'Quagmire' at VDOT not new Sources: Woes realized at least as early as 1998

BY PETER BACQUE TIMES-DISPATCH STAFF WRITER Nov 08, 2000

The Virginia Department of Transportation knew that its $54 million computer records system

project had serious problems more than a year before highway agency officials acted to

cancel the contract, sources familiar with the program say.

Indications the department's integrated document management system was not on track showed

up at least as early as January 1998. The Transportation Department canceled its contract

with the California-based Woodside Summit Group in November 1999.

A Feb. 9 department audit report criticized the project's procurement, administration and

financial management. Two senior department administrators have resigned, and the state

police are investigating the contract for possible fraud.

The department paid $46 million to Woodside Summit but estimates it received only $35

million worth of work from the company in return. The department today does not have the

working computerized record system the contract was supposed to produce.

Virginia's Transportation Department said it would not comment on the early reports of

problems with the contract work, but agency officials have said the first indications they

had that the records system project was in trouble came in the fall of 1999.

VDOT awarded Woodside Summit the first contract for what became a $54 million project to

develop the document management system for the 10,000-employee agency in 1996.

At least as early as 1998, department officials were pressuring the contractor and VDOT

employees to keep the computer records project moving forward, sources said.

The department's project manager told the contract's steering committee "he wasn't going to

let anybody sidetrack this program, and he was going to do anything he had to to keep it on

track," said one person familiar with the project.

"After that, nobody in the open meetings was really vocal about nondeliverables, or meeting

time schedules, or things like that," the source said. "Even those on the steering

committee, they didn't want us to know anything."

"It was getting to be a bad dream," said another person involved with the work at VDOT. "By

then, we were in the quagmire."

Saying the state "abruptly" canceled the contract for convenience, not legal cause, Woodside

has said it acted properly and complied with the contract's terms. The computer firm also

said the department never "at any time" questioned its performance during the project.

"The contract wasn't abruptly canceled," said a former Woodside Summit employee who worked

on the state project. The computer firm "was threatened over and over with termination of

the contract for 'failure to deliver.'

"Everybody at Woodside was very aware there were some serious problems there," the worker

said.

One early sign that the mammoth revamping of the agency's record-keeping system was in

trouble was a $754,000 unscheduled payment in 1997 to Woodside Summit.

The $754,000 figure was later corrected to $658,000 after a VDOT employee found a $96,000

arithmetic error in Woodside's billing.

The money was for similarly unscheduled costs for choosing of a software package, a payment

outlined in the February VDOT internal audit report.

An audit review concluded that "the level of effort did not justify the $754,000 charge,"

the report said. "The administrative Services Division analyst assigned to the project . . .

reached the same conclusion as did the project's own [independent verification and

validation] contractor," who worked for the department.

Woodside Summit agreed to pay back $393,080 of the charge. The department has said it would

check on whether the remaining $264,920 of the payment was justified.

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-- Doris (reaper@pacifier.com), November 08, 2000