Connecticut Assembly Closes Without Taking Up Privatization

Connecticut state comptroller Nancy Wyman this week took another shot at the state's efforts to privatize its computer operations in a pending deal with Electronic Data Systems Corp.

In a statement, Wyman said Connecticut Gov. John Rowland (R) should pull the plug on the EDS contract. Wyman threatened to release an audit her office started in February on the "relationship" between EDS and Connecticut's Department of Social Services (DSS).

The Comptroller's Office said the audit would "paint a bleak picture of DSS' contractual relationship with EDS."

"There are too many questions still unanswered, and a growing body of evidence suggests that privatizing our information technology through EDS could be the worst fiscal and policy decision of the decade for the state of Connecticut," Wyman said.

Wyman has been especially critical of a client/server contract -- dating back to the 1980s -- that EDS held with DSS. The contract was canceled after the company had trouble incorporating into the client/server system numerous regulatory changes required under welfare reform. EDS maintains that work done under the contract was incorporated into the department's existing mainframe system and that DSS and EDS had resolved the contract.

Wyman's words were just the latest in a barrage of criticism lobbed at the pending deal with EDS -- a deal that could be worth as much as $1.5 billion. Attempts to shoot down the EDS contract have been heating up as the contract's negotiation process nears its final stages.

Nuala Forde, a spokeswoman for Connecticut's Department of Information Technology (DOIT), said Wyman has been "vigilant" in monitoring the negotiation process but that her promised report will likely be little more than recycled criticism.

"This is old news, and this audit report is nothing more than individuals extracting the most inflammatory sentences from a stack of old letters," Forde said.

An EDS spokesman said that "all the issues surrounding development of that client/server system have been resolved long ago," and he called Wyman's announcement "curious timing. Anyone who tries to paint EDS as unworthy of performing on the IT modernization project would be off base."

State officials had wanted to finalize an award with EDS by June 15. But now officials predict that contract discussions will continue for the next several days. "Negotiations are continuing," Forde said. "It became clear on Monday morning that some additional time would be required and that it would be impossible to have the matter completed by the 15th."

Forde said the state should have some news on the privatization contract within the next 10 days.

DOIT's options include finalizing the contract, which would have to survive an audit and a vote in the Connecticut legislature; abandoning the privatization concept entirely; or starting negotiations with IBM Corp., which came in second in the state's procurement. "There is a lot of speculation and no shortage of theories at this time, but in the next four to 10 days we should know more about the state's direction," Forde said.


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