Florida cancels MyFlorida Alliance outsourcing contracts

(UPDATED) The Florida State Office of Technology plans to terminate contracts with BearingPoint Inc. for data center services and with Accenture Ltd. for applications management in 90 days, the agency announced Thursday.

The cancellation of these two contracts essentially kills the state's groundbreaking outsourcing project known as the MyFlorida Alliance.

In addition, the State Technology Office has asked the Department of Law Enforcement to investigate improprieties that may have occurred during the bidding process for MyFlorida Alliance contracts. The office plans to turn over communications between the agency and one of the bidders that occurred before the state issued a solicitation for the program.

The stunning announcement came after State Chief Information Officer Simone Marstiller offered assurances last month that the state intended to move forward with these programs.

BearingPoint of McLean, Va. had a seven-year statewide data center contract worth $126 million, while Accenture of Hamilton, Bermuda, had seven-year statewide applications management contract valued at $46.7 million.

The State Technology Office in August terminated the other major piece of the MyFlorida Alliance program, a seven-year, $87 million help-desk contract with Accenture in August. At the time, Marstiller said the other programs would continue, saying, "We may need to shore things up here and there, but those [contracts] are not problematic."

The MyFlorida Alliance contracts were awarded under the leadership of former state chief information officer Kim Bahrami in 2003. Bahrami resigned from her post in February. Marstiller, who is an attorney, succeeded Bahrami as chief information officer in May.

The MyFlorida Alliance began unraveling following the release in July of a blistering report by the Florida State Auditor General. The auditor general charged that the state technology office under Bahrami did not sufficiently document its decision to outsource, did not properly evaluate the bids and did not establish detailed contract provisions to protect state resources.

In a press release announcing the final termination of the MyFlorida Alliance contracts, Marstiller said the two companies had "worked hard to provide the state with quality services" while performing on the contracts for the past year. But after further review, she decided to terminate all contracts related to the MyFlorida Alliance.

"We already have addressed a number of the issues in the Auditor General's report and will continue to make adjustments to ensure that our procurements are transparent, competitive and fair," she said. "Further, we will continue to work with the Governor's Center for Efficient Government to ensure future outsourcing of these services will provide value to Florida's government, businesses and citizens."

The center was established within the Florida Department of Management Services to provide procurement guidance and assistance to state agencies.

An internal review by the State Technology Office under Marstiller turned up the additional information relating to communications between the agency and the unnamed bidder before the solicitation was released.

Ron Salluzzo, executive vice president of BearingPoint's state and local government practice, said that the company had worked diligently with Florida to create a business model for the state, which by the state's measure, had produced cost savings of $3 million annually and significantly improved customer service at the same time.

"Given this proven record of accomplishment, BearingPoint is disappointed by the state's decision," he said. "However, we understand the public procurement process and the objectives of the State Technology Office. We will continue to support the state on this important initiative."

(UPDATED, Friday, 2:50)

About the Author

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

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