The Maine State House in Augusta. Kennebec Journal photo by Joe Phelan  Buy this Photo

Maine officials and a California company hired to upgrade the state’s ancient human resources management software are locked in a multimillion-dollar contract dispute after a months-long standoff over how to complete the long-delayed project. But while the state has claimed the company, Workday, has failed to deliver a workable system, an investigation by the Portland Press Herald/Maine Sunday Telegram reveals that a series of problems on the state’s side are largely to blame for the project’s collapse.

Inexperienced and poorly qualified people were running the complex project for the state at multiple levels, according to state contractors. Payroll data imported from the old system was faulty. A state manager was accused of harassing both state and Workday personnel. The work environment grew so toxic that project workers would go outside to cry or sit in silence inside their cars, their colleagues said.

And when the Maine Department of Administrative and Financial Services brought in a new project manager to rescue the distressed project, it hired the DAFS commissioner’s husband, a move that was legal under the state nepotism laws but one that government ethics experts say should have been avoided.

This dysfunctional picture of the state of Maine’s stalled project to introduce a new human resources management software system emerged from an examination by the Portland Press Herald/Maine Sunday Telegram into how things went awry, leaving the state’s 12,000 employees relying on an antiquated software system the commissioner herself has described as “being held together with duct tape and paper clips.”

The effort, which has sought to replace a nearly 40-year-old system programmed in an obsolete language only one state employee knows how to use, has spanned two administrations and lead vendors, has missed its deadlines three times, and has resulted in legislative oversight hearings, calls for an investigation by the state’s watchdog agency, and a multimillion-dollar dispute between Workday and the state that’s likely to go to court.

In the process, the state has spent $34.7 million over five years with nothing to show for it, just a partially functional system that hasn’t yet been put online. Kirsten Figueroa, the DAFS commissioner, has blamed Workday for the project’s failure, saying it had “consistently operated in bad faith and has knowingly misled state officials” in a Feb. 25 letter to the company. Estimated costs to deliver a working system are now expected to total $55 million.

State officials declined to answer the Press Herald’s questions about the project, citing the potential for litigation. DAFS referred questions to the Attorney General’s Office, which is now handling the contract dispute with Workday, under which DAFS seeks $22 million in refunds and compensation. The Attorney General’s Office declined to comment, answer questions or provide information about the status of the Workday dispute.

Gov. Janet Mills’ spokesperson said in an email that she would like to see the dispute resolved “in an efficient and timely manner so that the State may move forward in the most cost-effective way with replacing its severely outdated system.”

The Press Herald reviewed hundreds of pages of letters, contracts, emails, meeting minutes, reports and presentations about the troubled project provided to the legislative oversight committee or directly to the newspaper, some of which had not previously been made public.

The newspaper also spoke with three former state contractors who worked on the project, all of whom dispute the commissioner’s characterization of events, telling the Press Herald that the effort was damaged by distracted senior management, shifting requirements from the state, a work environment that turned toxic, and the state’s failure to recruit and hire experienced and qualified personnel to staff the state’s side of the complex implementation effort.

‘LITTLE OR NO EXPERIENCE’

Two of the former contractors asked that their names not be published because they fear professional repercussions for speaking out. The exception was Ahmadah Afif, a Maryland-based global training consultant who worked on the Workday Maine project from February 2019 to May 2020.

Afif, who has helped states, universities and local governments across the country implement Workday and other complex software systems, said the underlying problem became clear soon after she relocated to Augusta and began working on the project.

“Maine didn’t have the right people in the right places, and the rates they were offering were not going to bring the right expertise to Maine,” Afif said. “In order to save money, they gave jobs to people with little or no experience. It was like: ‘Hey, I’m going to drop you in the fire. Dance for me!’”

Another former state contractor said: “I don’t think any of us were qualified for the jobs we had. They were quick to hire whoever they could.”

With DAFS declining to answer most questions for this story, the Press Herald was unable to independently determine the technical qualifications of managers and contractors to execute the demanding implementation.

There were management problems as well, the contractors said, with inexperienced managers, a lack of attention from the department’s top officials, and, in one case, inappropriate behavior.

At an appropriations committee hearing March 4, state Rep. Justin Fecteau, R-Augusta, caused a stir when he said he would not support new funding for the project because he had “learned of probable sexual misconduct in the program directed at the capable women who work there.”

The Press Herald spoke with a state contractor who said she had been among several victims of sexual harassment by a manager, a state employee, and had filed a complaint with DAFS’ human resources department. The employee said the manager had frequently made offensive comments to and about female state employees and Workday contractors, including references to their menstrual cycles and his desire to be romantically involved with them.

