We know that UVa employees hate their new electronic procurement system, but it turns out that UVa is no more fond of it, Aaron Kessler reports in today’s Daily Progress. The state is charging “user fees,” meaning that universities across the state — including UVa — have to pay a 1%-2% fee on top of all of their purchases. This comes as news to UVa. That’ll run them $2.5M, and now they have to figure out how to distribute that money among their departments and rejigger their budgets, retroactive to July 1, to pay for it. UVa has asked the state for $400k in funding to help cover the unexpected costs, meaning that the state would be paying UVa so that UVa could pay them.
So why the enormous fees? Turns out the entire system was contracted out to CGI-AMS, with CGI agreeing that they’d fund it solely through user fees. But then CGI said that user fees weren’t enough to run the system, and that they were losing money on it. (How much money they lost is secret, claimed by the company to be proprietary.) So the state decided to start charging these new fees and paying $3M/year from its own pocket, and now CGI will make $12M/year on this, or twice as much. The company is now paid a flat fee, and the user fees thing has gone out the window. Along the way the state is doing many of the things that CGI was doing, including running the customer service center and handling billing and collection.
So we’re paying CGI twice as much to do significantly less work because they’re not making enough money…but they won’t say how much.
[…] This new eVA purchasing system set up by CGI-AMS for the state has “boondoggle” written all over it. […]
I wonder where this privatization thing is going. The Dems may be on a roll, but I don’t see them overturning the bizarre rip-off-the-gov’t version of free market ideology that washes over US history like a full-year nor’easter from time to time. Virginia Company? Transcontinental railway? VDOT? MZM?
Now the Coast Guard cannot even get boats that float from Northrop Grumman, etc., according to the Washington Post. They decided to outsource not only the contract to build the boats, but the contract to monitor the contract. Result: cracked ships that can’t go out in a storm (very expensive 123 foot cruisers, I mean).
John McCain wants to send a coupla divisions to Iraq (tens of thousands of soldiers), but the Pentagon in the last twenty years has thrown most of its personnel overboard so they could spend all our money on defense contracts. In the 1991 Gulf War, we had something like 570,000 troops over there, as well as a ton more in Korea than now, IIRC.
And on the dinky local front, my fav. hobby horse, the people who drive the garbage trucks and puck up the cans are no longer in the quintessential tough job on a track up to the middle class. The now excess profit that subsidized that dream now goes to Waste Management headquarters and the workers join the spreading goo of job insecurity.
colfer, you speak my mind. This government hand-out corporate welfare business has gone too far. We’re really setting ourselves up for a populist, Huey Long-type figure to rise to power if we can’t find some other way to stop this foolishness.
Sliwoski said his department estimated that eVA actually saved the state more than $40 million last year on its purchases, making the system more than financially worthwhile, despite the fees.
I’m eagerly waiting to see that elaborated upon.
I’m with you.