Department of Revenue reviewed, recommended termination of IT contracts

TOPEKA – After an exhaustive review of the agreements between the State of Kansas and CGI, an information technology company, Governor Laura Kelly announced today that the Kansas Department of Revenue (KDOR) is terminating their two state contracts.

“For many years, I have voiced concern about the frequent use of ‘no-bid’ contracts under the previous administration,” Kelly said. “This practice bypasses the official state bidding process designed to ensure that contracts are transparent and in the best interests of Kansans.”

The State of Kansas had two contracts with CGI. Contract number 42792 was signed in 2017 to upgrade KDOR’s tax collections, fraud analysis, auditing, and depositing systems. In 2018, contract number 44559 granted the same private company the contract for maintenance of IT systems previously managed internally. Both were 10-year contracts. The minimum value of the contracts was roughly $111 million plus expenses and cost escalations. The state has paid about $28 million to date.

“After a thorough review, we determined it was necessary to end these contracts and take a different approach to obtaining enhancements to the state’s tax operating systems,” Secretary Mark Burghart said. “CGI was not able to adequately perform its obligations under the contracts.”

A letter was sent to CGI this morning terminating the contracts. KDOR will reassess its IT needs as it continues to improve its service to the people and businesses of Kansas.

“These contracts were not in the best interests of our state,” Kelly said. “Not only that, the process for initiating these contracts was contrary to the guidelines for state procurement. My administration will continue to review contracts from the previous administration, limit the use of ‘no-bid’ contracts, and increase transparency.”