How to Fix California’s Unemployment Agency

California’s unemployment insurance agency, the Employment Development Department, has had a rough year.

True, the wounds were self-inflicted; it’s as if EDD went to a gun range and fired at everything except the target, so much so that the “collateral damage” – not properly paying legitimate claimants while simultaneously handing out an estimated $30 billion to fraudsters –  caused to millions of Californians practically seems like intentional damage.  But the culture of the bureaucracy that caused the mayhem is a discussion for another time.

Instead of focusing on its failings, it may be time to give EDD – and the politicians and officials who are responsible for the department – some helpful advice.

Buy a new computer.

There – that’s done.

But one supposes one should elaborate.

While the raft of bills currently making their way through Sacramento are all well and good, none appear to directly and succinctly address the agency’s most immediate fixable issue – EDD’s technology.

The systems the EDD is coping with, and spending millions in an apparently fruitless effort to shore up, are decades old.  They were barely able to keep up in the best of times and are simply not capable of handling the current crush of use.

To address this issue, the Legislature should immediately consider a whole new approach to purchasing by eliminating, for the purpose of buying a new system, the procurement system currently in place. One supposes the governor could, considering his multiple executive pandemic-related lockdown and the no-bid contracts he entered into, simply do it by himself, but that may be wishful thinking.

To that end, a bill, or an amendment to a current bill, (or even use of the dreaded “gut and amend” tactic) that calls for the following should be considered immediately.  While this is not an all-inclusive list, the basic elements of the bill would include:

1. A one-time suspension of the state’s procurement system.  One of the reasons the tech is so atrocious is that the purchasing systems the state uses are guaranteed to cause instantaneous obsolescence due to the complications and time involved.  They also heavily favor massive Sacramento-savvy general consulting firms whose main area of expertise is navigating government procurement processes instead of the actual creation of whatever product is actually being purchased, which is why the same firms keep getting contracts even when those contracts involve fixing stuff the messed up in previous contracts but that, again, is a separate discussion.

1. Appoint a team of independent outside experts – and use staff and a new proposed stakeholder committee – to create a specification list focusing on system usability, scalability, and durability.  These specs can include granular technical requirements, but should focus primarily on exactly what the new system should do and how it shall do it and how simple it will be to operate (even down to appearance of websites, user interfaces, etc.).

1. Then take the specifications and craft a combined Request for Proposals/Request for Qualifications (RFP/RFQ) packet.  That packet would then be distributed to any interested potential vendor. California may have a few in-state companies that would be rather interested.

1. As part of this effort to open up the process, allow any firm – not just those on existing state contractor lists – to submit a bid.

1. All bids would include a  timeline for design, installation, completion, and use training.  The bids would also include the cost of the system (rather than pre-set a budgetary cap, let the industry figure it out in part because if a cap is set at $1 and it turns out it can actually be done for 80 cents it should not come as a surprise if all of the bids were for 97.5 cents instead of 80).

1. Bids must also include significant and checkable company histories and references outlining their experience, qualifications, and previous successful (and unsuccessful) large projects, whether in the public or private sector.

1. Additionally, the vendor must know in advance that all timelines and costs are extremely hard numbers and overruns and delays will not be tolerated and may lead fines.  That being said, the state must not “change order” the process to death – the bid specs must be followed to the letter by both parties.  In other words, once the bid is awarded the agency must simply stand back and not get in the way of the experts.

1. And then the committee awards the bid to the best overall vendor (not necessarily the lowest) and the work begins.  Done properly this entire process could take less than one year, and could have been done by now if the Governor had so ordered when he became aware of the problem.

It should be noted that this concept contemplates building an entire new system from the ground up, independent of the ramshackle mess that now exists.  Once completed, the data from the current system would be exported in its entirety. While it is more complicated, that process could be described as being similar to a person buying a new laptop and then exporting and installing your existing data on the new machine, or usually, more accurately, paying a tech geek to do it for you.  Since the new system would be built with this export process in mind it can be designed to seamlessly take the new data.

It would seem that this concept would be easy to push through the legislature and, from a purely functional perspective, it should be.  However, such a bill should expect concerted – if behind the scenes – opposition from one group of Sacramento players: the third house, or the lobbyists and fixers that currently prowl the halls of the capitol buying and selling their influence.  They will most likely fight any effort to change the current system because any such change would directly impact their power and, therefore, their bottom line.  If they are extraneous to a government process – as they would be in this concept – they have no one to bill for their time and influence and that will make them quite irritable.  Additionally, when this process proves successful it could be applied to many other areas of government purchasing (the DMV, anyone?), further eroding their power base.

Legislators must stand their ground and do both the right thing and the politically smart thing – any future election opponent they may face could very easily remind voters that they voted with the lobbyists and not with the truly desperate victims of the EDD.

And that’s how you buy a new computer.