Colorado officials have given computer contractor Accenture LLP two more weeks to fix the broken $44.8 million system it installed at the state Department of Labor and Employment.
Rick Grice, executive director of the Department of Labor, told lawmakers Tuesday that Accenture has until Dec. 20 to propose a cure for the unemployment-insurance computer system.
“We are involved in intense, head-banging, no-nonsense negotiations even at this moment,” Grice told the legislature’s Joint Budget Committee.
The state signed a $40 million contract with Accenture in April 2002, but two key components of the five-piece system still do not work. Grice called them the “meat of the coconut.”
State lawmakers have budgeted a total $44.8 million for the project. The state has already spent $35.8 million, Grice said.
The labor department computer system – called Genesis – was supposed to combine the state’s unemployment-insurance system into a single program that tracked tax collections from employers and benefits to unemployed workers.
Neither part of the system is operating. Under the original terms of the contract, the tax portion was supposed to be running in October 2003 and the benefits system by May 2004. The updated contract gave the company until November 2004 for the benefits portion and December 2004 for the tax part.
In November 2004, officials from the department of labor assured the Joint Budget Committee the system would be running soon.
Rep. Bernie Buescher, D-Grand Junction, Tuesday wanted to know why lawmakers weren’t told then “if these problems were apparent at this time last year.”
“I’m bothered by it and I want you to know I’m bothered by it,” said Buescher, who later added that he was relieved to hear Accenture has a $40 million performance bond, which gives the state greater leverage to negotiate a solution with the company.
Negotiations broke down in April 2005 and the state began “dispute resolution” proceedings in May. Accenture offered a solution in June, for an additional $19.9 million.
State officials sent a breach of contract letter in July, but rescinded it to again try negotiations. In August, Accenture revised its proposal and said the state would have to pay $9.8 million to get the system finished by June 2006 for benefits and the tax system done by November 2006.
The state rejected the offer and sent another breach of contract letter last month. Accenture had until Tuesday to cure the problem but was given until Dec. 20 in recent talks.
Grice, who joined the department in February, said he inherited the troubled system that has consumed the “vast preponderance of my time and headaches.”
On Tuesday, the budget committee held an executive session with Grice and other labor department officials – ejecting the public from the meeting – to discuss the possibility of a lawsuit against Accenture.
Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com.
