State penalizes company over massive computer problems
The state has started to impose daily fines and is withholding a $3 million payment to penalize a company that has helped overhaul the technically troubled unemployment-benefits computer system.
The Florida Department of Economic Opportunity announced Friday that it will hold back the payment and is enforcing a $15,000-per-business-day penalty against Minneapolis-based Deloitte Consulting for failing to deliver a "fully functioning" system.
Deloitte will be able to collect the payment when the system, known as Connect, is considered fully functional, department Executive Director Jesse Panuccio said Friday.
No deadline has been set for the system to be fully functional, but additional penalties could be applied if Deloitte is unable to complete the work without more consultants and vendors being brought in to direct and monitor the work.
"We always said there are issues with the system, and the question is at what point do we withhold payment and institute penalties," Panuccio said in an interview. "We think we've reached that point."
Representatives of Deloitte were not immediately available for comment Friday afternoon.
A release from the Department of Economic Opportunity recognized the criticism that has come from many users since the new $62.8 million Connect system came online Oct. 15.
"While Deloitte has made progress over the last few weeks, and many claimants are able to process claims without incident, the bottom line is that the overall system is still not working properly and the base code has not been stabilized," Panuccio said in the release. "The people of Florida deserve better and, after two months, Deloitte's failure to provide this functionality is simply unacceptable."
Panuccio added that despite increased department staff levels and hours to handle questions and problems with the new system, the delays have caused caseload work "to increase to unacceptable levels."
Officials from the department have previously described the troubles with the system as mostly technical glitches involving "back-end processes" and the adjudication of contested claims.
During a Nov. 4 appearance before the Senate Commerce and Tourism Committee, Panuccio described the revamped system as "operational" and that it was "processing most claims without incident."
But complaints continued to roll in.
Kenneth Cunningham of Bay County complained to Gov. Rick Scott via the state's Sunburst email system on Dec. 9 that he had been applying unsuccessfully since Oct. 17.
"I have literally made up to 50 attempts in one day and just eventually given up," wrote Cunningham, who had been laid off from AGB Corporation. "I would have to say the 'new user friendly' unemployment system we now have in Florida parallels the enjoyment people receive in enrolling in 'Obamacare.' "
The state's unemployment website was rolled out two weeks after the federal government's glitch-plagued Healthcare.gov website, which is part of the Affordable Care Act, better known as Obamacare.
Connect has been in the works since 2009 to replace a 30-year-old system people used to claim their weekly benefits, monitor accounts and request information. The department provides up to $275 weekly to more than 200,000 jobless Floridians.
The changeover, which is in part covered with federal tax dollars, includes about $28.2 million for Deloitte Consulting to set up the website.
Deloitte was penalized $4.5 million last year by the Department of Economic Opportunity due to project delays.
In exchange for $1.5 million in contractual relief and credits, Deloitte was given an extension from Nov. 15 to Dec. 20 to improve the appeals issues within the system.