THE SENATE	S.R. NO.	56
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII

SENATE RESOLUTION

establishing a senate special legislative committee to oversee the investigation of the department of taxation's contract award, and amendments thereto, to cgi Technologies and Solutions, Inc., relating to the integrated tax information management system.

     WHEREAS, in 1999, the Department of Taxation (DOTAX) entered into a benefits funded contract with American Management Systems, Inc., which later became CGI Technologies and Solutions, Inc. (CGI), to create the Integrated Tax Information Management System (ITIMS); and

     WHEREAS, ITIMS replaced an aging technical infrastructure with the intention to create new business processes and allow for the reallocation of DOTAX staff to better serve the citizens and taxpayers; and

     WHEREAS, at the end of this five-year project, DOTAX had integrated collections, net income, and business taxes collectively into one application, which allowed the majority of the tax clearance functions to be automated and DOTAX's customer service representatives to provide a one‑stop service to taxpayer inquiries; and

     WHEREAS, in January 2008, DOTAX executed Statement of Work 1 (SOW 1) to collect new delinquent taxes, to be paid on a contingent fee basis, whereby CGI receives one-third of all new delinquent taxes collected up to a cap of $25,000,000 subject to the State's realization of $75,000,000 in total additional tax collections; and

     WHEREAS, SOW 1 was executed for a cost of $25,000,000 and enables DOTAX to collect delinquent taxes, integrate all tax revenues into one electronic system, and train DOTAX staff on how to operate ITIMS;

     WHEREAS, in 2009 DOTAX executed a Statement of Work 2 contract (SOW 2) with CGI, which modified the SOW 1 contract and also reduced the duties, requirements, and initiatives that CGI was obligated to deliver to the State under the SOW 1 contract; however, DOTAX failed to also negotiate a corresponding reduction in the $25,000,000 SOW 1 contract price; and

     WHEREAS, there have been numerous reports regarding poor cooperation between DOTAX and CGI in carrying out day-to-day operations; and

     WHEREAS, there also have been several incidents that demonstrate a widespread lack of respect and professionalism between DOTAX staff and its management and the CGI consultants; and

     WHEREAS, the tension existing between DOTAX employees and CGI consultants in the workplace has led to extensive operational inefficiencies and incompetence in implementing, delivering, and maintaining ITIMS; consequently, the usefulness of ITIMS for DOTAX has been compromised; and

     WHEREAS, based on an analysis and detailed review of the information, documents, and testimony received by the Senate Committee on Ways and Means during informational briefings and hearings conducted on March 9, 2011, the Senate Committee on Ways and Means concluded that monetary appropriations to DOTAX for the original ITIMS contract in 1999 and the SOW 1 and SOW 2 contracts in 2008 and 2009 respectively, have not been wisely utilized by DOTAX; and

     WHEREAS, the State Auditor examined the legalities surrounding the SOW 1 and SOW 2 contract modifications between DOTAX and CGI and issued a report in December 2010, Report No. 10-11, finding that the CGI contract is flawed; and

     WHEREAS, section 21-3, Hawaii Revised Statutes, authorizes the establishment of a legislative investigating committee by resolution, and Rule 13 of the 2011-2012 Rules of the Senate allows for the establishment of special committees; now, therefore,

     BE IT RESOLVED by the Senate of the Twenty-sixth Legislature of the State of Hawaii, Regular Session of 2011, that:

     (1)  The Senate hereby establishes a Senate Special Committee on Accountability pursuant to chapter 21, Hawaii Revised Statutes, to oversee the investigation of DOTAX's award of and subsequent amendments to the CGI contract, including the SOW 1 and SOW 2 contracts;

     (2)  The purpose and the duties of the Special Committee on Accountability and the subject matter and scope of its investigatory authority shall be to review the CGI contract award documents and subsequent SOW 1 and SOW 2 contracts to investigate the issues raised in the Senate Committee on Ways and Means' informational briefings and hearings and to also assess the possible legal ramifications of DOTAX's actions with respect to the CGI contract and SOW 1 and SOW 2 contracts;

     (3)  The Special Committee on Accountability shall hold meetings and hearings as requested, receive all information from the investigation, and prepare a final report detailing its findings; and

     (4)  The Special Committee on Accountability shall have every power and function allowed to an investigating committee under the law, including without limitation the power to:

          (A)  Adopt rules for the conduct of its proceedings;

          (B)  Issue subpoenas requiring the attendance and testimony of witnesses and subpoenas duces tecum requiring the production of books, documents, records, papers, or other evidence in any matter pending before the investigating committee;

          (C)  Hold hearings appropriate for the performance of its duties, at such times and places as the committee determines;

          (D)  Administer oaths and affirmations to witnesses at hearings of the Committee;

          (E)  Report or certify instances of contempt as provided in section 21-14, Hawaii Revised Statutes;

          (F)  Determine the means by which a record shall be made of its proceedings in which testimony or other evidence is demanded or adduced;

          (G)  Provide for the submission of written questions to be asked of the witness by the Chair, including submissions from a witness's own counsel and counsel for another individual or entity about whom the witness has devoted substantial or important portions of the witness's testimony; and

          (H)  Exercise all other powers specified under chapter 21, Hawaii Revised Statutes, with respect to an investigating committee; and

     BE IT FURTHER RESOLVED that the President of the Senate is requested to appoint the Senate Special Committee on Accountability, pursuant to Rule 20 of the 2011-2012 Rules of the Senate, to investigate the above-mentioned issue; and

     BE IT FURTHER RESOLVED that the Senate President, from time to time, may refer to the Special Committee on Accountability specific matters that are within the scope of the committee's jurisdiction, and that the Committee shall work in cooperation with the President for the purposes stated in this Resolution; and

     BE IT FURTHER RESOLVED that the Special Committee on Accountability submit its written findings and recommendations to the Legislature no later than twenty days prior to the convening of the Regular Session of 2012; and

     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Governor, President of the Senate, Director of Taxation, Attorney General, and Auditor.

OFFERED BY:

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Report Title: 

CGI Technologies and Solutions, Inc.; Senate Special Committee on Accountability; Contract Award