Tuesday, April 14, 2015 | 2:08 p.m.
The state Board of Examiners approved a $222,408 contract extension between Xerox State and Local Solutions and the Department of Motor Vehicles, highlighting another link between Nevada and the company that built flawed software for the state’s health insurance exchange.
The deal is one of at least three contract extensions Gov. Brian Sandoval and state officials on the board awarded the tech company after the Silver State Exchange terminated the company’s $75 million contract for work related to the Affordable Care Act in May.
The state approved two Xerox contracts worth up to $7.8 million for auditing unclaimed property on behalf of the state treasurer in August.
The board’s latest decision bumps Xerox’s existing contract for DMV work to a value of $1.5 million and will last a year.
Xerox has had at least 11 contracts with the state since 1998.
State documents show the original contract with the DMV was not competitively bid. Amendments to the original deal show the state has offered Xerox at least $8.3 million for work with the DMV in the last 17 years.
The tech company, known for its copy machines and office equipment, lost its health care contract after more than 1,500 glitches in its payment and billing software for health insurance plans subsidized by the Affordable Care Act.
The state is in settlement negotiations with Xerox over the termination.
Xerox’s health care unit was a different subsidiary than its entity working for the DMV.
A LONG HISTORY
Xerox’s work with the DMV and treasurer go back decades.
Xerox purchased auditing firm ACS in 2009. ACS had worked with the treasurer since 1986 and the DMV since 1991.
Xerox inherited those contracts when it bought ACS.
For the DMV, Xerox operates tax and licensing computer systems.
After the board approved the contract, Sandoval told the Sun that Xerox was doing a “fine job” for the DMV, but the DMV system was “outdated.”
In his budget, he’s proposed around $50 million in technology upgrades for state agencies.
If his proposals pass the Legislature, some of that money would be used to upgrade Xerox’s system. The upgrades would be subject to competitive bidding, potentially ousting Xerox as Nevada’s provider for that service, Sandoval said.
At the Treasurer’s Office, Xerox audits have earned Nevada $71 million. The company finds financial assets abandoned by their owners and turn them over to the Treasurer’s Office.
Xerox earns a 12 percent fee on the money it recovers and does not get any additional money from the state.
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