There are Millions of Dollars and No Oversight in Texas IT Contracting

The state is employing thousands of tech contractors whose earnings and hours are almost completely unmonitored.

By Emily Donahue and David BrownMarch 6, 2015 3:52 pm| ,

It almost sounds like a joke: How many information technology contractors does it take for the state to do its job?

But there’s nothing funny about the punchline, since no one knows.

We do know the price tag, however. Since 2010, Texas has spent over half a billion dollars on IT contracting – all without competitive bidding or oversight.

IT contracting has been in the news since the Austin American-Statesman broke a story about 21CT – an Austin-based software company that was up for a $110 million, no-bid contract for the Health and Human Services Commission. The fallout from that report has been multiple resignations from HHSC, along with an FBI investigation.

Now, the Statesman is back with a broader investigation of IT contracting among state agencies. It finds the lack of oversight demonstrated by the HHSC case is pervasive across state government. That investigation has found that the state’s use of information technology contractors faces little or no oversight, even as companies have reeled in $580 million since the start of fiscal 2010.

Tens of millions of dollars have been paid to at least 3,000 contract workers working for 210 companies, all without bidding requirements or public scrutiny. At least 19 individual contractors have billed more than $1 million each since 2010.

More than 175 IT contractors have been on the state payroll for at least four of the past five years, even though state contracting guidelines suggest that they are supposed to work on a temporary basis, typically no longer than six months.

Statesman reporter David McSwane says no single state agency monitors payments to contractors. “They’re not doing addition with their own data at the [state] Department of Information Resources,” he tells Texas Standard.“Their answer was, we’re not statutorily obligated, or told by the legislature that they have to.”

“There’s some fear that if they start monitoring their own data and trying to check that against agencies, the agencies will say, ‘well, what authority to do you have to tell us how to hire?'”

McSwane acknowledges “there’s a legitimate reason” for IT contracting – especially in a tech town like Austin, where private sector salaries outpace government salaries.

“Where you start to ask questions is when you have a contractor who’s stayed on the payroll for five years, when it’s supposed to be a temporary program,” McSwane says. “In the case of [the Texas Department of Transportation], they’ve done that.

You can search IT contractor spending totals from TXDoT and other state agencies and compare contractor salaries in interactive tools from the Statesman.