State, IBM make deal on welfare computers

Tuesday, June 29, 1999 | 4:03 a.m.

The NOMADS project began as a $12 million contract to develop a computer system for welfare but has spiraled out of control for years. Its cost is now estimated at more than $130 million.

"The negotiations became contentious over the past few months," Gov. Kenny Guinn said. "We hope it will work out. If it doesn't, we'll be on our own and go from there, but it would obviously be better for us if IBM was involved."

His legal counsel, Scott Scherer, presented the changes in the $1 million contract. He said IBM's liability will be limited to $3 million, while the company agreed to indemnify the state for acts and omissions up to $50,000 per claim involving the welfare cases that NOMADS is supposed to manage.

Scherer said agreements on the pact were completed less than an hour before Monday's state Board of Examiners meeting.

Marlene Lockard, head of the Department of Information Technology, said the key difference is who's in charge of the NOMADS team employed by IBM to develop the computer program.

"This puts the state in control," she said.

Guinn said it's a good step toward getting the computer program completed and on line - and toward the day when the state will take over running and maintaining it.

When completed, NOMADS is expected to integrate all the welfare and related programs to provide a sort of "one stop shopping" for those in need of public assistance. Much of that program is to be running by September 2000.

Monday's $1 million contract is only part of recent funding for NOMADS. Welfare's new budget contains about $28.4 million for the project, and there's a separate $9 million appropriation to ensure the project meets federally imposed deadlines.