Contractor Northrop Grumman Corp. will shell out nearly $5 million to Virginia for losses caused by a massive computer outage last year that knocked out service at the Department of Motor Vehicles and 25 other state agencies. The outage prevented state residents from getting new drivers’ licenses and prompted Gov. Bob McDonnell to order DMV offices to stay open on weekends.
“We are committed to holding all state contractors accountable for the performance of their duties on behalf of the commonwealth and its citizens,” said McDonnell. “Northrop Grumman will pay the full costs incurred by the state during last year’s outage.”
Technology Secretary Jim Duffey said the penalty includes payments over the next two years totaling nearly $2 million — the costs incurred by the state from the disruption.
Northrop Grumman will also spend $2 million to make improvements to the state’s computer systems, including database backup and monitoring, and $750,000 for technology to copy and protect data held by the state.
The company had previously paid $250,000 for a third-party audit of the incident, which concluded that the outage resulted from the failure of a key data storage system and human error during its repair. The audit blamed the company for the loss of data and a prolonged delay in restoring system operations.
The defense giant inked a 10-year contract worth more than $2 billion in 2005 to manage and overhaul Virginia’s information technology infrastructure, but has been criticized for spotty service and for missing project deadlines. McDonnell helped rework and extend the deal by three years in 2010, increasing penalties if the company failed to meet performance standards and adding more than $100 million to the state’s costs.
He also installed former state Del. Sam Nixon, a Chesterfield Republican, to manage the Virginia Information Technologies Agency.
“I believe that the risks and problems identified in the audit have been satisfactorily addressed,” said Nixon. “Moving forward, I am confident that the improvements will make our infrastructure more reliable and resilient.”
Northrop Grumman spokeswoman Christy Whitman said she was pleased that the company reached an agreement with the state.
“In partnership with VITA, we are implementing new procedures, policies and safeguards to help avoid similar occurrences,” she said.
Still, issues with the state’s computer system continue to linger. Last month, the Virginia State Police email system, managed by Northrop Grumman and VITA, was hobbled, though the disruptions did not affect emergency response by police.
