Hp Refunds N.J. $7.5M And Backs Out Of Social Services Contract

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Hp Refunds N.J. $7.5M And Backs Out Of Social Services Contract

 news 2015-01-08 at 11:49:51 am Views: 235
  • #41765

    Hp Refunds N.J. $7.5M And Backs Out Of  Social Services Contract
    Hp will refund N.J. $7.5 million but will not deliver on social services contract
    By Susan K. Livio | NJ Advance Media for NJ.com

    TRENTON — The Christie administration is getting a $7.5 million refund from the information technology company hired nearly nine years ago to develop a massive software program intended to run New Jersey’s multi-billion-dollar network of social service programs, a state spokeswoman confirmed tonight.

    Without CASS — the Consolidated Assistance Support System — New Jersey continues to hobble along on its 1980s-era mainframe system, delaying thousands of people from enrolling in Medicaid and the Supplemental Nutrition Assistance Program.

    CASS was intended to unify the Medicaid, SNAP, welfare, child support and other programs that run separately — and most agree, inefficiently — by the Department of Human Services and each of the 21 county welfare agencies.

    Now Human Services is seeking a new consultant to recommend how the state should proceed, according to an email from state Human Services spokeswoman Nicole Brossoie. She said Hewlett-Packard earned $17 million from the state.

    “The State is committed to moving forward with an alternate plan to integrate the social services eligibility and enrollment system,” Brossoie wrote.

    The Christie administration and Hewlett-Packard agreed late last year to suspend work on the unfinished project, but the details of that separation agreement were just finalized, Brossoie said. Both sides called it a “termination of convenience, which represents the mutual agreement of both parties that neither will sue the other for breach of contract,” according to Brossoie’s email. “There is no admission of liability by either party with regard to the contract termination.”

    Company spokesman William Ritz issued a statement this evening:“HP understands that client needs sometime change over time and appreciates the opportunity to have served the residents of New Jersey.”

    State Auditor Steven Eells testified at an Assembly Human Services Committee hearing last month that he found the contract did not adequately protect the state’s interests.

    “Generally a contract has some type of performance penalty,” Eells said. The Treasury Department’s contract only protected the state’s investment in the event HP delivered a product that contained a virus. Human Services could have filed a complaint with Treasury about the project's troubles, but Eells said his office's review of the related documents found no evidence of that.

    The state also spent $10 million to hire Maximus as the project’s quality assurance manager, Eells said. In August, Maximus notified the Department of Human Services the delays and other problems with the project "jeopardized" the project's federal funding to pay for it. Maximus noted HP had changed project manager three times since 2010, including one the state rejected for not having the proper qualifications, according to a report issued by Eells’ office on fraud within the food stamps and welfare programs that also revealed numerous delays and deficiencies with the CASS project.

    The U.S. Department of Health and Human Services committed to paying as much as 90 percent of the $118 million contract, although Brossoie said she could not confirm how much the federal government had paid.

    Maximus is still under contract, Brossoie confirmed.

    The state awarded the contract to Electronic Data Systems in 2006, which was soon after acquired by HP. Work began in 2009 during Gov. Jon Corzine’s administration, and was taken over by Gov. Chris Christie who took office the following year.

    “Now that the HP contract termination is finalized, DHS is in the process of hiring a consultant to do an overall assessment of current processes, current requirements, opportunities and challenges,” according to Brossoie’s email. “After the contract is awarded, the consultant will have up to 90 days to complete the assessment and make recommendations to DHS about the most effective and appropriate way to implement a new system.”