Controversial IT companies team up for $500M job in California
Cost would cover services from 2015 to 2025
Sharokina Shams
KCRA 3 Reporter
Two companies linked to troubled IT projects are teaming up for a government job in California worth more than half a billion dollars, KCRA 3 has learned.Deloitte, the company behind problematic software upgrades at numerous agencies, plans to work with CGI, the company behind the troubled Affordable Care Act website, to operate and maintain a system that distributes millions of dollars in welfare payments, Medicaid benefits and food stamps in 18 California counties.Deloitte estimates the work to cost $537,921,454, according to the company's bid, which was released Wednesday in response to a Public Records Act request by KCRA 3.The cost would cover services for a 10-year period starting in 2015 and ending in 2025.CGI, a Canadian company, is listed as Deloitte's subcontractor and would do 25 percent of the work, according to a letter Deloitte wrote to the agency offering the work.News of the contract, which is for work on a program called CalWin, became public through a KCRA 3 investigation that aired Nov. 1. The dollar amount behind Deloitte's bid, and the plans to include CGI, were revealed Wednesday when the documents were released.The revelations have prompted one California lawmaker to argue that the state Legislature, which is charged with overseeing the contract, put it on hold."Five hundred million?" asked Sen. Jim Nielsen, R-Gerber. "Are we going to follow the federal case where they spent $600 million and now, obscenely, it's said, we're going to hire some experts to come in and fix it?"The agency awarding the contract, Welfare Client Data Systems, is a consortium of 18 California counties. Its executive director, Hali Reyes, did not return a call Wednesday. It remains unclear how the agency determined who to give the contract to. It issued a letter of intent late last month, announcing its decision to give the contract to Deloitte.The bids released Wednesday show that a competing bidder, HP, would do the work for about $6 million less.HP is currently doing the work on the CalWin system and has received awards for some of the work. The company has filed a protest of WCDS's decision.Numerous state agencies are responsible for overseeing the work and the contract, according to public documents. But it's not clear how many state leaders are even aware of the job or the half billion dollar cost connected to it."I have no idea," said Gov. Jerry Brown, when KCRA 3 asked about the contract this week. "But I'll be glad to look into it for you."But Brown had said in a previous interview that his office would be looking into contracts involving Deloitte. And late Wednesday, it remained unclear if that's being done, or who on Brown's staff is doing it.Nielsen said he will ask lawmakers to review the process that vendors such as Deloitte and CGI use to get government jobs."The Legislature should say, 'Whoa, we're not going to proceed," Nielsen said. "The governor should say, 'Whoa, we're not going to proceed.'"
Two companies linked to troubled IT projects are teaming up for a government job in California worth more than half a billion dollars, KCRA 3 has learned.
Deloitte, the company behind problematic software upgrades at numerous agencies, plans to work with CGI, the company behind the troubled Affordable Care Act website, to operate and maintain a system that distributes millions of dollars in welfare payments, Medicaid benefits and food stamps in 18 California counties.
Deloitte estimates the work to cost $537,921,454, according to the company's bid, which was released Wednesday in response to a Public Records Act request by KCRA 3.
The cost would cover services for a 10-year period starting in 2015 and ending in 2025.
CGI, a Canadian company, is listed as Deloitte's subcontractor and would do 25 percent of the work, according to a letter Deloitte wrote to the agency offering the work.
News of the contract, which is for work on a program called CalWin, became public through a KCRA 3 investigation that aired Nov. 1. The dollar amount behind Deloitte's bid, and the plans to include CGI, were revealed Wednesday when the documents were released.
The revelations have prompted one California lawmaker to argue that the state Legislature, which is charged with overseeing the contract, put it on hold.
"Five hundred million?" asked Sen. Jim Nielsen, R-Gerber. "Are we going to follow the federal case where they spent $600 million and now, obscenely, it's said, we're going to hire some experts to come in and fix it?"
The agency awarding the contract, Welfare Client Data Systems, is a consortium of 18 California counties. Its executive director, Hali Reyes, did not return a call Wednesday. It remains unclear how the agency determined who to give the contract to. It issued a letter of intent late last month, announcing its decision to give the contract to Deloitte.
The bids released Wednesday show that a competing bidder, HP, would do the work for about $6 million less.
HP is currently doing the work on the CalWin system and has received awards for some of the work. The company has filed a protest of WCDS's decision.
Numerous state agencies are responsible for overseeing the work and the contract, according to public documents. But it's not clear how many state leaders are even aware of the job or the half billion dollar cost connected to it.
"I have no idea," said Gov. Jerry Brown, when KCRA 3 asked about the contract this week. "But I'll be glad to look into it for you."
But Brown had said in a previous interview that his office would be looking into contracts involving Deloitte. And late Wednesday, it remained unclear if that's being done, or who on Brown's staff is doing it.
Nielsen said he will ask lawmakers to review the process that vendors such as Deloitte and CGI use to get government jobs.
"The Legislature should say, 'Whoa, we're not going to proceed," Nielsen said. "The governor should say, 'Whoa, we're not going to proceed.'"