IT Hiccups of the Week: California’s Unemployment System Upgrade Saga Continues

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Last week was a good week for IT project spotters to add to their snafu collection. We review our collection’s additions this week with a system snafu in California that just keeps chugging along with no real end in sight.

California’s Unemployment Insurance Upgrade Problems Rumble On

California’s Employment Development Department (EDD) put out a press release last Friday that tried to put another heavy layer of lipstick on its modernized unemployment insurance system’s pig. The EDD stated that it is “wrapping up work on new upgrades to our 30-year-old payment processing system” and that one month after the upgrade went live, it has reached the milestone of processing “about 83% of all certifications from all claimants within the week in which the certification was received.” Of course, 17 percent out of 800 000 who are on unemployment in California is still a pretty big number.

Also, notice the use of the word "about" used in the press release. As I noted earlier this month, EDD has had repeated trouble figuring out how many unemployment claims it has failed to process correctly. The number has grown steadily; first it was only 5000, then it grew to 20 000, then 50 000, and finally, at least 185 000. What also is unclear from the EDD press release is what it means by “claims processing.” Because of problems with the system upgrade, EDD personnel have been working lots of overtime to process unemployment claims by hand. It would helpful if EDD would break out its “about 83%” figure into those performed correctly by the new upgraded system, and those it still has to process by hand.

At one point early last week, some 124 000 Californians had yet to receive their unemployment checks—many many of whom who had been waiting since early September. Now that number has been whittled down to about 40 000. However, a big reason for that drop was Gov. Jerry Brown ordering the EDD last week “to start issuing the delayed checks immediately and verify the recipient’s eligibility afterwards.” EDD says it “hopes” to send out more checks later today.

Somehow I doubt the cost (or time) of verifying eligibility after the fact was budgeted into the upgraded system’s original project budget, although it probably should have been. Why? Glad you asked.

First, state unemployment insurance upgrade projects don’t have a good development track record: just ask Colorado or Pennsylvania, both of which canceled their projects after not being able to get them to work even after massive cost overruns.

Second, even when the systems go live, they aren’t very reliable, as Nevada and Massachusetts unemployed residents have found out over the past few weeks. Unemployment insurance officials always admit that they expected problems, but they are inevitably surprised that there are many, many more of them than they expected. For instance, an EDD spokeswoman told the LA Times that the department expected some “hiccups” with the system upgrade, “but we didn't know it'd be to this magnitude.”

Third, even when a system’s performance is admittedly “unacceptable” as California’s Secretary of Labor and Workforce Development Marty Morgenstern stated last week, it doesn’t prevent other government officials in the same department from claiming that problems are really not that bad. They only appear bad, they say. In Massachusetts, for example, Labor Department Secretary Joanne Goldstein insisted last week that the state’s new $46 million unemployment insurance system was operating with minimal problems even as a flood of complaints about the system came out after its rollout three months ago, the Boston Globe reported. The state had to negotiate a contract warranty extension with Deloitte Consulting, the prime contractor, a move made necessary in order to fix those supposedly minimal problems.

Finally, government IT program managers like to live dangerously. For instance, EDD gave the contract for its unemployment system to Deloitte “despite a string of problem projects” across California state and local governments that littered the company's track record, the LA Times reported late last year. These included: a project canceled after four years by California’s Department of Developmental Services after it figured out the system it paid $5.7 million to Deloitte to develop didn’t work; a project to link California's court system computers, originally slated to cost $33 million, but canceled because it couldn’t be made to work even after Deloitte pocketed $330 million; a botched payroll system Deloitte developed for the L.A. Unified School System; and a Deloitte-led, botched ERP system development for Marin County, California, among others. California government IT has been very, very good to Deloitte's bottom line.

