How Philly spent $5 million and got … absolutely nothing

The Philadelphia Department of Prisons is a city agency that confines 5,200 inmates, staffed by 2,300 workers on an annual $259 million budget. But the software employed to manage it all is a system called Lock and Track that's been in use since the 1990s — and whose lone source for tech support is a one-man software contractor living on a ranch in Colorado.

Rick Evans, whose company LockWorks is based at his 35-acre property where he trains horses and gives riding lessons, has been the city's go-to guy since 1995, soon after he and a former business partner developed the Lock and Track system.

Despite various upgrades, Lock and Track is past its prime.

"If this guy, Rick, gets butted by a goat, they're done," said a person familiar with the use of the system in Philadelphia. "For a prison system the size and complexity of Lock and Track in Philly, relying on the expertise of a single person is a recipe for disaster."

A few years ago, officials attempted to remedy that: They signed a $7.2 million contract with Science Applications International Corp. (SAIC), a large information-technology specialist based in northern Virginia, to build a new Integrated Jail Management System (IJMS) that would bring all prisons data into one modern, cloud-based software system.

Now, officials admit, the project was a failure. After spending $5.6 million, the city scrapped the entire IJMS initiative.

"It is a sunk cost," said Mark Wheeler, the city's interim chief information officer.

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Wheeler, however, said that about $754,000 worth of hardware purchased for the project can be reused. He said he made the call to cancel the contract after prison officials raised concerns that the software in development would not serve necessary functions, and after discovering that annual licensing costs for that software would exceed $1 million.

Wheeler, who has been in charge of the Office of Innovation and Technology since January,  now believes the initiative was flawed from the outset because it was designed using Salesforce, a customer-relationship management platform that had not been used for inmate management.

"The approach we were taking — to customize a jail-management system from a platform that never had a jail-management system on it before — really wasn't the best approach." Wheeler said.

The market has since evolved, too, he said. There are now off-the-shelf software programs that would be both cheaper and better suited to the purpose.

Observers, however, point to another reason the contract was problematic: SAIC essentially wrote the request for proposals before submitting the winning bid to create the new prison management software. That is: SAIC was first contracted for a $333,793 planning initiative meant to ensure a "lower acquisition risk and smoother overall modernization effort," according to a service order executed in March 2014. That work resulted in the second request for proposals — for the $7.2 million implementation contract.

City Controller Rebecca Rhynhart, who was a staffer in Mayor Michael Nutter's and Mayor Kenney's administrations before being elected to her watchdog role, said the arrangement that appeared to give SAIC the inside track is cause for concern.

"It definitely wouldn't be a best practice to pick the same firm to do the planning work and actually help with vendor selection — and for that firm then to be selected to do the actual project," she said.

The problem with such a scheme is that all bidding contractors are supposed to start on an even playing field, said Ellen Kaplan, the city's chief integrity officer.

"If that were brought to my office, I would flag that," she said. But it's up to each city agency to decide whether to run contracts by her office, she said.

First Deputy Managing Director Brian Abernathy said red flags were raised almost from the start of the Kenney administration — but the city and SAIC continued to try to work through the problems. The city finally suspended the contract in January, before deciding to terminate it in March. City spokesperson Mike Dunn said the city is not seeking to recoup any of the $5.6 million it paid SAIC.

For its part, SAIC simply issued a statement: "The City of Philadelphia and SAIC mutually agreed not to renew the contract because the city decided to go in a different technical direction. We understand that circumstances change and we hope to support the city in any future endeavors."

The IJMS upgrade was just one small part of a $120 million capital investment in technology upgrades launched under the Nutter administration. It's also one of at least five major projects, all part of that modernization push, to be affected by major delays, cost overruns, or even cancellation, the Inquirer and Daily News reported last year. The city spent $1.6 million on a new budgeting system before deciding to scrap it; poured $10 million, more than double the original budget, into licensing and inspection software that is not yet complete; and poured at least $8 million in cost overruns on what was supposed to be a $15 million payroll system.

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Adel Ebeid, who served as chief innovation officer under Nutter and was involved in negotiating the SAIC contract, said he was puzzled as to why it didn't work out.

"Issues are bound to come up in a complex implementation like a Prison Management System, but I'm surprised the city waited so long and bleeding $5.6 million before recognizing that the system doesn't meet their needs," Ebeid said in an email. "I'm sure there were several review milestones throughout the project and red flags that would have prompted the city to make a 'go/no-go' decision."

According to sources knowledgeable of the situation, there was significant turnover during those two years, and none of the managers had any experience using Salesforce. Also, although benchmarks were regularly getting approved, managers were pushing off the most complicated parts until the end. It was when they had to face those issues that they realized the project was doomed.

Dunn said that "red flags" were raised by the third out of 19 deliverables set for the IJMS project. "The city began frank conversations with the vendor.  The vendor in turn, presented mitigation plans that seemed reasonable and credible," Dunn said. He declined to say by which deliverable the city ended the contract.

Dunn also said there was a steering committee that had "final decision-making authority" on the IJMS project. He declined to name the committee members.

Ebeid, who's now a sustainable-tech consultant, said he stands by the idea of using Salesforce — but added that "revolving-door leadership" in the city's information-technology office and the prison's inability to adjust its policies to meet the capabilities of the off-the-shelf software likely doomed the project.

Evans, the Lock and Track creator and city contractor, said that "it's not surprising" that someone who was not "intimately familiar" with prisons and correction systems would not meet the city's expectation.

Since the scrapping of IJMS, city officials have paid $425,312 to enhance Lock and Track. Still, it's not anywhere what they had hoped they would have by now with a new system.

"It doesn't work well enough for them to meet current and future expectations," said Evans, who has a $1.2 million contract to continue to provide support services for Lock and Track and teach city employees how to maintain it themselves.

Still, Evans said he couldn't provide a timeline for when the city's IT team would become self-sufficient. His current contract lasts through June 30, 2019.

Many jail administrators around the country have been looking to existing inmate-management systems like one called Offender360. It's already in use in San Diego and Chicago. Maricopa County, which includes Phoenix, recently signed an $11.1 million, 10-year contract with Tribridge, which makes the software.

Wheeler said a system like that may be in Philly's future, too.

"Ultimately we will go out for another RFP. Because we've upgraded Lock and Track, we feel we have a another few years of that," Wheeler said.

In the meantime, "Rick is still available to us," Wheeler said.