Virginia's Costly IT Savings

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Six years ago, Virginia approved the centralization of information technology services for all state agencies after an audit determined that Virginia was wasting $100 million annually on IT project cost overruns and on unsuccessful efforts to get the different state departments' heterogeneous and outdated IT systems to communicate with one another. The result was the creation in late 2003 of the Virginia Information Technologies Agency (VITA) to bring IT under control as well as modernize it across the state.

According to VITA's website, "VITA provides outstanding service and technology solutions to support customers and address their business needs. Our services can be thought of as the information technology utility that supports specific agency requirements as they endeavor to deliver citizen services."

Well, an audit report released earlier this month by the Joint Legislative Audit and Review Commission showed that VITA ended the fiscal 2008 budget year with a $16.5 million overrun.

Furthermore, according to a news report, "By last year ... many state agencies and workers were harshly critical of VITA and its contracted operating partner, Northrop Grumman, for long delays in obtaining equipment and services and costs they say are higher than what they had when they managed their own information-technology systems."

"The audit commission study affirms the criticism and portrays an operation that won't realize the projected savings for years, if then. It says the partnership seriously lags in converting 85 executive branch agencies from stand-alone operations to VITA."

Among the commissions findings, the news report states, are that:

"There will be no savings to the state through the initial 10-year term of the state's $2 billion agreement with Northrop Grumman ... to provide information technology infrastructure services to state government agencies."

"The contract calls for 90 percent of the state personal computers to be replaced by March. Fewer than half of them have been replaced, the report says, despite the ... claim that the process is 83 percent complete."

"VITA has shown little willingness to ask state agencies about how they operate, their objectives and business needs."

VITA's chief information officer, Lemuel Stewart Jr., in responding to the audit report, asked for patience, and claims that the audit report actually shows that VITA has made great strides in centralizing IT across Virginia. A nice attempt at positive spin in light of the fact that the contract objectives aren't likely to be ever met.

I still haven't seen any decision about whether Texas has decided to terminate its outsourcing contract with IBM, which I blogged about in late October and early November. IBM in late November denied that it was in breach of its contract.

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