Is privatization of public services always bad?
Certainly not … Over the past three decades, most of Connecticut’s health and human service programs were successfully shifted to community based non-profit providers. (The very social service agencies that are now being targeted for some of the deepest, most devastating but cuts in Governor Malloy and Lt. Governor’s new proposed state budget.]
But while the rush to hire expensive out-of-state consultants or privatize government services often produces a product that is more expensive and ridden with incompetence, waste and even fraud, Malloy and his administration have spent untold millions of dollars on just these types of efforts and contracts, often with disastrous results.
The problems associated with the Connecticut Department of Motor Vehicles effort to upgrade their computer system is but one such example.
IMPORTANT NOTE: In their new proposed state budget, Malloy and Wyman are now proposing to privatize additional services at the Department of Motor Vehicles and planning to end the requirement that motorists are up to date on paying their local car tax in order to register a vehicle. Malloy’s plan would leave Connecticut’s 169 towns twisting in the wind, left on their own to try and collect the property taxes that are due.
See: Democrats Malloy and Wyman stab state employees in the back – again – and again. (Wait, What?), Malloy Proposes Bill To Outsource Some DMV Services (CT Newsjunkie); Malloy: Speed DMV lines by shedding ‘collection agency’ role (CT Mirror) and Malloy Calls For DMV Legislation To Cut Wait Times (Hartford Courant)
It is almost as if the Malloy administration is dedicated to forcing cities and towns to raise their property taxes, while purposely refusing to look around and learn from the experiences of others.
Kansas’ problems with the same contractor that Connecticut used to upgrade the DMV computer system.
In June 2013, the Topeka Capitol Journal highlighted the significant and growing problems associated with Kansas’s decision to turn to the 3M Company to upgrade that state’s Department of Motor Vehicle Computer System. In an article entitled, State won’t pay 3M contract until system is fully implemented, the paper reported;
The Minnesota-based company responsible for the state’s new motor vehicle system won’t receive the remaining balance on its contract until the whole system is active and bug-free.
The driver’s license system was supposed to launch in October 2012, but after the motor vehicle phase caused several issues at multiple counties throughout the state, the KDOR decided to delay its implementation.
By 2012, the problems with the 3M contract in Kansas had led to the call for a legislative audit that, in turn, revealed significant “flaws in Kansas’ motor vehicle driver’s license overhaul.”
But as noted, asking Connecticut State Government, or at least the Malloy administration, to learn from the lessons of others is apparently too much to ask.
The Waterbury Republican-American’s Paul Hughes reported on the DMV situation in September 2015, DMV computer mess assessed – Poor planning cost time and an extra $1.9M, explaining;
“Inadequate planning not only increased the cost of modernizing the computer system for the Department of Motor Vehicles, but also delayed completion of the project, according to a new report.
The rollout of the upgraded computer system snarled business at DMV offices across the state last month after they reopened following a weeklong shutdown, leading to long lines, high levels of frustration and lots of coverage from the state’s news media.
In a report released Thursday, the legislature’s Auditors of Public Accountants said it appears that a lack of proper initial planning by the DMV and project manager 3M Corp. resulted in $1.9 million additional costs and delays.
The DMV agreed with the finding, saying agency officials will reassess the need for professional management services when undertaking major information technology-related projects going forward.
The report noted several shortcomings on the part of DMV and 3M Corp. regarding the computer system upgrade that cost $26 million.
A lack of adequate planning resulted in certain business requirements not being included in the department’s request for proposals form interested vendors.
The scope of the project had to be modified many times because of the improper review of the contract.
3M Corp. had changed project managers 12 times.
DMV’s own auditing unit was not involved in the project planning.
In another blistering investigative piece, the Hartford Courant’s Jon Lender examined the Malloy administration’s actions leading up to and through the DMV disaster. On January 26, 2016, Lender’s story, Heated Words Inside The Crisis That Led To DMV Commissioner’s Resignation, reported;
Ayala, by the way, has not been heard from publicly since he submitted his resignation to the office of Gov. Dannel P. Malloy Tuesday night and then held a brief, emotional meeting to announce his decision to his top departmental managers at DMV headquarters in Wethersfield.
Word of Ayala’s resignation emerged this past Wednesday, two days after The Courant submitted an FOI request and questions on a subject that might have become the latest political headache for him and the Malloy administration: DMV’s hiring in November of an Ayala associate from Bridgeport — who pleaded guilty in 2006 of felony drug charges in Superior Court and served time in prison — as a $36,000-a-year office assistant in the commissioner’s office.
The aide, Carlos Cosme, 39, worked for two years as a $40,000 staff member of the state Democratic Senate Caucus, starting in January 2013, then switched to DMV while Ayala was in charge.
Cosme initially was sentenced to 11 years in prison in 2006 on charges of possession of drugs with intent to sell, but that term was reduced and he was released in 2009 to supervised parole that ended in 2011, records show. Cosme was not available for comment.
Personnel records obtained late in the week show that Cosme was hired at DMV on Nov. 13, although state comptroller’s records initially said it was early in 2015, and that he was rated as one of two top applicants by a three-member department panel that included Mildred Torres-Ferguson, the former top aide to the state Democratic speaker of the House who is now executive assistant in the DMV commissioner’s office.
