State accuses Northrop Grumman of breach
Published: July 1, 2009
Updated: July 1, 2009
LETTER TO NORTHRUP GRUMMAN: Notification of Failure to Complete Transition
The state now is accusing Northrop Grumman of failing to deliver computer services and hinting at unspecified action against the giant company.
In a shift yesterday, the state -- which has been defending its disputed 10-year, $2.3 billion deal with Northrop Grumman -- said the Chantilly-based firm is in breach of contract.
Further, the state is demanding a plan from Northrop Grumman within 60 days for ending delays -- some that have continued two years -- and for completing an inventory of computer equipment that was supposed to be finished yesterday.
That work may not be wrapped up for several months, with full implementation of the contract -- now three years on -- not expected until Christmas.
In a memorandum to two company executives, a senior official of the agency that hired Northrop Grumman signaled the state's new stance in the growing controversy over the shift to privately managed information-technology services.
Fred Duball, a director of the Virginia Information Technologies Agency, wrote that "Northrop Grumman's failure to complete transformation in a timely manner means . . . the commonwealth is deprived of the benefit of those services and may incur other damages to compensate for Northrop Grumman's deficiencies."
Duball left open the possibility of legal action, saying, "By notifying Northrop Grumman of its failure to fulfill its contractual obligations and requesting a corrective plan, the commonwealth is not waiving any contractual rights or remedies available to it, nor is it excusing Northrop Grumman's breach."
Northrop Grumman spokeswoman Christy Whitman, told of the Duball memo, replied in an e-mail, "We are working to address the issues of critical importance to the program's success."
The company, meanwhile, is running a full-page newspaper advertisement defending its work.
Gov. Timothy M. Kaine, for whom the Northrop Grumman contract -- the state's richest-ever privatization pact -- is becoming an election-year embarrassment, said the matter is in the hands of the board that oversees VITA. The panel is made up of gubernatorial and legislative appointees.
"The governor has confidence in their ability to handle it," Kaine spokesman Gordon Hickey said.
The state's latest position on the troubled VITA-Northrop Grumman alliance echoes that of the VITA chief, Lemuel C. "Lem" Stewart Jr., who was fired last month after complaining that Northrop Grumman is not fulfilling its obligations.
This week, the agency's interim head, Secretary of Technology Leonard M. "Len" Pomata, fended off criticism from House and Senate committees that the state had failed to hold Northrop Grumman accountable for not delivering on a number of promises.
Initiated by Kaine's predecessor, fellow Democrat Mark R. Warner, and backed by legislators in both parties, the IT privatization initiative is flowering as an issue in this year's elections for governor and the House of Delegates.
"Frankly, there needs to be a stick," said House Majority Leader H. Morgan Griffith, R-Salem, urging a remedy. "I don't want to pull away the carrot yet. But there definitely needs to be a stick in the process."
He added, "Right now, it's a pig in a poke."
In another reflection of political sensitivities, the General Assembly's investigative arm has been asked to accelerate a scheduled snapshot of the implementation of the Northrop Grumman contract.
Rather than report in December, the Joint Legislative Audit and Review Commission is expected to provide an update in October -- a month before Virginians go to the polls.
The request for an earlier report came in a letter to JLARC's chairman, Del. M. Kirkland Cox, R-Colonial Heights, from House Appropriations Committee Chairman Lacey E. Putney, I-Bedford, and Senate Finance Committee Chairman Charles J. Colgan, D-Prince William.
Contact Olympia Meola at (804) 649-6812 or
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Contact Jeff E. Schapiro at (804) 649-6814 or .
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Reader Reactions
To Broughton55: Nice ‘Tude Dude and you wonder why agencies are hesitant to cooperate. Have you been involved with the RFS process? If not, do a little research on how efficient your own bureaucracy is before criticizing the Commonwealth’s. You are a service provider, yet you blame the customer. You are providing what you want, not what your customer needs. Their primary job is to get the business of the agency done, not make transformation easy for you.
Like I said, nice ‘tude.
There are reasons why Northrop Grumman has missed deadlines: lack of cooperation from state employees at the state agencies. I was a state employee and went to Northrop. But since then, state IT employees at the individual agencies continue to throw up roadblocks and outright SABOTAGE to Northrop’s efforts! Wish I could name names and agencies but I suspect that it is not a coincidence that 4 of the agencies that I have been working towards transformation have had the same issues: agency IT employees outright opposed and with power to deny us access to systems and applications needed to do our jobs. Taxpayer money is paying my salary and those state employees causing the trouble are also paid by YOUR taxpayer money.
