The state is reassessing the effort to upgrade its business registration system after it was found to be flawed.

An effort to redesign and modernize the state’s business registration system has been suspended after a review this year found dozens of defects in the project, according to a consultant’s report.

The state has paid more than $500,000 so far to the main vendor and consultants working on the $1.86 million project, but the Department of Commerce and Consumer Affairs opted in August to put the initiative “on hold” to reassess the effort.

“The project’s prolonged suspension and changes in direction will result in increased costs, scope, and time,” according to a report on the project by a consultant called Accuity.

US Post Office. Honolulu. Located on Merchant Street.
The state Department of Commerce and Consumer Affairs has its headquarters in the King Kalakaua Building, also known as the downtown U.S. Post Office. The DCCA has suspended work on a project to upgrade its business registration system. (Cory Lum/Civil Beat/2020)

Century Computers Inc., which does business as Pacxa, was awarded a $1.527 million contract in May 2022 to serve as systems integrator to modernize the state system for registering and maintaining records on businesses.

DCCA’s Business Registration Division maintains records on domestic and international cooperatives, companies, partnerships and corporations. It processes over 160,000 transactions each year.

It now maintains information on about 200,000 registered entities, and most of those records “are required to be retained in perpetuity, and there are currently over 1 million records in storage,” DCCA spokesman William Nhieu said in a written statement.

The state uses two separate but interdependent systems to collect and maintain those records, and the Business Registration Modernization project is supposed to redesign the system and the registration division’s processes to make them more efficient, including its websites.

Accuity was hired by the state as a consultant to monitor progress on the project, and has flagged a number of problems with the initiative over the past year.

In particular, Accuity cited a “client interim review” in May that identified 33 defects — which are items not working according to the approved design — and 67 “enhancements.” The report describes enhancements as items that aren’t working according to specifications, or need small corrections.

Nhieu said in his statement that the project is still in the planning and design stage, and DCCA suspended work on it to reassess the design before moving into the development and “the commitment of significant resources to build and implement” the new system.

So far the state has paid $250,000 to Century Computers to redesign and modernize the records system, according to Nhieu. That is less than 20% of the original contract, which was supposed to be completed by the end of this year.

The state also paid more than $90,000 to Aalta LLC for project management services, which amounts to 60% of Aalta’s $148,000 contract to manage the project. Nearly $160,000 more was paid to Accuity for monitoring the project, Nhieu said in his statement.

Accuity said in its report dated Aug. 31 that “strategic choices regarding system architecture and design should be revisited.”

Earlier this year the state scrapped a much larger $16.5 million computer contract with a company called Labyrinth Solutions Inc. after state officials concluded the company could not meet the schedule, cost or performance requirements for replacing the state system to manage financial data.

Pacxa did not respond to requests for comment on Monday.

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