L&I workers' compensation IT modernization — $31M spent over 10 years, $292M current estimate, not delivered

Washington’s Department of Labor and Industries (L&I) has spent $31 million over ten years on a workers’ compensation IT upgrade that still hasn’t been delivered — and is now projected to cost $292 million with a completion date of 2034.

What happened

The Department of Labor and Industries (L&I) launched a project in 2015 to modernize its workers’ compensation computer system. As of April 2025, the agency had spent approximately $31 million over a decade with nothing delivered.

The total cost estimate has been revised repeatedly:

• A prior estimate of $362 million was scaled back
• The current estimate stands at $292 million after scope cuts
• The agency is asking for $18 million more in the current budget cycle
• Projected delivery: 2034

No fraud allegation has been made. This is a project management and cost-control failure.

What the primary source says

Governing magazine, in a piece reprinted by the Seattle Times on April 14, 2025, reported that the project has cycled through more than seven project directors since 2019 alone and has been paused and restarted multiple times. Former state Sen. Reuven Carlyle was quoted calling the statewide pattern of IT failures “total, complete, absolute nuclear meltdown failure … on virtually every large IT project.”

The same reporting found 70 ongoing state IT projects totaling $2.5 billion in public money, with seven rated at significant risk.

Status

The project is ongoing in a reduced-scope configuration. No enforcement action or fraud investigation has been opened. The 2034 delivery target remains in place.

Why it’s in the registry

Washington has a documented statewide pattern of large IT project failures. This case is one data point in that pattern: a decade of spending, repeated leadership turnover, multiple resets, and a price tag that has grown nearly tenfold from original estimates. The failure has a material cost to taxpayers independent of any fraud.

Reform implication

Projects this size keep going because there is no independent authority with the power to stop them. Stage-gate reviews conducted by a body outside the sponsoring agency — with authority to actually terminate a project when costs spiral past defined thresholds — are the structural control repeatedly missing from these procurements. See [reform: it_project_oversight] and [reform: procurement_reform].