Governor Kaine needs to ORDER his agencies to give advanced access to the systems and COOPERATE!! Otherwise neither Northrop, IBM, Compaq or any other global IT services company will ever be able to get the state systems out of the dark ages (and those entrenched state IT employees can keep their jobs working on 20th century antiquated systems while kicking back in their closed-door offices surfing the net). Do I sound bitter? I hope not. When the Northrop contract is cancelled, I’ll head back to west for new assignments. Too bad for Northrop but WAY too bad for the Commonwealth.
I have been following this news story with a chuckle since it broke and had no intention of commenting until reading the comments from this and other articles the last few days. I’ve been in what is now known as “IT” since the early ‘80s, thinking it was the “future”. I have worked for OEMs and third party service providers including NG. I even had the kiss of death title a few times, “Special Project Manager”. The truth be said, the NG-Vida thing is “Same ole, Same Ole” and nothing new! The NG/Vita story seems to be a classic example of the State following the private sector in allowing a “third party” entity to control of it’s technology interest. The scenerio seems to be playing out in every company over and over like a rerun of a bad movie with the ending always the same. Since the late ‘80 and early ‘90 corporations have outsourched their IT needs and hired “consulting firms” to run their IT shops to make the profit/loss numbers look good. The State needed some one to take control of their technology Blackhole. With an “IT consulting group” running the show those budget numbers can be hidden for a while as “non capital outlay” but those actual number and cost eventually rise to the top and must be explained. This is where the State is now. Let’s see! Vita acting as an umbrella for “some” of the States independent mismatched IT systems realizes it just can’t keep pace with the hardware-software changes happening to handle their employee users and customer needs. It’s just overwhelming. Bids are requested to take on this task. NG (substitute IBM/HP-EDS…etc) promises an IT land of “milk and honey” and makes a pitch to update, consolidate and fix the States IT systems. These consulting companies do no fact finding beyond writing a rehash of a previous bid for another company, substituting “Vita” where a previous companies name appeared. Vita takes the bait because they didn’t have to cough up anything they should have had on file like inventory, applications, operating systems and users info. NG hires various third parties to actually do the job…etc. Let the “Smoke and Mirrors” begin. Some where along the way both NG/HP/EDS and Vita fails to reach anything close to their goals and the blame game begins. Fire NG and another “Smoke and Mirror” consulting company takes over and repeats the same remedial process. It can be done but the State would have to take everything down and stop processing data for a few months. This Vida-NG mess sounds similar to the “Dead beat dads” system that never got off the ground a few years ago. The State needs to bite the bullet, hire their own IT employees and take back control of this monster. I have yet to see an IT transition work. It’s mostly smoke and mirrors anyway with bandages and thumb tacks covering up the really bad parts. When it does seem to be working some executive gets paranoid, especially if he’s a decade or so from retirement or thinks his job is in trouble and removes IT company A for Company B and the “same ole same ole” begins again. Nothing new is happening with NG and Vita.
I am sure that all staff working for executive agencies certainly have not enjoyed this path; nor the Service Delivery people stuck in the middle on NG trying to get the work done to please agencies all the while being told barely enough by their mgmt. If this continues, they will be lucky to keep any of those ones worth their weight given the pressures they are under…
If it hasn’t been said yet, the worst aspects seem to be the endless bureaucracy of middle mgmt. Requests (in particular the RFS process) must jump through so many hoops and people just for approval, and many have to throw in their thoughts regardless of the paperwork already submitted to kick off the request! Good luck ever getting what is being requested on-time.
tbhallr’s comment is right - our tickets go through VCCC (the helpdesk), but many go to our team to handle. Several of the systems we let the service delivery staff handle, but they relied on us so much it made sense for them to handle the support. Furthermore, it takes hours sometimes to get to us; we just have the users let us know so we can work on it and most of the time, by the time we get the ticket, we already have the work done. I won’t even go there about the quality of the helpdesk system itself…
Even when an agency does bend over backwards to support the transformations and VITA/NG mess (cannot claim for other agencies but do know directly that this does occur), the amount of time taken greatly reduces any ability for staff to do anything beyond just support what we shouldn’t even need to support! They are supposed to be *our* support, not the other way around.
Agreed that this “partnership” is a failure; Exited’s comment is spot-on. Investigation is certainly needed now. Complaints certainly have been sent up the chain of command…
As it should be -
In response to your last question, the little secret is that many agencies/organizations are not part of the NG/VITA partnership. The scope only includes “executive” agencies (those reporting to the governor), so legislative agencies like Workers Comp, and the courts are not covered.
