Infotech Firms Tackle Public Safety, Welfare
Changes in federal legislation are creating more opportunities for infotech firms at state and local levels
Leading information services companies are eyeing a host of new business opportunities at state and local levels, including public safety and welfare-related efforts.
Already playing a role in human services and public safety programs at the local level, Electronic Data Systems Corp., Plano, Texas, is poised to boost its efforts in both markets. However, it will be part of a crowded field of contenders, including large integrators such as Lockheed Martin Corp., Bethesda, Md.; Andersen Consulting, Chicago; and Unisys Corp., Blue Bell, Pa.
Changes in welfare are prompting enormous growth for infotech companies at state and local levels, said John Kost, senior vice president for McLean, Va.-based Federal Sources, noting that most states still operate legacy systems put in place in the 1970s.
Companies are likely to be called to help states and localities devise and maintain their individual human services programs. The size of these opportunities will depend on the amount of money the states set aside for infotech, said Kost. The states will receive block grants from the federal government for their programs. Also, plans call for a national registry to enforce the five-year lifetime limit on benefits imposed by the new federal law, said Kost, a project that would offer "huge opportunities" for infotech companies.
EDS is expecting to enlarge its role in welfare programs, said Merv Forney, EDS vice president for state and local government. The company is currently involved in two human services programs in California. "It will be different," he said, noting a fundamental program shift from a systems-driven to jobs-focused effort.
There is a mindset change from assessing and managing cases and even teaching job skills to re-evaluating the social services program. "It opens a different world to us," he said. And it's a world in which "we have experience," noting the company's background in business process re-engineering.
As a practical matter, the welfare bill passed by the U.S. Congress has had no immediate impact on the company, said Forney. However, EDS is pursuing a stake in programs currently being implemented in two states that have a jump in devising new plans -- Wisconsin and Texas. In Texas, the company already is battling Lockheed Martin and Andersen Consulting for a key role in the state's new welfare program even before the request for proposals has been released. For this effort, EDS is working with Unisys, and Lockheed is working with IBM. Texas has also set up a competition between separate state agencies for responsibility for the new welfare program.
Through its local representatives, EDS is also working to help other states understand "how technology can enable reform," said Forney.
A decision on how the five-year lifetime limit on benefits will be tracked nationally will not come until next year, said Rick Fereirra, director of human services, EDS Office of Government Affairs. He noted that the welfare bill directed the Clinton administration to submit a plan on how it will enforce the five-year limit six months after enactment of the law. This plan could be a national database or a system linking separate state databases, suggested Forney.
The company's welfare-related efforts in California would seem to be compatible with the new federal law, which emphasizes job placement within two years for welfare recipients and places limits on benefits. In 19 California counties, including Los Angeles, EDS has been tracking since 1990 the progress of welfare recipients participating in the Greater Avenues of Independence, a state-run program that offers welfare recipients counseling, child care, and job training and placement services.
Managing the GAIN Employment Activity Reporting System, or GEARS, EDS keeps data on all organizations providing training and placement services, as well as the progress of clients in the program. The company stepped up its involvement in GAIN in 1994 by performing a business process re-engineering effort to improve the program's job placement record.
Currently working under a five-year contract valued at $17 million, the company expects to reassess the program when the state brings its program in line with the new federal mandates. The state legislature is, for example, exploring whether to impose state standards on the many welfare programs, which are now handled for the most part at the county level, said Kost, noting that other large states including New York and Ohio are facing the same issue.
EDS also designed and implemented the AFIRM program in Los Angeles County, which uses fingerprint matching to battle welfare fraud. Initially used to screen General Relief Program applicants beginning in 1990, the program was expanded to Aid to Families with Dependent Children in 1993.
When applying for benefits, the applicant's prints are scanned and then checked against an existing database for matching prints. Prior to 1990, the county had been compiling the fingerprints of applicants but had no way to compare new prints to this database.
Devised under an $8 million contract, the system "paid for itself in the first year," said Curtis Williams, vice president and general manager for law enforcement and public safety for EDS State and Local Government. Audited by Ernst & Young, the system saved the county $28 million in fraudulent General Relief claims and $75.8 million in bogus AFDC applications.
As it awaits the changes in welfare, EDS wants to expand its locally based law enforcement and public safety programs. Such programs are less affected by federal actions, noted Kost, saying that legislation such as the 1994 crime bill provided little federal funding for state and local projects.
In October, EDS began participating in a demonstration project in San Francisco to exhibit its system to nab drivers running red lights. Slated to last up to a year, the project could yield a contract for the systems integrator before that period, said Forney. Also participating in the demonstration project and competing for the contract is U.S. Public Technology.
EDS launched the system to catch the red-light runners five years ago in New York City. The system uses cameras installed over intersections to snap rear-angle photographs of cars running red lights, capturing the license plates. The cameras are triggered by sensors embedded in the street. Besides generating the tickets that include the photos, the client/server systems process fine payments, schedule hearing dates and enable judges to view the digitized photos on courtroom computers.
Installed at 18 intersections in New York, EDS said the project has generated more than 433,200 tickets yielding $17.1 million in income from the fines over the past five years. The company is currently operating in the second year of a three-year contract valued at $10 million, which includes three additional one-year options worth $3.3 million each.
In the San Francisco project, the company has installed systems at four intersections in San Francisco. Similar to the New York system, the cameras will photograph the faces of the offenders, as well as the license plate to satisfy California's requirement for more explicit evidence.
The company is also looking to deploy its automated parking ticket enforcement system in Charlotte, N.C. The city will be taking bids in December and is expected to make a decision in January 1997, said Forney.
EDS originally designed its parking ticket system in 1990 for the city of Chicago by integrating diverse technologies. For example, hand-held computers are used by parking aides to write tickets, and imaging technology is used to eliminate the need for paper records of the tickets. Also, the ticket information is compiled in a database, which the city uses in assessing resource allocation and zoning issues.
The system has helped boost the rate of fine payments from 25 percent in 1990 to 70 percent at present. Each 1 percent gain translates into about $1 million in additional revenues to the city, said Forney.