Philadelphia, Oracle Strike Initial Deal on Stalled Systems Project

Agreement would add third-party software at no extra cost, city says

Philadelphia officials last week announced the signing of an agreement in principle with Oracle Corp. to restart the suspended rollout of a new water billing system called Project Ocean at no extra cost to the city.

The amended contract between the city and Oracle calls for the installation of additional utility billing software from another vendor to augment the applications in the original version of the system, said City Solicitor Romulo Diaz Jr.

"We'll have the functionality that the city requires and be able to meet budget requirements," Diaz said. City officials now expect the billing system to be up and running sometime next fall, he added. That would be about three years later than the city had originally envisioned.

Cost Remains the Same

It wasn't specified last week that Oracle would pick up the tab for the additional software. But outgoing Philadelphia CIO Dianah Neff said the project is still expected to cost the city about $18 million -- the same amount that was cited last month, when Neff said that local officials were negotiating with Oracle in an attempt to revive Project Ocean.

Neff and other city officials wouldn't identify the vendor of the new billing software, saying they wanted to wait until the amended contract is finalized. But Neff, who left her job in Philadelphia last Friday to do consulting on municipal wireless networks, said the software is a well-known product that the city has already evaluated and found to be workable. The vendor is one of Oracle's recognized business partners, she added.

Neff also defended the system's $18 million price tag, which is about double what the city anticipated it would be when Project Ocean was conceived in 2003. Neff claimed that based on the industry average for a modern utility billing system, the cost of installing one that's capable of serving Philadelphia's 600,000 water customers could be expected to exceed $32 million.

"We certainly hope the [agreement in principle] ends the political turmoil," Neff said. "It has taken longer than hoped, but we've come up with a very good solution that allows us to move forward."

She claimed that the Mayor's Office of Information Services took over Project Ocean when troubles developed and "got the full blame for problems, which was a little irritating."

Neff stopped work last October on Project Ocean, which was designed to replace a 30-year-old, custom-built billing system. Terry Phillis, who has been named Philadelphia's acting CIO, said last week that the suspension order will remain in place until the contract amendment is finalized, which is expected to occur within two to three weeks.

Oracle officials didn't respond to requests for comment by press time last week. In August, a company spokeswoman said that Project Ocean was still in progress and that Oracle would deliver on its obligations to complete the applications rollout.

Neff said last month that the problems with the software implementation stemmed from a combination of technical complexities, Oracle's inexperience at building such a system, and the departures of several project managers and executive sponsors who were overseeing the deployment.

Later this month, Neff plans to start work at Civitium LLC, a consulting firm in Alpharetta, Ga., that specializes in municipal wireless networks. Neff, who was the driving force behind a plan to develop a citywide wireless network in Philadelphia, is leaving City Hall after five years as CIO -- the longest term anyone has spent in that position.

Philadelphia Mayor John Street has asked the city's ethics board to review Neff's hiring by Civitium, which previously did work related to the city's planned wireless network under two separate contracts. Neff last week reiterated that she isn't concerned about the probe. "There was nothing wrong with my decisions," she said. "Anybody who knows me knows I'm a very ethical person."

Copyright © 2006 IDG Communications, Inc.

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