California Cancels $208 Million IT Overhaul Halfway Through

g01d4 writes "According to the LA Times, 'California's computer problems, which have already cost taxpayers hundreds of millions of dollars, have mounted as state officials cut short work on a $208-million DMV technology overhaul that is only half done. The state has spent $135 million total on the overhaul so far. The state's contractor, HP Enterprise Services, has received nearly $50 million of the money spent on the project. Botello said the company will not receive the remaining $26 million in its contract. ... Last week, the controller's office fired the contractor responsible for a $371-million upgrade to the state's payroll system, citing a trial run filled with mishaps. More than $254 million has already been spent.' It's hard not to feel like the Tokyo man in the street watching the latest round of Godzilla the state vs. Rodan the big contractor."

Comments

Would like to see this happen more

[fermion]

If contractors knew that they projects would be cancelled, and maybe even be sued for breech of contract, we may not be wasting money like we are. In my state I see roads being built, software being delivered, all the time on budget and on time. it may not be the best but it is adequate. But it seems to be ok to spec the project inadequately, provide minimal funding knowing that more can be asked for later, just to con the tax payers into accepting a worthless or expensive project.

We see this all the time in the military. A low estimate is given on a minimally speced out project. Then as the project money is spent, the agencies go back to the congress and ask for more money, saying we already spent this money, and it won' really work the way we need it to. Instead of firing the con artists, and suing the contractors, and accepting the money as lost, we fund it more thus encouraging the fraudulent behavior.

Somethings wrong with this

[Anonymous Coward]

"The contract was awarded in 2007 to the Texas-based Electronic Data Systems. The company was later bought by Hewlett-Packard and renamed HP Enterprise Services. Hewlett-Packard is now run by Meg Whitman, who during her failed campaign for governor in 2010 promised to save California money with better computer technology."

I smell something going on here. I'm thinking this may have been a bit too convenient.

Re:Fallacy of Sunk Costs

[St.Creed]

Last year a well known IT architect wrote an article titled "The Failure bonus" where he describes how the system for government IT contracts is set up in such a way that failure is rewarded richly, but performing better than specs will lead to unemployment at a rapid pace. It's not that big IT consultants are incompetent, it is that they are very competent at following the money.

That said: big projects are inherently impossible to complete and everyone in IT knows it. Government knows it too, big projects should be cut down to manageable size or abandoned. Putting out contracts on a "cash on delivery" basis would probably make that a much more viable option for small firms.

Re:Typical of the Federal Government too

[RocketRabbit]

I think you've been reading too much fiction. The discovery and due diligence processes are there for the benefit of the customer, in order to make it appear that you know what you're doing with their project, even when their project is a mess - which is most of the time.

If you tell the customer that they are clueless, you probably lost the contract. So, you have to pussyfoot around and figure out how you can make any progress at all, despite the fact that your management, and their management are both fighting you every step of the way.

You probably believe in the ghost called Minority Shareholder Lawsuits too.