AUGUSTA — A legislative committee will continue its inquiry Friday into the Mills administration’s effort to reclaim $22 million from a Silicon Valley software vendor in a dispute over a contract to upgrade the state’s outdated human resources management and payroll system.

Commissioner of the Maine Department of Administrative and Financial Services Kirsten Figueroa Joe Phelan/ Kennebec Journal

Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services, will appear before the Government Oversight Committee to provide information and answer questions about the contractual dispute with Workday Inc., which was hired in 2018 to do the software systems upgrade.

Figueroa is expected to disclose details of a third-party assessment of the Workday system in Maine by IJA Strategies, a Michigan-based consultant the state hired to review Workday’s implementation of its system.

The state’s problems with the company came to light in March, when Figueroa told lawmakers that Workday’s staff had walked off the job in February.

In late March, DAFS officials said they were working with the Attorney General’s Office on the “terms of dissolution” of the agreement because the company had failed to meet its obligations under the contract. Those talks with Workday are continuing, according to Kelsey Goldsmith, the department’s director of communications.

A spokesperson for Workday has said the state has no grounds to terminate its contract.

IJA Strategies, the firm hired to review Workday’s system, did not respond to a reporter’s messages.

The company’s website indicates that its entire focus is on addressing Workday issues, and it suggests that problems with implementation of the software are common.

“More than 10 years ago, I found myself in tears before work one day because I was SO frustrated with Workday and didn’t know how to fix it,” IJA’s founder and managing director, Andrea Chudy, says in a statement on her website. “I felt defeated. I felt inadequate. I felt like a failure at my job. I vowed that day that no person should ever feel the same. For over a decade I have dedicated myself to becoming a Workday expert and in 2017, I founded IJA Strategies to help others.”

Figueroa accused Workday of, among other things, misrepresenting the status of the project, failing to produce the specific products in the contract and pressuring the state to accept a premature launch date. Figueroa also said Workday’s decision to halt all work on the project on Feb. 12 was not allowed under the contract and represented a “default and breach of the agreement.”

At stake is at least $31 million of taxpayer funds that was paid to Workday since it began working on converting the state’s antiquated systems used to pay state employees, manage their vacation and sick time, health care and other benefits, according a review of contract documents.

Workday is the second company in five years to see its contract terminated by state officials who became unsatisfied with the pace and the results of a replacement system meant to track the pay and benefits of about 13,000 state workers.

An earlier $22.7 million contract, signed in 2016 with a different vendor, Infor Public Systems Inc., was terminated in 2017 by the administration of former Republican Gov. Paul LePage. The LePage administration then signed a new contract with Workday in November 2018,  just weeks before Democratic Gov. Janet Mills was sworn into office.

Figueroa has told lawmakers that while the state has confidence that Workday’s software package will work for the state eventually, it’s new “go live” date has been pushed back again to 2022.

Replacing the payroll system has been a decadeslong goal that the administrations of four different Maine governors, dating back to the late 1990s, have all failed to achieve.

Critics of the state’s failure include a Westbrook businessman whose company provides benefits administration software and services to large city and state governments.

Daniel Freund, president of Common Census, said he did not bid on the work when the state issued a request for proposals in 2015 because he missed the announcement. But since February, he has been reaching out unsuccessfully to state officials with an offer to set up a pilot system that could be implemented for less than $250,000.

“I think I could have saved the state millions of dollars and they would have a system that worked by now,” said Freund.

Freund said his company provides similar services and solutions for large organizations, including the city of Pittsburgh, state governments in Ohio, Wisconsin and Pennsylvania, and private sector clients that include MetLife and ADP, a payroll services firm.

The issue with Workday was brought to the attention of the Government Oversight Committee in March when Rep. Justin Fecteau, R-Augusta, wrote to them asking for an investigation by the committee’s Office of Program Evaluation and Government Accountability – Maine’s watchdog agency, tasked with rooting out fraud, waste and abuse in government.

He said he was made aware of the problem by state government workers as he campaigned for re-election in 2020.  Fecteau on Wednesday said he remains concerned the state has wasted an enormous sum of taxpayer funds that could have been applied toward other state government needs or used to avoid additional borrowing by government for infrastructure improvements.

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