Pennsylvania is taking another stab at modernizing its outdated unemployment compensation benefit delivery and appeals system and this time, officials hope it works.
The state Department of Labor & Industry executed a $35 million contract with Florida-based Geographic Solutions to create a system that enhances customer service, improves quality, is more operational efficient, and is sustainable into the future.
The company boasts on its website that its "solutions" can be found in more than 75 percent of the country.
Labor & Industry Secretary Kathy Manderino said the contractor is expected to begin work on the system on Aug. 1 with a projected timeline of 18 to 24 months to make it operational.
"We're hoping to have the new system up and running sometime in 2019," she said.
The department hired Chicago-based CSG Government Solutions in 2015 for $6.1 million to assist with developing plans for this project and help monitor its progress to ensure the work is done right before payment is made at certain milestones along the way, Manderino said.
Labor & Industry's first attempt to modernize its system through a contract awarded during former Gov. Ed Rendell's administration to IBM was deemed a failure after running 45 months behind and $60 million over budget.
Former Gov. Tom Corbett's administration pulled the plug on that contract in 2013. Gov. Tom Wolf's administration has a lawsuit now pending against the tech giant over such claims as breach of contract, fraudulent misrepresentation, and fraudulent concealment of emerging problems with the project.
"All told, Pennsylvania taxpayers paid IBM nearly $170 million for what was supposed to be a comprehensive, integrated, and modern system that it never got," Wolf said in announcing the lawsuit.
The latest attempt to modernize the system was expected to cost around $60 million based on other states' experience, Manderino said. Given that Geographic Solution's proposal came in at $35 million instead, she said, "we were very pleased."
Now she hopes lawmakers will find a way to pay for the replacement to the current legacy system that she describes as held together with duct tape and chewing gum.
Senators had serious misgivings last year about giving the department any more money without an accounting of how it had used the nearly $200 million that was, in part, intended to pay for the computer modernization.
Mostly, though, they learned the department spent the money to cover personnel costs associated with operating the unemployment compensation system.
Failure to reach an agreement on additional funding by the end of last year led to the layoffs of hundreds of workers in December and lengthy wait times for jobless workers calling about their benefits. In April, Gov. Tom Wolf signed a temporary funding bill to provide $15 million, enabled the department to call back about 200 of the furloughed workers to improve customer service.
Part of that bill though required Labor & Industry to develop a plan by this month for weaning itself off the need for state supplemental funding for recurring operational costs and to submit a separate funding request to cover the cost for the benefit modernization project.
Manderino said lawmakers now have that plan in hand, she is hopeful the checks and balances the department has put in place satisfies their concerns enough to provide funding for the project.
Senate Labor & Industry Committee Chairwoman Kim Ward, R-Westmoreland County, said, "That funding has to come through. We can't as legislators complain that they are not modernizing the system and then when they are ready to go, refuse to fund it. It's something we should find a way to do, absolutely."
*This story was updated to reflect a more recent cost of the CSG Government Solutions contract.