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Vermont pauses workers’ compensation IT project after vendor issues; state to reassess options
Summary
Committee members were told Feb. 25 that Vermont’s long‑running workers’ compensation modernization has been paused after the project failed to meet expectations; officials said some vendor work may be reusable but a new procurement or revised scope is under consideration.
On Feb. 25 the House Energy and Digital Infrastructure Committee was briefed on multiple Department of Labor modernization efforts and told that the workers’ compensation project has been paused while officials reassess options.
Michael Harrington, commissioner for the Vermont Department of Labor, said the department recently "decided to separate ties with that vendor" after concluding the product and costs did not meet expectations. Andrea de Labriere, deputy secretary at the Agency of Digital Services, told the committee the decision to pause and re‑evaluate "was not made in a vacuum" and that the teams aim to reuse work where possible.
Officials said the workers’ compensation project has been underway for several years and involved multiple vendors providing different modules. The department is conducting an analysis of completed deliverables to determine how much can be reused and whether to pursue a new vendor for remaining work or consider alternative off‑the‑shelf solutions. Harrington asked program staff to contact counterparts in other states to understand whether vendors have provided off‑the‑shelf systems that could be adapted rather than fully custom builds.
Committee members asked about financial exposure and contract payments. ADS and department staff said they are evaluating invoices against milestone deliverables and have paid only for milestones the teams judged met agreed criteria; they said the accounting varies by contract type (deliverables versus time‑and‑materials) and that the teams are being "very thoughtful about what is paid and what's not paid." The committee was told that, at present, there is not a situation where the state and vendor both owe material sums to each other.
Officials described the pause as limited to the workers’ compensation project and said it does not affect the UI modernization work underway with Fast Enterprises.
The committee did not take action but heard that staff will report back with a gap analysis and options for next steps, including whether existing work can be completed by a different vendor and whether an additional appropriation would be required.
Harrington and ADS staff emphasized the need to balance reuse of prior vendor work with avoiding additional spending on a solution that would need replacement again shortly.
