Project to Upgrade City Computer System Halted : Government: Agency orders review of $1.3-million contract amid concerns that consultant will be unable to deliver modified software.

The city of San Diego’s Data Processing Corp. has halted a $1.3-million computer project because, after investing more than $550,000 and 19 months in a consultant’s work, city officials are worried that the consultant’s product may prove useless.

The nonprofit computer agency decided March 16 not to authorize further work by Integral Systems Inc. while it determines if the Walnut Creek-based company can modify a long-awaited software program for the city auditor and its personnel department.

“I don’t think any of us are willing to continue down a suicide path here,” said Rich Snapper, city personnel director. “We’re not lemmings.”

In the meantime, lengthy, unexpected delays will force the city to spend $150,000 more to “patch” the existing, 22-year-old payroll system--antiquated software that prevents the city from offering its workers deposit of paychecks to banks or pretax deductions for child-care expenses. The system is simply unable to handle such entries, said Ed Ryan, city auditor and comptroller.

The system is so inadequate that tax forms for the handful of city officials who earn $100,000 or more have to be hand-written because the computer can display only five digits, Ryan said.

In a brief telephone interview, Wayne Macaulay, Integral Systems’ vice president of professional services, denied that there have been problems and maintained that the city contract has not been put on hold.

“The contract, as far as I’m concerned, has not been halted, and we’re moving forward with it right now,” Macaulay said. “I really don’t know why we’re going through this, and I have no further comment.”

But several city officials said this week that work has indeed been halted, pending the outcome of a 30-day review and negotiations with Integral to either modify the original system or install a system developed after the city signed a contract with Integral in August, 1988.

“We have put the project on hold,” said Robert Metzger, executive vice president of Data Processing Corp. “We have stopped the expenditure of funds.”

Data Processing is also considering legal action against Integral and is determined to recoup its losses if the contract is eventually canceled, Assistant City Manager Jack McGrory said.

Nevertheless, Metzger defended Integral to some extent, saying that contracts for large, complex computer programs involve detailed give-and-take between the customer--in this case Auditor Ryan and Personnel Director Snapper--and the consultant.

“I think there are different levels of expectations between what the contractor expected to deliver and what the city expected to receive,” Metzger said. He noted that Integral’s deadline to have the system running is not until late this year.

Others, however, were less charitable.

Snapper, for example, estimated that, even in the best of circumstances, Integral could not deliver the system for 18 months.

“We are in the middle of a project that is, by our estimation, taking far too long and is consuming much too much time and effort for what has been produced,” he said.

Integral has “the confidence that they can produce. I don’t have that confidence that those modifications can be made and make it a working environment right now,” Snapper added.

“I was very disappointed about the performance of the contractor . . . because they didn’t deliver what we thought we were getting,” said Roger Talamantez, president of Data Processing’s board of directors.

According to the minutes of the board’s Jan. 25 meeting, Talamantez said, “The expense of the project under the present situation was absurd.”

Problems with Integral have caused additional delays for the payroll and personnel project, first conceived in 1984, according to a Jan. 19 Data Processing Corp. report.

That year, a committee explored the purchase of software programs from private vendors and selected Integral’s as the best product. However, city officials and Metzger decided not to buy the product. Instead, Data Processing Corp. developed a list of requirements for the system, which would handle payroll functions and track employees’ careers, including training, exam processing, disciplinary actions and counseling, according to the report.

Data Processing also considered having its own staff produce the program but rejected that idea as too costly and time-consuming.

But, because of “lack of progress” from May, 1986, to August, 1987, Integral was hired as a consultant for $100,000 “to review the project and recommend alternatives on how to proceed,” the report states. Integral recommended that Data Processing purchase its system for about $250,000 and hire the company to modify and implement it. Data Processing Corp. contracted the company for $1.3 million.

The project has been plagued, however, by three changes in the company’s project manager and four changes in account managers since April, 1989, according to the report and Metzger.

“Additionally, the project team was unable to make consistent progress in identification of requirements and specifications,” the report said.

In essence, the company has been unable to tailor a generic software package to the personnel and payroll demands of the city, officials explained. For example, it has been unable to devise a system to log the hours worked by the various classifications of its 8,000 employees, Snapper said.

Data Processing Corp. now finds itself at a critical decision point, Metzger said, with three options:

Scrapping the project, which would mean considerable extra expense and delays.

Making the current system work.

Negotiating the substitution of a replacement system.

“There’s a point in time when you come to a railroad crossing and you see the train coming,” Metzger said, “and there comes a time when you have to say, ‘I’m going to step on it,’ or you’re going to say, ‘Let’s stop.’ ”