Maryland Paid $32.5 Million for a Procurement System That Failed

Maryland's Department of General Services runs the centralized purchasing for most state agencies -- about $2.1 billion in procurements in fiscal year 2024 alone.▸ In 2019, the Board of Public Works approved a 10-year, $38.2 million contract⧉ to build a new eProcurement system, eMaryland Marketplace Advantage (eMMA), meant to finally give the state a single platform for bidding, contracting, and payment. A fiscal compliance audit released in December 2025 by Maryland's Office of Legislative Audits⧉ found that six years into that contract, the state had paid the vendor $32.5 million -- 85% of the total -- for a system that still can't properly interface with Maryland's own accounting records, and that today "primarily functions as a bid board."

The integration eMMA was supposed to deliver -- a direct link to the state's Financial Management Information System (FMIS) -- was the same feature that had already failed in the prior version of the system a decade earlier.▸ It failed again. Auditors traced FMIS expenditures for the four pilot agencies that began using eMMA in November 2022 and found that roughly 1,100 purchase orders, worth $35.6 million, couldn't be matched to any purchase order in eMMA at all -- because the system changed FMIS purchase-order numbers whenever an order closed. Unable to track its own outstanding balances, the state had to hire an outside accounting firm to reconstruct them; as of September 2025, that cleanup had cost $1.6 million. The same firm's review turned up roughly 2,100 invoices that eMMA had cancelled after the state had already paid them through FMIS -- payments OSP still had not investigated as of May 2025.

OSP's own internal review in July 2022 had already caught this pattern: it identified about $740,000 paid for deliverables later found deficient, including $202,600 for a single deliverable that was never validated or deployed at all.▸ But OSP never went back to check the work that followed. As of May 2025, $26.7 million in payments for work performed after that July 2022 review had never been reviewed for the same problem. When auditors tested a small sample themselves, they found it too: of $2.3 million in tested invoices, $719,700 lacked the signed timesheets the contract required, and two invoices worth $499,100 billed $382,700 for labor rates and job categories that were never part of the contract -- including $33,600 for a "Software Test Manager" role that didn't exist in it.

OSP terminated the vendor's contract in June 2025.▸ Even though the contract allowed liquidated damages for missed delivery dates, auditors found OSP had never assessed any, and had instead simply pushed delivery deadlines back rather than penalize the vendor. As of the audit's October 2025 cutoff, OSP had not attempted to recover a dollar of the failed work, though auditors recommended it still pursue recovery. To finish what the original contract was supposed to build, the state signed a $19.8 million contract with a new system integrator in May 2025, plus a separate $5.7 million contract with the platform provider -- $25.5 million in new spending layered on top of the $32.5 million already gone.

The eMMA contract set a 10% Minority Business Enterprise (MBE) participation goal, with a specific subcontractor designated to perform that share -- by February 2025, OSP had paid the vendor $3.6 million for services billed under that arrangement.▸ Auditors found that between April and December 2023, a senior OSP management employee directed the eMMA vendor to route invoices from several non-MBE subcontractors through the MBE subcontractor instead. When DGS investigated in December 2023, it determined the MBE subcontractor had done no work on the contract other than passing along payments and billing for them. OSP fired the employee and referred the matter to the Attorney General's office -- but kept paying the vendor for the MBE subcontractor's ostensible services for another year and a half, until the whole contract was terminated in June 2025.

The arrangement inflated costs: in a sample of four invoices worth $215,100, $59,600 -- 28% -- was pure administrative-fee markup, with one subcontractor's $82.50 hourly rate rewritten to $170 before it reached the state.▸ The same audit separately found OSP failed to collect at least $2 million in administrative fees -- concentrated in just 2 of roughly seven other eMMA contracts tested, which omitted the required fee clause entirely and together covered $199 million in statewide payments -- a problem auditors say has gone uncorrected since December 2016.