California hires Deloitte to improve its unemployment IT system

28 May 2020 2 min. read

California’s Employment Development Department has awarded Deloitte a $5 million contract to help improve its unemployment IT system, which includes an online portal for unemployment claims processing.

The $5 million, 12-month contract will see Deloitte work to upgrade the EDD’s online system for processing claims for the Pandemic Unemployment Assistance program, which has opened up benefits to contractors and the self-employed.

Deloitte will provide IT consulting in the areas of system analysis, design, architecture, development, testing, project management, and implementation.

California’s EDD, like many other state unemployment agencies, has been struggling to cope with the massive wave of claims in the wake of Covid-19. California has seen more than 5 million applications filed since the start of the pandemic. This has inevitably led to a huge backlog, with many waiting eight weeks or more to receive benefits as IT systems are inundated with unmanageable volume.

California hires Deloitte to improve its unemployment IT system

The huge surge in unemployment (up 10% to 15.5% in April in California) has forced the EDD to reallocate over a thousand employees to its unemployment insurance branch, while greatly extending call center hours.

The crisis has likewise made the department turn to Deloitte in order to improve its online portal so that claims can be processed faster. The contract was of a no-bid variety, in order to get the work started faster by skipping a comprehensive bid process.

Deloitte previously won a competitive procurement in 2010 to help the EDD redesign and scale its unemployment benefits system. That contract has since grown to $110 million, nearly double the state’s estimate for the project. Deloitte says the added costs have come from changes to the project’s scope, as well as new federal and state mandates.

The consulting firm also previously won a competitive bid contract in 2017 to deliver maintenance and services for California’s unemployment system.