New Jersey Finally Cancels $118 Million Social Welfare Computer System

State’s auditor questions why incompetent mismanaged project wasn’t canned long ago

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New Jersey Finally Cancels $118 Million Social Welfare Computer System
Photo: Corbis

IT Hiccups of the Week

We end this year’s IT Hiccups of the Week series much like how we began it, with yet another expensive, incompetently managed, and ultimately out-of-control U.S. state government IT project spiraling into abject failure. This one involves the New Jersey Department of Human Services’ six-year, $118.3 million Consolidated Assistance Support System (CASS). It was supposed to modernize the management of the state’s social welfare programs, but it was CASS itself that was in dire need of assistance.

The Department of Human Services decided to announce that it had pulled the project’s plug over the Thanksgiving holiday—no doubt to try to reduce the bad publicity involved while people were enjoying their much-easier-to-swallow, non-IT turkey. A DHS spokesperson would not explain why the CASS contract was terminated; her only related comment made to a reporter was that “an analysis is in progress to determine next steps.”

Hewlett-Packard, which was the CASS project prime contractor (the contract was originally awarded to EDS in 2007; HP acquired the firm in 2008), was equally mum on the subject. However, an HP spokesperson did seem to hint strongly that any and all project problems were the fault of New Jersey’s DHS, when he stated that, “Out of respect, HP does not comment on customer relationships.”

Last week, an audit report (pdf) by Stephen Eells, New Jersey’s state auditor, showed why both DHS and HP did not want to discuss why a system touted as “New Jersey's comprehensive, cutting-edge social service information system” had turned into a debacle. According to the report, both DHS and HP botched the project nearly from its outset in August 2009. The audit report, for example, found HP’s overall technical performance “poor,” due in part to the company’s “absentee management.” HP has changed project managers on the eight-phase CASS effort three times since 2010. One of the managers the state rejected, Eells stated, because they lacked the qualifications “to manage such a large project.”

The audit report also notes that while the CASS contract cost was $118 million (it was originally $83 million), the state’s own project-related costs added up to an additional $109 million. According to a article, Eells, in testimony last week before New Jersey’s Human Services Committee, made it clear that the state botched its CASS oversight role as well. DHS senior management, he indicated, consistently ignored red flags that the project was in deep trouble, and apparently failed to bring “concerns over the contract to the Department of Treasury, which is responsible for ensuring that problems with contracts are resolved.”

Eells also ruefully noted that the state’s contract with HP didn’t “allow the state to recoup damages from the failure to complete the contracted work.” A minor oversight, one might say.

The Human Services Committee wasn’t able to find out why DHS ignored the warnings that the CASS project was in trouble or failed to report the contract troubles to the state department that really needed to know about them, either. This void in the record is because DHS Commissioner Jenifer Velez “declined to speak at the hearing, citing the ongoing talks with Hewlett-Packard,” reported.

I tend to doubt that the Commissioner will ever explain why her department’s IT managers chose to ignore the facts screaming out to them that the CASS project was on the fast track to failure, or why her department’s contract managers failed to protect state taxpayers from the cost of failure as is routiniely done. It’s not like the Commissioner is personally accountable for what happens on her watch or anything.

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