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Northrop Months Late On Virginia Outsourcing

Contractor submits "corrective action plan" to state IT officials in bid to get deal back on track.

Northrop Grumman acknowledged Monday that it is at least nine months behind schedule on a plan to revamp the state of Virginia's information technology systems under a ten-year, $1.9 billion outsourcing deal inked in 2005.

The contractor was slated to complete the transition this past June, but now concedes its mandate to move Virginia's governmental agencies to state-of-the-art hardware and software won't be complete until at least March of 2010. Northrop's admission was part of a "corrective action plan" it submitted to the Virginia Information Technologies Agency, which coordinates statewide IT operations and contracts.

"We have used our now considerable experience from our interaction with VITA and with state agencies to create what we believe are vastly improved schedules and processes under this plan," said Tom Shelman, VP and general manager for the Civil Systems Division at Northrop Grumman Information Systems.

"We are looking forward to VITA's suggestions so that we can come to agreement on the best approach for this final push in modernizing the IT infrastructure," said Shelman, in a statement.

Controversies surrounding the contract have resulted in at least one high-profile casualty.

VITA's overseers fired state CIO Lemuel Stewart in June after he criticized Northrop's performance and raised questions about possible overbilling. Stewart's duties were temporarily assumed by Virginia Secretary of Technology Len Pomata, who held posts at Oracle and numerous other private sector vendors. Virginia's CIO position now belongs to former Solera Holdings tech chief George Coulter.

The deal's problems could impact Virginia's November gubernatorial contest.

Democratic candidate R. Creigh Deeds told the Associated Press last week that he plans to shake up VITA if he's elected. "I'm as concerned as anybody else about paying $8,000 or $9,000 for laptop computers or waiting days or weeks for technical support," Deeds told the AP.

Among other things, Deeds would have VITA report directly to the governor, rather than to the semi-autonomous Virginia Information Technology Investment Board. VITIB is currently chaired by former Siebel and Unisys executive James McGuirk.

Under its corrective action plan, Northrop pledged to communicate more effectively with VITA and state agencies on implementation dates, improve the incident escalation process, and allow individual agencies to sign off on scheduling matters.

"We will review it thoroughly and work with Northrop Grumman to refine it and put it into action," said Coulter, in a statement.

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