Unfunded mandate?

Integrators, states await federal dollars for election systems

The election reform law is definitely an opportunity for systems integrators, said Meg McLaughlin of Accenture.

Olivier Douliery

Despite the passage of a sweeping election reform bill last month, many states are waiting to see if Congress also approves the required funding before they move ahead with plans to modernize voting procedures and systems.

Consequently, some systems integrators also have put on hold plans to allocate resources for related products and services until they see the states act.

"We believe states won't begin [the work] until the money flows," said Booth Jameson, director of global government affairs for Electronic Data Systems Corp., Plano, Texas.

The Senate last month overwhelmingly approved the Help America Vote Act of 2002, which would authorize a $3.86 billion, multiyear grant program to help states enact comprehensive reform. The bill is an attempt by federal lawmakers to address long-standing problems with flawed registration and voting procedures, including obsolete equipment, that disrupted the 2000 presidential election.

The bill, which at press time was awaiting President Bush's signature, would authorize provisional ballots, require states to develop uniform and nondiscriminatory statewide voter registration lists and establish an election assistance commission to help the states.

However, Congress also must pass a separate bill appropriating the required funding. And while analysts and industry officials are confident the president will sign the authorization bill into law, they are uncertain whether lawmakers will approve complete funding when they return Nov. 12 for a lame-duck session following the midterm election.

"The worst thing that could happen is what Congress did for state elections in 1993 with the motor-voter law, which was to put a lot of requirements on them but not provide any funds for it," said Kim Brace, president of the election management services firm Election Data Services of Washington.

If funding is approved, the bill should create opportunities for integrators to assist states in modernizing election equipment and processes, industry officials said. For example, states will need help to develop plans to obtain federal funds, install new voting machines, train poll workers and modernize voter registration databases.

Under the new law, the federal government would pay 95 percent of the costs of enacting the reforms, while state and local government would pay the rest. To receive these funds, state officials are required to prepare and certify a state plan for reform.

When the grant program is established, election-related business "will pick up steam rapidly," Jameson said.

The new law "is definitely an opportunity for Accenture and for other systems integrators," said Meg McLaughlin, a partner with the e-Democracy Group of Accenture Ltd., Hamilton, Bermuda.

The enactment of the new law is expected to change the nature of the business opportunity, said Steve Fehr, a managing director with the state and local practice of BearingPoint Inc. of McLean, Va., formerly KPMG Consulting. In the past, integrators have not played a big role in the elections market, because the demand was more for hardware than for services.

"If you look at what has happened over the past two years, most people thought of this as a pure hardware play," he said.

Christopher Baum, vice president and research area director for public sector at the market research firm of Gartner Inc., Stamford, Conn., said the legislation will result in three main areas of opportunity for systems integration:

*Creation of statewide voter registration databases;

*Maintenance of county records that need to be reflected in these databases;

*Enabling the records stored in those databases to be checked against motor vehicle records.

In addition, states also will need help from integrators developing reform strategies, applying for grants and accurately identifying and authenticating voters, he said. This means opportunities for a wide variety of companies, including voting machine manufacturers, election management companies, systems integrators and hardware and software services providers, Baum said.

"There isn't one company that is positioned to provide all of these services," he said.

The legislation requires statewide voter registration databases to be managed and controlled at the state level. Only 11 states have a unified or statewide database of registered voters, according to the Washington-based Election Reform Information Project, a nonprofit research group.

In the past, the responsibility for voter registration databases has been shared by state and local government. Under the act, states would be required to modernize these databases and to connect them to legacy systems that hold motor vehicle records for voter authentication and identification purposes.

"Databases are the single most important thing that states can do to prevent voter registration fraud. ... [They are] the crucial piece of election reform," said Dan Seligson, the group's communications director.

Many of the existing databases are rudimentary and will require significant modifications to meet the law's requirements, Fehr said. The new law not only would create an opportunity for modernizing voter registration databases and tying them to legacy systems, but also for managing the changes associated with new election procedures, he said.

Eight states approved new statewide voter registration databases in 2002, according to the Election Reform Information Project. Half of those are proceeding with the projects, while the other half are awaiting federal funds before they begin.

The cost of modernizing the registration databases will vary depending on the complexity of the system and the number of voters in the state, voting experts said.

Baum said that some states will have to build expensive new systems from scratch, while others will be able to modify existing systems at less cost. "The numbers are going to be all over the board," he said.

Accenture is building a centralized voter registration and election management system for Pennsylvania using software made by election.com of Garden City, N.Y., according to McLaughlin. Accenture won the five-year, $19 million project in July. The Statewide Uniform Registry of Electors system is scheduled for rollout in the second half of 2003, according to the company.

Following the 2000 presidential election, several large systems integrators formed strategic alliances and partnerships for products and services, expecting that states would move quickly to upgrade equipment and improve election administration. These companies are Accenture, EDS and Unisys Corp. of Blue Bell, Pa. They formed alliances with companies that either manufacture voting equipment or provide election management software and services.

The passage of the election reform bill has spurred these integrators and others, such as BearingPoint, to re-enter discussions about partnerships, company officials said.

Analysts and industry officials said companies that work on voting projects are subject to tremendous public scrutiny. Credibility is a big factor in the election community, McLaughlin said. Those that do the work successfully win more business, while those that do poorly don't get additional business.

Brace agreed. "The voting business is peculiar," he said. "There is an awful lot of hand holding of the clients, and a lot of exposure for the companies involved. They have to be real careful with what they do." *

Staff writer William Welsh can be reached at wwelsh@postnewsweektech.com.

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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