The Universities escaped the partnership by being semi-autonomous. While they do get some state money, the lions share of their funds come from fees and endowments which give them a greater say in how their IT is run - and so they chose not to join the partnership.
The same with the legislative and judicial agencies - they had a choice (executive agencies were mandated by the contract and law). So far, no agency/organization that had the option to join has done so.
I will also apologize for reiterating a previous post, but I find it deliciously ironic that this ‘wonderful’ experiment in outsourcing IT services, was for the executive branch only, that the legislature evidently listened to their IT folks and did not jump on the band wagon. What is sauce for the goose….
I have an idea! let’s outsource the legislature, oh yeah never mind, we already have and that is why the FBI is interested in the GA lobbyists.
Exited - of the numerous comments in the many articles of late, yours is possibly one of the most well thought out. As one of the “draftees” in this debacle, I can barely express my frustration with this project. As staff escape the “partnership” we are squeezed to the breaking point because positions are not backfilled. We are hammered by agency heads in vitriolic diatribes on the agency’s intranet, all the while trapped in the middle of unhappy users and the NG management epistles from on high. All the while, we continue to bust our humps to do the best job possible, often in the same places, for the same people we’ve been supporting for years. Even worse? If we even try to show NG any loyalty by attempting to apply for positions in other sectors our job applications are rejected - IMMEDIATELY! The current economy and state budget crunches leave us trapped like a mammoth in the tar pits. There’s fault on both sides of this fence - the agencies often resist change of any kind and NG attempts to rubber stamp their solutions on everyone, painfully and sometimes detrimentally forcing square pegs into round holes to reach deadlines. I can only hope that the light at the end of this tunnel isn’t a freight train.
My agency contracted a major program out over 10 years ago and the contract will not be renewed. They now do not abide by the contract and will not cooperate with the transfer of data. N/G owns the state now and even if we wanted to, there is no way out of this mess. BTW, there was a major security breach with data being stolen. Why hasn’t the TD reported on this event from last week? Entire personal files were taken, so much for N/G security and up to the date technology.
This entire venture has not been about better management of state IT resources since the day it was voted into legislation. It was about politics, plain and simple. State employees were conscripted from their home agencies into VITA with no say whatever. If your job profile fit the VITA model, you were drafted. The process of integrating almost 90 agencies into VITA would have taken at least 5 years to do right. Instead, it was forced into a year and a half. The problems NG is having now were the same problems VITA started out with.
When NG came along, VITA employees were wooed with tales of great raises, superior training, and much improved opportunities, none of which have come to pass. Lem Stewart was the biggest proponent of all for people to transition to Northrop Grumman. He once said in an agency meeting to discuss the PPEA that if he was a state employee with the opportunity to go to Northrop, he would jump at it.
NG promised they had systems and processes that would manage everything better, and they have been making it up as they go along since July 2006. They are squeezing the remaining employees to work more and harder, and many IT service delivery employees have been working 60 and even 70 hour work weeks routinely.
Anybody with common sense could look at the gargantuan task they were taking on and know it was not going to happen. There were almost 50 separate transformation projects on the books. Some have been completed, but rarely with satisfactory results to the customer agencies. Negative comments were not appreciated, and realism had no place in the “partnership”.
Almost everyone still working there is looking for a new job, but in this economy IT jobs in Richmond are fewer and the competition is fierce.
This venture is a failure. The sooner we have a General Assembly and Governor with the political will and nerve to state the obvious, the sooner this mess could start getting cleaned up.
But, in all likelihood that will never happen, and things will limp along until the contract runs out.
I apologize in advance if this is a bit of a repost, but come on now… A bit of investigation is needed here:
1) Len Pomata, former honcho at Litton PRC who sold his business and made a load of change, sold his company to which contractor involved in this mess? None other than Northrop Grumman.
2) Pomata, who made mucho contributions to fortify Gov. Gilmore gets appointed to the GMU board and sat on the pay-as-you-go Northern Virginia Technology Council’s board.
3) Which Secretary of Technology switched making contributions to the GOP to filling the coffers of Mark “The Technology Governor” Warner and slides onto the IT Investment Board as a result? Sweet Len, of course!
4) Who sat on the IT Investment Board, which oversees VITA, while the NG contract is being mismanaged - none other than our Lenny boy!
So much hand washing - so many incestuous relationships - all at the cost of Virginia taxpayers!
JLARC’s study of VITA is misguided - they should be studying the ITIB!
And, hey, I wonder what’s contained in Lenny’s “Statement of Economic Interests” (if he’s required to file one with the State)? Think he owns stock in NG or one of it’s affiliates? Any bets?
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