Nice work if you can get it

From the Washington Post:

Virginia fines Northrop Grumman nearly $5M for massive computer outage
Northrop Grumman has agreed to pay nearly $5 million for the massive government computer meltdown last summer that left several Virginia agencies unable to handle citizen requests for days.

The defense giant also will implement a series of improvements that address the findings and recommendations of an independent third-party audit.

The outage, which was a result of both technological and human errors, left 26 state agencies, including the Department of Motor Vehicles, scrambling to serve Virginians.

�We are committed to holding all state contractors accountable for the performance of their duties on behalf of the commonwealth and its citizens," Gov. Bob McDonnell (R) said in a statement. �This agreement brings closure to this incident, and provides the commonwealth with an improved information technology infrastructure that will reliably support Virginia�s citizens and agencies in the years ahead.�

Good for the citizens of Virginia -- get some of the lost revenues back from the developer. My concern is that when a State or Municipality has a one-off custom piece of software written for them, they are completely beholden to the developer for any future maintenance releases or updates. Case in point:

�I am satisfied that Northrop Grumman has been held accountable and that the Commonwealth has been made whole,� Duffey said. �This compensation package will benefit all agencies impacted by the outage and enhance the state�s information technology infrastructure.�

McDonnell, who had criticized his predecessor, Timothy M. Kaine (D), for failing to properly manage the Northrop Grumman contract, pledged to run such programs as businesses.

McDonnell�s solution was to rework the state�s contract with Northrop Grumman, extending the 10-year agreement by three years and agreeing to pay the company $100 million more than originally envisioned, but adding new penalties for poor service.

Emphasis mine -- must be nice to be Northrop Grumman -- you get a $5M whack to your pee-pee for failing to do your work but you then get a three year extension to your monopoly and an additional $100M income. Stories like this make me wince -- there is nothing unique about the business of a City or a State -- sure there are different sets of operations or procedures but these are not cast in stone. There is a class of software dedicated to Enterprise Management -- the leading company is SAP. If you are spending the millions of dollars to roll out a State's computer system, they will customize that to whatever specs you want. The key thing here is that 99% of the back-end applications are the same across the entire product line so when one application is upgraded, the entire installed base can benefit from the same upgrade. With the Northrop Grumman approach, each installation is basically unique -- if one thing needs to be upgraded, the programmers need to code the upgrade specific for that application and there is no cost benefit for them to put a lot of effort into the task. With SAP, that effort extends through the entire customer base so it behooves them to put their brightest and best on the task. Hiring Northrop Grumman was a typical mid-level management f*ck-up that happens all too often -- the sales team takes you out for a couple nice dinners, they fly you to their office to close the deal and they are in your pockets until eternity. Bad move. Seriously bad bad move...