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The Boston Globe

Business

Review of state IT deals sought

A legislative committee moved Wednesday to create a special commission that would investigate how state information technology contracts are awarded and managed, following a series of costly problems and delays involving computer systems used by two public agencies.

Before the state could move ahead with more than $800 million in borrowing for technology projects, the new panel would have to come up with “best practices” guidelines to help assure that IT contracts were awarded to companies that would deliver as promised.

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“On these IT projects, in some cases, they are behind by years, not months,’’ said Representative Antonio Cabral of New Bedford, chairman of the Committee on Bonding, Capital Expenditures and State Assets. And in a number of cases, he said, “the cost is beyond what it was originally estimated to be.’’

The seven-member panel would include two designees of Governor Deval Patrick.

The panel is being proposed following Globe reports on two major state-funded technology projects that went awry under the direction of the same vendor, Deloitte Consulting. The Department of Revenue fired the New York-based firm in August, midway through a project to overhaul the state’s tax system, and after paying the firm $54 million.

In addition, a new unemployment benefits system overseen by Deloitte was unveiled on July 1 — two years late, $6 million over budget, and riddled with glitches that have left thousands of people struggling to get payments.

Despite the problems, Deloitte was recently awarded a $76.8 million state contract to modernize the Registry of Motor Vehicles’ customer system.

If the borrowing measure passes, the commission would be the first in the state convened specifically to examine IT expenditures. Cabral said the bonding committee wants to make borrowing for such spending contingent upon improvements in the way the state hires and monitors technology contractors.

Departments and agencies “cannot spend any money out of those authorizations until the commission’s recommendations come back,’’ he said.

The bill is expected to go to the House Ways and Means Committee and, if approved, then go before the Senate.

The commission would be chaired by the secretary of administration and finance or his designee. In addition to the governor’s two appointees, the panel would include one representative each from the offices of the treasurer, attorney general, speaker of the House, and Senate president. Those appointments must take place by Dec. 15, according to the bill.

The proposed legislation calls for commission members to have “experience in at least one of the following areas: software and technology development, operations management, government procurement, public finance and government contract negation, and dispute resolution.’’

The commission would be charged with making best-practices recommendations by May 1, Cabral said. He said it could call for legislation or other remedies “regarding responsible and fiscally prudent standards for state information technology procurements.’’

Alex Zaroulis, a spokeswoman for the Office of Administration and Finance, said, “We are reviewing [the proposal] and welcome an open dialogue on ways to improve IT procurements.’’

The state plans to borrow $830 million to pay for technology projects that include additions or enhancements to public safety information systems and the state’s Health Insurance Exchange, as well as the replacement of the Registry of Motor Vehicle’s Automatic License & Registration System.

The governor’s five-year capital investment plan also includes $40 million in proposed borrowing to deliver broadband Internet access to underserved areas of Massachusetts. That work would be exempt from the commission’s review.

A spokesman for Deloitte declined to comment on the move to create the oversight commission. Besides its problems in Massachusetts, the consulting giant has come under scrutiny for failed and troubled projects with public agencies in California, Florida, and Pennsylvania.

In Massachusetts, the Senate Committee on Post Audit and Oversight has scheduled an Oct. 28 hearing to examine the Labor Department’s unemployment system contract and the many problems with paying benefits seen since the system was rolled out in July.

The state Revenue Department said it terminated its contract with Deloitte after test runs showed the system couldn’t print forms or calculate interest and penalties. Deloitte officials have said there was a mutual agreement to end the contract “when the project changed direction.”

Beth Healy can be reached at Beth.Healy@globe.com. Megan Woolhouse can be reached at Megan.Woolhouse@globe.com
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