Lawmakers put a hold on contract amid questions about IT agency’s role in tech projects

A $445 million contract for technology services has been put on hold by two state senators who call it another example of what is wrong with the state’s approach to such projects and the department they believe should oversee them.

Sens. Stephen Hershey Jr. (R-Upper Shore) and Katie Fry Hester (D-Howard and Montgomery) wrote to the Board of Public Works this week, asking it to delay a vote on a 10-year $445 million information technology contract with more than a dozen vendors.

In an interview after sending the letter, Hershey and Hester said that in addition to questions about the contract itself, the  pause gives them time to consider a revamp of the state’s Department of Information Technology, often referred to as DoIT.

The senators, who serve on the Joint Committee on Cybersecurity, Information Technology and Biotechnology, said it might be time to consider turning major technology projects over to an entity such as the Maryland Stadium Authority, which has had success managing construction of stadiums and even the new Department of Legislative Services building in Annapolis.

Hershey said Hester’s research on DoIT and how the state manages and oversees major technology projects has led to one question: “Is DoIT a good steward of the taxpayer dollars?” he said. “We’re questioning that.

“Everything, as you know, that’s going on right now in the General Assembly is all focused on the budget, where we are with the budget,” Hershey said.

A spokesperson for DoIT did not respond to a request for comment.

The department was created more than two decades ago. At the time, Hester said, the  state was spending about $570 million on technology, and the department was charged with overseeing tech projects and reining in costs.

But Hester said the agency struggles and pointed to a scathing audit last year that highlighted problems.

“It’s not any better than it used to be,” she said.

Hester said the agency does not want to manage or oversee major projects.

“There’s a fundamental disagreement between the legislature and the department on what they’re supposed to be doing,” Hester said. “We believe that we established them to be accountable for the oversight and management of these projects. They believe they help out when asked by an agency.”

Hester said DoIT is currently only managing and overseeing five of 70 major IT projects in state government. Last year, the department proposed legislation that would eliminate its role in managing major projects.

“It says they don’t want to be accountable,” Hester said.

The contract delayed by the Board of Public Works exacerbated the situation.

Both lawmakers pointed out that the procurement — conducted by the Department of General Services — has run into trouble. Dozens of vendors expressed interest, the senators said. Following the naming of 14 companies to participate in the award, there were 19 protests filed. Five of those remain outstanding and there is one appeal before the Board of Contract Appeals.

“That’s telling us that something was amiss” with the solicitation, Hershey said.

On top of that, Hester and Hershey said the contract is unusual.

“What we’ve discovered is a lot of these projects are not results-driven procurement,” Hershey said, adding that the proposed contract is for “half a billion dollars over 10 years to provide resources and not provide the results of a project — not to do a project.”

“None of the rest of the world does contracts this way,” Hester said, adding that if the state wanted a new system for a department, the state would “scope out what that … system is going to look like online.”

“Then we agree on a contract, a timeline and somebody should be held accountable for delivering the project on time and on budget,” she said.

Hershey and Hester said the legislature is left with two choices, which the delay gives them time to consider.

The first is to reassert DoIT’s role in major projects.

“We created them,” Hershey said. “We created DoIT, and we can certainly clarify their roles and their responsibilities.”

The second could be to diminish the department’s role and move oversight to the Maryland Stadium Authority.

Hester stressed there is no formal proposal to move managing IT projects to the authority, but added that there are a number of bills already introduced that could be vehicles for such a change.

Both lawmakers pointed to the quasi-government agency’s reputation for managing projects that are delivered on time and on, if not under, budget.

Most recently, the authority managed construction of the new Department of Legislative Services building. The 144,000-square-foot building, which sits opposite the State House, was originally expected to cost $120 million. Construction costs were lowered to $112.5 million, and the authority completed the building for $3 million less.

“Currently, they’re the truest project management entity that the state has,” said Hester. “That’s why I think it’s come up. Everybody has recognized, whether it’s building buildings or building IT and running IT programs, that (the stadium authority) is a results-driven type of solution that we’re looking for.”