ACS will feel right at home alongside IAP Worldwide, the Cerberus-owned government contractor. Both are facing criticism for repeated delays in implementing large government contracts – and forcing taxpayers to pick up the slack.
This Sunday, the Nashua Telegraph reported that New Hampshire’s contract with ACS to handle the $61 million upgrade of the state’s Medicaid Management Information Systems has reached a “critical juncture.” The system upgrades have been plagued with delays and is a full year behind schedule. Last week, the Health and Human Services Deputy Commissioner told the state’s executive councilors that ACS is reimbursing the state for costs related to the delays. However, ACS is not paying the federal share of delay costs – even though the feds are funding 75% of the project – and there’s no guarantee that the feds will pick up that cost.
Cerberus might say this is the kind of inefficiency the firm hopes to correct after the buyout. However, IAP’s five-year, $103 million contract with the IRS to process income tax returns has also been held up by extended delays. IAP was expected to have taken over at seven processing sites by Dec 1, 2006. By April 2007, IAP had started work at only two facilities. Further delays were reported as a result of IAP not meeting contractual obligations related to background checks.
Hmmm…taxpayers paying for contractors’ mistakes. Under Cerberus’ watch, such mishaps add insult to injury when you consider the tax advantages enjoyed by PE which we raised in our last post. Can we expect more of the same if Cerberus acquires ACS?
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