Massachusetts admitted a few weeks ago that its original contract with Deloitte to modernize the state's unemployment system was “flawed” and allowed Deloitte  “to miss deadlines and still charge the state some $6 million more than originally planned,” the Boston Globe reported earlier in the month. Suzanne Bump, the Labor Department Secretary in charge of the contract at the time—who is currently State Auditor—told the Globe she has “no recollection of what was in that contract language.”

It is always amazing how selective amnesia seems to strike government officials whenever they are asked to explain their unexplainable decisions.

Jeep’s Transmission Problem Fixed

Usually, U.S. auto manufacturers work overtime to ship new model year vehicles to their dealers in August in order to take advantage of the big September Labor Day sales weekend. This typically means a ramp up in production during the summer months at the automobile production plants. So it was a surprise when early last week, Chrysler announced that it was temporarily laying off the several hundred workers it added just in mid-August at its Toledo Assembly Complex where its new and highly anticipated 2014 Jeep Cherokee was being produced. Chrysler told Automotive News that it had produced a “critical number” of vehicles, and it didn’t want to place too much of a strain on its logistic partners by shipping them out.

Chrysler’s explanation didn’t make any sense to many observers because Chrysler had been insisting that it would be selling the Cherokees in volume by now. Automotive News did a check and found that “no Cherokees were listed in dealer stocks anywhere in the United States.” The only thing that Chrysler did say to add clarity to its nonsensical statement was that the Cherokees required a “software fix” before the vehicles would be sent to its dealers.

Well, on Thursday, the head scratching ended when Chrysler reversed course and announced that it would soon begin delivering the new Jeep Cherokees to dealers after all. The Wall Street Journal reported that Chrysler had been having “problems tuning [the new vehicle's] nine-speed transmission” which caused the car not to shift as smoothly as expected at different speeds and temperatures.

The Journal reported that earlier this summer, “Chrysler delayed test drives for the media on the Cherokee because it was having trouble working out all the bugs in mating the new nine-speed transmission to the vehicle's engines.” According to Chrysler, the 2014 Cherokee has “the world's first application of a highly technical nine-speed transmission” and with it being “mated to two new engines and three complex 4x4 systems,” it wasn’t surprising that technical issues arose.

The company is updating the Cherokee’s powertrain software, and hopes that dealers will be able to sell the new Cherokees very soon. Those with a long memory may remember that there was a flaw in the transmission software for Chrysler’s new 2008 Jeep Grand Cherokees and Commander SUVs that caused engine stalling. The vehicles were subject to an embarrassing recall in May 2008, something that Chrysler wants to avoid this time around.

Obamacare Public Health Exchanges Cross Their Fingers

Well, tomorrow is when Americans can start to sign up for the public health exchanges being created under the U.S. Patient Protection and Affordable Care Act (pdf). As I have noted previously, a number of states are warning that problems may await those signing up. The list got a little longer last week, when the District of Columbia announced that computer issues have caused its exchange’s opening to be delayed for an unspecified amount of time.

A story today at the New York Times provides a good overview of the situation at several state exchanges, which, in a word, can be described as “tense.” Another word that could be applied is “uncertain.” For instance, Rocky King, the executive director of Oregon’s new health insurance exchange, which has delayed the full operations of its exchange to engage in more testing, told the Times that even when the exchange goes live with limited functionality tomorrow, “We could crash and burn and have to close it down.”

No one really will know until tomorrow how many of the exchanges are ready for prime time. We’ll report on the good, bad and ugly in next week’s IT Hiccups review.

Of Other Interest ...

New York City Targets Risky Taxi Drivers after Computer Glitch

Heathrow Passengers Stranded by Baggage Glitch

Apple Maps Glitch Sends Drivers onto Alaskan Airport Runway

Google Gmail Glitch Hits Millions

Wendy's Restaurant Glitch Charges Customers Multiple Times

UK Nationwide Bank Shows Customer Accounts as Bring Empty

Orbital’s Cygnus Docks With ISS After Software Fixed

Photo: Photo: Rich Pedroncelli/AP Photo

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