Bacon's Rebellion

I Thought VITA Was Supposed to CUT Costs

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by

James A. Bacon
in

Peter Bacque with the Richmond Times-Dispatch reports this morning that the Virginia Information Technologies Agency wants to increase the rates it charges state agencies “Our agencies are going to experience a hit,” state CIO Lemuel C. Stewart Jr. told the Virginia Information Technology Investment Board yesterday. The higher charge, he conceded, amounted to a “backdoor budget cut.”

Lemuel contended that Virginia’s public computer systems are not adequately protected againt cyber attacks. Upgrading systems to comply with state requirements will cost more $6.5 million over the next two years. Including other mandated projects, VITA needs a total of $20.8 million. Rates must be approved by the Joint Legislative Audit and Review Commission.

The purpose of creating VITA was to cut costs, not add to them. Charges to state agencies ought to be going down, not up! Where are the savings? VITA is supposed to be one of the great legacies of the Warner administration. What the heck is going on?

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  1. Terry M Avatar
    Terry M

    This is simply business as usual for VITA. I pay 85K a year, to suppor 80% of two positions which used to be long to me, which I now have little control over, and don’t even get a full 80% of because they have mandatory VITA meetings and such each week. Plus, I pay a 6% markup for all technology buy, even if VITA adds no value.

    It is a scam.

  2. Paul Avatar
    Paul

    Jim – I know some higher ups in VITA. I’m gonna talk to them and get back to you.

    From what I’ve heard from them, the overall savings are huge with VITA. What they charge the departments is one part of their budget..

    For those of you who don’t know, the whole idea with creating VITA was that we now don’t have a dozen defacto IT shops running in every department instead of just one (VITA).

  3. Paul Avatar
    Paul

    Terry M – explain, I’m a bit confused by your post. Are you a contractor?

  4. Terry M Avatar
    Terry M

    Nope. CIO in a small VITA-transitioned agency. From what I can tell, I am not getting better prices on anything I buy off the state contract than I would have without VITA.

    I have not seen any savings, nor have I seen any improvement in services.

  5. Jim Bacon Avatar
    Jim Bacon

    Paul, Given the logic of consolidating multiple IT operations, you’d have to think that VITA has saved huge amounts of money. At the same time, you’d also have to think that the savings would be reflected in (a) lower charges to state agencies, (b) improved service, or (c) extraordinary new capabilities that didn’t exist before.

    Judging by Terry M’s view from the trenches, the agencies aren’t getting any savings or better service. Conceivably, they are benefiting in ways they don’t fully appreciate, such as better security. But it does look like VITA has some ‘splainin’ to do.

    Please do follow up and let us know what your VITA associates say.

  6. Will Vehrs Avatar
    Will Vehrs

    Jim, I posted on the same subject, but deleted my post when I saw yours. Just for the record, here’s what I wrote:

    It’s almost an article of faith that the creation of the Virginia Information Technology Agency, VITA, was one of Governor Warner’s signature accomplishments. It would save tons of money and make government more efficient.

    This Richmond Times-Dispatch story leads me to question the conventional wisdom on VITA.

    State agencies allegedly need $20.8 million in security upgrades and other projects over the next two years, so those agencies will have to pony up the money to pay VITA. Without disputing the price tag, one has to wonder why, with all the savings promised, that kind of money isn’t just lying around.

    As far as government efficiency goes, am I off-base to question this Byzantine process?

    “In July 2004, VITA had $20 million in the bank. At the end of February, it was running a $1.5 million deficit.

    The reason: VITA can end up waiting 75 days after spending money to provide state agencies with services before being repaid, Stewart said.

    At the same time its cash has been decreasing, the money owed VITA is going up, from $15.8 million in June 2004 to $34.1 million at the end of February.”

    Huh? Isn’t state government one big organization? Isn’t this just a little “inside baseball” accounting transaction, or does VITA owe real money to various outside consultants and vendors?

    If anybody can explain all this, please chime in. Folks I know who are close to the action are shaking their heads. I’ve emailed the reporter

  7. Anonymous Avatar
    Anonymous

    You need to examine VITA’s budget and its line item requests just prior to session to understand the security issue. Much of the revenue is going to be used to upgrade agencies to standards (in some cases they have NO security), but as you can see in the budgte request, a significant portion of the funds are to be used to create FTE positons in VITA. This is the main problem with this agency and the way it is set up to be run (not governed). It is growing at an alarmning rate and must feed itslef on the backs of the agencies to pay for its human resource nightmare. The legislature has done a good job of scopin gup any savings that may or may not have existed. It is hard to tell: VITA is full of double-talk and the approps guys are quick to snap it up. Many members on the approps committee are not satisfied, nay upset, with the way this is going, but the hits just keep on coming!- skip

  8. Terry M Avatar
    Terry M

    I should also point out that I have learned that VITA is looking to outsource most of the employees under PPEA. So, current tech staff that have already transitioned from one agency to another, are now being told to decide if they wish to remain state employees or go to work for the successful bidder if this takes effect.

