HELENA – State officials are defending the process by which the front-runner for a software contract was chosen. They also question another company’s claims that recent layoffs are at least in part due to its apparent loss of the deal.
Deloitte, a global services company, submitted the preferred bid in the search for a company to develop software for the Department of Public Health and Human Services to manage its food stamp and cash payment welfare programs.
Deloitte’s $29.6 million proposal indicated that some of the work would be done overseas.
That prompted news reports that Northrop Grumman, which has 125 employees in Helena, entered a lower bid and would not have outsourced work. Company spokeswoman Christy Whitman said Northrop Grumman was putting eight employees on indefinite furloughs “in part” because it wasn’t getting the contract.
DPHHS Director Anna Whiting Sorrell and Gov. Brian Schweitzer said Wednesday that state and federal laws prohibit the state from taking into consideration where the work would be done.
They also questioned how Northrop Grumman could be furloughing people due to the loss of a contract that hasn’t been awarded.
“You can’t lay off people for a job you don’t have,” Schweitzer said. “For anybody to say they’re laying people off because they didn’t get this new bid is irrational.”
Whiting Sorrell said she was confused about Northrop Grumman’s claims, as well, because it was never anticipated that the contract would be awarded this early.
“A lot of this feels like we’re kind of a little ahead of ourselves here,” she said, noting the state hadn’t even begun negotiations with Deloitte.
Deloitte was the clear front-runner as the state looked for a new software system for its Supplemental Nutrition Assistance Program and Temporary Aid for Needy Families, Whiting Sorrell said.
She said the state was looking for software that could be used up to 20 years.
“We are really looking at developing a new system,” Whiting Sorrell said. “It’s not like we’re just adapting the old system.”
Northrop Grumman’s bid, which scored the lowest in meeting the state’s detailed requirements, came in at about $23 million.
“I actually believe some of the proposals, in particular the one that ranked No. 1, will be less costly over the life of the system,” Whiting Sorrell said. “We focused on the technical aspects of this proposal. That’s really where Deloitte and the other contractors scored high and Northrop Grumman’s proposal just didn’t stand up.”
Deloitte officials have declined comment.
Any software contract must be approved by state contract officials and Whiting Sorrell.