Nevada officials rebooting failed HR, financial system upgrade; approve $90M contract
Nevada officials have taken the first steps to relaunch a massive human resources and finance system replacement project, nearly six months after the prior effort was canceled following years of delays and dysfunction.
The state Board of Examiners — a three-member panel made up of the governor, attorney general and secretary of state — approved the $90 million contract Tuesday with CGI Technologies, a Canadian IT consulting firm, to lead the integration of the new system.
The state also plans to pursue a separate contract to host the new system, according to contract bidding documents. The Legislature appropriated $166 million for the new project this year.
The Interim Finance Committee — which is composed of state lawmakers and makes financial and spending decisions while the Legislature is out of session — will meet next month to approve the $90 million contract.
It’s been a long time coming for the state to have a clear path forward to replace its human resources and finance systems, which have not been significantly updated since 1999. The project seeks to ensure all state employees fill out payroll and undergo hiring processes under the same system.
The five-year contract approved Tuesday brings the total cost of the decadelong effort to more than $170 million. The original project cost estimate made in 2017 was $50 million, when the state appropriated its first funds for the Silver State Modernization Approach for Resources and Technology in the 21st Century (SMART 21).
Over the next six years, the SMART 21 project was plagued by poor leadership, minimal staffing, lackluster training, an over-customization of systems and tensions with the contractor leading the project, The Nevada Independent reported in July. The contractor — LSI Consulting — was terminated last year, essentially stalling the project.
Republican Gov. Joe Lombardo axed the project in March, with state officials saying in July that the project was “past the point of salvaging.” By then, the state had already spent more than $80 million on SMART 21, tens of millions more than originally anticipated.
The cancellation meant that all state human resources and finance systems would revert back to the same software that had been in place since 1999. That system has faced significant issues, including a limited pool of employees who can keep the system functional. Project employees said the systems could fail at any time — potentially leading to catastrophic consequences — but state officials said that the systems are not “on the brink of collapse.”
State leaders said earlier this year that SMART 21 collapsed, in part, due to an over-customization of systems and that the new project would adopt an "off-the-shelf" product, making limited customizations to an existing product. The anticipated go-live date for a “minimum viable product” is Jan. 1, 2025, a timeline that project leaders and employees admitted was aggressive.
The state purchasing division released an “invitation to negotiate” with interested companies earlier this year, opting to not use the “request for proposal” process typically used in such large-scale government projects. Gideon Davis, the administrator of the state’s purchasing division, said the smaller scope allowed companies to “propose innovative solutions.”
The state received proposals from seven companies, ultimately deeming three of them viable: Deloitte, Oracle and CGI. Officials selected CGI after hearing presentations from the finalists. CGI has conducted similar projects in 22 states, including Utah and Arizona, Davis said on Tuesday.
Frank Richardson, a former SMART 21 project leader who says he was pushed out at the beginning of this year, said he envisions the new project suffering a similar fate given the issues that he suspects remain with the project.
“From my opinion it’s just kicking the can down the road, three years from now we’re going to be in the same place, and they’re going to hand it off to another group,” Richardson said.
CGI’s human resources projects use the Advantage system, the same platform the state has had in place since 1999. However, employees who worked on the SMART 21 project who spoke to The Nevada Independent anonymously emphasized that the current system has been customized so much that it no longer resembles a typical Advantage platform.
“People will get excited when they hear we're going with Advantage thinking that they're going to use the same thing they've been using,” said a former project employee who requested anonymity because they were not permitted to speak publicly. “What they have today looks nothing like Advantage.”