The State Worker

Chronicling civil-service life for California state workers

February 8, 2013
'Frightening' failures prompt state to ax $90 million software deal

12:04 p.m. This post has been updated with a statement from SAP.
1:30 p.m. This post has been corrected to reference the MyCalPays/21st Century project.

State Controller John Chiang has axed a multimillion-dollar software agreement with Pennsylvania-based SAP after a small roll-out of its payroll program failed -- and government officials learned of the failures from affected employees.

SAP had taken on an $89.7 million contract to implement MyCalPays/21st Century project software it developed, but small test runs of about 1,300 paychecks included 100 types of errors, everything from child-support payment mistakes to outright pay miscalculations. Employees and staff research flagged the problems, said Chiang spokesman Jacob Roper.

"It's frightening," Roper said.

The state plans to use "all means available" to recoup the $50 million paid to SAP so far and could sue for up to 150 percent of the contract amount, Roper said.

In an emailed statement from SAP's headquarters, spokesman James Dever said, "SAP is extremely disappointed in the SCO's actions. SAP stands behinds our software and actions. Our products are functioning flawlessly in thousands of government agencies around the world. SAP also believes we have fully satisfied all contractual agreements in this project."

Watch for more details in Saturday's Bee.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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