Credibility Gap

Bad contracts leave lasting damage.

by / October 3, 2005
Elimination of the Florida State Technology Office (STO) in June 2005 emphasizes the importance of CIOs' credibility -- and the fragility of their relationships with lawmakers.

Florida's STO began unraveling several years ago, when the state auditor blasted procurements associated with the MyFlorida Alliance, a bold attempt at outsourcing state government IT services. The auditor's report said former Florida CIO Kim Bahrami may have improperly awarded contracts worth hundreds of millions of dollars to BearingPoint and Accenture.

After Bahrami resigned in 2004 to take a job with BearingPoint, the task of straightening out the mess fell to Simone Marstiller, who was a deputy chief of staff for Florida Gov. Jeb Bush before taking over as state CIO. Marstiller, a smart and savvy choice for the post, quickly killed the questionable contracts.

But the damage to her office was already done. The scandal shook state lawmakers' confidence in the STO, eventually leading to its demise. What's more, failure of the Florida outsourcing contracts triggered intense scrutiny of technology spending throughout the state. IT professionals who had no role in the suspicious initiative now find themselves under a microscope for even the most routine technology spending.

For a glimpse of the turmoil that can follow, Floridians need only look to the opposite coast.

California faced a similar scenario several years earlier, when then-CIO Elias Cortez came under fire for signing a controversial statewide licensing agreement for Oracle database software. A state auditor's report said benefits of the hastily approved, $95 million agreement were greatly exaggerated, and the deal was rescinded after a series of high-profile legislative hearings.

California lawmakers subsequently refused to extend the life of the California Department of Information Technology, causing the troubled agency and the state CIO position to disappear in June of 2002. The scandal gridlocked IT progress, as the governor's office pored over even the smallest IT purchases with a fine-toothed comb.

Lately California appears to have regained its footing -- the state is now consolidating data centers, and recently launched a strategic sourcing initiative to reform IT procurement.

Before that, however, were several rough years for state agency IT professionals. California owes much of its recent progress to the skill and determination of current CIO J. Clark Kelso.

Kelso, a uniquely talented negotiator and collaborator, succeeds without statutory authority. Clearly his inclusive style is much more effective than the ham-handed approach of his predecessor, Cortez.

Perhaps California's experience -- and the collaborative style of the state's current CIO -- is instructive as Florida IT professionals work to regain trust and re-open dialog with elected officials.
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