State pays ACS US$7.25M to settle software project suit

Minnesota's health department will pay integrator ACS the sum, bringing the now-killed project's tab to $41 million

Minnesota's Department of Human Services has agreed to pay ACS US$7.25 million to settle a lawsuit the systems integrator brought against it in connection with the development of HealthMatch, a system for determining a person's eligibility for health care.

ACS must be paid by March 31 under the terms of the settlement, which was announced this week. The payment will bring HealthMatch's total cost to more than $41 million, a department spokeswoman said. The original budget was about $13 million, according to a 2008 state report on the project.

The project was wracked with problems, including staff turnover, changes to state health care policy, increased project requirements and slow delivery of quality code.

As of May 2006, some 2,273 bugs had been identified and fixed, with 930 remaining outstanding at the time, according to the document.

The department fired ACS in March 2008 due to "insufficient progress and quality concerns" and abandoned the HealthMatch project. ACS subsequently filed suit in 2009.

The settlement "represents a portion of the contract price for the partially completed but un-submitted work on the remaining contract deliverables," according to a letter MDHS Deputy Commissioner Anne Barry sent to legislators this week.

An ACS spokesman did not respond to a request for comment.

While many software projects end in failure or don't meet original expectations, it's rarely possible to blame a single entity, given the important roles both vendors and customers must play.

"There's a tendency when these projects have a breakdown for the parties to paint the picture as very black and white, and say it's totally the other party's fault. in fact that's rarely the case," said Michael Krigsman, CEO of Asuret, a consulting firm oriented around helping organizations make their IT projects succeed.

The HealthMatch project should also be placed in the proper context, he added.

"These types of public health software systems are very complicated," he said. "They are not the only state that has had problems."

Judging from details in the state's 2008 report, the various problems with the HealthMatch project constituted "a perfect storm for failure," Krigsman said.

The state is now still using "aging systems developed decades ago and paper applications processed by state, county and tribal workers," according to an Associated Press report this week.

"If it weren't so sad, it would be enough to make you laugh. But instead it makes you cry," Krigsman said.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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Tags enterprise resource planningbusiness issueslegalsoftwareapplicationsapplication developmentacsCivil lawsuits

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Chris Kanaracus

IDG News Service
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