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In-state software offered for less

In-state software offered for less

HELENA - If it gets final approval, a company that intends to send some Montana state government work to foreign workers overseas will cost taxpayers almost $6 million more than would have a company that proposed to do the same work entirely with Montana employees.

The company, Deloitte LLP, a global professional services firm, was recently selected as the best company to create software to manage and help run Montana's food stamp and cash welfare programs, known by their acronyms of SNAP and TANF, respectively.

Deloitte proposed to Montana human services officials to create the software for $29.6 million, according to state information. Deloitte also indicated in its proposal that some of that work would be done by foreign workers out of country.

The lowest bid

Northrop Grumman, primarily known as a defense contractor with a 125-person Helena office, proposed to do the work for $23.8 million and was the lowest bid among the four companies that made it to the final round of considerations for the state contract.

Northrop Grumman's Helena branch is a certified "Made in Montana" firm and, according to company information, intended to create the software entirely by workers at its Helena office.

That a company intending to send state work offshore beat a "Made In Montana" firm for a multimillion-dollar state contract has caused a storm of controversy since it was made public Monday.

Deloitte was selected as the top-scoring firm last week, but the deal is not final. The would-be contract must still be signed off on by state contract officials and, ultimately, Anna Whiting Sorrell, director of the Department of Public Health and Human Services, which runs the two poverty-relief programs.

Northrop Grumman officials told its Helena employees Monday that eight employees there have been placed on indefinite unpaid furloughs.

Ongoing operation

The company won the last contract to build software for the programs and is the company maintaining $13.5 million software now. The company has an ongoing operation and maintenance contract for the existing software. That work will not be affected by the new contract, said Christy Whitman, a Northrop Grumman spokeswoman.

"Northrop Grumman is disappointed that we were not selected, and we believe our solution represented the best value for the state," Whitman said Tuesday.

According to state public-health and contracting officials, many factors played into Deloitte's emergence as the best company for the work. However, all four of the companies evaluated performed fairly well, and fewer than 60 points out of a total 1,250 possible separated the top-scoring firm from the lowest.

No company earned the highest possible points, state information showed. Deloitte, with 1,006.69, earned the most. Northrop Grumman received the lowest at 949.36.

It is unclear what role, if any, offshoring of work played in the final decision. Brad Sanders, chief of the state's Procurement Bureau, did not respond to several phone calls seeking comment for this story explaining the scoring.

Public-health officials did not respond to that question from a reporter and referred all other questions to Sanders.

Officials could not say Tuesday if Northrop Grumman was the only company that intended to do all the work in-state.

Two other firms, Accenture and Keane, also submitted proposals for the contract. Each scored better than Northrop Grumman, but also cost more.

Cost is one of the last elements to be considered, according to state information. Cost estimates are intentionally left unopened until after officials have considered each company's proposal and met with company representatives for a face-to-face presentation.

The documents outlining each of the company's scored could not be made public Tuesday, the state said.


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