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Iowa ends contract with Workday, company chosen without traditional competitive bidding
Conversion of financial management system to a cloud-based system was halted last year after ‘implementation issues’
Three years after Iowa sidestepped traditional competitive bidding to hire a cloud computing company with little state government experience, the state has ended its contract with Workday.
After delaying the project last year because of “implementation issues,” the Department of Management and Office of Chief Information Officer decided the Workday platform won’t meet the state’s needs, according to a news release Friday.
“Despite the time, effort, and money invested, this decision is the responsible and prudent course of action to ensure the state has the right tools to support our operations, save money over the long term, and improve service to Iowans,” Gov. Kim Reynolds said in the release.
The state now has signed a contract with CGI — its former vendor — to take over upgrading the financial management platform to a cloud-based solution. The project will start April 1, with an estimated completion in March 2024.
The Governor’s Office did not immediately respond to a question about how much money already had been spent on the failed implementation. The news release also did not say how much CGI will be paid through the new contract.
Iowa chose Workday, a California-based company, in September 2019 to convert the state’s aging human resources and financial management systems to the cloud. That contract was worth $21 million. The state signed another deal with Workday in February 2020 for $28 million.
Instead of seeking proposals from multiple companies to see which best met Iowa's needs and was most affordable, state officials chose a generic contract Workday had signed in 2015 with a for-profit procurement organization in Texas, The Gazette reported in 2020.
Workday got the multimillion dollar deal after Jake Ketzner, Reynolds' chief of staff for more than a year, left her office and became a lobbyist for the company. A spokesman for the Governor’s Office told The Gazette in 2020 Ketzner was not involved in the contract talks.
The Iowa Department of Transportation and Iowa State University also hired Workday to convert computer systems, with the DOT project facing delays.
Workday’s implementation of the state’s human resources platform in September 2021 was successful, the Governor’s Office said. But last summer, as testing neared for the financial management system, “potential implementation issues were identified that would impact a number of state business processes,” the news release states.
“It was extremely important to take the time to better understand whether the issues could be resolved without impacting data integrity or compromising the goals of the initiative,” Matt Behrens, Chief Information Officer, said in the prepared statement. “Ultimately, the decision was made to reassess the platform.”
The state went back to CGI, which now has a cloud-based software-as-a-service model that didn’t exist when the state chose Workday, the Governor’s Office said.
“Since then, multiple state and local governments have successfully implemented it and are now leveraging the benefits of a public sector solution,” the news release states. “A preliminary review suggests this option is more compatible with the state’s requirements and current business operations and will result in less disruption to internal functions and lower ongoing costs over 10 years.”
The state still will use Workday’s human resources system, which can “exchange information seamlessly” with CGI’s platform, the news release states.
Iowa's Workday Timeline
Sept. 26, 2016 — Iowa State University signs $17.6 million contract with Workday, a California-based software company.
Sept. 21, 2017 — Iowa Department of Transportation signs $9.4 million contract with Workday, piggybacking on financial terms set by ISU contract.
June 8, 2018 — Jake Ketzner leaves as Gov. Kim Reynolds' chief of staff to “pursue opportunities outside state government.”
Oct. 1, 2018 — First date Ketzner is listed as a lobbyist for Workday.
Oct. 30, 2019 — Iowa Office of the Chief Information Officer signs $21 million, five-year contract with Workday to provide human resources and financial cloud-computing services.
Feb. 11, 2020 — Iowa OCIO signs $28 million Workday contract for implementation of human resources systems by summer 2021 and financial systems by summer 2022.
July 2020 — Gov. Kim Reynolds transfers $21 million from Coronavirus Aid, Relief and Economic Security, or CARES Act, to Workday implementation.
Oct. 16, 2020 — U.S. Treasury Department and State Auditor Rob Sand tell Reynolds CARES Act transfer is not allowed.
Dec. 14, 2020 — Reynolds announces she will return CARES Act money spent on Workday.
Feb. 9, 2021 — Iowa Senate approves $21 million for Workday to update the state’s financial management system
Summer 2022 — Iowa suspends Workday system implementation to conduct a review of issues holding up the process and impacting a “number of state business processes”
March 2023 — Iowa cuts ties with Workday, signs contract with CGI, its former vendor
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