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September 11, 2013 | By | Posted in General News

New PA.gov under way, despite denial of $5M funding request

By Melissa Daniels | PA Independent

WEB WORK: The dozens of websites in Pennsylvania state government will soon be revamped with the self-funded contract of NIC.

WEB WORK: The dozens of websites in Pennsylvania state government will soon be revamped with the self-funded contract of NIC.

HARRISBURG – Pennsylvania residents should see the first revamped versions of a state government website this fall, but only after an attempt to get $5 million in state taxpayer money failed.

NIC USA and its Harrisburg-based subsidiary Pennsylvania Interactive entered a no-bid, no-cost contract with the state last fall to take over management, design and operation of Pennsylvania websites.

The work was meant to be self-funded, covered by specific fees charged to web users, but that fee’s implementation was put off. Instead, $3.4 million worth of invoices were sent to Treasurer Rob McCord, who didn’t pay them because the contract with NIC didn’t allow for additional funding.

Now NIC has formally amended its Securities and Exchange Commission filings to remove $5.1 million in estimated revenues from the commonwealth of Pennsylvania that it will no longer receive.

Dan Egan, press secretary for the Office of Administration, said the state will implement a $2 fee on driver records this fall to fund NIC moving forward. So far, that’s the only fee NIC and state officials have agreed to implement, he said.

“They won’t get any revenue until the self-funding kicks in,” he said. “They’re in agreement with that. There’s been no discussions as far as ‘We need to add more fees,’ or ‘We need more money.’”

The fee will be paid by insurance companies who routinely seek driver records from the Pennsylvania Department of Transportation.

“We don’t believe we need legislative approval to change that fee,” Egan said. “If we feel we need legislative approval to do something, that would be part of the conversation.”

Pennsylvania Interactive has continued to work on the website although it hasn’t received any form of payment from the commonwealth or from web users. Egan said the first fruits of NIC’s work on PA.gov, the state’s homepage, should be received this fall.

Gary Tuma, McCord’s press secretary, said NIC’s amendments to its financial filings show the system of checks and balances worked.

“The administration can’t just sign a contact and then after the legal review, make substantive amendments that change the amount of public money being spent,” he said.

In its SEC filing, NIC told shareholders that removing the $5.1 million in commonwealth revenue would not put their 2013 fiscal year budget off pace.

“The Company continues to operate in good faith and provide eGovernment services under the contract with the Commonwealth, but will not recognize revenues under the contract subsequent to June 30, 2013 until the contract has become self-funded, which the Company currently expects to occur in the fourth quarter of 2013,” the company wrote.

Rep. Rob Matzie, D-Beaver, has continually raised concerns about how the state has executed this contract, and said any additional web fees should be created by the Legislature, not the administration. Matzie’s also concerned about the no-cost nature of the contract, and what happens with the data NIC is receiving as part of its services.

“The company is forgiving more than $5 million dollars owed raises a red flag,” he said in an email to PA Independent. “I have amendments and will prepare others if and when a transportation bill comes up in the fall regarding data mining.”

Contact Melissa Daniels at melissa@paindependent.com

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Melissa Daniels is a reporter for PA Independent. She can be reached at 717-350-0962 or Melissa@PAIndependent.com

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