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.