San Diego sole-source overrun soars by $7 million

A sole-source contract touted by development officials for bringing new efficiency to permit processing as it breezed through city council three years ago has come a cropper, according to a November 16 report by interim city auditor Kyle Elser, costing taxpayers millions of dollars in cost overruns and resulting in years of project delays.

"We found that [the] Development Services Department and the City of San Diego’s management skipped fundamental steps early in the implementation to speed up the process," says the document of a data processing contract awarded to government software provider Accela, Inc. of San Ramon. "The new project team has executed nine change orders since the exit of the initial project manager."

As a result, the audit says, the project's "original go-live date of May 2017 was delayed by several years; full implementation is now planned for February 2020, near the end of the initial 5-year contract. Additionally, the originally approved $10.9 million budget for the purchase and implementation of Accela is now projected to reach $17.7 million."

When in September 2015 the proposal suddenly materialized before the city council, officials sold it to the public as a quick way to solve the city's chronic processing bottlenecks.

"City staffers say the move is so crucial that they are recommending approval without allowing other firms to participate in a traditional competitive bidding process, and without presenting the proposal to any of the council’s committees for preliminary discussion," said a September 21, 2015 Union-Tribune account.

But that haste turned out to be especially costly, per the new audit, when key city workers abruptly left the project years before its completion, and the development process spiraled out of control.

"City management skipped fundamental steps early in the implementation to speed up the process, which resulted in an over-reliance on the [Project Tracking] system’s architect as the project manager and technical lead and compounded previously identified issues with a poorly documented home-grown system," the document says.

"The implementation sustained further delays when the project manager, with the institutional knowledge, retired prior to completing the most complicated portions of the blueprints. Shortly after, the Accela project manager also left the project, further setting it back."

Making matters worse, management problems were found to be rife across the city's entire data processing operation. "We identified weaknesses in the implementation governance that has significantly increased the cost and implementation timeline for replacing the existing system. These weaknesses exist throughout the City’s Information System Governance of System."

With cash continuing to hemorrhage, the report says that city chief information officer Jonathan Behnke has "agreed to fully implement" the audit's recommendations for improvement, including tougher control policies, more staff training, and establishing a way to "track system information from cradle to grave in a new repository.”