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
How many members of the General Assembly have stock in N/G? How many own mutual funds who own stock in N/G? Full disclosure is needed, but we won’t get it.
Get rid of VITA Procurement… they haven’t got a clue. What a joke. This mess has been coming for years. Lem tried to sound the alarm. No one dared speak up, even NG, about the train wreck. This is what happens when there are no rules or guidelines in the process.
It is ridiculous the hoops state employees have to jump thru in order to have solution to problem resolved. Out of the numerous calls that are made to VCCC, only one was resolved by VCCC. All the other calls are reverted back to our building. I have made @ least 4 calls a week since this has been implemented.
It is frustrating to the users to be told that their IT team cannot help them, that it has to go thru to VCCC. Then to have VCCC to turn around and send it back to our IT team. We have lost numerous hours of time when we could have called our own Help Desk and it could have been resolved in ½ of the time.
Meeting deadlines on a daily basis, our team does not have time to wait until it can be assigned to someone else. How can this be cost effective? It seems the only ones that are benefiting are from this, are the people that they created jobs for in South West Virginia.
You’re right NewsGirl. Our agency had excellent customer satisfaction. How did we know? We did annual survey’s to see how we could improve performance.
We weren’t broken. in fact regularly we were asked to do more with less, and we did.
The sad part of this is good talent was transitioned to NG. Now we’re broke.
Killer Dog: Absolutely right about state employees. It does not pay for them to buck the GA. They get threatened and can lose their jobs. Regarding “...didn’t know how to organize it’s own IT house, so they contracted it” I’d go one step further and say that there was no desire to fix what wasn’t broken. There was never any groundswell of complaint by the agencies about their IT capabilities because they simply fixed what they needed to, within their own budgets. It’s becoming painfully obvious that the state would not save money doing this, either. The whole exercise was simply a case of a business giant exercising political muscle. The question now is whether they will reinstate the only VITA person willing to tell the truth.
This is to Spanky. I worked under the Medicaid contract at FHS at one time. Considering that the programmers were not all 100% dedicated to working under the contract even though the contract required it, FHS has no reason to complain. They milked that cash cow for all it was worth.
Wow - this sounds like “quite the mess” - both for the state workers and NG.
It is a real shame that the state hires a contractor to “fix the problem” and it ends up being more of a problem than before.
I agree with SPANKY that it is a two-way street - i.e. cooperation from both parties is a must.
Good luck state workers getting through all of this!
Curious though, why doesn’t this affect/effect the universities?
Gil,
In a previous article they covered the contributions. Here is the quote from that article dated June 24th.
“Kaine defended Northrop Grumman, which has donated more than has $808,000 to Virginia political candidates of both parties since 2001, including $76,000 to his campaign and inauguration.“
‘backed by legislators of both parties’ The rot runs deep - and wide. Relationships between the private sector and government have become way too cozy to the point the lines are blurring between the two. Getting on a soapbox about ‘socialism’ or ‘fascism’ isn’t the issue. The issue is the public’s interest is not being served by these kinds of relationships and they need to be reigned in.
Many state agencies employees who work closely with VITA/NG, have benn saying there were problems, for years. The state bureaucrats, at supervisor, manager and director levels, are taught to supress disagreement with the official state line. It’s autocratic management. They would like to think themselves a technocracy, but they are’t that smart. They lable, as renegades, all who dare speak the truth. If it ain’t in the talking points you get pushed aside, humiliated and disciplined, or simply fired.
The commonwealth obviously didn’t know how to organize it’s own IT house, so they contracted it out. Problem is they didn’t know how to structure a working contract and they brought on board a pack of wolves to guard the sheep. These folks only manage the money pouring out of taxpayers wallets. After all, they need a revenue stream to make campaign contributions to politicians who gladly take their (your) money.
Why isn’t the so called Technology Board being held accountable? Has anyone examined the benefit they receive from keeping the scheme alive? Any possibilty their business’s profit from all this?
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