The problem, Mr. Watson, is that it doesn't pencil out

You know my passionate advocacy of transparency into how we spend public dollars is a driver of my interest in public policy. The $2 billion slice that is technology in our state is only one piece of the puzzle of course, but it’s something that is a virtual black hole. Despite enormous amounts of work to date, we are just at the beginning of a long journey of structural reform in this area.

House Bill 3178 passed the legislature and sat on the governor’s desk today. It is an important step forward in seeking transparency into the $2 billion, and I’m proud of the stakeholders who came to the table to pull it off. I’m pleased that it is a vital step forward in creating a true enterprise wide strategy. It is a step that will only work with ownership from agency CIOs, DIS, OFM and legislators. I get that.

The Governor signed the bill today but she used the red veto pen on a chunk of the legislation. She killed sections 5,13,14 and 15. A good argument can be made that the core integrity of the bill still stands toward accomplishing three central goals: 1) create a line item for technology in the budget, 2) execute upon a true enterprise wide strategy across state government, 3) save substantial dollars in this year’s supplemental budget and in the years to come. For that I’m grateful to the Governor.

The decision to veto the four sections is really driven by the folks on the front line who feel they couldn’t be done without more resources. I guess the 6,000 IT people in state government spending $2 billion a biennium were busy.

In all seriousness, after much reflection the only thing that keeps me from going nuclear on the liberal use of the red veto pen by the bureaucracy is that incoming OFM director Marty Brown have empowered OFM’s Stan Marshburn to lead the effort around technology systems reform. He’s a thoughtful, gracious, intelligent and forward-thinking numbers guy with 33 years of experience bringing about change. He gets it that my criticism over our technology spend doesn’t have anything to do with technology. It’s about big numbers and he recognizes how structurally broken state government remains in this category. He seems truly committed to the idea that in next year’s two year budget we’ll literally have a technology line item. For that transparency alone, I consider the legislation a big success.

I think the veto of the ‘application services’ section was a huge mistake and missed opportunity, but we’ll take another run at during this interim because it’s good public policy. Perhaps it’s just me but I’m starting to get the idea that state government doesn’t like to outsource work. (Ok, enough sarcasm for one post).

But one section that was vetoed makes me more than frustrated and disappointed. It makes me resentful that the light of transparency on the $300 million state data center was shut off once again, and that the executive branch folks didn’t try and work with me during the entire legislative process on this one. They just waited silently in the shadows for their opportunity to veto the section they really, really hate. (Ok, now I’m really done with the sarcasm).

After a year of hard work trying to push, prod, agitate and organize for the state bureaucracy to write a real business plan for the Wheeler state data center instead of the pathetic, fraudulent one submitted last year, I finally included a provision in the legislation to require just that.

It’s section 5 of the bill and has been vetoed.

NEW SECTION. Sec. 15. (1) The office of financial management
25 shall contract with an independent consultant to:
26 (a) Conduct a technical and financial analysis of the state’s plan
27 for the consolidated state data center and office building; and
28 (b) Develop a strategic business plan outlining the various options
29 for use of the site that maximize taxpayer value consistent with the
30 terms of the finance lease and related agreements.
31 (2) The analysis must consist of, at a minimum, an assessment of
32 the following issues:
33 (a) The total capital and operational costs for the proposed data
34 center and office building;
35 (b) The occupancy rate for the consolidated state data center, as
compared to total capacity, that will result in revenue exceeding total
2 capital and operating expenses;
3 (c) The potential reallocation of resources that could result from
4 the consolidation of state data centers and office space; and
5 (d) The potential return on investment for the consolidated state
6 data center and office building that may be realized without impairing
7 any existing contractual rights under the terms of the financing lease
8 and related agreements.
9 (3) This review must build upon the analysis and migration strategy
10 for the consolidated state data center being prepared for the
11 department of information services.
12 (4) The strategic plan must be submitted to the governor and the
13 legislature by December 1, 2010.

This section is merely a request for a thoughtful, comprehensive, honest business plan about how to move forward. Too much to ask because the state budget didn’t fund the request specifically, I’m told by OFM. But look closely at the actual questions and issues in the provision. Wouldn’t you think they could be easily answered given that the entire project is nearly complete? Amazing.

So we continue to watch construction daily of our massive $300 million state data center in Olympia that has literally no valid business, financial or technical plan to justify its return on investment. All I was asking was for someone–anyone–to write a business plan that shows how this massive facility will pencil out for the state. You’ll notice that I wasn’t focusing the analysis on the PAST of the state data center (I’m not trying to dig up the bodies) but on it’s FUTURE.

The problem, Mr. Watson, is that by creating a valid business plan for how the facility pencils out, it would become clear that it doesn’t.

One day–whether tomorrow or in 10 or 15 years–you can safely bet there will be graduate school case studies written about how this state data center is bad public policy, bad technology strategy, bad financing and a bad return on investment. It is, in my opinion, a total, complete and unequivocal waste of the taxpayer’s money that we will regret for generations.

Under my legislation and this year’s state budget there is a high likelihood that large numbers of front-line IT people in state government will lose their jobs. It pains me deeply to see such personal loss and the impact on families while IT management continues to invest unabated in questionable buildings, infrastructure, servers, PCs, custom software and so much more in a totally uncoordinated and unjustified fashion.

Your partner in service,

Reuven.