    Does this make these staff more or less accountable? Does it make them more effective? Does this actually save me money?

  9. Paul Avatar
    Paul

    First of all, let me address the big picture:

    The the VITA cost saving transition is a multi-year one. No one ever claimed that there were going to be immediate savings. For example, there are huge up front costs to setting up a central server to replace the 30+ individual servers that existed before VITA. That’s going to pay off in the long run.

    The PPEA thing has the possibility of saving money, and it’s something they’re thinking about. And I think that’s making plenty of people uneasy. And that’s understandible. That makes sense…

    I also would assume (commonsense would suggest) that many people in various departments aren’t happy about losing their IT shops/authority over employees. That’s to be expected. For 30 years, IT operated like that in VA. And some people aren’t happy about the changes.

    But this is a long term project. Let me repeat again – no one ever expected this to save money immediately. It’s going to take time and there are lots of up front costs. This security upgrade is one of those costs (and, frankly, doesn’t relate to the overall debate about VITA. This is an upgrade that would have been needed regardless of whether they consolidated.)

  10. Will Vehrs Avatar
    Will Vehrs

    Paul, you said “no one ever expected this to save money immediately.”

    Show me a quote from the Governor or a high official, made back in 2003.

    As with most political pronouncements, the good word–“savings”–is trumpeted. The not so good words–“eventually”–are in the footnotes.

  11. Terry M Avatar
    Terry M

    I actually support the concept of VITA. However, the implementation has not been a success in many ways. I have only been in the Commonwealth for four years, so I am not tied to the way things were.

    however, there are a couple hundred servers, not 30 that have to be addressed. Many of them will not be as they are web servers or data warehouse servers…both of which are outside the scope of VITA. Maybe in the longterm that will change, but, to the best of my knowledge, it is not planned.

    Further, given the current cost structures to the agencies, I still don’t see how this will actually save money…other than gradually looking to reduce the bodies supporting the agencies.

  12. Paul Avatar
    Paul

    Will: Everyone I talked to GUARENTEED ME that no one ever said this would save money in 2 or 3 years. It’s a long term change, and a HUGE restructuring of government bureaucracy…and it seems like commonsense to me. It’s a two step process: They’ve completed the employee transistion, but the infrastructure transformation is still continuing and will require some investment. It takes time.

    I do know that several telecom contracts were negotiated recently that saved the state several million dollars from the previous contracts.

    I also know that lots of other departments owe VITA money. So that explains the debt.

  13. Terry M Avatar
    Terry M

    Paul, while what you say is true. It is also true that no one said that this was going to cost agencies (small ones especially) MORE to for the same or less service.

    How does that work out to save money in the long run?

  14. Paul Avatar
    Paul

    Terry – That’s a good point, and I’m not sure how to answer it. I’m not sure what the situation is in some of the other departments, I’d have to ask.

  15. State Guy Avatar
    State Guy

    My little agency had one IT guy on staff and he kept everything running. All of a sudden Vita came in with three or four guys. Our network started having outages where we never did before. Everybody was complaining.

    The Vita guys left and haven’t been seen since. Our old IT guy is back running things. I don’t know if we’re saving money or not. I asked our IT guy if we needed more security and he said no. I was surprised because he’s a maniac about security.

  16. Ray Hyde Avatar
    Ray Hyde

    I have no idea how to evaluate this.

    I have made a career for thirty years by solving problems created by the productivity products of Bill Gates.

    I’m not convinced there is any advantage gained, but that is just a gut reaction.

  17. Anonymous Avatar
    Anonymous

    Just so I can sleep at night. VITA’s cost savings so far are not worth the paper they are printed on. Claiming a cost savings off list prices? Unreal. Who in state govt pays list prices now or in the last five years. Prices on all IT hardware and software are always falling. I know that costs to agencies have gone up and no one cares. VITA empowers higher levels of Govt. If anyone audited their numbers, they would see that the savings to date are bogus!

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