The November hiring was Cosme’s second try at employment in the DMV commissioner’s office; it turns out that Ayala had attempted to hire him at DMV in January 2015 on his way in as commissioner, a top state official said.
Andres Ayala Jr. resigned as head of the troubled Connecticut DMV in the wake of a disastrous role out of a new computer system. The computer software, meant to streamline DMV services, resulted in massive wait times, erroneously suspended registrations and a number of angry complaints beginning in August 2015.
While Ayala appeared to shoulder the blame, his tenure and the continued problems came at the end of a process that began in 2009.
The errors in the software turnover have continued into 2016, with many vehicles missing from town tax rolls. West Hartford Assessor Joseph Dakers told the Hartford Courant that the missing property amounted to $7.6 million just for his town and it would take a long time for towns to sort through the missing data.
The DMV intended the Connecticut Integrated Vehicle and Licensing System Modernization Project, called CIVLS, to update its computer system. The goal was to allow more online integration so that drivers could register their vehicles, pay fines or fees and order license plates through a website rather than standing in line.
DMV awarded the contract to oversee the update to Science Applications International Corporation. SAIC then sub-contracted with the 3M corporation to use its software. SAIC and DMV purchased 3M’s software in March of 2010 under then DMV Commissioner Robert Ward. Over the next four years, the new commissioner, Melody Currey, oversaw the installation.
“It’s always referred to as the 3M contract, but really SAIC was the contractor,” said Currey, now Department of Administrative Services commissioner.
The contract with SAIC, with a value of up to $30 million, included just under $22 million for the 3M software, $4.9 million for “additional deliverables,” and up to $3.5 million for optional maintenance over eight years.
Installation of the new system was scheduled to take place over four phases, beginning with “Release 1” or R1. R1 dealt with back office financials and infrastructure, and took place out of the public eye. Currey described the launch of R1 as “very successful” and “a positive story.”
Following R1 in 2011, SAIC transferred leadership of the project to 3M to implement the R2 phase of licensing and registration. According to Ward, there were concerns within the DMV that SAIC was not devoting enough resources to the project and state officials pressured SAIC to turn over management of the project to 3M.
SAIC still maintained responsibility for the project, according a September 2011 memo from the company. “SAIC, however, acknowledges that it will remain primarily responsible for the completion of the terms and conditions of the Agreement. Any enforcement of the terms and conditions of the Agreement will be made in accordance with the terms of the agreement with SAIC which remains fully responsible for the performance of its subcontractors and the completion of the project.”
The problems began for Connecticut drivers during the R2 phase of the software upgrade. Similar to the issues facing towns now, records for hundreds of divers that should have been transferred were lost in the old system. The DMV had to assign a special team to retrieve the information. Glitches in the system itself extended wait times from half an hour before the upgrade to three hours following the rollout. Several months after the upgrade, drivers were still reporting that the DMV had erroneously suspended registrations, which led to tickets for the “violation.”
When a 2012 audit of the DMV found that the upgrade was facing serious problems with implementation, one of the names signed at the bottom of the report was former DMV Commissioner Ward’s. When he left DMV, Ward became one of Connecticut’s two auditors of public accounts.
The audit notes that 3M had changed project managers twelve times since work had begun. It also raised concerns about improper management. “It appears that inadequate planning of the project not only increased the cost, but also resulted in delaying the completion of the project. Many existing issues with the current antiquated system that should be resolved with CIVLS may remain unsolved for years.”
The audit recommended improvements. “The Department of Motor Vehicles should consider proper planning by using professional project management services for major projects such as CIVLS, so there is adequate planning in order to avoid additional costs and issues in carrying out the project.” DMV did not follow this recommendation.
Currey said many states have tried similar upgrades to DMV software with worse results. “It’s a very hard change in the system. You knew there were going to be glitches and struggles as it is with any change in technology.” She said that California, in particular, spent $208 million before giving up on a DMV upgrade project altogether. California was using the contractor HP Enterprise Services, another company with a sour history updating DMV records, particularly in Vermont where the contractor and state parted ways after an effort costing $18 million.
Some supporters say Ayala may have been the “fall guy” for a faulty system put into place years before his role at the DMV – while his predecessors moved on to new, more powerful positions.
“My four years at DMV brought about many changes that created a more effective department for people and businesses. I have those same goals for DAS,” Currey said at the time of her nomination to run DAS, Connecticut’s main contracting agency. Currey said she believes Connecticut weathered the storm much better than other states and now the new system is up and working properly.
While proposing to cuts to most of state government spending, the Malloy administration recommended increasing the DMV budget by 27 percent next year. Overtime at the agency is on track to double this year.
Overtime at the agency is on track to double this year?
And now Malloy and his administration want to outsource more of DMV’s services and eliminate DMV’s role in helping towns get the property taxes that they are due. Of course, unpaid local property taxes can lead to program cuts or increased taxes for those who do pay what they owe.
But apparently all of that is of little concern to Team Malloy/Wyman.