Laurel, Md. – July 28, 2023 – WSSC Water Commissioners today released a report detailing the year-long independent investigation into the process to replace the utility’s outdated billing system completed between 2016 and 2019. The project to implement the new billing system, Project Cornerstone, was necessary because the existing mainframe system could not handle the new rate structure that WSSC Water implemented in July 2019. The new rate structure was required following a March 2017 order by the Maryland Public Service Commission (PSC) finding that WSSC Water’s then-existing rate structure was unreasonable. Commissioners hired Kropf Moseley PLLC and Investigative Group International in May 2022 to complete the independent investigation. The Commission authorized up to $2.5 million for completion of the work and the report, which equals 2.07 percent of the total $121 million spent on Project Cornerstone.
The defined scope of the investigation covered five main areas: procurement compliance; project management; transparency to Commissioners; cost and potential conflicts of interest and ethics violations. The report identifies serious issues in the first four investigation scope categories. During a recent closed-session meeting, the investigative team separately presented findings on potential conflict of interest and ethics violations to Commissioners. This fifth scope category will be referred to appropriate agencies for further action.
“Given the crucial public health mission WSSC Water successfully fulfills every day, we must put our 1.9 million customers first in every action we take as Commissioners – especially as it pertains to our role as vigilant stewards of the public’s money,” said Commission Chair Regina Y. Speed-Bost. “This informative report identifies systemic process changes that must occur within WSSC Water to ensure robust examination of project expenses as well as greater transparency with Commissioners prior to our votes on multi-million-dollar contracts. With the recent hire of a new General Manager and CEO and her selection of a new leadership team, this governing body will work closely with management to implement forward-facing changes necessary to enhance the public’s trust in this organization. Out of this report comes an opportunity for WSSC Water to excel as Commissioners and management work together to chart a more unified path forward.”
Summary of Findings
Compliance with Procurement
Pressure to deploy the new billing system to handle a new rate structure within two years led to several procurement process failures, including the use of improper exemptions in the bidding process, governance shortcuts and lack of thorough review of Project Cornerstone contracts by WSSC Water’s legal office and other departments.
Project Management Issues
Former WSSC Water management did not have a qualified system integrator to implement the complex project, leading to delays, increased costs and abandonment of parts of the implementation. The rush to go live with the new billing system within two years of the March 2017 PSC order led to non-competitive bidding, increasing cost and business risks.
Transparency to Commissioners
Former WSSC Water management withheld information from Commissioners and presented costs piecemeal rather than providing an overall ongoing budget. Management did not disclose the potential cost, delay and other risks in choosing the selected software product to implement the new billing system. Additionally, an analysis recommending another software solution and detailing significant risks with the software that was selected was never shared with Commissioners. The report shows no evidence that management withheld information for an improper reason – rather, a desire to implement a complex project within a concise timeline resulted in a lapse in controls over the project.
There were numerous non-competitive contracts and change orders associated with Project Cornerstone due to former management’s insistence that the billing system be implemented within two years. Project Cornerstone encompassed more than 20 contracts, with approximately half procured using an exemption to competitive bidding. The rush to implement Project Cornerstone resulted in a final cost of just over $121 million.
“I pledge to work with my fellow Commissioners and WSSC Water’s new management team as we implement concrete solutions to make certain that every contract that comes before us is properly vetted and in the best interest of the organization and our customers,” said Commission Vice Chair T. Eloise Foster. “The billing system is working and producing accurate bills. It’s the process by which we arrived at the new system that we must improve.”
As noted in the final report, “the project ultimately succeeded in implementing a working billing system today.” The final report can be found here.