Alabama paid company that botched ObamaCare website $47M for malfunctioning software
MONTGOMERY, Ala. — The State of Alabama chose the same company who oversaw the rollout of HealthCare.gov to upgrade the state’s financial management software, and is now experiencing similar results.
The State of Alabama Accounting and Resource System, STAARS, had not been updated for roughly a quarter century, prompting state government leaders in 2013 to pursue a new, highly automated system that they believed would make doing business with state government more efficient. At a cost of $47 million, the state hired to implement the upgrades a Canadian company called CGI Group, one of the largest information technology and business process services companies in the world.
The governor’s office explains:
Prior to the STAARS overhaul, Alabama’s mostly manual financial payment system dated back to 1990. There was little coordination across state agencies with the paper-based system. The 25-year old system was increasingly inefficient and therefore costly for state taxpayers. For instance, payments to state vendors took up to eleven days and required several signatures before payments could be made for goods and services provided to state government. One vendor could be listed over a dozen different ways in the cumbersome, predominately manual system, and each state agency operated its own independent configuration. The manual system, which predated the advent of the modern internet, increasingly created customer service deficiencies for the State of Alabama, both to taxpayers and to vendors operating within and outside the state.
The current system is operated under a state contract with CGI, a global company with locations in Troy, Huntsville and Birmingham and employing over 700 people in Alabama. CGI has more than 37 years of enterprise resource planning system (ERP) software and service delivery for federal, state and local governments, and has implemented more than 400 government ERP systems. CGI has successfully delivered hundreds of government ERP systems that today manage $700 billion in disbursements and serves more than 93 million citizens nationwide.
Unfortunately for state vendors, the promises of a more streamlined payment system have not yet been realized. Instead, the system’s rollout has experienced glitches that have kept many vendors from getting paid in a timely manner, if at all.
The exasperated director of the Alabama Road Builders Association told the Montgomery Advertiser that some of his clients have struggled to get by without receiving payments for months.
“One of my members said, ‘I’ve begged, borrowed and stolen everything I can. I really have to get paid now,'” he recalled.
The State Finance Department has brought in additional staff to try to work through the backlog of bills, but the software glitches have become such an issue for the state that they are bringing back memories of the companies disastrous rollout of HealthCare.gov.
The HealthCare.gov website — the online portal for consumers to access ObamaCare — was launched on October 1, 2013, but by some estimates only 1% of individuals seeking health insurance through the site were able to signup. According to CNN, “maddeningly long wait times” continued to be an issue weeks later, and all of the issues were not resolved for months. Accenture was hired to replace CGI as the site’s lead contractor in January of 2014.
In spite of that very public failure for CGI, the company continued being granted government contracts. Alabama’s twenty largest state agencies are now using the company’s software, and State Finance Director says the problems are being fixed and the backlogs are getting smaller.
“We knew all along when we made the conversion (to the new system) it would take up to maybe 90 days to get everything working perfectly,” he told al.com.
Newton added in a separate statement that “when the State completes the implementation of this software upgrade, all users of the system will recognize the significant benefits.”
Payments are being made to vendors. Open Alabama is back up and the implementation process is on schedule. https://t.co/v1pmP8EMug
— Gov. Robert Bentley (@GovernorBentley) December 19, 2015