The human resources department, she said, had recently informed her that its investigation had concluded and that the manager would remain. “I wasn’t the only one to make a complaint, but somehow he is still in the same post he’s in,” the contractor said, adding that this manager’s behavior damaged staff morale.

DAFS spokesperson Kelsey Goldsmith confirmed that the investigation – conducted by outside legal counsel contracted by the Attorney General’s Office – had found the accusations did “not meet the legal definition of hostile workplace or harassment of any kind.”

‘FEELS LIKE APOLLO 13’

The effort to replace the state’s HR management system goes back to 2016, when then-Gov. Paul LePage contracted Infor, a New York firm, to replace it for $13.5 million. That company proved incapable of delivering the promised system, and in November 2018 the LePage administration signed contracts with Workday to provide both the software and an implementation team to work alongside state contractors and staff to get the new system launched by Jan. 1, 2020. The price was $15 million.

By the time the project got underway in January 2019, Janet Mills was in the Blaine House and Figueroa, a former colleague of the governor at the Attorney General’s Office, had taken the leadership of DAFS. In the coming months, the state hired contractors to work alongside Workday’s consultants to complete the wide-ranging project, which included customized cloud-based software for payroll, recruitment, time tracking, benefits administration and security.

Kirsten Figueroa, commissioner of the Department of Administrative and Financial Services Russ Dillingham/Sun Journal

In formal letters later sent to Workday, Figueroa asserted that reports to the department’s Executive Steering Committee “throughout the project were rosy and optimistic” and that “at no point was the ESC given any indication of the depth and magnitude of the problems.”

But minutes and presentations from the Executive Steering Committee’s meetings show senior department leaders were well-apprised of the unfolding crisis starting in August 2019, when the group began contemplating pushing the “go online” deadline from Jan. 1 to March 31, 2020, because of ongoing personnel shortages and testing delays. Minutes from their Aug. 22 meeting – attended by senior state managers and Workday consultants – said such a contingency plan had been discussed with the commissioner and had her support.

The independent auditor Maine hired to evaluate the project, Panorama Government Solutions, completed a report the same day that judged the project to be in “yellow” status overall, warning of tight timelines and fatigue among project staff already working overtime. It warned the project “will quickly move to Red should something unforeseen arise in Testing or elsewhere on the project that causes delays.”

“This feels like the movie ‘Apollo 13,’” the department’s chief information officer, Fred Brittain, said at a special meeting of the committee on Sept. 13, 2019, referring to the film about how moon-bound astronauts saved themselves through improvised onboard repairs after an explosion damaged their spacecraft. “Are we going to splash down on water or burn down on entry?”

Thirteen days later, the ESC concluded that the entire project was “significantly at risk” because of testing problems and other issues. The 15 attendees – including Brittain, Deputy Commissioner Heather Perreault and at least two Workday consultants – unanimously recommended moving the deadline, meeting minutes show, though the final decision to do so didn’t come until November.

THINGS FALL APART

In the months that followed, nothing went as planned.

Testing of the payroll portion of the Workday system revealed enormous problems. Figueroa later testified to legislators that the system had a greater than 50 percent “error rate” but that Workday pressured the state to go ahead with an April 1, 2020, launch all the same.

A Workday spokesman, Sion Rogers, said via email that neither assertion is accurate. The problem lay not with Workday’s system, which was calculating payroll accurately, but with the data being imported from the state’s existing system, which was filled with errors and inaccuracies. “Workday did not recommend the State go-live” on April 1, Rogers said. “Rather, Workday answered questions and provided guidance to help the State make its decision.”

The former contractors agreed the payroll problem was with the legacy data for the 12,000 employees covered by the system, a shortcoming also mentioned in several of Panorama’s periodic reports on the project. In essence, the state in many instances hasn’t been calculating pay in accordance with the rules and parameters it provided Workday during the system’s design phase, which resulted in large numbers of variances when the systems were tested side by side.

“They wanted the payroll to match the old system, but the old system wasn’t paying people correctly,” one said. “It uncovered that people were being paid improperly.”

Afif said the payroll modules of HR management systems are by far the most complex and difficult to execute. Governments have diverse workforces, from police officers to hospital staff to librarians, drivers and boat captains, with different rules, union memberships and requirements. “Payroll is always problematic, no matter what,” she said. “It’s hard to pull it together if you don’t have experienced people who know how the process works.”

In Maine’s case, two other former contractors said, the state police had a wide range of small hourly pay differentials based on whether a given officer had spent time working with a K9, wearing scuba gear, or carrying a weapon, which generated a huge number of variances.

