Oregon Accuses Tech Firm of Failing to Uphold Contract

Oregon sues Propylon, an Irish company, for breach of contract. The company is still working with the Kansas Legislature, however.

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(TNS) -- The Oregon Legislative Assembly sued a technology company that contracts with the state of Kansas after its bill-drafting software failed to meet expectations.

Some Kansas lawmakers blame Propylon, an Irish company with a U.S. office in Lawrence, for technical problems that slowed down the 2015 legislative session.

Oregon sued Propylon for breach of contract, settling out of court for $600,000 in 2014. The problems identified in the lawsuit match many of the issues raised by Kansas legislative staff members in documents released last week.

Kansas has paid the Dublin software company $15.8 million since 2005 to build custom software and provide ongoing technical support. Legislative leaders have held off renewing the contract until the firm addresses problems with the software.

Oregon contracted with the company in 2006 to build custom bill-writing software but terminated the contract three years later "as a result of Propylon's repeated breaches and Propylon's apparent inability to produce the software it had contracted to deliver," according to the lawsuit filed by the Oregon Legislative Assembly in 2010.

"Propylon's false promises that it could repair the problems induced Oregon to pay Propylon a total of $2,245,000 under the Agreement before it became apparent that Propylon would not and could not come through on its obligations," the complaint states.

Propylon was supposed to repair bugs in its software before Oregon's 2009 session, according to the complaint, and the company's CEO assured the state the software was ready for the session, but it "nonetheless contained 'minor issues' that Propylon intended to repair through a patch to be delivered later."

However, the legal brief, written by the Oregon attorney general's office, states that "the 'minor issues' actually constituted more than 1,000 outstanding problems ... many of them serious flaws preventing use of the software."

Oregon sought more than $3 million in damages but settled for $600,000, according to a copy of the settlement agreement obtained by The Eagle. The settlement notes that it is not an admission of wrongdoing by either party.

Asked about the lawsuit, Propylon's CEO John Harrington said in an e-mail that he rejected the insinuation that Propylon had not met its obligations to Oregon or that the lawsuit had any bearing on the firm's work in Kansas.

"The project with the State of Oregon ended up with both parties settling to an agreement where Propylon returned some funds to cover license and other fees. Neither party admitted fault and as sometimes happens in business we both agreed to go in our separate directions," Harrington said.

The Oregon Attorney General's Office would not comment on the settlement. The Kansas Legislative Information Systems and Services system, which Propylon built, has programs for bill writing, research, setting the Legislature's calendar and posting information online to the website. The goal was to seamlessly integrate the process of lawmaking and make it accessible to the public. But lawmakers and staff members say that some of the programs have been plagued by glitches since 2011, when the software launched.

Senate President Susan Wagle, R-Wichita, has said that glitches in the software often forced staff members to work late into the evening during the session and delayed votes.

Kansas has stuck with the firm but halted renewal of its contract in July pending a review.

The state was initially slated to pay the firm $625,000 for this fiscal year, which began in July, but that remains up in the air. A special committee made up of the Senate president, the House speaker and the Democratic leaders of both chambers are reviewing the situation. Last week, the Legislature's researchers, clerks and attorneys submitted documents outlining the problems.

Attorneys from the Office of the Revisor of Statutes identified numerous problems, including that language "sometimes completely disappears from the bill" while attorneys work on it and that formatting errors often occur.

The Legislative Research Department said the software doesn't always accurately analyze data, making it difficult "to provide legislators with requested information about the estimated fiscal impact of legislation." Before the Kansas legislative leaders act on the company's contract, Propylon must submit a formal remediation plan. House Minority Leader Tom Burroughs, D-Kansas City, initially objected to this idea. He said he didn't want to wait six weeks for such a plan and that Propylon should just proceed with needed fixes.

"We need to get started," Burroughs said. "And so I say, 'Here it is, get busy, prove your worth and let's move forward.' "

But Wagle contended that before lawmakers agree to another contract, it is important to have Propylon commit to a resolution in writing. "I don't know how we go forward in spending taxpayer dollars without a written contract, knowing that this was dysfunctional last year," Wagle said. "A document that says this is what our goal is, this is what we're paying for, before any more money is spent. I don't see how we do that without a written document that we put on record."

Kansas paid Propylon nearly $9.7 million to build the Kansas Legislative Information Systems and Services program between 2005 and 2011. In the years since, it has paid the company more than $6.1 million for technical support -- including technical fixes to the system.

"The Kansas system has been in production for 5 years and has been modified by the State team several times since. We have fulfilled all of our contractual commitments during this period," Harrington said in the e-mail. "I am happy to report that I have spoken with staff leadership and the State IT team is currently putting plans in place to address the requests from staff. These activities are being supported by Propylon under our current maintenance contract."

House Speaker Ray Merrick, R-Stilwell, said in an e-mail that the purpose of reviewing the contract was to allow staff members to present their problems with the system. He said he was pleased with progress so far and that the review has resulted in "productive conversations" with Propylon "about how to address and resolve the identified issues."

After lawmakers began scrutinizing the firm's contract this summer, Propylon hired former Kansas House Speaker Doug Mays as its lobbyist. Mays was speaker at the time the firm began talks with the state. He said last month that he could not remember whether he had a role in selecting Propylon for the contract.

The company also hired Hein Governmental Consulting to represent it. That firm employs Cindy O'Neal, the wife of former House Speaker Mike O'Neal, who was in office at the time the system launched.

(c)2015 The Wichita Eagle. Distributed by Tribune News Service.


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