An Information Technology contract in the Bureau of Workers Compensation to rebuild Ohio’s injured workers’ billing and claims system has cost taxpayers millions more than anticipated and still hasn’t seen the light of day.
The cost and scope of the project have both skyrocketed and deadlines have long been past due. Originally, the plan was to overhaul only the billing and claims system at BWC, called Core, by the end of 2013 at a cost of $52.7 million.
Now, not only has the cost of the original project ballooned to $60 million and beyond, the contractor, CGI Group, still isn’t finished and will develop additional BWC processes, despite not completing the original project on time or within budget.
CGI Group’s reputation has hardly been stellar. They were one of the primary contractors in charge of the ill-fated Affordable Care Act website. That website was plagued with massive glitches during its roll out, and was temporarily shut down. CGI was eventually let go on the project.
For OCSEA members in the state agency, none of this had to happen, though. “The problem with bringing in outside vendors for something like a BWC IT system is that it’s very large and complex,” said Tim McAllister, an Infrastructure Specialist for the agency and an OCSEA State Board of Directors member. “When you’re talking about a system that’s taking care of all of Ohio’s injured workers, that’s a big system just by definition,” he said. “We have the expertise in-house in terms of scale to take care of this. Contractors simply do not.”
Each year, BWC members process 150,000 injured worker claims and have as many as 2 million open claims at any one time.
But, for five years, BWC IT workers have been tied up helping the privateer, instead of working on other systems that need support, a bone of contention for many IT employees in the department. “Given that our IT employees had to be involved, think of the opportunity costs that we’ve lost over the last five years. That’s huge. Instead, we’ve been propping up the contractor,” said McAllister.
The answer for McAllister and his colleagues is not further privatization, as some have suggested, but the opposite: bring the IT services back in house. Now!
Research supports this view and other large employers are moving in that direction. Some, such as General Motors, keep a strict time limit on contractors and are bringing large IT systems back in-house with permanent employees.*
Last year, when the CGI group had its hands full with cost over-runs and missed deadlines, BWC IT staff were quietly developing two new systems: one for employer billing and another for medical claims billing. And they did it on time and on budget, despite their additional work supporting the contractor.
Many thought their in-house performance would be a jumping off point for BWC to drop the CGI Group and bring the work back to state employees.
“They saw we could do it better and that we had the flexibility to get it done. We have a proven track record, existing skill sets and are able to do it efficiently and on time,” said McAllister. “In the time it has taken the contractor to complete this project, we could have rebuilt the entire system from the ground up."