CHARLESTON, W.Va. -- One of the most expensive West Virginia government contracts just got more expensive.
Auditor Glen Gainer, Treasurer John Perdue and Gov. Earl Ray Tomblin's chief of staff voted last week to spend another $12.4 million on a computer contract already expected to cost $98 million.
The multi-year project is supposed to eliminate scores of far-flung software programs by creating one computer system to manage the state's accounts, personnel and assets. The project is known as the Enterprise Resource Planning system, or ERP.
The contract, one of the largest in state government, was awarded late last year to CGI, a Montreal-based technology company that does similar projects in other states.
CGI representatives and state officials, led by Gainer, met four days last week to renegotiate key parts of the initial contract.
Following those negotiations, Gainer, Perdue and Tomblin chief of staff Rob Alsop voted Friday to increase CGI's contract by more than 12 percent.
The state purchasing division's handbook "strongly" discourages changes to projects that cost more than 10 percent of the initial agreement.
But officials said they expected the unexpected when they first signed the ERP contract with CGI.
Gainer said the state created a $25.5 million contingency fund because officials knew they would want to update the contract and might have to deal with unforeseen issues.
Gainer said even with the $12.4 million in new costs after CGI's first year, he still expected to have money in the contingency fund when all is said and done.
Gainer said the money was for a host of project costs, not just changes to CGI's contract.
"That's not $25 million that could go to CGI," he said.
Gainer said there will be a second round of negotiations early next year that will also add costs to the contract, although they will be "substantially smaller" than the $12.4 million changes.
The state is also paying $12 million to $14 million to Connecticut-based Information Services Group to provide expert advice on setting up such a system. Mitt Salvaggio, the consultant's managing partner, sat in during negotiations with CGI last week, Gainer said.
The new computer system has been a long time coming. Officials talked for years about upgrading the state's many aging computer systems and combining them into one, modern system.
The project is already costing more than was initially expected. In 2008, the state's top technology official thought it would cost maybe $60 million.