Drip, Drip, Drip: Down the Drain

Three years and $18 million later, the city of Philadelphia has temporarily stopped work on Project Ocean, “the most complex and biggest IT system in [Philadelphia’s] government.” The project was slated to be completed in one year, at a cost of $7 million. Project Ocean was designed to manage the complex set of tasks related to billing, collections, and operations for the city’s Water Department, replacing an outdated system with modern software from Oracle.

The time and cost overruns have resulted from a variety of project management issues, ranging from incomplete understanding of the complexities that such systems involve, to poor contract negotiations with Oracle. Amazingly, the contract enables “Oracle to be paid without meeting requirements along the way to show progress.” Adding insult to injury, the project was sponsored by the city’s CIO over the objections of the former city Water Commissioner.

Along the way, apparently due to lax contractor oversight systems, the project lead billed the city for 80 hours of work every week over the course of months. Oh, and by the way, while doing so she also had a part-time IT project job in Connecticut. As a side note, she is under indictment for paying-off a Connecticut state senator. I suppose one can ask “What’s a little gift among friends?”

City Controller Alan Butkovitz seems focused now on this over-billing issue. And of course, the juicy stuff about the rogue project manager is being played up in the press. However, her billings aren’t the source of the problems on this project — she’s a somewhat lurid and definitely interesting sideshow.

Here’s my take: the city needed a new system to handle Water Department issues. It’s a complex task requiring specialized expertise. The CIO wanted to go with Oracle, over the objections of the Water Department and despite Oracle’s inexperience with such systems. Oracle underestimated the level of complexity (anyone hear the word “arrogance” here) and screwed up. However, due to excellent contract writing, they pretty much remained unscathed. The city of Philadelphia didn’t manage well or control the project properly, creating delays and cost over-runs. Finally, an independent contractor seems to have taken advantage of the poor management and general confusion to enrich herself.

And what, you may ask, does Oracle have to say about all this: vice president of consulting, Stephen Holdridge, issued a statement when he was contacted about Project Ocean: “Oracle believes it has fulfilled its contractual obligations with the city, and we have attempted to work with the city to move this program forward. We continue to stand firmly committed to partnering hand-in-hand with the city under the terms of our contract to ensure that the benefits afforded in their technology investments are realized to the greatest extent.” Asked for clarification Oracle issued another statement saying, “The Project Ocean implementation is still in progress, and Oracle believes that the work performed to date conforms to the current agreement. Oracle has also continued to confirm its commitment to deliver on all its obligations to complete the project.”

There you have it. And more money goes drip, drip, drip down the drain.

UPDATE: Project Ocean seems to be coming back to life. Click here for more.