That is because the computer company that had won a $12.7-million contract to replace the ERS system, had been holding onto the personal data on Hawaii government workers and their families pending resolution of the dispute. With the settlement, ERS does not have to pay the contract fee agreed to in 1999, but is left without a new computer system and must pay about $1 million to settle the dispute, according to a Honolulu Star-Bulletin report.
Per the terms of the resolution, Colorado-based Quovadx Inc. will be paid $1.14 million – $745,000 as ERS’ payment for services and $395,000 as payment for software licenses and other rights that ERS will keep. ERS officials agreed with the general figures, but said some of the cost will be born by other parties.
Additionally, the resolution will allow the $7.8-billion retirement system to continue on its quest to replace its 16-year old Wang system, which state auditor Marion Higa called ineffective and inefficient and said it was hindering the retirement system’s ability to perform its mission. In fact, the disputed computer contract was a major point in Higa’s critical report on ERS in December, in which she said disputes arising from mishandling of the computer system replacement had cost the ERS $3.5 million “in wasted resources.”