ALBUQUERQUE, N.M.—A computer upgrade at the state's Motor Vehicle Department was launched by the administration of former Gov. Bill Richardson despite knowing that the prime contractor allegedly lacked a proven track record in the field.

Records obtained by the Albuquerque Journal ( http://bit.ly/U5pUxI) show Hewlett-Packard was awarded the 2010 contract to revamp the MVD system even after lawyers for contract rival 3M warned the state that HP had not successfully rolled out similar projects elsewhere.

The administration of now-Gov. Susana Martinez cancelled the deal last year after the state spent $5 million on the project and fired HP.

Now the state is trying to figure out how to improve a system described in 2005 as one of the worst in the country. It is making do with an MVD computer system described as on the "verge of collapse," while New Mexicans pay for a replacement that has yet to be chosen, to the tune of $5 million in extra fees per year.

The agency's new "Milagro," or miracle, computer system had repeated problems during initial testing, at one point spitting out a motorcycle license and a commercial driver's license for a 13-year-old.

As it worked to win the state contract, HP Hewlett-Packard was represented by a Santa Fe lobbying and consulting firm headed by Richardson's longtime friend and former congressional aide, Butch Maki, records show.

Maki, whom Richardson once described as "the go-to guy," told the Journal last week that his clients had to win state business "on the merits and the price every time" despite his relationship with the governor. "If anybody knows Bill Richardson, he's not going to give anything to anybody that doesn't help the state."

Asked for comment last week, an HP spokeswoman emailed the Journal a statement saying "HP and the state of New Mexico agreed to mutually terminate the contract. However, we look forward to working with the state on future projects."

The MVD has been seeking information from the private sector on how to proceed with a new system, but has not hired a new vendor.

"The delay is just unacceptable," said Sen. John Sapien, D-Corrales. "Now we're here well over a year later (since the contract was terminated), and we're still nowhere near even having a contract in place."

Failures in large state computer upgrade projects aren't unusual. One national study found that as many as 25 percent of information technology projects completely fail and another 40 percent aren't delivered on time, within budget or with all the expected functions and features, according to a state report.

"It's a chronic problem all over the U.S. to be able to bring these projects on line," said David Abbey, director of the state Legislative Finance Committee. "It's a potential black hole and high risk."

Next year, the motor vehicle agency plans to ask the Legislature to approve $6 million in funding for the computer project, which two years ago had a price tag of more than $26 million. Such MVD system overhauls have cost up to $65 million elsewhere.

Though computer redesign is risky business, a Legislative Finance Committee report issued last month advised against waiting too long to replace New Mexico's MVD system, which was described as outdated and "on the verge of collapse."

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Information from: Albuquerque Journal, http://www.abqjournal.com