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Fla. agrees to pay $7 million to avoid lawsuit

Gary Fineout, Associated Press

TALLAHASSEE, Fla. (AP) -- Florida is offering to pay a business technology company $7 million to avoid a potentially costly lawsuit over plans to consolidate the state's e-mail systems.

It's yet another technology setback for the state, which has over the last decade has spent tens of millions on technology projects that either failed to save the state money, or never got off the ground completely.

The administration of Gov. Rick Scott agreed in late December to pay the money to a subsidiary of Xerox Corp. The company signed a seven-year contract in 2011 to consolidate the different email systems used to maintain some 115,000 accounts throughout state government. The idea was to give every state employee common email addresses.

While Scott himself favored consolidation the project become contentious as some state officials including Attorney General Pam Bondi resisted switching to a new e-mail system.

State legislators back in 2010 ordered the project, but then last year they cut off funding. House Republicans who pushed to scuttle the project said they were concerned that the $15 million in savings associated with the consolidation of e-mail systems would not materialize.

But Xerox State and Local Solutions warned state officials last August that the company had already spent roughly $30 million on the project and it was prepared to sue to recover its investment.

A company spokeswoman said this week that Xerox agreed to the settlement in order to avoid a long battle in court.

"We have entered into a settlement with the state that is intended to avoid protracted and extensive litigation so we can continue a constructive working relationship with Florida," said Jennifer Wasmer in an e-mail.

The $7 million payment still needs to be approved by the Florida Legislature and it was not included in Scott's original budget recommendations presented last week.

Sen. Joe Negron, R-Stuart and Senate budget chief, said he was aware that a settlement was in the works but he had not seen the final agreement with Xerox.

Sen. Denise Grimsley, R-Sebring, and one of those who pushed to end the e-mail project said she "felt strongly that the company was not keeping up with its end of the bargain."

"Moving forward we will have to determine what is in the best interest of the taxpayers," Grimsley said in an email.


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