BOSTON (AP) — A state contract for a computer system to process unemployment claims provided few protections for taxpayers and little oversight of consultants, resulting in a system that arrived years late, millions of dollars over budget, and riddled with problems, according to review of contract documents.
The deal allowed contractor Deloitte Consulting to miss deadlines and still charge the state about $6 million more than planned, according to state documents obtained by The Boston Globe (http://b.globe.com/16bkvjM ) through a public records request.
When the new system went online July 1, two years behind schedule, it erroneously cut benefits to hundreds of jobless residents, and required thousands of overtime hours by state employees to handle complaints about glitches.
Joanne Goldstein, secretary of the state Executive Office of Labor and Workforce Development, acknowledged that the project went so far off track the state considered firing Deloitte. Instead, she negotiated a contract amendment that for the first time included financial penalties for the contractor: Finish the job by July 1 or pay the state $10,000 a day for every day it was late. Deloitte met the deadline.
"We decided our best option was to keep Deloitte on the project and added obligations on Deloitte to further protect the Commonwealth," Goldstein said.
Deloitte did not address the problems directly.
"This has been a complex and challenging project and that is why we have invested considerable time and resources into making sure UI Online is a quality system that meets the needs of the Commonwealth and the people it serves," Deloitte spokeswoman Courtney Flaherty said in a statement.
The modernization of the three-decade-old unemployment system has spanned two governors and three labor secretaries. Plans for the system overhaul began under Gov. Mitt Romney.
The system is processing about 120,000 claims per week and rooting out more fraud, Goldstein said. The new system has detected $6.6 million in overpayments incurred by claimants dating to 2005.
Information from: The Boston Globe, http://www.bostonglobe.com
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