saltzman.jpg

Portland Commissioner Dan Saltzman, who is ultimately responsible for the project, didn't shy away from the fact the city deserved criticism for spending millions without much progress.

(Oregonian staff)

The city of Portland has stopped work on its latest technology boondoggle, a paperless permitting system, but not before falling years behind schedule and blowing through about $8 million.

At last count, Portland had spent roughly 70 percent of its budget but as little as 25 percent of the work has been completed, according to a scorching new assessment obtained by The Oregonian/OregonLive through a public records request.

Things are so bad, the report said, it would take six to nine months just to figure out what's been done and how much it'd cost to move forward.

While the city puts much of the blame on Portland's now-ousted lead contractor, Sierra-Cedar Inc., the new report highlights wide-ranging problems inside the city's bureaucracy. It found "significant gaps" in leadership, management and oversight of the project - although only one city employee, the project manager, has been forced out.

What's more, city officials apparently didn't heed repeated warnings from outside experts and missed key opportunities to stop the project before it spiraled out of control.

Portland Commissioner Dan Saltzman, who is ultimately responsible for the project, didn't shy away from the fact the city deserved criticism for spending millions without much progress.

"It does seem bad," he said.

But Saltzman also said city officials will learn from their mistakes and make necessary changes. Portland's Bureau of Development Services is committed to finishing the project in some form, he added, although it'll probably take several more years and likely will be completed on a piecemeal basis.

"It's still the goal to have state-of-the-art technology," he said.

The so-called Information Technology Advancement Project, or ITAP, was supposed to bring the city's permitting bureau into the 21st century. As envisioned, developers and architects would be able to submit paperwork electronically, employees would access records from the field, and historic permit and property information would be available to the general public at the click of a button.

The project was supposed to be a boon to both business and government. Easy access to documents would cut costs for companies by up to $1 million a year, according to city estimates, while eliminating the need to hire nine new employees would trim $1.3 million from the annual payroll.

But instead, the project became a boondoggle. It's now joined other high-profile technology disasters, including a software fiasco in 2000 that left the water bureau with millions of dollars in uncollected bills and a separate citywide software effort in 2010 that tripled in cost to $47.4 million.

Plans for the permitting system began taking shape in 2010 and officials eventually set a tentative budget of $8.2 million, with completion expected by May 2015. Then the budget jumped to $11.8 million. The timeline kept slipping, too, first to December 2015, then February 2016, then the end of 2018.

Despite each setback, city officials publicly presented an upbeat facade during quarterly updates provided to the City Council. Commissioner Amanda Fritz, who oversaw the project from mid 2013 to July 2015, previously said she was confident the project would be completed "on time, on budget, and it will work."

Even as recently as five months ago, when Portland cut ties with Sierra-Cedar after paying the company $3.9 million, Saltzman said he still believed the project could be completed by 2018.

But the city's new report offers a painful dose of reality.

Officials hired Portland-based Virtual Information Executives to evaluate the project. The $50,000 review repeatedly pointed fingers at the city's project manager, Rebecca Sponsel, and Paul Scarlett, the bureau director.

According to the report, Scarlett delegated almost all project responsibility to Sponsel, a decision that was labeled a leadership gap. The job was too much work for a single project manager, the report said, and Sponsel appeared to lack several key abilities needed to deliver. Reviewers said Sponsel alone approved many project tasks instead of looping in Scarlett or others. And although a steering committee was created, roles and responsibilities weren't clear and key checkpoints weren't defined.

Compounding problems, the city's contract allowed Sierra-Cedar to bill monthly fees without providing working products. Many project documents are incomplete, inconsistent or full of boilerplate language. City officials don't know how much work was actually completed, although it's estimated at between 25 percent and 55 percent.

"A more precise account of work is not feasible given the lack of an accurate, resource-loaded plan with defined metrics against which to measure progress," consultants wrote.

City officials have now spent about $8 million of the $11.8 million project budget, a figure that includes staff salaries. Money comes from permitting fees charged by the bureau, not tax dollars.

The outside review also noted a "disconnect" between reports prepared by Sponsel and warnings raised by an outside quality-assurance consultant. And when serious issues were reported, it appeared that no action was taken, according to the report.

City officials also missed key opportunities to head off problems.

The first setback surfaced during contract negotiations, when there was still ambiguity about what would be included in the project. Uncertainty should have been resolved at that time, the report found, resulting in a project plan with clear deliverables and milestones.

"According to many of the project participants, a true project plan was never produced, even to the present," the report stated. "Yet the project went forward. This is a major gap - much of the project's failure to produce completed work stems from this critical missing component."

Absent a detailed plan, Sponsel should have stopped the project, according to the outside review.

"Without a plan, there was no way to provide realistic target dates for pieces of work, no way to forecast the resources needed to complete the work, and no way to report the percentage of work completed," consultants wrote.

City officials have offered varying responses to the report.

Fritz declined to comment, citing a busy schedule and not enough time to review the analysis.

In separate interviews, Scarlett and Sponsel took issue with some findings. Among other things, each said Scarlett was involved in big decisions. Each also said the city did take action in the face of problems, including issuing warning letters to Sierra-Cedar and pushing the company to deliver specific tasks on short timeframes.

"I'm not going to dismiss or skirt any kind of responsibility," Scarlett said. "I wish things had gone better. And certainly, I am very committed to seeing this through."

Scarlett said he terminated Sponsel last week.

Sponsel acknowledged room for improvement but generally defended her work. Asked if she provided adequate leadership, Sponsel responded: "The report says that I did not. But I was only one person in a job that required many more qualified resources, and those were not supplied."

The report recommended stopping the project and Saltzman heeded the advice. Although officials wanted to know how much more time and money it would cost to finish the project, consultants said they couldn't determine either without another six to nine months of review.

Officials are now starting a "discovery project," which could be done in less time. It will highlight what the city should do next, including the potential for upgrading existing software. Whatever emerges, the project will become a priority citywide, led by both the Bureau of Development Services and the Bureau of Technology Services.

Consultants have also recommended a rebranding effort. Not only could that help provide a "fresh start," it may also "infuse new energy and confidence into the project."

-- Brad Schmidt

bschmidt@oregonian.com

503-294-7628

@cityhallwatch