Legacy systems crumble under high demand

Unemployment insurance and other social safety net IT systems around the county are crumbling under the stress of millions of users seeking to apply for benefits in the wake of unprecedented unemployment during the COVID-19 pandemic.


Unemployment insurance and other social safety net IT systems around the country are crumbling under the stress of millions of users seeking to apply for benefits in the wake of unprecedented unemployment during the COVID-19 pandemic.

The crisis is getting so bad that New Jersey's governor put out a call for legacy systems programmers in a video address.

"Given the legacy systems, we should add a page [to their online call for health professionals] for COBOL computer skills because that's what we're dealing with," Gov. Phil Murphy said April 4. "We have systems that are 40-plus years old. There will be lot of post-mortems, and one of them on our list will be how the heck did we get here when we literally needed COBOL programmers."

Florida's unemployment system, the subject of multiple adverse oversight reports that were ignored by Rick Scott and Ron DeSantis, the state's former and current governors, has crashed under the weight of hundreds of thousands of applications. The state initially urged applicants to use an out-of-support version of Microsoft's Internet Explorer browser before switching to paper applications.

Similar problems are affecting other states and they're likely to get worse as unemployment continues to spike. The Labor Department reported that a record 9 million unemployment claims were filed in the two-week period ending April 2.

U.S. Digital Response is a new effort that has sprung up to connect volunteers with governments struggling to scale their public facing technology systems, supply chains, digital communications and more to meet demand during the COVID-19 crisis. The group is looking to attract volunteers with expertise in legacy systems to help fill the gaps faced by state and local governments.

Mark Headd, formerly chief data officer for the City of Philadelphia and currently at the General Services Administration, noted that the age and legacy codebase of government systems don't tell the whole story when it comes to failure and overload.

"What if, instead of trying to replace mainframes for the last 30 years -- which has been an unmitigated failure -- governments had instead decided to find ways to work with them more or build on top of them?" Headd said on Twitter.

Another issue Headd identified is outsourcing the maintenance and development of these systems.

"Governments have mostly followed the strategy of contracting out for technical expertise for the last 30 years as well, rather than building up internal capacity," he said. "That also hasn't worked. At all."

Federal problems

Legacy tech problems aren't confined to states and their unemployment systems, or even to the public sector.

Britain and many European countries trying to transmit state bailout aid to small and medium sized business looking to meet payroll during the crisis are having problems. One notable exception is Switzerland. According to an April 4 article in the Financial Times, disbursements from a $20 billion relief package are being deposited in beneficiary accounts very quickly.

"I applied on Friday afternoon and we had the money on Monday morning. It was a one-page form," the head of a family-owned engineering business told the newspaper.

This is in stark contrast to the chaos that greeted the opening of U.S. government efforts to supply forgivable, emergency loans to small businesses looking to make payroll and avoid layoffs.

The $350 billion program, which was included in the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, is being run largely through commercial lenders. The Small Business Administration released a two-page form designed to collect the information banks will need to process the loans.

The program launched last Friday, with details still being hashed out the night before, with SBA and Treasury reportedly at odds over program administration.

"The SBA and the Treasury need to quit the power struggle, get aligned, provide REAL guidance (for ALL lenders, business owners, and agents) so that we can get much need capital into the hands of SMBs that are suffering right now!" Brock Blake, the founder and CEO of small business loan marketplace Lendio said on Twitter the night before the program opened.

Officials are hoping for improvements in the coming week.

Sen. Marco Rubio (R-Fla.) announced on Twitter that SBA's clunky loan processing system E-Tran is getting a boost from a new Amazon Web Services contract.

"When you launch something this unprecedented & far reaching, just 7 days after it became law, you are going to have some problems," Rubio added.

In an April 2 email to FCW, an SBA spokesperson said the agency was working with "technology partners" to provide "a user friendly front-end website on SBA.gov to assist lenders unfamiliar with SBA lending. SBA lenders will process their loans system-to-system via web services." The spokesperson said the agency has added "additional technical resources to assist existing lenders with their web service implementation."

Treasury Secretary Steven Mnuchin said on Twitter that $1.8 billion in paycheck protection loans were been processed by financial institutions in the opening day of the program, but there was no word on disbursements to borrower accounts.

Rubio noted that financial technology firms such as PayPal and online lenders are looking to pitch in on processing loans applications, but they have to wait for Treasury to release applications to get certified to participate. Rubio said applications for non-bank lenders could be out by early this week.

Mark Rockwell contributed reporting to this article