State Spends $40 Million For Nothing? -- Big, Unfinished Computer Project May Get The Boot

OLYMPIA - State officials are divided over a Department of Licensing computer project that's nearly two years late, nearly $10 million over budget and that, if completed, would cost five times more to operate than the computers the department now uses.

The unfinished computer system has created a power struggle pitting lawmaker against lawmaker, and the Legislature against a state board.

The License Application Mitigation Project (LAMP) was supposed to be a technological leap forward for the licensing agency. Eventually, the project was supposed to bring together information on drivers licenses and car and boat registrations in one supercomputer.

But rather than streamlining the system, some lawmakers say, the project is an example of government ineptitude.

Its first phase, begun in 1990, was to be completed in July 1995 but now won't be finished until November, if at all. Its price tag, once $41.8 million, has grown to $51 million.

That has created a difficult choice for state officials: whether to forge ahead with a project that already has cost the state more than $40 million, or cut losses now to avoid even more cost overruns and delays.

Licensing officials estimate it would cost an additional $7 million to complete the first phase by November.

The first phase would only bring drivers-license information online in the LAMP system - in other words, exactly what the state can already do with its existing drivers-license computer system. But it would cost about $4.2 million more per year to operate. The state now spends about $800,000 a year to run its system. Using LAMP would balloon the annual cost to roughly $5 million.

It would be the state's equivalent of "the $800 Pentagon toilet seat," said Sen. Bill Finkbeiner, R-Redmond, who wants the project killed.

To bring about what the Legislature and licensing officials envisioned - combining driver's licenses and vehicle registrations - would cost $18 million more, according to Licensing Department estimates.

Finkbeiner said that given the project's troubled history, there's no guarantee the cost won't end up much higher. He said the money - which comes from the gas tax and vehicle-registration fees in the state's transportation budget - could be better used to build roads.

The state has had other problems with large computer projects. The Department of Social and Health Services has been trying to computerize its welfare records since 1982. But its first attempt, the Community Services Management and Operations System, or COSMOS, was ditched in 1989 after $20 million was spent because caseworkers found it easier to do the work by hand.

The next attempt, the Automated Client Eligibility System, or ACES, was begun in 1991 but put on hold in 1992 when cost estimates for initial development work doubled. The project manager was also fired after a state investigation found he had improperly passed on confidential information to a potential bidder. Finally, after five years, the system went online last April.

LAMP's problems were partly caused by poor management and partly by legislators, said Evelyn Yenson, who was appointed state licensing director in January.

Early in the project, licensing officials decided to develop one part of the project in-house and have a private contractor, DMR Consulting, work on the other part. Yenson said the state apparently thought it could save money by doing part of the work in-house. But that led to poor coordination and delays.

More delays were caused when legislators diverted money from the project to build a new offramp for the Emerald Downs racetrack in Auburn. And every time legislators passed new laws affecting licensing and registrations, the project had to be altered, bringing even more delays, Yenson said.

Those delays were costly. DMR continued to receive its $216,000 monthly fee to manage the project. If the state decides to finish the first phase by November, DMR will have received $6.2 million more than originally anticipated, Yenson said.

More fundamentally, LAMP's problems were caused by its scope. As in Oregon, Arizona, and California - where multimillion-dollar computer projects ran into huge cost overruns - some computer experts said Washington officials overestimated what the project would bring and underestimated its complexity.

"I think the common thread in all those states was optimism about the ability to develop a very large system," said Ed Lazowska, chairman of the University of Washington's computer-science and engineering department and a member of a board that oversees state computer projects. "These things were perceived at the time to have very large benefits and not to be very difficult to construct. They have turned out to be very difficult to build and very hard to operate."

Lazowska, Finkbeiner and Steve Kolodney, director of the state's Department of Information Services - all members of the state Information Technology Board - were in the majority when the board voted last week to pull the plug on LAMP.

However, the project has its defenders in the Legislature, including Sen. Eugene Prince, a Republican from Thornton, Whitman County, and chairman of the Senate Transportation Committee.

Prince angrily challenged the board's ability to kill a project authorized by the Legislature, and committee attorneys are researching whether the board really has the authority.

Prince called the Licensing Department's current computer system an antique that may soon need to be replaced anyway. He said it would be folly to simply write off the more than $40 million already spent on the project. And he lashed out at Finkbeiner, saying he and others are trigger-happy to kill the project for political gain.

"He wants to have a hash mark and say he saved the state money," Prince said of Finkbeiner. "But he might really cost the state money."

The Licensing Department has begun creating a plan to shut down LAMP. At the same time, Yenson is aware that some legislators are trying to find a way to keep the project alive.

The ranking Republicans and Democrats on the House and Senate transportation committees have asked Gov. Gary Locke to buy time.

Locke's chief of staff, Joe Dear, has been lobbying members of the board to keep the project alive until the beginning of April so legislators can seek an alternative to shutting it down.

The board has scheduled a vote on Monday.

If Finkbeiner and the board won't go along, Prince said he'd try to keep the project alive by putting it in the state's transportation budget, rather than in the general fund. Neither side is sure what would happen then.

All of which has left Yenson in a quandary. "We're not exactly sure where things stand," she said.