SUN-SENTINEL: After botching Florida’s unemployment system, consultant just won a $110 million state contract

The company placed under investigation by Gov. Ron DeSantis for its handling of Florida’s flawed unemployment website is poised to land another lucrative multiyear state contract for at least $110 million to update the Medicaid program.

Deloitte Consulting LLP beat out four competitors in a bid posted by the Florida Agency for Health Care Administration, despite its work designing Florida’s CONNECT unemployment website facing scrutiny from state investigators.

DeSantis has likened the website to a “jalopy” and questioned why the state spent $78 million for the system, which went online in 2013 during former Gov. Rick Scott’s administration. DeSantis ordered the state’s chief inspector general to investigate the contract as an unprecedented surge in unemployment claims overwhelmed the system.

“This thing was a clunker,” he said in April. “There is no doubt about it. … With this volume it was going to be a problem no matter how good the system was, but I do think the way this thing was designed was very problematic.”

Despite the public criticism from DeSantis and others, Deloitte stands to make millions off a multiyear contract to build an “enterprise data warehouse” that would serve as a central information repository for state agencies. Deloitte scored higher than four other bidders — Accenture LLP, IBM Corp., Optum Government Solutions Inc. and CMA Consulting Services.

The Agency for Health Care Administration posted notice this week it intends to award the contract to Deloitte, which has a politically connected team of high-powered lobbyists in Tallahassee.

Democrats questioned why the state is continuing to do business with Deloitte given its history.

“When you do business with someone and they do you wrong, you don’t keep doing business with them, particularity when doing business with the public’s money on an essential state function like health care,” said state Sen. Jose Javier Rodriguez, D-Miami. “With so many other options, why do the governor and his team keep going back to people who have failed us in the past?”

Senate Democratic Minority Leader Audrey Gibson called on DeSantis to rescind the contract.

But Fred Piccolo, a spokesman for DeSantis, indicated in an email that the governor’s office wouldn’t get involved because of its duty to “uphold the statutory integrity of the procurement process.”

“The competitive procurement process was created in statute by the Florida Legislature to follow strict legal guidelines intended to, among other things, shield the process from political interference, collusion, or favoritism,” he said in the prepared statement.

The Agency for Health Care Administration declined to provide details on the selection, citing a 72-hour blackout period for the bid. The agency’s long-range plan has $110 million budgeted for the project.

Rory Mackin, a spokesman for Deloitte, did not respond to requests for comment.

In a previous company statement, Deloitte defended its work on the Florida CONNECT website, saying it “built the CONNECT system to comply with Florida’s specific requirements and the state accepted the system.”

Deloitte has a powerful team of lobbyists in Tallahassee, state records show.

Jennifer Ungru, one of the lobbyists representing the company, served as lead recount manager for DeSantis’ razor-thin victory in 2018 over Andrew Gillum. Before moving to the private sector, she served as chief of staff for the Agency for Health Care Administration, which is overseeing the data warehouse contract.

Another lobbyist on Deloitte’s team, Christopher Moya, served on DeSantis’ Inaugural Committee.

Deloitte gives widely to both Democratic and Republican candidates, according to the Center for Responsive Politics. In January, Deloitte made a $3,000 contribution to the Friends of Ron DeSantis political committee, state campaign finance records show.

That came just before a historic number of unemployment claims flooded the unemployment website as Florida locked down to stop the spread of the new coronavirus. But even before the pandemic, audits revealed glitches, errors and other problems with the website. The most recent audit came in 2019.

When the system launched in 2013, the Florida Department of Economic Opportunity fined Deloitte and withheld payments, citing the company’s “failure to deliver a fully functioning online computer system” for filing for unemployment in the state.

Florida isn’t the only state awarding contracts to Deloitte, which is one of the world’s largest accounting firms.

Bloomberg Law reported unemployment agencies in California, New York and nine other states have spent a combined $173.8 million on contracts recently to expand unemployment claims processing, staff call centers and help prevent fraud. Deloitte won $141 million of those contracts, Bloomberg Law reported.

But in Florida, Deloitte’s work on the unemployment website garnered criticism from both sides of the aisle. State Sen. Joe Gruters, who leads the state Republican Party, told the news website Florida Politics he faults the state’s vendor Deloitte for the “boondoggle” and that someone should go to jail for it.

State Rep. Anna Eskamani, D-Orlando, said she thinks the state shouldn’t award new contracts to Deloitte while the investigation is ongoing. She said her office has been bombarded with complaints about the website Deloitte designed.

“People are understandably frustrated with Deloitte because the CONNECT site has been an utter disaster,” Eskamani said. “The governor announced an investigation to look at the contract and relationships and why the website was a jalopy. To then contract with them again, it definitely raises eyebrows.”

Deloitte is facing a class-action lawsuit from laid-off workers that seeks damages for delays and wrongful denial of benefits.

The company’s lawyers argued in a motion to dismiss that Deloitte hasn’t been involved with the system in over five years, and Deloitte is not responsible for processing the state’s unemployment benefit claims.

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