Report on Computer Flap Says DMV May Recoup Some Costs : Finance: The agency might be able to sell hardware from its ill-fated $51-million upgrade project, consultant advises. But it would realize only about $800,000.
A private consultant estimates that the state Department of Motor Vehicles can perhaps recover up to $800,000 in costs from the failure of its $51.2-million computer improvement project last year, if it can find a hardware buyer.
The Warner Group, management advisers hired by the Legislature to recommend reforms in the DMV’s computer operations, said a customer might be found to buy the computer hardware components that never could be made to work as envisioned. The hardware cost the state $17 million.
The 7-year-old project was abandoned by the Wilson Administration last year when it became clear that costs had soared far out of control. Officials said there was no hope of ever making the system operational without investing another $57 million to $114 million.
The project was intended to merge millions of driver’s license and vehicle records into more manageable and efficient forms for a DMV that has struggled with an increasingly heavy workload. It was billed as the most ambitious computer project of any state in the nation.
But the enterprise soon bogged down amid sloppy management, hints of possible conflicts of interest and cost overruns. When the extent of the problems were revealed last year, it proved to be a political embarrassment for Gov. Pete Wilson as the Legislature heaped criticism on his ability to manage the DMV.
In a draft report released Monday, the Warner Group noted that about $17 million had been spent on Tandem Inc. computer mainframe hardware and software, which the DMV estimates now has a market value of only $600,000 to $800,000. Additionally, the hardware consumed another $7 million over the years in maintenance and other overhead costs.
In the meantime, computer technology has advanced swiftly, leaving the DMV’s huge mainframe equipment difficult to sell.
The report said that Tandem, a major Silicon Valley manufacturer, recently offered to upgrade the virtually abandoned equipment for $2.5 million, as long as the hardware is put to use by any state agency but the DMV.
In a cautiously worded analysis, the Warner Group said several unidentified private organizations had expressed “potential interest” in buying the hardware.
Bob Dell’Agostino, an information technology expert for Legislative analyst Elizabeth Hill, said Monday it became obvious months ago that the DMV would have to unload its hardware to a private buyer or another state agency.
“Our concern has been, to what extent has the Administration gone to find another use for it?” Dell’Agostino said. “In the absence of anything definite, it is hard for us to say there is a use.”
DMV spokesman Evan Nossoff said the department has not yet shopped for a buyer. “We were waiting for the [consultant’s final] report,” which is due May 26, he said.
Dell’Agostino said he recently made informal calls to officials of the University of California and California State University systems. He said both universities indicated they probably would not be potential buyers but would look into the matter further.