“In any case, payroll was dead on arrival in early 2020 because of the testing results and needed to be reworked,” one said. “At that point they could have cut payroll out to work on and rolled out benefits, recruiting, security, time management and the other modules that were ready to go, but they didn’t.”

COMMISSIONER’S HUSBAND HIRED

Instead, state officials decided to put the brakes on everything and hire somebody to come in and sort out the mess. That somebody would turn out to be the commissioner’s husband, Doug Birgfeld.

Birgfeld, who had been working at the Department of Economic and Community Development since shortly after Mills became governor, was hired to resurrect and head DAFS’ Project Management Office, a position he had held for the three and a half years until LePage shut it down in 2016 as part of his drive to slash the state workforce. The department tasked him with undertaking a strategic review to put the project back on track. He received $114,280 in wages and benefits from this staff position during 2020, state records show.

The department says his hiring was legal because officials acted in accordance with the state’s nepotism rules and laws, which prohibit family members from making the final decision to hire relatives but allow relatives to serve in jobs overseen by them.

“Birgfeld was selected by (Chief Information Officer) Brittain from a competitive pool of applications for the role of Director and Birgfeld reports directly to Brittain,” DAFS spokesperson Goldsmith said via email. “Commissioner Figueroa was not involved in his hiring.”

Goldsmith provided a written statement from Brittain in which he said the commissioner wasn’t involved in the process and had proactively alerted him that her husband was applying and “that she did not want to be involved or consulted in any way.” Brittain said he chose Birgfeld from a field of “three well-qualified finalists.”

Scott H. Amey, general counsel for the Project on Government Oversight, a government ethics group in Washington, D.C., said such hires are still problematic.

“Any situation in which a senior official is overseeing their spouse is a recipe for waste and abuse,” he said. “That scenario should be avoided and appropriate screening should take place. These ethics dilemmas are easy to avoid, and another qualified candidate should have been hired.”

Asked about Birgfeld’s hiring, the governor’s press secretary, Lindsay Crete, said via email that the administration adheres to state laws governing the hiring of family relations and “focuses on hiring the best, most qualified individuals for jobs throughout State government as required by Maine’s Civil Service law.”

As Birgfeld began his review in March 2020, Panorama issued a new report warning that his intended plan to come up with a revised workplan and launch date by the end of that month was unrealistic and that if he undertook significant changes it would likely have an adverse impact on the team’s productivity and morale, and that some were scheduled to move to other projects in May.

The former contractors said morale was already flagging. “People were leaving the building crying and others would storm out cursing and get in their car and sit there for an hour,” one said. With the project at a standstill, contractors started being let go.

When the coronavirus pandemic reached Maine in March 2020, state government went into lockdown, and DAFS became the lead agency in ensuring state buildings and employees had personal protective equipment, Plexiglas partitions, remote computer access and all the other things required to keep essential operations going.

What went wrong in the 10 months that followed remains unclear, with the state and Workday offering fragmentary and contradictory assessments. Workday withdrew its consultants on short warning in May 2020, alarming department leaders, but then replaced them. Birgfeld developed measures meant to improve the state’s governance of the stalled project but complained about a lack of “day-to-day tactical support” from the Workday consultants. The state and Workday went back and forth for months about whether the latter would receive additional consulting fees, with at least 42 proposals exchanged between them.

FALSE RESTART

In September the parties appeared to try to reset their relationship and get the system implemented, but they disagreed over whether Workday should be paid for the additional work. The state hired IJA Strategies, a firm that implements Workday systems for clients, to conduct another independent assessment that detailed longstanding problems, almost all of them involving the state’s side of the ledger.

The problems IJA identified in its November 2020 report included the state frequently changing plans, deadlines, and configurations “as new staff review previous design decisions”; fatigue, turnover and loss of motivation among project staff; disagreements among state agencies over how statewide payroll rules should be interpreted; and bad data being loaded into the new systems from the old one, ensuring errors and delays.

This assessment, Workday’s Rogers said via email, highlighted issues the company had been raising with the state for many months. “Any technology deployment is nuanced and requires both parties – the customer and vendor – to complete certain requirements on their end in order to be successful,” he wrote. “On the customer side this can include project staffing, clear business and functional requirements, and data quality, among others.”

Workday says it sought to engage the department’s leaders this winter in finding a path forward but were continually rebuffed, denied access to weekly status report meetings and stopped being included in Executive Steering Committee meetings.

