State officials begin fining Deloitte Consulting for failing to fix the glitch-ridden unemployment website it created.

State officials begin fining Deloitte Consulting for failing to fix the glitch-ridden unemployment website it created.

By Ashley Lopez
Florida Center for Investigative Reporting

After months of trouble following the launch of Florida’s new unemployment benefits website, the state has begun fining Deloitte Consulting– the contractor hired to create the new site.

The new $60 million unemployment website–CONNECT—has been riddled with problems since it launched Oct. 15.

As complaints and calls for a federal investigation have rolled into the state agency in charge of the program, there has been little improvement. Even the call centers created to help the hundreds  of people who can’t navigate the website have also been problematic.

Weeks ago, state officials warned Deloitte that it had until Dec. 20 to fix all the remaining technical glitches users of the site had been experiencing for the past two months. According to officials at the Florida Department of Economic Opportunity (DEO), if problems persisted up until that time, the company would face a daily fine of $15,000 for every day that issues remain. According to The Tampa Bay Times/ Miami Herald, there are still problems:

The state has started to impose daily fines and is withholding a $3 million payment to penalize a company that has helped overhaul the technically troubled unemployment-benefits computer system.

The Florida Department of Economic Opportunity announced Friday that it will hold back the payment and is enforcing a $15,000-per-business-day penalty against Minneapolis-based Deloitte Consulting for failing to deliver a “fully functioning” system.

Deloitte will be able to collect the payment when the system, known as Connect, is considered fully functional, department Executive Director Jesse Panuccio said Friday.

No deadline has been set for the system to be fully functional, but additional penalties could be applied if Deloitte is unable to complete the work without more consultants and vendors being brought in to direct and monitor the work.

“We always said there are issues with the system, and the question is at what point do we withhold payment and institute penalties,” Panuccio said in an interview. “We think we’ve reached that point.”

At the time, Deloitte wasn’t releasing comments on the fines and ongoing trouble with the site. However, on Dec. 23 the company defended it’s work on the state’s website. According to a statement from Deloitte spokesman Jonathan Gandal via the Times/Herald:

“Throughout this project, Deloitte has worked in good faith to meet or exceed DEO’s criteria for acceptance of our work. We have successfully completed the tasks and activities outlined in our contract and all subsequent amendments. In just 60 days, the new system has surpassed the performance of the unsustainable systems it replaced, meeting or exceeding longer term key performance indicators by reducing average time to adjudicate separation issues, reducing the number of claims requiring staff intervention, and decreasing average time to implement lower authority appeals.  Performance will continue to improve as the system matures and as both departmental users and claimants become acclimated to its new functions.

“The vast majority of eligible claimants are successfully accessing the CONNECT system and receiving the Reemployment Assistance benefits to which they are entitled.  As we have communicated to DEO, we believe that any remaining issues deemed ‘high impact’ by DEO’s own definition either require Departmental actions or are otherwise beyond Deloitte’s control.  We will continue to provide warranty support to DEO, in accordance with our contract, and work diligently to resolve any warranty items as they are identified. We will also continue to work with DEO to clarify the true nature of the remaining issues and will hold ourselves strictly accountable for fixing anything within our control as quickly as possible.”

Recently, 10 News in Tampa reported that these widespread problems were known to DEO well before the failed launch of the website on Oct. 15. According to 10 News:

…In June 2012, the DEO threatened to cancel its contract with contractor Deloitte because of repeated missed deadlines.  A letter from the state agency to the contractor indicated the “software development project (had) limited prospects of success.”

Yet the DEO kept Deloitte in-place after renegotiating its contract.  Deloitte promised new managers and a new plan, while the state received $4.5 million in restitution.

However, when the site was launched on Oct. 15, 2013, the problematic website had disastrous effects.

…The 10 News Investigators also confirmed Deloitte had problems with an unemployment website it created in Massachusetts. The companywas fired in November after it failed to meet a series of deadlines, similar to Florida’s.

“We asked about the issues that happened in Massachusetts and elsewhere and made sure that those same problems weren’t going to manifest themselves here,” said DEO Executive Director Jesse Panuccio.  “In hindsight, we would have liked to launch a site without issue.”

Exacerbating the problem– among other things– is a recent law that requires jobless benefits seekers to only use the new website to get assistance. Also in the new unemployment law, was a sizable reduction of unemployment benefits in Florida. The reduction, which was signed into law by Scott, cut maximum state benefits to 23 weeks from 26 when the jobless rate is 10.5 percent or higher.

A month ago, Sen. Bill Nelson and other Florida lawmakers asked federal investigations to launch  an investigation into Florida’s unemployment system.