Audit: Florida tech office outsourcing flawed

The Florida State Technology Office failed to take several basic steps to ensure proper administration of a statewide information technology outsourcing contract inked last year with two systems integrators, according to the Florida Auditor General.

The MyFlorida Alliance contract signed in August, 2003, had a number of deficiencies that left the state at risk, the auditor said.

The two prime contractors for MyFlorida Alliance are Accenture Ltd. of Hamilton, Bermuda, and BearingPoint Inc. of McLean, Va.

In her written response to the report, State Chief Information Officer Simone Marstiller has pledged to strengthen oversight of the contract and conduct additional analyses to help the state determine how much it is saving through the outsourcing approach.

The state technology office will work with the governor and the legislature to implement budget tools for fiscal 2005-06, "which will help capture actual [base] costs for selected information technology services incurred by state agencies," she wrote.

Florida has agreed to pay the companies $324.7 million over seven years for four enterprise initiatives: communications, technology services desk, applications management, and data center operations and consolidation.

State technology officials have not yet negotiated terms and price for five remaining initiatives, which are portal, security, licensing court document e-filing, desktop management and support, and local area network administration and support services.

The audit focused on the state technology office's management of the outsourcing of its IT business functions through the MyFlorida Alliance initiative from December 2002 through May 2004.

Marstiller, who was appointed CIO in May, succeeded Kim Bahrami, who served as CIO during most of the period examined by state auditors.

Bahrami resigned in February.

The state technology office failed to document its decision to outsource IT services and to properly evaluate and negotiate the contract, the report said. Florida officials also failed to establish provisions to protect state resources adequately and to document supporting cost savings to the state.

The auditor general recommended that the sate technology office:

• Conduct appropriate feasibility studies, cost-benefit analyses and risk assessments for the remaining initiatives under the MyFlorida Alliance


• Update the MyFlorida Alliance contract file with the appropriate documentation


• Develop solicitation documents for future procurements that will provide sufficient detailed information to allow for proper vendor responses to any of the requested services


• Strengthen its contractual agreements with Accenture and BearingPoint to delineate timeframes for performance and to ensure adequate protection of state resources


• Re-examine the methodology used to justify cost savings for the MyFlorida Alliance initiative.