“There has been no discussion around the major issues that have been hindering project success such as poor data quality, resource turnover challenges, and incomplete/changing requirements due to policy interpretation, amongst other issues,” Workday’s senior vice president for implementation services, Christopher Curtis, wrote Deputy Commissioner Perreault on Feb. 11. “Attempts to engage with the State of Maine teams are often met with resistance, deflection, defensiveness and other tactics.”

Curtis said Workday’s consultants were now “relegated to a staff augmentation or ad-hoc consulting role” with no real partnership or collaboration with their state counterparts. As a result, he said he was pulling them from the project Feb. 12 until the department decided if it was committed to act on addressing the problems identified in the IJA report.

Perreault responded that the state would take its time determining how to move forward with the failed project, would share its decision when it came to it, and considered Workday to have been pervasively “acting in bad faith.” She said that if Workday’s consultants paused work, the state would consider the company to be in default of its contract.

Two weeks later, Figueroa put Workday on notice that it was being fired as implementation partner as of March 9. The state, which has paid Workday about $7.5 million to date, is seeking $22 million from the company, including compensation for having to keep the legacy system going. Workday rejects the claim, and the matter has been turned over to the Attorney General’s Office.

In March, Rep. Fecteau asked for the Legislature’s watchdog agency, the Office of Program Evaluation and Government Accountability, to launch a formal investigation of the project. The government oversight committee, which must approve such a request, held a hearing April 9 where Figueroa gave her testimony, but has decided not to act until after the state resolves its $22 million dispute with the company.

“OPEGA investigations require considerable resources from the agency or department involved,” the House chair of the committee, Rep. Genevieve McDonald, D-Stonington, said via email. “There was bipartisan agreement among members of the Government Oversight Committee to keep Workday on our unfinished business list pending the outcome of settlement agreements.”

DAFS has put forward a number of specific grievances against Workday that it says amount to a breach of contract, including an alleged failure to produce certain features relating to labor cost distribution and the creation of certain ad hoc reports; a failure to create a particular advisory committee; and “pressuring” IJA Strategies to release its findings before giving them to the state.

“Per contract terms, as the project implementer, it was Workday Professional Services’ responsibility to lead the implementation,” DAFS spokesperson Goldsmith said via email Friday. “Instead, they have walked off the job twice over the course of the year despite repeated attempts to engage with them.”

Workday, in turn, has rebuffed all of these arguments, saying the state didn’t ask for the first feature until well after the project had started; that the second feature in fact exists; that the advisory committee at issue was created at the end of 2018 but that the state dissolved it weeks later; and that it did not pressure IJA. The Attorney General’s Office has taken over the dispute.

WORKDAY’S TRACK RECORD

Workday’s cloud-based human resources management systems are used by companies and governments around the world, and generally receive good reviews, with top officials at FedEx and Patagonia recording video testimonials for the system. L.L. Bean touted “smoothly transitioning” to Workday in September 2018, and South Portland-based Wex Inc. credited it among the assets that allowed it to successfully transition most of its 5,000 office employees to remote work at the onset of the pandemic.

Implementations sometimes go awry in high-profile ways, however.

Multnomah County, Oregon, also had a rough Workday payroll system rollout in January 2019 that resulted in four unions threatening class-action lawsuits against the county because of widespread overpayment and underpayment problems among their 6,000 employees. But county officials who oversaw the project there say the issues were largely resolved within a year and the county has been happy with the overall experience.

“We are very glad we moved to Workday,” Tracey Massey, the county’s interim chief information officer told the Press Herald. “I’m not going to say everything was perfect, but if we had not been on Workday during the last 15 months of the pandemic, I don’t know how the county would have survived.”

Baltimore’s January 2021 rollout of Workday’s payroll system was also marred by widespread errors, but city officials blamed most of the problems on employee or supervisor input errors, the Baltimore Sun reported. 

In an email, however, DAFS spokesperson Goldsmith raised Baltimore’s situation as a cautionary tale about rushing to implementation. “When I read about the debacle we were, oddly, proud. Proud that DAFS has been such diligent stewards of the effort here in Maine,” she wrote. “When we launch Workday Maine, there will be bumps. And there will be more bumps between now and then, too. But our goal is to avoid a widespread issue like what is happening in Baltimore.”

As for Maine’s project, DAFS says it intends to keep the Workday system, which it likes, but wants to find another partner to help implement it. Spokesperson Goldsmith said the department’s immediate focus is to support the administration’s post-pandemic economic recovery efforts.

The legacy system – the one Figueroa has said is “being held together with duct tape and paper clips” – will apparently have to hold together a while longer.

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