Michigan, HP reach deal over $40 million program

Attorneys for the state of Michigan and Hewlett-Packard in a Kent County courtroom on Oct. 9, 2015.

LANSING, Mich. (WOOD) — The State of Michigan and Hewlett Packard reached an agreement on Friday to keep key Secretary of State systems up and running.

The transition agreement lays out a plan for HP employees to service the systems they created, and at the same time teach state workers how to do the job themselves. The agreement runs until July 11, 2016.

The state fired HP from the Business Application Modernization, or BAM, project citing missed deadlines and problems with the $40 million project.

The BAM system handles the Secretary of State’s online portal, along with things like voter registration and vehicle licensing.

Last week, the state went before Kent County Circuit Court Judge Christopher Yates and argued that without HP personnel on site, the state may not be able to fix the system if it crashes.

HP argued the contract required a mutually agreeable transition plan, and the state was unwilling to negotiate.

Judge Yates told both sides to take the week to try to work out an agreement, which was reached Friday.

The BAM project has been plagued with issues for years. The contract was initially awarded to EDS ten years ago, a company that was later purchased by HP.

A state audit in 2012 found a series of missed deadlines and problems on the part of HP, and mismanagement at the state level. That mismanagement included millions of dollars in payments to HP for systems that were either not finished, or not working. Other payments were made without appropriate approval.

The audit also found the State was lax in enforcing the requirements under the contract. HP argues the state was also responsible for delays in the project, and failed to timely identify issues and give HP time to fix them.

There are still issues that remain. The state argues that the contract requires HP to turn over the program’s source code, which is the computer code created by HP to build and run the system.

HP argues the state hasn’t paid for all of the code it wants, and some of it is tied into other systems owned by HP, not the state.

A hearing has been set for Nov. 2nd in Kent County Circuit Court to hear arguments on that issue. The agreement reached Friday pays HP for the next nine months. During that time, the state is expected to search for a new company to take over the project.

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