Virginia Restructures Troubled Outsourcing Deal - InformationWeek
Government // Open Government
02:26 PM
Connect Directly

Virginia Restructures Troubled Outsourcing Deal

The move is the latest in a busy three weeks for the state, which has also seen the firing and hiring of CIOs and a reorganization of the state IT department.

Virginia has restructured a troubled $2.3 billion IT outsourcing contract with Northrop Grumman, Virginia Governor Bob McDonnell announced this week, only two weeks after reorganizing the state's IT department and switching CIOs.

Despite major contract woes -- including repeatedly missed deadlines and failing to create even a fraction of the jobs expected -- Northrop Grumman will be getting an added $152 million for additional hardware and services over the next nine years, though the state said the re-worked contract would cost significantly less than backing out and finding a new vendor.

Contract negotiations had been underway since before McDonnell took office earlier this year, and McDonnell's office was quick to point out in a press release that Northrop would have gotten even more additional money under a plan by predecessor Tim Kaine.

In terms of improving performance, the new contract increases penalties by 15% if Northrop Grumman doesn't meet certain performance standards, put new performance measurements into place, redesign the work order process, and create improved incident response and dispute resolution processes.

"Through this renegotiation we have implemented a number of new features that will make the system work more smoothly," McDonnell said in a statement. "We will demand a much better managed [Virginia Information Technologies Agency] and a much more responsive Northrop Grumman."

The revised contract includes some additional services as well, including new cybersecurity work, upgraded disaster recovery services, and revised help desk services and processes. Additionally, under the new contract, Virginia will begin "long delayed" upgrades to desktop operating systems, Microsoft Office, and Microsoft Exchange Server later this year.

The restructured contracts cap a series of sweeping changes made to Virginia's IT department over the last few weeks. Since mid-March, McDonnell signed a new law that reorganized and reallocated IT leadership power in the state, removed the state's previous CIO, and hired a new one.

On March 15, McDonnell signed a new law that gives the state's secretary of technology a number of new powers, made the state's CIO directly accountable to the governor, and disbanded a formerly powerful independent oversight board.

Then, on March 24, McDonnell used his powers to remove CIO George Coulter, who had only led the state's IT department since late August 2009, after former CIO Lem Stewart was controversially fired last May. To replace Coulter, McDonnell hired Sam Nixon, a Republican state delegate and IT consultant for Richmond-based consulting firm CapTech Ventures. Nixon has had a long career in IT and politics and has helped push a number of IT-related reforms through the state legislature.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of November 6, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll