Deloitte defends work on Florida's unemployment system

Officials from a company that played a key role in setting up Florida’s much-criticized online unemployment system defended the firm’s work Monday, as Democratic lawmakers argued it launched "something that wasn't ready" and was designed by the state to fail.

John Hugill, a principal with Deloitte Consulting, told members of the Senate Select Committee on Pandemic Preparedness and Response that company officials are "sympathetic to the challenges" that people had when using the CONNECT unemployment system during the past year as the coronavirus pandemic led to massive job losses.

But Hugill said the company’s contract and contact with the CONNECT system ended in May 2015, when it was turned over to the state Department of Economic Opportunity.

"CONNECT was designed to comply with Florida-specific rules, requirements, and policies, many of which were new, and coincided with the launch of this complex system in October of 2013," Hugill said. "As has been well-documented, there were technical and business process issues before and after the system went live. We accepted responsibility for the issues that were within our control, and we worked with the Department of Economic Opportunity to resolve them."

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Deloitte was the primary contractor that helped put in place the CONNECT system, which went live in 2013 at a cost of $78 million and became overwhelmed last spring when economic fallout from the pandemic tossed hundreds of thousands of Floridians out of work.

The appearance by Deloitte officials at the Senate committee followed the release Thursday of a 95-page draft report that put a spotlight on problems setting up CONNECT. Also, Dane Eagle, executive director of the Department of Economic Opportunity, said last week that retaining the current system is "not an option."

 The draft report by state Chief Inspector General Melinda Miguel outlined that CONNECT was never tested to meet the demands encountered during the pandemic, and more than a dozen issues remained outstanding years after the system went live.

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Miguel also recommended the state update what is known as the "System Disaster Preparedness Plan" to incorporate lessons from the pandemic into CONNECT, strengthen administrative and physical infrastructure and consider moving the system’s data to a cloud service "to allow for greater scalability."

The completion of Miguel’s report awaits formal responses from contractors such as Deloitte. 

Hugill said the company is comfortable with what it has done on the project but had not completed a review of the report.

"We do know that during the development process, CONNECT was performance-tested and stress-tested to handle both hurricanes and financial crises, using volumes from the Great Recession as the benchmark," Hugill said. "Obviously, this standard was obliterated by the immediate and drastic spike in demand that DEO (the Department of Economic Opportunity) experienced when the U.S. economy shut down in 2020."

Sen. Randolph Bracy, D-Orlando, noted that a lack of easy access to CONNECT has been an issue since the site was designed and cited concerns raised last summer by DeSantis. He asked if conversations had been held between the company and the state to limit the amount of access to the system.

Sen. Jason Pizzo, D-North Miami Beach, said the report doesn’t help Deloitte, even while it appears the company was following Florida-specific directions in setting up the system that included features that weren’t found in similar systems put in place at the same time by Deloitte for Massachusetts, Minnesota and New Mexico.                                                                     

"The site you delivered, I don't think was that great, I don't think was ready, I don't think was battle-tested," Pizzo said. "I do think you got away with launching something that wasn't ready."

DeSantis was more tempered when asked earlier in the day if his view on the system has changed from last summer.

"Obviously, we're going to probably have to do something on the physical side," DeSantis told reporters at the Capitol. "We want to make sure that the system is better going forward."

DeSantis directed Miguel to undertake the review in May as the CONNECT system failed to handle the hundreds of thousands of jobless applications being submitted weekly in the early months of the pandemic. At that time, DeSantis repeatedly lambasted the system as a "jalopy" and said it was designed under former Gov. Rick Scott, now as U.S. senator, with "pointless roadblocks" to discourage people seeking jobless benefits.

House Minority Co-leader Evan Jenne, D-Dania Beach, said Monday that Deloitte built the system it was asked to build, which was intended to keep unemployment numbers low rather than help people out of work.

"It was a system that was made to fail. It was a system that was made to be incredibly, incredibly difficult to get in and out of and navigate through," Jenne said in a Zoom call with reporters. "That was a request made by the Scott administration. So, I am not throwing that at the floor of the current governor, or anyone else. This Legislature had their hand in it, making it as difficult as possible. We as a (Democratic) caucus warned them about that year after year after year on the floor, that what they were doing was creating a system that would be impossible to navigate in order to, in my opinion, to help create artificially low unemployment numbers." 

Sen. Jeff Brandes, a St. Petersburg Republican on the Senate pandemic committee, said Deloitte was "kind of maligned" over the past year.

In her findings, Miguel wrote that "the requirements for system capacity, as outlined in the 2010 (invitation to negotiate to contractors), were never fully tested nor documented." 

"The contract mandated system capacity for a minimum of 200,000 concurrent external users," Miguel wrote. "We could not find evidence where DEO enforced this contract requirement. Deloitte’s stress testing documentation shows testing was for approximately 4,200 concurrent users (internal and external)."

Miguel wrote the independent verifications of the system as set by the department "were neither fully independent nor adequately rigorous." 

She also noted that of 31 findings from a 2015 state auditor general report about the system, more than half were still unresolved in 2019 and that a more-recent audit "identifies 14 issues still outstanding."

Hugill said the company met the contractual requirements.

"I think we, you know, the state set certain requirements that we built to, and (we) did that successfully," Deloitte Principal Scott Malm said.

Eagle, appearing before the Senate committee last week, said that in addition to maintenance costs, more than $73 million will be needed over the next two years just to revamp the system.

Eagle outlined a multi-year project aimed at upgrading the process of making claims, expanding contact center staffing and shifting stored data to a cloud-based portal with a company such as Amazon or Google.

According to Eagle, the state spent $49 million last year as the department scrambled to make emergency improvements to the system and hired hundreds of people to field questions about claims. The system was budgeted at $12 million a year.

Since March 15, 2020, the Department of Economic Opportunity has handled more than 5.23 million claims, which have resulted in nearly 2.3 million claimants receiving more than $23.7 billion in state and federal assistance.

Miguel’s report has already become an issue in a potential class-action lawsuit over CONNECT that is pending in Leon County against the state department and Deloitte.

In filing a copy of the report Thursday in the case, plaintiffs’ attorneys Marie Mattox and Gautier Kitchen wrote that the report "supports virtually every, or almost every, argument plaintiffs have made in this case. This document is critically important for the court’s consideration of the pending motions to dismiss."

Leon County Circuit Judge John Cooper in September dismissed an earlier version of the lawsuit but gave the plaintiffs an opportunity to file a revised complaint. After the revised case was filed, attorneys for the department and Deloitte filed motions to dismiss on several grounds, but Cooper has not ruled on those motions, according to an online docket.

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