Kansas Department of Revenue secretary Sam Williams vowed to improve transparency in an hour-long meeting with reporters Friday about a behind-the-scenes deal to privatize technology services and eliminate 56 jobs for state employees.
Describing himself as an agent of change who took over a troubled department 18 months ago, Williams said he negotiated a deal exclusively with CGI because the company owns the license for outdated tax software used by the state and his agency lacks the talent to modernize. He said he informed employees last fall that the agency no longer will support or develop software, and morale among information technology employees "sucks right now."
Williams said he didn't think about announcing the 10-year, $53.5 million deal or consider issuing a news release. He also didn't see the need to get public feedback on the arrangement.
"I’m in the position I’m in because someone who is elected chose me to be in that position," Williams said. "And the decisions I make, the negotiation of whether that was a good decision or a bad decision, is going to be between me and my boss, not between me and the public. Because I wasn’t elected — I was appointed. The governor was elected, OK?”
Kansas uses a tax collection and compliance system that dates to 1995. CGI bought the company that developed the software and owns the licenses. Williams estimated it would cost $100 million to modernize the system with state employees.
"Folks, we just can’t compete with having the talent we need," Williams said.
To secure the deal with CGI, Williams said, KDOR used a procurement process that avoids taking bids by only looking at companies that have an existing relationship. After negotiating a deal with CGI, the department submitted a prior authorization form. Other companies had seven days to object.
Williams said one company opposed the deal, but the Department of Administration determined that company was incapable of performing the services KDOR needs.
"My feeling was as we went through this process — it was being made public at the levels it needed to be," Williams said. "It’s out there. It’s public record."
During the first phase of the project, CGI provided a self-serve portal for taxpayers. The agency says the portal is responsible for $15 million in "clearly defined" new revenue. The next phase will turn over maintenance and support of software to CGI, which will be tasked with changing the language of underlying code and making it a cloud-based system.
So far, Williams said, CGI has delivered on every promise. In contrast, he inherited "challenges" exacerbated by limited funding.
"Have we been restricted in resources?" Williams said. "You all know the story. You guys write about that. There’s been several issues around that."
The agency later said his point was KDOR isn't in the business of developing software.
"KDOR is a tax collection agency, not Microsoft," the agency said. "Updates to KDOR's tax software system were not purchased but nonetheless, KDOR IT staff did terrific job maintaining software from 1995."
Two weeks ago, KDOR spokeswoman Rachel Whitten declined to respond to questions about layoffs at the agency. Williams explained there was nothing to say because the layoffs, which are scheduled for August, haven't happened yet. Employees were given the timeline this week.
Williams said he would welcome a "new world" of transparency.
"I’ve heard you today say that we can do better," Williams said. "We will. What that looks like, I can’t tell you right now. But we will make it better."