Deloitte execs: Meltdown of unemployment system we built wasn’t our fault

Deloitte Consulting had no responsibility for last year’s meltdown of the Florida unemployment system the company built, executives said during a frequently tense two-hour hearing on Monday.

Two executives said that the failure experienced by the online unemployment system, known as CONNECT, was “clearly unrelated” to the company’s work, which ended in 2015.

And they did not know why CONNECT failed when other states with similar Deloitte software had an easier time coping with the massive increase in jobless claims related to the pandemic.

“We have pride in the work we did in the project,” said John Hugill, a principal with Deloitte Consulting who worked on CONNECT from 2011 to 2015, when the company was paid more than $40 million to create the system. “Did everything go right? Absolutely not. Did we fight to deliver the best that we could and meet our requirements? Absolutely. So I am proud of that.”

Monday’s hearing was a rare chance for lawmakers to grill executives from a company that has been battered by Gov. Ron DeSantis and the media for CONNECT’s failures last year. The system went down immediately at the start of the pandemic, forcing millions of desperate Floridians to wait months before filing or receiving unemployment claims.

But the hearing ultimately left more questions than answers about what exactly went wrong last year and why longstanding issues with the system were not fixed prior to the pandemic. The Deloitte executives said they didn’t know why the system failed, beyond the fact that it was overwhelmed with claims.

Of the 10 members of the committee, only half had questions for the company, and only Sen. Jason Pizzo, D-North Miami Beach, vented the frustrations experienced by Floridians over the last year.

“Who owes my constituents an apology?” asked Pizzo, a former prosecutor.

“If I could personally give them an apology, I would give them an apology,” Hugill said.

Hugill and his colleague, Deloitte principal Scott Malm, pushed back on criticism that the company failed Floridians. They said they delivered precisely what was asked for by Florida’s Department of Economic Opportunity, which was overseen by former Gov. Rick Scott at the time.

A damning report

They also denied key findings in a state inspector general report released last week.

The report found that on the date before CONNECT went live in October 2013, the system had 14 “fatal” defects, although the state’s contract with the company allowed for none. The Deloitte executives said Monday that it wasn’t true, and that there was a “misinterpretation” of internal documents.

“By my professional opinion, those were not fatal defects. Those were cosmetic,” Malm said.

The inspector general found that under the state’s contract with Deloitte, the system was supposed to be tested to be able to handle 200,000 concurrent users. Instead, the system was tested to handle just 4,200 people at a time. (Today, after the state installed 72 servers to beef up the system during the pandemic, it can reportedly handle just 100,000 users at a time.)

Hugill said that the 4,200 figure was based on a complicated formula that reflected the testing of 200,000 people.

“It wasn’t a literal 200,000,” Hugill said.

Pizzo has pointed questions

Pizzo and other senators had trouble grasping the idea that Deloitte left the state with a functioning product when its contract ended in 2015. CONNECT failed when it rolled out in 2013, and state auditors flagged recurring problems in 2015, 2016 and 2019.

“Do you guys really think you delivered a website that could efficiently work for any type of disruption in economic activity in the state of Florida?” Pizzo asked. “Do you really believe that?”

“I don’t think there’s any kind of vendor that can make that kind of commitment,” Malm said.

“Then you shouldn’t take our money,” Pizzo said.

The rigorous questioning was unusual in the Legislature. The committee chairman, Sen. Danny Burgess, R-Zephyrhills, intervened multiple times on Deloitte’s behalf, telling the company’s representatives that they didn’t have to answer some of Pizzo’s questions.

When the pandemic struck, Hugill said Deloitte offered to help, but that state officials told the company that considering how much time has passed, “it was probably best that we not be brought in.”

Ultimately, Pizzo said he didn’t blame Deloitte for what went wrong, saying that state officials bore most of the blame. Hugill noted that New Mexico, Minnesota and Massachusetts, which all had Deloitte unemployment systems, were overwhelmed by claims but performed better than Florida.

“It’s like letting my kids pick what they have for dinner, and then getting upset at them a few years later if they’re found to be malnourished,” Pizzo said. “It’s my own fault.”