California Courts and CIRM: Both Troubled by Technology Problems

The Sacramento Bee today carried an instructive piece that has implications for governmental enterprises that engage in major outside contracting and need complex computerized systems to monitor data and dollars.

That includes the California's $3 billion stem cell research effort. CIRM would be out of business without its outside contractors, which it is compelled to use because of a legal cap of 50 on staff size. The agency is also wrestling with a computer system to monitor the performance of its grantees and manage its multi-year grants, which will total nearly $1 billion by the end of this week.

The Bee's article by Robert Lewis is a fine piece of investigative reporting. Lewis chronicled the ins-and-outs of an effort to computerize the state's court system. The project began in 2001 and now faces costs close to $2 billion, but it is years away from completion.

The original cost projections appear to be unknown. The Bee quotes a court spokesman as saying costs estimates “at junctures where critical decisions were made” do not exist. How much has been spent so far? Court officials could not provide an answer.

Lewis' article notes that the state court project ballooned without the scrutiny that other state computer systems face. That's because the courts are an independent branch of government. CIRM is not an independent branch of government, but it receives even less normal state oversight, which usually comes from either the governor or the legislature.

Lewis does not identify a particular point where the the state court effort went wrong, although the court system severed ties with one major contractor in midstream. The project seems to have grown willy-nilly with differing goals, lack of a cohesive plan and huge no-bid contracts. Court officials also apparently ignored advice that called for a “business case” justification that would spell out the project's objectives.

CIRM's grant management system is small change compared to the court boondoggle. However, CIRM directors were told this year that the critically needed grant managements program is “at risk.”

The history of the CIRM project does not instill confidence. In October 2007, CIRM directors were told that the “complete cost” of the system would be $757,000. By the following spring, CIRM was seeking additional help at a cost of $85,000. By this year, the original contractor, Grantium, no longer was working on the project. Other contractors had been hired, at a cost of more than $350,000. Just last month, CIRM advertised on its site for more programming assistance. CIRM has made no public disclosure of all the costs of the system since the beginning of the Grantium contract.

In July, John Robson, vice president of operations for CIRM, differed with our reports of “disarray” in the grants management system. Robson, who did not join CIRM until after Grantium was selected, said the current system provides all the necessary information but is labor and time intensive. That is not a small consideration given the tiny staff (40 something) at CIRM. Robson also predicted that the current grants management system will save money compared to Grantium.

Robson made his comments to us following a meeting of the CIRM directors' Finance Subcommittee at which they asked for a detailed breakdown of spending on the grants management system. So far, that information has not been forthcoming.