Maine threatens to break deal with Workday, company Iowa hired for computer system upgrade

Maine is threatening to terminate its contract with Workday - a California company that Iowa hired to update the state's information technology system - after Workday stopped work last month, according to news reports.

The Portland Press Herald reported Monday a review of Maine's Workday implementation showed a host of concerns, but when the state told Workday about the issues the company paused all work Feb. 12.

Maine officials gave Workday 30 days to remedy 'all defaults and failures to perform under the contract,” including 'failure to deliver adequate labor cost and ad hoc reporting solutions, failure to meet certain expectations in the agreed upon statement of work, and operating in bad faith,” according to a statement to the Press Herald from Kelsey Goldsmith, a spokeswoman for the Maine Department of Administration and Financial Affairs.

If Workday can't fix the problems, Maine would terminate its contract and seek a refund of more than $21 million, Goldsmith said.

Workday provided a statement Thursday to The Gazette:

'We have made every effort to partner with the state of Maine to address issues that are delaying the successful completion of the project. However, technology deployments are a highly collaborative process that require all parties, including customers, to deliver on their commitments in order to be successful. We remain committed to partnering with the State of Maine to find a solution that will help the state go-live with Workday so that it can realize the value of our cloud-based system.”

Iowa Gov. Kim Reynolds signed a measure Feb. 23 passed by the Legislature paying Workday $21 million to replace Iowa's outdated computer systems for human resources and financial operations.

This was after she tried to use coronavirus relief aid for the project, but the U.S. Treasury Department and the state auditor told her it wasn't allowed because the system wasn't necessitated by COVID-19 and was in the works beforehand.

Iowa signed contracts with Workday in October 2019 and February 2020 to pay the company about $50 million. The state chose Workday after sidestepping traditional bidding and after Reynolds' former chief of staff, Jake Ketzner, went to work for it as a lobbyist, The Gazette found in a 2020 investigation.

Iowa Chief Information Officer Annette Dunn said Thursday she is aware of the claims about Workday in Maine.

'However, that has not been our experience and we have successfully implemented the HR portion of Workday at the DOT,” she said of the Iowa Department of Transportation, which signed a $9.4 million deal with Workday in 2017.

The human resources and payroll portion of the Iowa DOT contract was implemented in May 2019 - six months after its initial go-live date - but the finance portion still hasn't gone online, despite a scheduled rollout in June 2020. The finance implementation now is scheduled for May, Iowa DOT spokeswoman Andrea Henry said Thursday.

Sen. Joe Bolkcom, D-Iowa City, who was critical of Iowa including $21 million for Workday in special appropriation this year, said he's disturbed to hear about Maine's issues.

'The Legislative Oversight Committee needs to get answers about the status of Workday's progress in Iowa and protect taxpayers from any failure to meet their contractual obligations,” he said.

Maine hired Workday in 2016, when Republican Gov. Paul LePage was in office, the Press Herald reported. The company was supposed to replace an aging computer system used for payroll, vacation time, taxes, health care and retirement benefits for over 10,000 state employees. The Maine rollout was scheduled for last summer but stalled.

Maine's finance commissioner says the state will need another $8 million to install the system by 2022, according to the Press Herald.

Comments: (319) 339-3157; erin.jordan@thegazette.com