Lawmakers warn against changes in VITA contract

SPECIAL REPORT: VITA

Lawmakers are warning the state's computer chief and Northrop Grumman against ramming through potentially pricey changes in a disputed contract ahead of a looming shakeup in Virginia's information-technology bureaucracy.

Though by law it falls to Chief Information Officer George F. Coulter to accept or reject revisions, he and Northrop Grumman's Virginia project boss, Samuel Abbate, were told modifications should be vetted by the next governor and General Assembly.

The next governor and legislators are expected to enact stricter controls over the Virginia Information Technologies Agency -- its management and, perhaps, budget.

In admonishing Coulter and the company, the head of a Virginia Senate panel investigating the problem-plagued IT program said the political turmoil engulfing it as well as the state's bleak cash picture compel delaying any changes until next year.

The new governor and General Assembly "should not be saddled with last-minute changes to the contract," said Sen. Yvonne B. Miller, D-Norfolk, head of the government-operations subcommittee of the Senate Finance Committee.

Miller's remarks are the latest sign that the controversy over Virginia's shift to a privately run computer-and-communications network -- a headache for Gov. Timothy M. Kaine since the June firing of Coulter's predecessor -- is likely to roil the opening months of the next governor's term and the debate over the state budget.

Members of Miller's subcommittee, echoing an idea first floated earlier this week by the House Appropriations Committee, expressed support for budget language that could hold Northrop Grumman to the current annual payments of $236 million.

"It might work," Senate Finance Committee Chairman Charles J. Colgan, D-Prince William, said in an interview.

Sen. Janet D. Howell, D-Fairfax, whose district is home to Northrop Grumman's state headquarters, said she takes a "very dim view" of paying Northrop Grumman more because the "cost is just too dear to other programs" -- a reference to state budget cuts that by January could reach nearly $7.5 billion.

Coulter, in league with Kaine's office, is discussing changes in the state's 10-year, $2.3 billion contract with Northrop Grumman that would allow the company to recover some of the additional expenses tied to the Virginia venture for the which it says it should be paid. Some revisions were reviewed separately yesterday by VITA overseers.

Coulter has said extra costs could be manageable. They range from $30 million to $40 million, according to the General Assembly's watchdog agency, the Joint Legislative Audit and Review Commission.

Abbate told Miller's subcommittee that Northrop Grumman, which yesterday announced better-than-expected corporate earnings, is "fully aware of the financial situation of the commonwealth." Abbate said he did not anticipate that costs would go up, but later he would not rule out possible increases.

VITA, which hired Northrop Grumman in 2005, has declared the company in violation of the contract for failing to refit government departments with new computers by a June 30 deadline.

Northrop Grumman submitted a fix-it plan in August, but it is unclear whether the state believes it will work. Coulter said yesterday that the plan can work "operationally," but he will not announce until week's end whether he has accepted it.

A repair program is not only crucial to implementing improvements to the state's IT network, but it could head off possible litigation over the declaration that Northrop Grumman is in violation of the contract -- a step that, technically, could move Virginia toward scrapping the agreement with the company.

Contact Jeff E. Schapiro at (804) 649-6814 or .