder for the people who are trying to get this thing straightened out.
There’s no question that NG has performance issues. As a state employee intimately involved with my agency’s IT operations, I can testify to their failings. But, a huge measure of the blame rests with VITA. Incompetent staff at the most senior levels of VITA’s management are one of the pillars of it’s disfunctionality, many of whom work at VITA because they’re previous employers didn’t want them. Dissolution of the contract is not feasible—unless the state wants to incur a huge cost to do so. Here are a few beginning steps to a pragmatic solution. Gut VITA. Have the CIO report to the Governor through the Secretary of Technology. Turn all purchasing and contracting responsibiities, including the NG contract, over to the Division of Purchases and Supply. Leave policy development and project management in VITA and eliminate everything else. Establish a performance review committee comprised of senior IT managers from state agencies which would report directly to the Secretary of Technology. If we don’t implement some real solutions now, beginning with the gutting of VITA, this whole IT debacle will continue to cost the state millions.
So our only choice is to continue to throw good money after bad?
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