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Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Citing Problems With CGI, State Postpones $100M Computer Project

Technological glitches on the new health insurance exchange are having a ripple effect on information technology projects across state government. And a $100 million computer upgrade has now been put on hold as state officials work to resolve their digital problems.

The computer system at the Agency of Human Services has been around since the 1980s. And state officials say its old age and weak performance is hobbling their ability to reform the social safety net.

So when federal money became available for the overhaul of state IT systems across the country, Vermont set to work on a $100 million project that has become known as “integrated eligibility.”

But a request for a bid issued for the project in November of 2012 was canceled late last month. And the decision to postpone has everything to do with CGI, the embattled technology firm at the center of the state’s troubled insurance exchange.

The plan had been for CGI to construct the exchange as the digital foundation for the integrated eligibility project that was to follow. When the firm failed to deliver a satisfactory product, Racine said the state needed to pull up stakes and seek a new vendor.

“Yes, we could have continued negotiating with CGI,” Racine says. “It was the opinion of all of us who were working on this project that that was not the right way to go. CGI obviously had performance issues.”

The cost of the integrated eligibility project could range from $50 million to $100 million, depending on how much of CGI’s groundwork the next tech contractor is able to salvage.

Racine says the project will allow the state to deliver services more efficiently, and target their efforts in a more coordinated manner.

“So integrated eligibility is about integration, so that we can look at somebody who walks into one of our offices, and figure out what their income level is, what the family situation is, and what their needs are, and address the whole person,” Racine says.

Better services for the needy aren’t the only things riding on the success of the integrated eligibility project. Racine says the state’s existing computer system is incapable of supporting the Shumlin Administration’s planned overhaul of Vermont’s health care system, and that the single-payer can’t go forward unless a new IT framework is in place to make it run.

“So yes, this is an essential program to achieve our goal, the governor’s goal, of getting all Vermonters insured through a single payer system in 2017,” Racine says.

Racine says he recognizes that problems with the exchange have made for poor public relations. Republicans have called for the delay or revocation of the single-payer proposal in the wake of the problems with the exchange, and say that if government can’t operate a website, then it has no business overhauling the health care system.  

Racine says problems with the exchange have made the politics of single payer even more difficult.

“There are folks who do not agree with the governor’s goal of single payer health care … so they’re going to look at mistakes that are made and take advantage of those mistakes to create uncertainty about whether government should continue,” Racine says.

But Racine says he’s confident that the state will solve its technology problems in time, and that the problems won’t erode the political will that will be needed to institute a universal, publicly funded health care system.

Racine says the state will actively court technology firms that it wants to see bid on the new integrated eligibility project. He says he hopes to have a new proposal out to bid before the end of March, and have the contract secured within “several months” after that.

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