Ten years after the failure of an SAP enterprise software installation at the Pennsylvania Turnpike Commission that exposed a pay-to-play bribery scandal, Ciber Inc. has agreed to pay the commission just $2 million of the $45 million that the agency demanded in a 2012 lawsuit.
The complaint accused Ciber of overcharging the commission by tens of millions of dollars above the actual cost of the installation. Ciber also failed to get the system working to run the turnpike’s finance, accounting, service, maintenance, purchasing, and other systems. The failure forced the turnpike to hire SAP employees and use its own staff to do work it had already paid Ciber for, the turnpike commission said in its complaint.
That is just part of the fallout from the turnpike’s notorious software case. The Pennsylvania Supreme Court in March ordered the agency to pay $4.2 million in damages, costs, and interest to whistleblower Ralph Bailets, the turnpike’s former manager of financial systems and reporting, for unfairly firing him.
According to the unanimous Supreme Court decision, Bailets had warned his bosses that Ciber’s prices were highly inflated, and then reported its work was badly managed, incomplete, and could not be used without much more work. Bailets continued warning officials that Ciber wasn’t getting the job done even after his turnpike bosses told him that Ciber enjoyed political influence and that continued complaints would hurt Bailets’ career.
Bailets’ warnings about Ciber proved well-founded, the court found. Instead of admitting Bailets was right and acting to protect the public, the turnpike fired him “in retaliation for his reports of wrongdoing and waste,” the Supreme Court wrote. The turnpike later cited many of the Ciber criticisms its fired employee had made in preparing its own civil lawsuit against Ciber.
Bailets was represented by Philadelphia lawyer Thomas Sprague, who says the court set a precedent by upholding a fired state whistleblower’s right to non-economic damages, including the embarrassment of getting fired for doing the right thing — as well as for actual losses.
The state’s 2012 suit against Ciber was delayed after senior turnpike officials were indicted in 2013 for allegedly accepting bribes from former Ciber vice president Dennis Miller in exchange for delivering the overpriced contract. Miller was eventually given two years probation and put into a program for first-time offenders.
The state’s $45 million civil case was transferred to federal bankruptcy court in Harrisburg after Ciber, which also struggled with failed software installation disputes in Washington, Hawaii, and Louisiana, declared bankruptcy in 2017. The case was later moved to bankruptcy court in Delaware, where Ciber lawyers agreed to pay the turnpike $2 million as of April 26, agency spokeswoman Roseanne Placey confirmed.
Ciber, which is based in Colorado, has not been awarded a Pennsylvania state information technology contract since 2015, but the company continues to work on projects under the state’s Information Technology Augmentation Staff program (ITSA), which uses U.S. and foreign engineers and technicians to work on computer projects that aren’t put out for competitive bidding.
Ciber’s failure to properly complete the project is one of a string of high-profile Pennsylvania state software failures dating from before the current administration of Gov. Tom Wolf, including a 20-year, $800 million failed attempt to integrate police and emergency communications systems, and a failed IBM workers’ compensation payment system that is the subject of a $148 million lawsuit that the Wolf administration has filed against that company.