How One State Will Work With the Feds On a Major Tech Overhaul

Wisconsin will work with the federal government’s in-house tech consultancy, known as 18F, along with a nonprofit that assists public sector agencies with technical needs, as part of an effort to upgrade the state’s outdated unemployment insurance computer system.

State officials have blamed the old IT setup, which depends on programming developed in the 1970s, for lengthy delays with delivering benefits to out-of-work residents during the Covid-19 pandemic. Last month, Gov. Tony Evers, a Democrat, signed a bill that requires Wisconsin’s Department of Workforce Development to begin work to modernize the system.

Many states are weighing how to improve their unemployment insurance technology, which came under intense pressure last year as the coronavirus outbreak upended large segments of the economy and knocked millions of people out of work. 

At the same time, Congress added emergency benefits, which states had to administer on top of their usual unemployment programs. Meanwhile, scammers caused another layer of difficulties as they swooped in and siphoned away billions of dollars in fraudulent claims.

In Wisconsin, Evers proposed nearly $80 million for upgrades to the state’s unemployment computer system in a February budget proposal. But the Republican-controlled legislature didn’t include money for the project in the bill they passed calling for improvements. 

Instead, the law directs the department to, initially at least, seek federal funds for the IT upgrade. It also leaves the door open to finance the work through a “master lease” arrangement state agencies can use to acquire equipment and services, paying for them in installments.

“A step in the right direction,” is how the governor has described the law. 

On Thursday, the Department of Workforce Development said it would move forward without money from the legislature, and that it would use federal grants to get the procurement process underway for an “integrated cloud-based communications center” that would offer users 24/7 phone access to claims information.

The workforce agency said that it had entered into a no-cost deal to receive preliminary consulting services from a nonprofit group, U.S. Digital Response, and that it had also signed a $1.2 million contract with 18F to develop specific requirements for the next phases of the technology revamp and to assist the state in coming up with a request-for-proposals from vendors.

Money for the 18F contract will come from $2.4 million in new federal grant funding that became available to the state earlier this month.

"Typically, it can take over a year just to lay out the requirements for a full system overhaul of this scale," Department of Workforce Development secretary-designee Amy Pechacek said in a statement. "The department is on an aggressive timeline.” 

States have worked with 18F in the past, including on a project involving a child welfare services system in California and technology for determining Medicaid eligibility in Alaska.

Launched during the Obama years, 18F is housed within the General Services Administration. “Wisconsin reached out with a clearly defined need,” a GSA spokesperson said by email. “18F’s technology teams have the right mix of skills to address that need: technology procurement expertise and know-how on successfully delivering modern software within government.”

Acting deputy director and acquisitions director for 18F, Ashley Owens, added that by “focusing on the user, we hope to provide an approach for DWD that can be replicated and scaled.”

The plan is for Wisconsin to take an “agile” approach to the project. The term refers to a contracting method that breaks large, complex procurements into multiple, smaller parts, allowing for tech systems to be implemented in successive pieces, as opposed to all at once.

State or local governments with federal funding that are interested in completing software development or acquisition projects, can reach out to 18F to see about working with them.