NOMADS has a decade long history and the biggest tab
NOMADS has a longer history and a bigger total cost than any other project in Nevada state government history.
When approved in 1989, it was to take a couple of years and cost $22.6 million. By the end of this budget – a decade later – Welfare Administrator Myla Florence said the total state and federal tab will be $126 million.
The Nevada Operations Multi-Automated Data System project was created to implement a 1988 federal law that requires states to develop a unified system to enforce child support orders and track down deadbeat dads.
The Welfare Division proposed studying the feasibility of combining child support with other programs from welfare to food stamps, Medicaid and other assistance programs.
The idea was to improve efficiency by uniting and coordinating all those programs and lower costs at the same time.
Not only has that not happened, state, and federal officials as well as consultants agree that the system will never deliver on those promises.
A consulting firm, Maximus, and the federal Health and Human Services Department both found serious problems with the NOMADS system. Maximus rated IBM’s overall performance less than satisfactory both in managing the project and the quality of the program being developed.
Health and Human Services officials were even gloomier: “We have serious reservations as to whether the NOMADS project can remain viable and can be brought to successful completion under present conditions,” reads a report on the system.
Looking at a computer program with more than 10 million lines of code, more than 500 screens for workers to deal with and an operators manual more than 900 pages long, Health and Human Services concluded NOMADS would never meet its original goals of improving efficiency and lowering costs.
“State staff indicated there would never be a break-even point for NOMADS,” the federal report states. “Based on the current projected costs and benefits, cost will always exceed benefits.”
Yet Maximus recommended not scrapping NOMADS because that could mean up to $30 million a year in federal welfare penalties during the five years it would take to develop a replacement.
The 1989 Legislature approved the concept with a budget of $22.6 million but nothing happened for two years because the budget was frozen by then-Gov. Bob Miller’s administration. Nevada finally signed with IBM for $12.3 million in 1992.
IBM ran into problems and its first system was rejected in 1993. Contract changes and threats by IBM to pull out won the company another $6.8 million in 1994. Welfare reform upset the apple cart completely in 1996-97 and prompted contract changes that upped IBM’s total costs by another $10 million.
More costs were added to the total during the past couple of years but, when the state continued to miss deadlines for getting it up and running, the federal government pulled the financial plug in 1999.
Gov. Kenny Guinn, Information Technology Director Marlene Lockard and Florence went to San Francisco and convinced the government to start paying the bills again and, this past year, the state took over the project itself.
Even so, IBM still has about 15 people on the project making up to $154 an hour.
Detractors including Sen. Bill O’Donnell, R-Las Vegas, who owns a computer firm, said it should be scrapped and Nevada should start over.
But, faced with the prospect to a huge federal payback, Guinn said he is giving NOMADS one more chance.
“Let’s try one more time to fix this,” he said. “If we can’t, I have to stand up and make some bold recommendations.”