Lawmakers say government IT projects need to be smaller

Posted February 6, 2014

— State lawmakers received a postmortem Thursday on a failed effort to build a new tax-processing system – the latest government IT project to run into trouble – and said there has to be a better way to manage such projects.

The state Department of Revenue split with software firm CGI last month after five years of trying to build the TIMS system. Although the system can process some tax returns, it hasn't been able to handle individual income taxes, corporate income taxes or sales taxes, which combine to account for 89 percent of the state's tax revenue.

Total spending on the contract has topped $90 million.

"Let me get this straight," Rep. Dean Arp, R-Union, said during a meeting of the Joint Legislative Oversight Committee on Information Technology, "almost 90 percent of the budget was spent on this project, and we received nothing for it?"

Jeff Epstein, chief operating officer of the Department of Revenue, said the system has brought in some money – state officials have applauded it for finding $320 million in unpaid taxes – but officials finally decided they couldn't keep waiting on CGI to finish it.

"Our decision was how much longer are we going to go on with this, and when it does get done, is it going to do what we really need it to do?" Epstein told lawmakers.

CGI is the same company responsible for the defect-riddled rollout of the federal HealthCare.gov website used to enroll people for health coverage under the Affordable Care Act.

"When it comes down really to it, we've been defrauded in this state by a software company," said Sen. Ralph Hise, R-Madison.

Epstein said the problem is that the contract was written to favor the company, not the state. Rep. Joe Tolson, D-Edgecombe, said that has been a problem for years across state government.

"I don't know when we're going to learn how to go out and get the experts that can come in, tell us what we need to do and plan it," Tolson said.

Committee Chairman Rep. Jason Saine said it's time to rethink big IT projects, breaking them into smaller pieces with more accountability and more safeguards.

"Things are going to go wrong. That's just the nature of software," said Saine, R-Lincoln. "Whether you're Bank of America or Wachovia or any large organization, things happen, but we've got to better at how we react to that."

The committee also heard a report about the network outage that shut down NCTracks, the state's Medicaid billing system, for more than a day this week. Officials said Computer Sciences Corp., the contractor on that system, will be fined for the hours the system was down.


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  • Old-Guy Feb 8, 2014

    I have 50 yr IT experience. I agree with the decision to contract smaller projects. Contracts should be better conceived, and project should include miletstone checkpoints.

  • thomasew52 Feb 7, 2014

    "I don't know when we're going to learn how to go out and get the experts that can come in, tell us what we need to do and plan it," Tolson said.

    The state shouldnt have to depend on contractors to come and tell us what we should do. NC dept people should know what needs to be done, and dictate to the contractors the specs. They have the tail wagging the dog so to speak. Problem is NC dept heads do not know what should be, and needs to be done to begin with. They are looking for someone to come, wave the magic sand, and all is well. This type of solution is unrealistic, and impossible to find.

  • HeadsUp Feb 7, 2014

    Is it fraud for a legislator to sell a $2M state prison to his local community college for $1?

  • HeadsUp Feb 7, 2014

    Pat and Idunna never should have launched NC Tracks. They should have delayed it until it was ready, or pulled the plug and started over with a different vendor and a much better system.

  • westernwake1 Feb 7, 2014

    Finally a statement from lawmakers that makes common sense.

    There is also the need to start excluding large consulting from state IT contracts who have failed to deliver previous projects. The state should select smaller, more agile firms to get the IT projects completed successfully.

  • LuvLivingInCary Feb 7, 2014

    NO!! They need to fire the State's CIO and get qualified companies to bid. Notice IBM, HP, Sas have all not won any big contracts in past years. IBM will come to the bidder's conference and decide to not even submit a bid. HP gave the best solution for NC Tracks but the contract was awarded to the cheapest contractor. Look now at that cost.