The Department of Health Services last month signed a new contract with Deloitte Consulting for more maintenance and enhancement of the information system for SeniorCare and other income maintenance programs.
According to the public inspection copy of Deloitte’s technical proposal, the new, eight-year contract (known as CARES) increases the hourly billing rate from $92 to $104 and increases the fixed facilities rate from $1,320,000 to $2,040,000 a year. When multiplied by the 300,000 billable hours that DHS estimates will be available, this contract’s total annual cost is tens of millions of dollars.
DHS could scale back this contract by hiring information technology professionals and doing much of this work in-house for less money. That’s what the Department of Workforce Development did several years ago when they took over maintenance of the portions of the CARES system which deal with the W-2 and Child Care programs.
Why is DHS preparing to spend over $30 million a year on one information system when times are so tough? It won’t create jobs for Wisconsin residents since most of Deloitte’s workforce is subcontracted from India.
Maybe when Scott Walker promised during his gubernatorial campaign that he’d create 250,000 jobs, perhaps what he really meant was those jobs would be in India, not Wisconsin.
He couldn’t find a Wisconsin Company to rip the state off?
I understand the not going to have it done in house, because we all HATE state employees… But couldn’t you get an instate contractor at the very least.
Teabaggers going nuts on Saturday!
http://www.youtube.com/watch?v=83E54QstNxM
http://www.youtube.com/watch?v=iL1KZ3hQn98
“DHS could scale back this contract by hiring information technology professionals and doing much of this work in-house for less money.”
This is a comedy piece, no?
Actually not…I know a number of Wisconsin IT professionals that are working as contractors for state agencies developing new systems and are being paid less than they made in private industry…and there are still plenty of unemployed IT workers in the state. Yes, the state could do it themselves for less money by using local contract employees. If we spent our tax dollars with local businesses using local employees…there might actually be a shred of a trickle down.
Did you just say trickle down? Batten down the hatches, be prepared to duck. 🙂
Seriously though, I think the real point to be made is that IT projects of anything other than a very small scale, with a very limited scope, are almost doomed either way. In house, state employees or contracted out projects, the bottom line is that committees almost always fail to manage those types of projects. You need a smart, experienced individual to lead them and people who can do that are in very short supply and rarely on government payrolls.
To some degree, I do disagree with forgot on this. There are certainly advantages to contracting out – especially in this day and age where benefits and long-term implications of putting someone on a full-time payroll is significant. The advantage of contracting is it’s a faucet you can turn on & off vs. fulltime workers who are a constantly running. That said, I think in a number of areas, our government has actually gone too far and there’s just too much going on. Too many contractors collecting too steady of a paycheck from the government for too long – and at a premium rate. There are most certainly places where switching over to in-house, full time government employees would be an improvement. Unfortunately, it’s not a one size fits all thing, and quality management is required. Probably wishful thinking though.
Deloitte apparently has 170K employees worldwide and 15K in India. So how does it follow, as Jill Hynum’s article claims, that “most of Deloitte’s workforce is subcontracted from India”?
Contractors are not employees…and many companies use Indian contractors rather than hire in India.
Got pinged when the last comment was made & I read a little more into it…
So let me get this straight – we have a government program to provide reduced costs for prescription drugs. (An “income maintenance program”???) And the IT costs are tens of millions of dollars a year? Seriously? Doesn’t anyone find that utterly ridiculous? Think about that for a moment. We’re not talking about the cost to pay people to administrate the program. Or the actual funds to pay for the benefits. This is just the IT costs. To write the software to keep track of things. And we’re not talking about actually writing the program – it’s been done (and God knows what cost). This tens of millions of dollars per year is only to maintain the code and add improvements. That’s really just staggering. In a nutshell, that’s a pretty good example of why I’m a cynic when it comes to the government – especially the federal government – being able to solve problems in anything resembling an efficient manner.
And though I stuck up for the practicality of doing work in-house at times to save money…in this circumstance, you can’t get a much better reason to have zero confidence in the people managing the program. What reason is there to believe they’d be any better at the even more difficult task of managing this function internally?
Public IT projects are in fact nuts…but look around at the FBI project that was cancelled after millions of $$$ expended that was being done by outside contractors…or the British tax system…ditto…and the UW payroll system from a few years back that was part in house and part vendor. IT projects are often over budget and late just because the specifications are often incomplete, are continually modified, and/or the complexity is underestimated by the group requesting the application.