The administration of Gov. Jeff Colyer is attempting to negotiate with a university to donate or sell at a steep discount as much as $10 million in unused computer equipment stored for several years in Docking State Office Building in Topeka, legislators said Tuesday.
The state still owes about $2 million on the purchase in 2016 of hardware to develop a centralized storage system for computer information, an endeavor canceled by state IT officials who viewed the proposed Kansas GovCloud as cost-prohibitive. The decision to contract with an outside company to store data on remote servers accessed from the internet left the Kansas Department of Administration with a truckload of surplus equipment.
Attempts to sell the equipment failed to attract bidders, leading to ongoing discussion about unloading the gear before its value cratered to the level of scrap metal.
“They’re looking for a university that might be able to use that,” said Sen. Mike Petersen, a Wichita Republican who chairs a House-Senate committee on IT security. “They’re working on details to see what could happen, whether they need to chip in a little. The value depreciates rapidly. If we can recoup a few dollars I’d be ecstatic.”
Sen. Tom Holland, D-Baldwin City, said the state’s scuttled storage cloud plan wasted millions of dollars. In all, the state allocated $17 million, including $10 million for the equipment, before pulling the plug. Selling it for pennies on the dollar or donating it to someone has merit, he said.
“The point is, equipment after a while just becomes obsolete. If somebody can use it, great. If you can get some money out of it, fine,” Holland said.
In May 2017, Department of Administration spokesman John Milburn said the agency remained “confident that our continued efforts will result in a solution that is in the best interest of taxpayers.”
Sen. Caryn Tyson, R-Parker, said the state’s short-sighted approach to IT was illustrated by the storage cloud debacle.
“We keep changing our IT philosophy as a state. Knee-jerk reactions. We need an overall picture to understand the direction the state needs to go,” she said.
The Joint Committee on Information Technology, meeting at the Capitol, discussed the possibility of drafting legislation requiring state agencies to disclose information to the committee about pending IT contracts. The committee wouldn’t have the power to block a proposed contract, but the information could be passed to House and Senate budget committees.
“I’m tired of watching re-occurring car crashes,” Holland said.
Petersen, the committee’s chairman, said confidential audits of Kansas public universities and state agencies demonstrated shortcomings in IT security.
“It needs to be improve. We definitely need to focus on security-awareness training for all our state employees,” Petersen said.
The joint committee discussed the Kansas Department of Revenue’s no-bid contracts with CGI Group, of Montreal, Canada, which are expected to cost the state $82 million over 10 years. Rep. Kyle Hoffman, R-Coldwater, said members of the committee were concerned the revenue department may have agreed to the deals after CGI demanded millions of dollars for unpaid licensing fees.
Chris Holm, chief financial officer at the Department of Revenue, said the agency paid $600,000 to CGI for resolution of software maintenance obligations stretching back to 2000. Secretary Sam Williams was responsible for the pair of single-source contracts of at least $40 million with CGI, he said.
Holland said he was concerned the state would find it hard to transition to a new IT provider at conclusion of these contracts.
“In essence then the state and revenue is basically wed to CGI until eternity? Where do you go after the end of the 10-year contract?” Holland said.
Holm said the agency couldn’t easily distance itself from CGI upon expiration of the 10-year contracts because the state would no longer have access to operational software.
“It wouldn’t be impossible to change, but it makes it very difficult because they own the code to the software. In order to be able to transfer that to another vendor it would be violating the software agreements,” Holm said.