Mishaps with Florida’s unemployment system discounted before officials awarded $135m contract, transcripts show

TALLAHASSEE — During one of the final meetings before deciding which company to choose for a potential $135 million state contract, Florida’s assistant deputy secretary for Medicaid asked her colleagues for a show of hands.

Who wanted to ask one of the finalists, Deloitte Consulting, about the company’s previous job building CONNECT, the state’s online unemployment system?

By the time of the July 10 meeting, CONNECT had already earned weeks of national scorn for being unable to handle a record number of pandemic-related jobless claims, which left millions of Floridians without benefits. It got so bad, Gov. Ron DeSantis ordered an investigation into what went wrong.

“Everything needs to be looked at, 100 percent,” DeSantis said during a May news conference.

And yet, two months later, no one on the state’s selection committee raised their hands when asked if they wanted to know more about Deloitte’s work on the failing system.

“That means no one thinks we need more information,” said the assistant deputy secretary, Abby Riddle.

“Correct,” two people responded, according to transcripts of the state’s selection team meetings obtained by the Times/Herald.

A month after that July meeting, the team chose Deloitte for a potential nine-figure contract to handle the state’s Medicaid data, a decision that posed a political liability for DeSantis, who was already accused of mismanaging the state’s unemployment crisis and who had just ordered an investigation into the state’s 2011 contract with Deloitte to build CONNECT.

DeSantis has blasted the Agency for Health Care’s decision, which he oversees, and has said that he doesn’t want Deloitte to get the job. Two of Deloitte’s corporate competitors, Accenture and IBM, have filed protests to stop the award.

Transcripts show that state officials were well aware of the public’s animosity towards Deloitte for CONNECT’s failings. They had also seen a negative review of Deloitte from the Department of Economic Opportunity, which manages CONNECT. Deloitte has said it hasn’t had anything to do with the system since 2015.

But the team members decided against asking the department or Deloitte for more details, dismissing the project as “a long time ago” and that the finger-pointing between Deloitte and the Department of Economic Opportunity amounted to “sour grapes.”

“It almost reads like, you know, like a renew of a messy breakup,” said Shaun French, data processing manager for the Agency for Health Care Administration. “There’s going to be two sides to every story.”

Department of Economic Opportunity officials wrote that they would not hire Deloitte again, but the team members on the Medicaid project gave that negative review little weight. They said the department’s recommendation was “vague” and that the people who gave it weren’t around during the disastrous 2013 launch of CONNECT.

“It’s like you’re looking at a few trees in the forest here and not really the whole picture,” said Mike Magnuson, an agency director overseeing the Medicaid data project. “And we don’t — it’s just hard to glean a lot of information from this.”

The team members members also wrestled with the idea of whether CONNECT’s failures would matter in their choice between Deloitte and Accenture. On the one hand, unemployment systems across the nation were crushed by pandemic-related claims, although Florida’s experience was worse than most.

On the other hand, committee members noted that Deloitte was unusually defensive in news stories about CONNECT, admitting no wrong and stating that they had nothing to do with it for five years.

“Is their posture really, hey, there’s nothing we could have done about this?” asked Damon Rich, a bureau chief for the agency. “To me, that would influence me.”

The committee members subsequently voted not to ask. Committee members could have asked Deloitte and the department for more information, and they they could have also asked CONNECT’s project manager for more information.

That manager of the CONNECT project was Tom McCullion, who in 2010 had a hand in choosing Deloitte. In 2019, the Agency for Health Care Administration had hired McCullion at $155 an hour to advise the agency on its overall Medicaid data project, of which choosing a contractor was a major part.

One of the selection team members wondered whether CONNECT’s contract and project managers would talk about it. But those people were “no longer available for comment,” said the state’s procurement director, Crystal Demott. McCullion, who left the agency four months earlier, was not mentioned.

Selection team members also said their counterparts at the Department of Economic Opportunity shouldered some of the blame for CONNECT’s failings.

“If they were performing that badly, that’s — I mean, that’s also a contract management function,” Riddle said.

“It’s only as good as what (the Department of Economic Opportunity) asked for,” said Nikole Helvey, a bureau chief for the agency.

“It almost feels like a project manager issue, if anything,” French said. “I think if there are any issues with this (CONNECT) project, it was probably at a higher level.”

Left unmentioned during the meeting was that state auditors flagged persistent problems with CONNECT in three separate audits, years after Deloitte left the project. Neither the DeSantis nor Gov. Rick Scott administrations fixed the problems.

Deloitte was penalized $8 million for its performance on CONNECT, but it wasn’t mentioned in the company’s bid for the Medicaid project, according to the meeting transcripts.

The other finalist for the Medicaid project, Accenture, had positive remarks from two Florida agencies, but one of those agencies was close to penalizing the company for its performance, one of the team members said. Accenture corrected itself before the department handed down any penalties.

Team members said penalties and performance problems were almost a part of doing business with big contractors.

“There aren’t many people in this industry that haven’t been on a project that’s failed in some level or another,” said Matt Kline, an agency administrator. “You know, those can kind of be some of the best lessons, too.”