Franklin halts Office 365 migration after authentication failures; director orders reboot and outside analysis

Jim Matelski, Franklin City director of information technology, told the Technology Commission on Feb. 24 that he had halted the city’s Office 365 migration and issued a termination for cause to the contracted firm, I Bailey, after authentication and synchronization work failed to reach usable reliability.

Matelski, who led the presentation, said the project was split into two phases: Phase 1 to build a Microsoft Office 365 government tenant (G3) and implement hardware two‑factor authentication (2FA) via YubiKey; Phase 2 to migrate mailboxes from the city’s on‑premises Exchange 2010 server to Office 365. He said the migration was fast‑tracked after a security incident and a cybersecurity insurer deadline but that Phase 1 never produced stable authentication for workstation (Windows) logins and Directory synchronization.

Matelski said, “I had to put this project on permanent ice and cancel our contract with I. Bailey. I did that.” He told the commission the contract was stopped on Jan. 31 and formal notice followed in early February, and that the city still pays monthly Office 365 license fees while the tenant remains active.

Why it matters: the city faced a 90‑day insurer requirement to implement 2FA and move off Exchange 2010; failure would jeopardize cyber insurance renewal. Matelski said the insurer extended the deadline to March but said the extension likely remains difficult to meet without a clear, tested path forward.

Key technical problems and vendor selection

Matelski said multiple vendors gave conflicting…