Use of consultants doesn't always compute
7/29/2007COLUMBUS - It was 2001 and Ohio was unplugging the job-search system it paid a private consultant $60 million to develop because OhioWorks, well, didn't.
The same year, the director of the Ohio Department of Job and Family Services resigned amid revelations that a consultant-heavy computer project pressed forward without reprogramming a significant flaw. The decision not to fix the problem resulted in the illegal withholding of child-support funds from low-income families.
The state vowed to go on a consultant diet and to develop more in-house talent. But six years later, after the theft of a computer tape from an intern's car placed the personal information of more than a million people and businesses at risk, there are still allegations that the state sometimes turns the keys over to the outsiders.
Highly paid contractors outnumber state employees on the ongoing $158 million Ohio Administrative Knowledge System (OAKS) 167-to-119. Of the 167 contractors on the project, 117 work for Accenture, the company that was behind the failed OhioWorks.
The OAKS project manager, state employee David White, was being paid about $52 an hour when he resigned on July 20 rather than be fired. That's roughly a quarter of the $200 an hour Ohio taxpayers were paying Compuware Corp. consultant Brian Welch, who was working as his assistant. Mr. Welch's contract has been terminated.
The report from Inspector General Tom Charles in the wake of the tape theft suggested that Mr. White was too dependent on Mr. Welch and $125-per hour Compuware consultant Avadhut Kulkarni for the heavy lifting.
The warnings about the state's dependence on contractors for major computer projects weren't just six years old. Prior to Gov. Ted Strickland taking office in January, his transition team raised similar concerns while examining the Office of Information Technology.
"There are serious issues with over-reliance on vendors/contractors in long-term or mission-critical roles," reads the transition report. "[T]oo often, they become fixtures at great expense and questionable [return on investment] to the taxpayers.''
Bruce Wyngaard, operations director for the Ohio Civil Service Employees Association, said progress has been made since 2001 to develop more in-house computer talent and that the Strickland administration has been receptive to continuing that. But he said not enough of that has been done to date with OAKS, a massive centralization of payroll, purchasing, and other accounting functions from various departments and agencies.
"Presently, there's little incentive for a contractor to transfer knowledge to a state employee because he knows his contract is not going to be renewed," he said. "They're in a position to charge a premium for that work.
"Some of our IT members have been upset when a contractor comes in and performs work they could be performing, but at a much higher rate," he said. "When the contract's done, our members have to go back and fix it on the state's nickel, and these are their tax dollars as well."
Mr. Strickland's information technology director, Steve Edmonson, on the job since February, said the state will continue striving to transfer knowledge from higher-paid consultants to the state employees charged with running a major computer system such as OAKS after it has been developed.
"The dilemma is that when you bring in a new system, you need special expertise that doesn't exist within state government," he said. "It takes time to bring state employees up to speed to take responsibility We pay twice as much for a consultant than a state employee. We're hoping to remedy that."
He said the contract for Accenture, the prime consultant for OAKS, calls for a transfer of knowledge to state employees. He said the current ratio of consultants to state employees, 167-to-119, is at its peak and will drop now that the biggest OAKS tasks are behind it.
Tom Hayes, who was brought in by Gov. Bob Taft to right the Job and Family Services ship in 2001, noted that the IT staff he inherited boasted some 900 people, 600 or so of whom were consultants. "We terminated some 100 to 200 contractors, hired employees to replace them, and saved tens of millions of dollars," he said.
Despite predictions that government couldn't compete with the private sector to hire higher-skilled employees or to keep those whose new skills make them more attractive to consulting companies, Mr. Hayes said it wasn't difficult to fill the positions.
"It was relatively easy," he said. "As we terminated contractors, some of those were hired as state employees. We were in a situation where [the Worldcom collapse] had just happened, and there was a significant amount of available IT staff. We hit the market right.''
Still, both Mr. Hayes, now an advocacy consultant for nonprofits, and Mr. Edmonson said state government will always experience a surge in consultants whenever it tackles major new computer projects. Job and Family Services just approved a $101 million contract with Texas-based EDS to develop a massive computer system for Medicaid, the largest chunk of Ohio's budget.
Contact Jim Provance at:
jprovance@theblade.com
or 614-221-0496.