Operating Without a Safety Net

Florida’s new unemployment insurance system debacle costly for Deloitte, while banking systems continue their run of problems

3 min read Operating Without a Safety Net
Joe Raedle/Getty Images

IT Hiccups of the Week

It may be a new year, but the past few weeks of IT snarls, snafus and general mayhem look a lot like last year’s (or last century’s (pdf), for that matter). We start off the 2014 Risk Factor edition of IT Hiccups with yet another wrinkle in the 2013 IT horror story of the year—namely the chaotic implementation of the Affordable Care Act (ACA) website and supporting back-office systems. I didn’t think I could be surprised by any more news about how unprofessional the implementation has been, but I must admit that the Wall Street Journal story last Friday reporting that the site was operating without a back-up system in place still managed to startle me. Not to worry, though. Officials at the Centers for Medicare and Medicaid Services (CMS), which manages the website, reassured the WSJ that “redundancy is a critical part of our planning.”  In other words, they'll get around to it, eventually. Talk about living dangerously.

Also disclosed on the CMS planning “to do list” is the capability to go on line and make basic changes to health insurance coverage, like adding a new child, reporting a marriage, divorce or death, or other “change in circumstance” events. That capability was supposed to be there from the day the system went live in October, but it was postponed amid the flurry of fixes meant to provide even more basic website functionality, like not crashing. Whether the ability to change one’s insurance status will be available by mid-January, right along with other promised ACA back-office functions such as making payments to insurers for the coverage they are offering, remains to be seen. Few outside of CMS hold out much hope that deadline will be met, however; the agency is currently scrambling to get the tens of thousands of individuals who thought they had signed up for health insurance or Medicaid, but don't actually have coverage because of system issues, to sign up again.

Several states also report continued difficulties with their ACA system implementations. Oregon’s implementation is probably in the worst shape, but Maryland’s, Massachusetts', Minnesota’s, and Vermont’s aren’t that much better. The latter two states have decided to follow Oregon’s lead and withhold money from the prime contractors responsible for the botched IT implementations until the systems are fixed.  Oregon is withholding US $20 million from Oracle, while Massachusetts and Vermont are withholding some $58 million and $6 million, respectively, from CGI. CGI, you may recall, is the prime contractor for the mismanaged implementation.

Florida has also decided to withhold funds from its IT vendor, Deloitte Consulting, but in this case, for mishandling the implementation of the state’s new $63 million unemployment insurance system which was rolled out in October. Florida says that Deloitte has failed to meet its contractual obligations, which Deloitte vehemently denies. Florida officials have hit Deloitte with penalties of $15 000 a day since 23 December 2013 (which is in addition to $3 million in payments already being withheld, a separate $1.5 million penalty imposed last month, and a $4.5 million penalty imposed on Deloitte by the state in 2012). If things keep going, Deloitte will end up paying Florida for the privilege of building the unemployment system.

Finally, there were a number of banking and credit card systems that experienced a variety of problems during the holiday season, including those at Allied Irish Banks, NatWest and RBS in the UK, and PNC bank in the U.S. All apologized to their customers for the inconvenience, of course—which I doubt did much to sooth the consumers' anger when they found they couldn’t pay for their holiday purchases. Saga Continues Unabated Operating without Back-up System in Place

Making Changes to Plan Difficult

More than 100 000 Enrolled Through Need to Enroll Again

For What It's Worth: Prime Contractor Has Top Software Process Credentials

Congress to Consider Security Legislation

Florida’s New Connect Unemployment Insurance System Becomes Deloitte Debacle

Florida Fines Deloitte Over Unemployment Insurance System Mess

Deloitte Defends its Work On CONNECT Unemployment System

Florida and Deloitte Claim Alternative Realities in Unemployment System Fiasco

Florida Doubles Personnel to Handle Unemployment System Problems

Florida’s Unemployment Number Misleading Because of Unreliable System

Bank and Credit Card Systems Say Not Today

Allied Irish Banks Suffer ATM Glitch

AIB Says It Has Fixed ATM Problems

NatWest Online Banking Down Due to DOS Attack

Tesco Petrol Payment Issue Freezes NatWest and RBS Credit Cards

PNC Bank Customers Find Their Money Missing After Computer “Glitch”

UAE Bank Cards Fail to Work

Of Other Interest …

EBay Overcharges Some Buyers

Australian Myer Department Store Resolves Online Problems

Malfunctioning Issues Reported With Nest Thermostat

BNC Bankcorp Website “Glitch” Creates Problems for Rival Bank

Microsoft Promising Surface Pro 2 Firmware Fix Soon

Delta Honors Glitch Fare Pricing

Glitches Galore Delight Online UK Holiday Shoppers

Photo: Joe Raedle/Getty Images

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