Call To Probe Virginia Outsourcing Deal

Virginia's largest newspaper is calling for a public inquiry into a troubled outsourcing contract that has resulted in the firing of the state's CIO.Here's the background.

State CIO Lemuel Stewart last month criticized Northrop Grumman's performance on Virginia's ten-year, $2.3 billion outsourcing deal with the contractor. He was swiftly canned by the board that oversees Virginia's IT operations.

Stewart's duties have been assumed by Virginia Secretary of Technology Len Pomata, who has held posts at Oracle and numerous other private sector vendors.

This isn't sitting well with the Richmond Times-Dispatch's conservative editorial board, which is ordinarily pro-business.

"Stewart had raised questions regarding Northrop Grumman, the private company contracted to operate the state government's information system. If the circumstances of Stewart's departure did not necessarily flunk the smell test, then they did not necessarily pass it, either," the paper stated in an editorial last week.

The Times-Dispatch is also concerned about the lack of openness and public accountability on the project.

"The taxpayers need to know whether the terms are being fulfilled. And if certain stipulations are going undone, then the citizenry needs to know why. Perhaps there are good reasons for apparent delays. Perhaps there are no excuses," the paper said in its July 1st editorial.

Complaints about Northrop's performance include allegations that the contractor has missed several, key implementation milestones. Northrop Grumman was slated to fully takeover management of Virginia's IT operations on July 1st, but that deadline has come and gone.

Northrop Grumman officials maintain that the contract's vast scope means problems are inevitable.

"The IT infrastructure partnership is a visionary, groundbreaking concept never undertaken before. The partnership is addressing much more than IT. It is helping Virginia foster significant organizational and cultural changes within state government to improve efficiency and service delivery," a company spokesperson told me in an e-mail when I first wrote about the problems last month. That may be, but another high-profile government IT flop, even at the state level, won't help the Obama administration sell some of its own grandiose tech visions-such as the plan to digitize all of the nation's health records by 2014-to an already skeptical public.

The repercussions from this boondoggle could extend well beyond the Old Dominion State.