After delay, PCs headed to health agency for swine-flu effort
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Click here to read about the troubled history of the Virginia Information Technologies Agency’s computer contract with Northrop Grumman.
Published: October 24, 2009
Updated: October 24, 2009
Extra computers are headed to health offices as part of Virginia's response to swine flu after the company providing IT services to the state initially resisted supplying the gear because it was uncertain it would be paid.
Northrop Grumman attributes the holdup to a misunderstanding. The Virginia Health Department blames confusion that, once cleared up, led to a better deal for the agency.
The incident is the latest example of a major issue contributing to friction between Northrop Grumman and its lead customer, the Virginia Information Technologies Agency: payments for services outside the company's 10-year, $2.3 billion contract with the state.
Virginia's largest-ever outsourcing contract restricts annual payments to Northrop Grumman to $236 million. But it includes provisions under which the company can bill the state for services beyond the basic agreement.
The company and state, however, are quarreling over what qualifies as an extra.
In Northrop Grumman's view, the contract is not an all-you-can-eat buffet. Rather, the meat of the contract -- basic services, such as updated computers and software -- is essentially fixed in cost. The gravy -- custom services -- potentially adds millions of dollars to the cost borne by taxpayers, but also could improve Northrop Grumman's bottom line.
The company has consistently argued that it is spending more on the Virginia venture than it gets back.
Both sides are trying to determine what is what. The process is a contentious one, requiring lawyers, vetting by the VITA oversight board and, ultimately, an OK from the agency's boss, George F. Coulter. But it spotlights what's at the core of the difficulty between the state and Northrop Grumman: government's responsibility to serve the public, versus the company's demand for profits.
In addition to the Health Department's roughly 115 laptop computers for monitoring H1N1 flu -- a request that lurched through the information-technology bureaucracy for about three weeks, according to state officials -- Northrop Grumman and VITA have clashed over payment for computers for 17 temporary unemployment offices.
In a report sharply critical of Northrop Grumman and VITA, the Joint Legislative Audit and Review Commission said the Virginia Employment Commission wanted the offices outfitted with computers and communications gear in one to three months. Northrop Grumman took up to six months.
"According to VITA, Northrop Grumman slowed procurement of PCs at other offices because temporary use would not ensure NG's full cost of recovery," said JLARC, the General Assembly's investigative arm.
Earlier this week, a subcommittee of the VITA governing board screened two other projects that apparently fall outside the contract: data security and enhanced Internet service.
In the tussle over the H1N1 computers, Samuel Abbate, recently named by Northrop Grumman to run its embattled Virginia project, first refused to approve the equipment request, citing concerns about payment.
"I don't have the confidence that your contracts or business organization will accept a cost after execution," Abbate said in an e-mail to a VITA manager, Debbie Secor. "The risk of recovering our costs is all on [Northrop Grumman]."
But in a statement yesterday, Abbate indicated he changed his mind. Without elaborating, he said: "There were some initial discussions about the particular requirements for the Health Department project, but those were quickly cleared up and the request was approved."
Dr. James Burns, deputy commissioner for public health, is pleased with the outcome.
He said the agency got the computers, is paying for them with federal funds and agreeing to a service charge from Northrop Grumman for the time that the equipment is expected to be used. After the flu outbreak ebbs, the computers -- Burns could not provide a cost per unit -- will be mothballed until the next emergency.
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
Not sure what NG is complaining about. The state purchased those 115 computers with federal money and now becomes the property of NG. NG is responsible for replacing them when they become obsolete. What makes one think NG is going to let them set on the shelf? They will get used elsewhere so NG does not have to buy more PCs to replace others in the state-wide system.
Try it this way:
http://jlarc.virginia.gov/meetings/June09ISF/VITA Package.pdf
no good deed goes unpunished, perhaps this link will work:
http://jlarc.virginia.gov/meetings/June09ISF/VITA Package.pdf
To revnhoj
http://jlarc.virginia.gov/meetings/June09ISF/VITA Package.pdf
Has the pricing, for example, a notebook with encryption costs approximately $170/month. Yes, JLARC, the legislative ‘watch dog’, approved these obscene rates
Anon,
I don’t really know the details of who is responsible for what aspect of the programs (do you?) But certainly the state health department does, even if it’s just providing logistics.
The point is: The Health Department knows what it’s doing and what it needs. It’s not some thug from NG that should be making that decision.
Are you saying that NG should be deciding who gets vaccine and on what schedule? Not even the pharmaceutical companies have that kind of authority. Not to mention that no single pharmaceutical company has been given a monopoly on providing the vaccines.
rtdild,
Are you saying that State Health Department employees are running around from school to school, supervising the vaccinations? I thought local health departments had their own adult supervision.
Dave,
They need these computers so they can take them out to the field to schools and community centers where they administer vaccine in temporary set-ups. Yea, they could probably get by tracking everything on paper out in the field, and key everything in later, but this would create delays, be prone to error, and ultimately cost more than being able to automate the tracking and collection of data.
Yeah buddy, 400 million is sounding more like a deal with each passing day. Whether or not the PCs are necessary is NOT NG’s nor the public’s call, The technology partner should provide what the public health department needs, if the public does not like how the health department is run, tell your delegate, but let the poor schmucks do their job!!!!!!!!!!!!!!!!!!!
Won’t someone please ask why 115 computers were needed to ‘fight H1N1’? I find it hard to believe that with the computers we have today there isn’t enough memory and power to do whatever tracking is necessary with existing computers. Software may have needed downloading, but that would seem to be a more economical approach than buying hardware.
Not being privy to the specific provisions of the contract and not being an attorney, there, nonetheless, seem to me to be two courses of action that the Commonwealth must pursue.
First, vigorous litigation to enforce specific performance by Northrop-Grumman for those services they are absolutely required to provide under the contract. Northrop-Grumman apparently must be forced to live up to its contractual agreement by force of law.
Secondly, athorough investigation and selection of alternative sources of services and hardware which Northrop-Grumman is not required to provide under the existing contract. Surely the service NG Is NOT REQUIRED TO PROVIDE N THE EXISTING CONTRACT can be dekuvered faster, probably less expensively, more efficiently, and of better quality by other sources.
As one who practiced as a certified information systems security professional before retiring in 2005, it is a cause of dismay and great concert that information security services - absolutely crucial to ensure the confidentiality, availability, and integrity of sensitive information flowing through the Commonwealth’s mission-critical IT infrastructure - areconsidered “extra-cost” items outside the scope of services required under the base contract.
There can be no excuse for Mark Warner and those who approved this contract which has materially damaged the ability of the Commonwealth to conduct its business and protect its confidential data in an effective, timely, and cost-effective manner.
From all accounts Warner et al created a situation in which Northrop-Grumman effectively and absolutely controls the Commonwealth’s crucial IT infrastructure. One wonders whether if the question were properly argued in a court of law, our courts might find the contract unconscionable and unenforceable because of the degree to which it permits NG to hold the Commonwealth hostage. As a legal layman and taxpayer, I believe that should be seriously and carefully considered.
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