The VITA experiment
- August 31, 2009
Sometimes experiments go awry. That’s certainly the case with Virginia’s efforts to turn over the day-to-day running of the state’s computer systems to an outside vendor. In fact, Virginia’s pact with defense giant Northrop Grumman has assumed Frankensteinian proportions.
Instead of an updated system that delivers prompt service at a savings, what has the 10-year, $2.3 billion contract produced so far? Missed deadlines, poor service and $9,000 laptops. Complaints have been so numerous that three legislative inquiries are underway.
As they probe and ponder on how to fix the mess, there’s a larger question: what does the experiment portend for the future of public/private partnerships in Virginia?
During an economic downturn when states are reeling from reduced revenues, the idea of doing major public projects with a private partner is appealing. Virginia has three bids pending now from outside companies to run the ports. Yet as the deal with the Virginia Information Technologies Agency (VITA) shows, private companies may not necessarily do a better job when it comes to running government services.
Brokered three years ago, the VITA contract was billed as the largest public/private partnership in the country. It began with a laudatory goal: the implementation of a statewide, integrated data and voice network as opposed to a hodgepodge of separate IT systems for Virginia’s many agencies. At the time, other states were jealous. They wanted to know how Virginia talked a private company into paying millions upfront in capital investment for facilities, equipment and personnel to replace an outdated computer network.
Arguably some good has come out of it. Northrop Grumman built a $23 million data center in job-hungry Southwest Virginia. Today, workers in Lebanon provide help and disaster recovery for some of the state’s IT systems. It also built a $35 million new primary data center in Chesterfield County.
At this venture, though, the deal seems more a monster than a model. Serious questions of contractual performance prevail, and one career has been derailed. Lemuel Stewart was fired as VITA’s director after he questioned a multimillion dollar invoice from Northrop Grumman and wanted to dock its monthly payments because of poor service.
Meanwhile, Northrop Grumman has questioned the state’s governance of the contract. Currently, Virginia’s Chief Information Officer, a position now held by George F. Coulter, is the company’s contact person. The CIO is selected by the Information Technology Investment Board, whose members are appointed by the governor and the legislature. The arrangement adds complexity and contributes to service delays and miscommunication, one Northrop Grumman vice president said in a recent newspaper column.
Hopefully, the two sides will be able to work out the kinks. If not, public-private partnerships will probably look different in the future. Private companies may be more reluctant to step forward, and states may insist on more controls before putting tax dollars at risk.