US state failed to resolve 'major issues' with IT suppliers

An auditor has accused the US state of Virginia of failing to keep a close eye on IT vendors as it adopts a multi-supplier model.

The state legislature’s Joint Legislative Audit and Review Commission accused Virginia Information Technologies Agency (VITA) of not holding suppliers to the requirements of their contracts closely enough.

In December 2018, Virginia settled a long-running legal dispute with Northrop Grumman, which had been its solitary IT contractor for 13 years, by paying the contractor $35.8m to end its contract 10 months early.

The new multi-supplier model replacing the old contract was set up six months late, according to the commission’s report. It also accused VITA of understaffing its contract management function.

“VITA staff did not begin tracking whether suppliers had completed many contract deliverables until eight months after the contracts started,” said the report. “As of August 2019, VITA was still not formally tracking whether suppliers were completing hundreds of additional contract requirements related to the provision of services.”

According to the report, VITA has failed to resolve “major issues” with suppliers quickly enough.

“As a result, multiple agencies have experienced prolonged problems with key VITA services – such as phone, internet and email – that have hindered their operations,” the report said. “VITA suppliers also have not resolved billing disputes or agency requests for new IT services in a timely manner.”

The audit recommended that the state legislature conduct a comprehensive review of VITA’s organisational structure to determine whether it is equipped to manage the multi-supplier model.

It also suggested the agency should fine-tune its procurement procedures to ensure that suppliers are properly evaluated, and should use a comprehensive tracking tool to monitor contract requirements. This would automatically collect penalties from vendors who failed to adhere to contracts.

Virginia chief information officer, Nelson Moe, told StateScoop the new model would save money.

He believed the outcome of the report is largely due to the investigation being carried out before the multi-supplier model was fully implemented by the state.

Moe said the report failed to reflect some of the challenges the state faced in developing the project so quickly following the dispute with Northrop Grumman.

“What we have to keep in mind is that in this long-term view we had a supplier that was not interested at all in helping the commonwealth,” Moe said. “We planned on doing this over three years – nice and sequenced – but we didn’t have that luxury.”

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