Lawmakers press Mills administration on delays in $22 million software contract

Mar. 26—A legislative committee is pressing the Mills administration for more information on a contract for human resources software that is running years behind schedule and has cost the state more than $22 million.

Last month, the Maine Department of Administrative and Financial Services threatened to terminate the state contract with California-based Workday Inc. and seek $22.2 million in refunds, effective today, unless the company remedied "all issues" related to the contract. Workday had paused all work on the project in February amid rising tensions with the department.

On Friday, the Legislature's Government Oversight Committee voted unanimously to send a letter to the department requesting more information on the Workday situation, as well as the years-long delays among several contractors to replace the state's outdated human resources software.

"It's been six years since the original bid went out to fix this broken system, outdated system, and I think the public has a legitimate inquiry," said Sen. Rick Bennett, R-Oxford. "Two administrations seem to have had problems with this. This is demanding legislative oversight at some level."

The committee took up the issue at the request of Rep. Justin Fecteau, R-Augusta, who had requested a full investigation into the tens of millions of dollars spent on an as-yet-undelivered software upgrade. Fecteau has also raised concerns about allegations of "sexual misconduct" involving the Workday contract, although those issues will not be part of the legislative request because they are outside of the committee's purview.

Given all that has become clear and the lack of information that has been shared with lawmakers . . . I am urging a full, complete and independent investigation," Fecteau told committee members on Friday morning. "I believe the toxic environment surrounding this program has been a waste of taxpayer funds and put state personnel at risk, even though this modernization is much needed."

Rather than launch a full investigation, the committee took a half-step on Friday by opting to send an initial letter to the department seeking detailed information on the Workday contract.

The committee would likely then follow-up by asking department officials to answer questions at a future meeting before deciding whether to direct the Legislature's watchdog agency, the Office of Program Evaluation and Government Accountability, to launch a full investigation.

"We escalate our tactics depending on the responses that we get," said committee co-chairman Sen. Nate Libby, D-Auburn. "In my view, the (committee) writing a letter is an escalation step. Certainly, we have investigative powers and subpoena powers reserved for when we are not getting anywhere."

The most recent issues with the Workday contract and the department's threat to terminate first came to light publicly during a legislative budget hearing earlier this month.

Workday was hired by the LePage administration in 2016 to replace an antiquated computer system used to manage payroll, vacation time, taxes, health care and retirement benefits for more than 10,000 state employees. The company was hired after an earlier, multi-million dollar contract failed to produce a new system.

The new software system was supposed go on online last July under the contract with Workday, but it has been delayed.

In testimony before the Legislature's budget committee in early March, finance Commissioner Kirsten Figueroa was questioned about the project and said the state remained confident in the software system, even as it was threatening to sever ties with Workday. But she also told lawmakers that the state would need another $8 million to bring the system online and that it wouldn't be fully implemented until 2022.

In a sternly worded letter to Workday officials on February 25, meanwhile, Figueroa had already threatened to cancel the contract effective today unless the company fixed a long list of problems within 30 days. Figueroa also indicated that, if the contract were terminated, the state would demand the repayment of $22,164,755 "due to incomplete deliverables and failure to meet the state's requirements."

It was unclear Friday morning about the status of the state's contract with Workday. Department officials did not immediately respond to questions about whether the contract had been terminated.

"Throughout this contractual relationship, the State has relied upon the expertise and word of Workday," Figueroa wrote to Workday senior vice president Christopher Curtis. "However, Workday has consistently operated in bad faith and has knowingly misled State of Maine officials."

This story will be updated.