RI, HP reach deal to finish long-delayed DMV computer project

After nearly 10 years, officials insist $16.5M system will launch in September 2016

PROVIDENCE, R.I. (WPRI) – After nearly 10 years and millions of dollars in cost overruns, state officials say they’re confident the effort to build a new computer system for the R.I. Division of Motor Vehicles is finally on track to succeed.

Following five months of negotiations, the Raimondo administration signed an amended contract Tuesday with Hewlett-Packard Enterprise (HP) that calls for the infamous IT system to be finished and in use by September 2016, at a final cost of $16.5 million.

But the net cost to Rhode Island taxpayers will be lower. As part of the contract amendment, HP has agreed to pay Rhode Island $3 million over the course of the next year to make amends for its role in the problems with the project, known as the Rhode Island Motor Vehicle System (RIMS).

“There is a light at the end of the tunnel,” Walter “Bud” Craddock, who took over as DMV administrator in June, told WPRI.com. “It is progressing. The progress is measurable. We’re all confident that it is going to get done, based on what we can see and the work that’s being done.”

Thom Guertin, the state’s chief digital officer and the man widely credited with turning the DMV project around, estimates it is now roughly 70% finished. “We feel confident – because the system is performing and we can test these transactions – that we’re going to release the system in September 2016,” he said.

HP officials declined to be interviewed on the record, but in a statement, a spokesman said the company “is pleased with the agreed upon plan that allows us to work in partnership with the state to implement the project. We are confident about the positive impact this work will have on the citizens of Rhode Island.”

If the new computer system does launch successfully next year, it would allow officials to finally put behind them a project that has become synonymous with government waste and incompetence in Rhode Island.

“I equated this with Boston’s Big Dig,” Craddock said.

The DMV first announced plans to build a new computer system in 2006. The $8.8-million contract was awarded in 2008 to Saber Corp., a technology consultancy, and the system was supposed to be done by 2010. But Saber was soon sold to another company, EDS Corp., which itself was then quickly sold to Hewlett-Packard.

While the corporate changes made the project difficult to track, a significant share of the blame for its woes also belonged to the state, which wound up paying $1.3 million to HP after all its work from 2008 to 2010 had to be scrapped. By 2011, with $8.7 million already out the door, the state stopped paying HP.

Drivers, meanwhile, have been shouldering the rising cost of the project by paying a $1.50 technology surcharge on DMV transactions. The state borrowed $11 million to fund the new computer system back in 2010.

Multiple governors have bemoaned the DMV project over the last half-dozen years as deadline after deadline has been blown. Former Gov. Don Carcieri, whose administration launched the project, said in 2010 that HP had “really let our people down.” His successor, Lincoln Chafee, described the project as “a nightmare” in 2013.

State Sen. Lou DiPalma, who chaired a commission formed in 2012 to study the DMV, attributed the DMV project’s struggles to “a lack of the right oversight,” saying: “It was there, but it wasn’t to the breadth and the depth that it needed to be.”

Things began to change in 2013, when Chafee reached out directly to HP CEO Meg Whitman, who pledged to direct more resources to getting the project done.

Then, in April 2014, Guertin was sent in to assess the situation. His first impressions weren’t good.

“It was a jumble,” he said. “It was a mess. We couldn’t produce real transactions. We couldn’t test it. We couldn’t even evaluate performance at that point in time because of that. We had issues on the way you document code, the way it’s structured – there were a lot of pieces that I didn’t take kindly to and didn’t put a real positive spin on.”

Guertin decided to organize what he recalls as a “very intense” three-day meeting with staffers from HP and DMV where the various teams spoke candidly about what had gone wrong. He and others say that marked a turning point.

“It was really a change in approach and methodology and commitment from both sides that I think really made the difference,” Guertin said. “Those three days shed a lot of light. … We came out of those three days of discussions and went to this new approach.”

“We have HP and DMV and IT people sitting side by side,” he said. “We have a process where people are making decisions in a rapid fashion. It’s an iterative approach where you don’t put a date on the calendar and say, ‘OK, we’re going to have a meeting to discuss this.’ It’s, ‘We need to discuss it in 10 minutes.'”

Another major change, Guertin said, was in the way the software developers do their work. They are now writing code in what he described as two-week “sprints,” allowing the product to be evaluated and tested on a regular basis, unlike earlier in the life of the project when no testing was done for months – or longer.

HP has as many as 50 employees assigned to the DMV project, with up to eight DMV employees and a half-dozen from Guertin’s office also working on it. They’ve taken over a major portion of DMV’s third-floor administrative offices in Cranston, which now look a bit like a tech startup. Hundreds of color-coded Post-It notes on the walls show each discrete task that needs to be incorporated into the software.

Guertin estimates 1.5 million lines of software code have been written for the DMV system, with 1.2 million of those done since the three-day “reset” meeting in April 2014. “In the last 18 months we’ve written more code and actually had more testable transactions than in the last seven years combined,” he said.

Craddock said the ability to keep testing the system as it gets built has made him hopeful that the September 2016 launch date will stick. “I’m very confident that we’ll be able to meet the deadlines,” he said.

Under the terms of the contract amendment signed this week, the state is scheduled make its first payment in years to HP at the end of January, for $1.23 million, according to Guertin. He said the remaining payments in the new contract are tied to progress on the project, with the final payment set to be made 30 days after the system is up and running.

Rhode Island has taken a different approach to its technology woes than some other state governments. Just last month Michigan sued HP over a $49-million IT modernization project allegedly gone wrong, and in 2012 Vermont reached an $8-million settlement with the company over that state’s DMV IT project.

Despite the long delay, Guertin and others argue Rhode Island’s DMV system could turn out to be a good deal. He said other states have spent an average of $30 million to $40 million for DMV computer upgrades with similar capabilities.

DiPalma, the state senator, made the same point. “It’s higher than what we originally had put in place, but in comparison to what we’ve seen from other states, it’s a fraction of what it is in other states,” he said.

Craddock said the DMV’s current mainframe computer system – which dates back to the early 1980s, and is too old to use a mouse for navigation – is slow and difficult to keep up-to-date. The new system should be easier for DMV staffers to use, eventually helping to reduce wait times and allowing more transactions to be completed online.

“Next year when things go live, very soon thereafter people will have forgotten how long it took and how much it cost, especially if it works well,” DiPalma said.

DiPalma also said the changes with the DMV project reinforce state leaders’ decision back in 2012 to create the new Office of Digital Excellence that Guertin leads, with staffers who have the expertise to keep an eye on taxpayer spending on technology.

“Thom is one phenomenal state employee,” DiPalma said. But, he added, “Thom’s not going to be there forever. We need to ensure that we learn from this and we capture these things, so that when Thom isn’t here anymore we always have to be able to institutionalize a process or procedure.”

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He hosts Executive Suite and writes The Saturday Morning Post. Follow him on Twitter: @tednesi

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