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Tuesday, March 27, 2018 by Jessi Devenyns

Commissioner rocks the boat with concerns about security of Austin Energy software contract

Several years ago, Austin Energy found itself “over a barrel” due to an underbid and underdelivered contract awarded to IBM to create new system software that would bridge Austin Energy’s meters and its billing system. Now one member of the Electric Utility Commission, who clearly remembers the ramifications of having poorly managed software involved with customer accounts, is adamant against recommending a similar contract that would securely continue that connection to Leidos Cyber Inc.

“I really question the choice of contractor,” said Commissioner Karen Hadden at the March 19 meeting of the Electric Utility Commission.

The contract that was recommended to Council for negotiations is a multi-term contract with Leidos Cyber Inc. intended to provide maintenance and support and training for existing systems management software “for up to five years for a total contract amount not to exceed $528,000.”

Hadden underlined her concerns by presenting the commission with a Politico article titled “We took a broken system and broke it completely” that referenced the enterprise’s shortcomings as a software provider.

Hadden referred to the article’s mentions of glitches in a medical record system that prevented doctors from seeing as many patients as they previously had. She specifically cited a mention that doctors experienced a 33 percent reduction in patient visits per day.

Elaina Ball, the deputy general manager and chief operating officer of Austin Energy, explained that “the types of items you’re referencing … have not been our experience.” She indicated that although the utility was indeed intending to contract with the same company, the software that Austin Energy would be using was not the same. Additionally, Austin Energy went through multiple audits and didn’t find any issues with glitches in the software it is intending to use. However, she noted, “If we see issues or hear of issues, we’re going to actively manage those.”

Furthermore, according to Ball, this contract is in a sense a renewal rather than a brand-new negotiation. Leidos has owned the system management software that the city has used for years and has done so to the satisfaction of staff. The change with this upcoming contract is that Austin Energy will be getting rid of the middleman and contracting directly with Leidos itself. She explained that by contracting directly with the software provider, the utility will be able to divest itself of the 50 percent upcharge on the contract it was paying previously.

Hadden noted that although Austin Energy has already been using this company’s software, previously the commission “actually failed to recommend one of the contracts related to this company.”

With Austin Energy’s software history and the latest findings from the article in mind, she repeatedly questioned the wisdom of entering into negotiations again.“Are we beholden to them because that’s what we’ve bought (in previous years)?”

Although she voted in favor of recommending the contract, Commissioner Susanne Vaughan warned against continuing a relationship merely for the sake of familiarity. “If you stay with the same system long enough, you become blind to its inabilities,” she said, referencing the situation that the commission faced with IBM software.

Despite Hadden’s reservations and her dissent at the vote, the commission approved the recommendation of this contract to Council. Commissioners Teresa Reel and Stefan Wray were absent.

In an effort to allay any residual misgivings about the impending negotiations with Leidos, Ball said that Austin Energy is confident in their choice of vendor because if the software fails it would “garner the ire of federal regulators.”

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Key Players & Topics In This Article

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

Electric Utility Commission: The advisory body charged with oversight of Austin Energy, the City of Austin's municipally-owned electric utility.

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