Lessons to be learned from a project nightmare

11.03.2015
The U.S. Department of Labor (DOL) is in the middle of an Oracle Financials implementation that has gone horribly wrong. Its experience should serve as a cautionary lesson for enterprises planning major projects.

In June 2008, the DOL awarded Global Computer Enterprises Inc. (GCE) a 10-year, $50.4 million contract for Oracle Financials. The first part of the contract required GCE to migrate the DOL to the Oracle financial software running in the GCE cloud. The remainder of the contract was to pay for software maintenance and hosting services.

At the beginning of 2010, the DOL reported that it was live on Oracle Financials and the legacy systems had been decommissioned. Unfortunately, by the end of 2009 the DOL had spent $11.5 million and, according to Washington insiders, had only implemented a small part of a total financial package. Implementation continued and costs increased. From 2010 to 2012, the DOL spent an additional $57.7 million with GCE on implementation and cloud hosting.

In 2013, the FBI began investigating GCE's alleged use of foreign nationals on federal contracts requiring U.S. citizens to perform the work (presumably to reduce GCE's operating costs, but violating contract terms and potentially compromising personally identifiable information in DOL databases.) Although GCE collected another $14.5 million that year under the original contract, GCE was running out of money.

In September 2014, GCE filed for bankruptcy. The DOL had to scramble to keep its financial systems operating. It engaged Booz Allen to help operate its current financial system until it could migrate to the Department of Transportation's Shared Service platform.

The DOL's experience reinforces the need to follow good contract management practices, including:

The DOL's financial systems debacle demonstrates the importance of careful contracting and excellent project management. Conceptually, both are straightforward. In practice, both require an enormous amount of work, consume huge amounts of time, and require great attention to the details. But failing to perform these critical functions successfully can cost far, far more. Just ask the DOL.

Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. Contact him at BartPerkins@LeveragePartners.com.

(www.computerworld.com)

Bart Perkins

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