DMV computer project has cost $46.9M so far, HPE says

RI DMV HQ

PROVIDENCE, R.I. (WPRI) – Hewlett Packard Enterprise says it’s spent almost $34 million more than the state has paid it working on the notorious R.I. Division of Motor Vehicles computer project that remains unfinished after almost a decade of work.

HP Enterprise told R.I. Superior Court Judge Michael Silverstein the company spent $46.9 million on the project from January 2008 through this September, while the state has only paid about $13 million, court documents show. The state sued HP Enterprise last month after the company threatened to walk off the job unless it received more money, and Silverstein has ordered work to continue for now.

A company spokesman confirmed it has spent more than $40 million on the project but declined further comment.

Gov. Gina Raimondo’s administration has noted that HP Enterprise signed an amended contract with the state in November 2015 that foresaw the project being finished by this past Sept. 28, at a price tag of about $13.5 million after refunds. Saber Corp., a company later bought by HP, signed the original contract for the project back in January 2008, at a price tag of $8.8 million.

“Hewlett Packard pledged to complete the Division of Motor Vehicles computer project at a cost specified in the contract that they signed just last year,” R.I. Department of Revenue Director Robert Hull said in a statement. “HPE needs to fulfill that promise.”

According to Silverstein, HP Enterprise’s argument is that the amended contract only required the company to complete 54 “sprints” – two-week periods of intensive coding and testing – by Sept. 28, and since the system was not finished at that point, the state should have to pay $700,000 for each additional sprint required after that date.

The company estimates the state would owe an additional $12 million for the remaining work on the project, known as the Rhode Island Motor Vehicle System (RIMS), Silverstein said. So far the judge has sided with the state in the dispute, though the two parties are due back in court this month. He has also ordered them to continue mediation talks.

“The agreement as amended provided for a fully functional RIMS system, which HPE stated and the state agreed could be completed in 54 sprints,” Silverstein said in court Nov. 14, according to a transcript. In addition, he said, “during the negotiations leading to the [contract’s] fifth amendment, that was an issue which was resolved in accordance with the state’s position requiring a fully functional system.”

John Tarantino, a lawyer for the state, wrote in a court filing: “While HPE may now regret the business deal it made with the State, courts do not rewrite the terms of contracts. … If anything, however, the amount HPE has spent to perform its obligations under the [contract] reflects that it made a poor business deal.”

“The state cannot be faulted for HPE’s business decisions,” he added.

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