State reaches settlement in DMV computer system lawsuit

Cost of project, spanning 3 governors, has more than doubled to $20 million

Photo: Gloria So/WPRI 12

PROVIDENCE, R.I. (WPRI) – The state and the technology company installing a long-overdue computer system at the Department of Motor Vehicles have reached a legal settlement that calls for the company to keep working to get the system up and running by July.

Announced Wednesday, the agreement means DXC Technology – formerly Hewlett Packard Enterprise – will receive $5.5 million from the state to continue working on the computer system, and an additional $1.5 million for money owed under the prior contract.

The project’s final cost to Rhode Island taxpayers will be roughly $20 million when all is said and done, officials now estimate. The Raimondo administration is seeking to extend a $1.50 DMV fee to cover the cost. The project’s price tag was originally supposed to be $8.8 million, back in 2008.

The state sued HPE last fall after the company threatened to walk off the DMV job if it did not receive more money. R.I. Superior Court Judge Michael Silverstein ordered the company to temporarily continue work while the legal process unfolded. Retired Chief Justice Frank Williams handled mediation between the two parties in an effort to avoid a trial, which was scheduled to start next month.

“To me it’s a win-win,” Williams said Wednesday. “And I’m a taxpayer in this state, too. My whole life. And I can say to the public honestly that this was not a loss to them, or to the governor, or to the General Assembly that appropriates the funds, or to the Department of Motor Vehicles that is required to serve them.”

Williams added that research done during the mediation process indicated a comparable system would cost $44 million to build, more than twice as much as the DMV system is expected to cost when all is said and done.

In a news release, R.I. Department of Revenue Director Robert Hull – who oversees the DMV – said the “renewed commitment” means the new computer system is now on track for a July 5 launch. It is replacing a nearly 40-year-old mainframe.

“This agreement clarifies and confirms DXC Technology’s commitment to delivering a fully functional system to replace the aging mainframe now in use by the Division of Motor Vehicles,” Hull said in the release.

Williams added: “I expect we’ll go live over July 4th weekend or I’ll be there with my own whip to get it done – for what we’ve been through and what the state has been through.”

The computer project has now spanned three governors and dragged on for nearly a decade. The state has spent about $13 million on the project so far, but the company has claimed the actual cost is approaching $50 million.

Virginia-based DXC Technology, which was created by the merger of Hewlett Packard Enterprise and Computer Sciences Corp. (CSC) earlier this month, inherited the DMV lawsuit brought by Rhode Island officials last fall.

“This agreement reaffirms our longstanding commitment to the successful completion and launch of the computer system,” Marilyn Crouther, a DXC senior vice president and general manager for the U.S. public sector, said in a statement. She said her company expects the final product “to be a model for other public-sector agencies.”

Hull also warned drivers that “wait times will certainly increase in the initial weeks after the launch” on July 5.

Tim White ( twhite@wpri.com ) is the Target 12 investigative reporter and host of Newsmakers for WPRI 12 and Fox Providence. Follow him on Twitter and on Facebook

Ted Nesi contributed to this report.