NCDHHS: a big government mess decades in the making

The liars in the remnants of our state’s mainstream media would have you believe state government was working like a charm prior to the January 2013 inauguration of Republican governor Pat McCrory.  *The seventh seal has been opened.  The Prince of Darkness and his four horsemen are walking the Earth, bringing about the End of Days.  Children are being starved.  Barry Saunders is being discriminated against.  Lefties are being asked to leave the legislative building at closing time.  The Horror!*

It’s clear the lefties are seeking a scalp — or a severed head to mount on a pike at the gates of their Mecca — Carrboro.  It appears they’ve set their sights on Dr. Aldona Wos, who was given the thankless task by Gov. Pat of managing the lefties’ sacred cow:  The NC Department of Health & Human Services.

I bet most people can’t recall the names of the NCDHHS secretaries in the Perdue, Easley, or Hunt administrations.  Democrats were in charge at that time.  They were hiring a lot of mainstream media reporters as PIOs at state agencies.  Life was good.  Backs got scratched.  Negative stuff RARELY got reported.

Now that Republicans run the show in Raleigh, we’re getting scrutiny never before seen in the history of modern journalism.

I find myself in an usual spot — defending an organ of the welfare state.  I think there is a TON wrong with our state bureaucracy.  But it didn’t start with Pat McCrory or Aldona Wos or Phil Berger or Thom Tillis. 

NC FAST is the current boondoggle being blamed on McCrory, Wos, and the GOP.  The two main contracts for this project were awarded in 2008 and 2010.  Let’s see.  WHO was governor then? 

The federal government is criticizing North Carolina over the operation of its NC FAST software package, which handles the distribution of food stamps.  You have a Democrat administration in DC teeing off on a GOP administration in Raleigh.  One of the few real reporters ever to grace The N&O newsroom — Joe Neff — detailed the problems associated with NCDHHS software in 2012.  Who was governor then? 

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The project has gone in fits and starts since it began in 2004: cancelled and rebid, then amended and extended. Costs have kept rising, so much so that the expense of setting up the new system and running it for seven years, plus maintaining the old system, now adds up to an eye-popping figure: $851 million.

And that’s if it goes on line next summer, as scheduled.

Little in this project has gone as scheduled. The first contractor was dismissed, only $16 million into the work. The second, CSC, is two years behind its original timeline. In the world of information technology, the delays and overruns earn it the title of a “black swan” project.

Most of the delays and cost increases come from changes in federal and state laws and regulations, according to Al Delia, secretary of the state Department of Health and Human Services. He likened it to a home construction project where the owner asks the builder to add a second floor and garage midstream.

“Most of what have been called cost overruns aren’t really cost overruns,” Delia said.

[…]

“We expect this will be cutting edge, state of the art,” Delia said.

If so, it will be an unusual cutting-edge system: it’s largely written in COBOL, a computer language developed in the 1950s that is scarcely taught in North Carolina – just community colleges in Hickory and Charlotte. CSC has imported workers from India to fill the jobs in Raleigh.

Legislators wonder if state officials will ever be able to get the project finished.

“The $640 million question is, will the Medicaid system operate as billed?” asked state Rep. Nelson Dollar, a Cary Republican who co-chairs a committee that oversees DHHS. “We are skeptical until we see it.”

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In 2003, the state solicited bids to replace the outmoded Medicaid claims system, which had been operated for 35 years by EDS, a Texas company later purchased by Hewlett Packard. Millions of lines of computer code power the program, which accepts claims from some 70,000 providers – doctors, clinics, hospitals, nursing homes and others.

It’s a big business: the Medicaid program will cost nearly $13 billion in North Carolina this year, about 23 percent from state funds and the rest federal. The new system is designed to detect fraud and avoid waste.

Federal tax dollars pay for 90 percent of the design of the new program and half of its operating costs.

There were high hopes in 2004 when the state gave the $171 million contract to Affiliated Computer Systems to replace the 1980s system.

Let’s see.  Which party controlled the governor’s mansion AND legislature that year?

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The project soon fell behind, with DHHS officials and ACS arguing over timeline and payments, each blaming the other for the mess. In May 2006, State Chief Information Officer George Bakolia threatened to kill the project unless the two sides could resolve their differences and come up with workable plan. Bakolia demanded new project managers at DHHS and ACS.

In July 2006, the state cancelled the contract, and eventually paid ACS $16.5 million, partly for work, partly to settle a lawsuit.

Who ran the show in Raleigh that year?

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Round two began in 2008, when the state awarded a $265 million contract to CSC, with a go-live date of August 2011.

The contract sparked a fierce fight. HP, which runs the 1980s system, was a bidder on the new contract and protested on technical and political grounds: CSC had retained former DHHS Deputy Secretary Lanier Cansler as a lobbyist. Weeks after the contract award, Cansler was named DHHS secretary by Gov. Bev Perdue.

Hmmm.  Former GOP legislator turns lobbyist for software company. His software company gets the state contract.  He goes to work for DEMOCRAT Bev Perdue to oversee the implementation of the Medicaid system upgrade.

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The program soon fell behind, and in the summer of 2010 CSC asked for an extension. Following a lengthy negotiation, the state granted an 18- to 22-month extension and raised the contract price to $495 million. […]

Delia, who became DHHS secretary in February, says CSC added six months of delay by overestimating how much code it could bring from New York. The company agreed to pay the state $10 million in damages, an amount criticized as unsubstantiated and low in a subsequent state audit.

The rest of the delay, Delia said, stems from changes in federal and state laws and regulations, and was out of the control of DHHS.

A January report from State Auditor Beth Wood questioned the six-month figure, saying that DHHS did a poor job of documenting how it made key decisions: determining the six-month delay; calculating the damages owed by CSC; and tracking $30 million in unauthorized changes that CSC made in the program.

The audit was contentious from the start. Stewart told Wood that his staff was too busy to answer questions and provide documents. Their cooperation “will, by necessity, be minimal due to the lack of staff time, the urgency to complete the project and the liability related to delaying the IT contractors working on the project.”

The department’s response, twice as long as the audit, disagreed with virtually every paragraph, calling the audit biased, inaccurate, unproductive, ill-informed, unfounded and asinine.

Wood called the audit the most difficult of her career.

“It was the most uncooperative, dragging-the-feet, missing-deadlines audit like I’ve never seen,” she said.

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The audit did not touch on the fact that the state contracted in 2008 for a program written in COBOL, a computer language written in the 1950s. According to Bakolia, the former state chief information officer, COBOL is used in banking, transportation and federal systems that have been in use for decades, but it is almost never used in new systems.

“If the programs are written well and operate, companies don’t want to rewrite them,” Bakolia said. “If I were to write something today, it would not be COBOL. You can’t support it.”

In North Carolina, classes in COBOL are as popular as 8-track tapes. Wake Tech’s extensive computer science offerings don’t have COBOL, and neither does N.C. State.

Frank Mueller, an N.C. State computer science professor, said the supply of COBOL programmers is dwindling as people retire.

“As a consultant to any company, I would probably advise them against using COBOL,” Mueller said. “The problem is that it’s harder to find someone to change the code. If you change the law, you have to change the code.”

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