Fund to sue contractor for defective software

The NMI Retirement Fund board of trustees decided yesterday to sue the contractor of its pension software system, which remains on the shelf due to several defects.

The board decided to take legal action after Express Electronics Ltd., owned by Gary Sword, failed to provide a plan of how it will fix and complete the long-delayed project.

The board of trustees had given Sword’s company a 10-day ultimatum on July 10 to submit a response to the deficiencies identified in the system by R&R Associates. Fund deputy administrator Esther Ada said yesterday that the 10-day ultimatum expired on July 17 with no response from Sword despite several follow-ups.

She reported that Sword had indicated that he wants to fix the problems but he emailed the Fund last week that he was off-island and that the report, which detailed the deficiencies of the software, had already been turned over to the company’s programmer in India. Ada said that Sword will be back on island on Aug. 21.

The pension software system project has been on the table in the last several months. Because of the deficiencies of the software system, the agency hired a program analyst—R&R Associates—to evaluate the entire project and seek recommendation if there’s a need to keep the project or scrap it entirely to prevent additional expenses.

Ada said the result of the evaluation was presented and discussed with Sword, who was given the 10-day ultimatum to come up with his plans to rectify the problem.

Board member Francisco Rosario expressed frustration with the issue and urged the board yesterday to come up with a final decision “once and for all.”

After many years of waiting, the Fund is getting the “same old thing” about the project during its meetings, he said. “We need to move on and make the decision as soon as possible,” he urged his colleagues.

The board went into a short executive session prior to announcing its decision and advising its counsel, Viola Alepuyo, to initiate the filing of the suit.

The pension software project cost $449,000 and was signed in 2008. The Fund has already paid Sword’s company $402,340 for the project, which represent 89.4 percent of overall project cost. Based on the terms and conditions of the $449,000 contract, the product was supposed to be completed in 2009.

In a single audit performed for the Fund in 2009, the pension software system was among the serious findings noted by auditors. Violations of the contract were noted in both parties.