Oregon has again selected a Colorado company to replace the rickety system it uses to manage unemployment benefits.
Fast Consulting is the same vendor Oregon chose in September, but a rival protested that selection and that forced the state to revisit its choice.
The mainframe computer system from the 1990s is the primary reason why Oregon was unable to promptly pay hundreds of thousands of jobless claims this year.
The state was among the nation’s slowest at issuing payments, according to an analysis by The Oregonian/OregonLive, and was the very last to pay federal coronavirus relief payments for the first week workers were out of a job. Congress authorized those payments in March but Oregon didn’t start paying that $300 million in benefits to more than 400,000 Oregonians until last week.
After eight months the state has largely caught up with what it owes, but the faulty computers continue sending misinformation and confusing messages to laid-off workers.
The new computers won’t address this year’s problems – Oregon doesn’t expect to complete the system upgrade until 2025 – but it could help prevent a similar debacle in the future.
Oregon received $86 million in federal funds to upgrade its technology in 2009 but a string of management failures at the department prevented the work from ever being done. Oregon expects to spend between $80 million and $123 million on the upgrade.
It still has $82 million of the federal funds from 2009 to help finance the work.
The employment department must agree to a contract with Fast Enterprises before the technology upgrade can begin. It’s not clear how long that process will take, but Gov. Kate Brown’s next budget allocates $53 million for 55 jobs to begin the upgrade.
Fast Enterprises has installed the technology that runs the employment systems in Washington, Michigan and elsewhere and built a different kind of system for the Oregon Department of Revenue.
Its employment systems in Michigan and Washington had major problems with fraud – Michigan’s 2013 system incorrectly flagged 34,000 legitimate claims as fraudulent, while in Washington the state paid out $576 million in actual fraudulent claims this year.
Still, observers say the technology may not have been at fault in Washington’s case and say that system, which was installed years after Michigan’s, appears to be functioning better.
— Mike Rogoway | firstname.lastname@example.org | twitter: @rogoway |