By ALLISON SCHAEFERS The Honolulu Star-Advertiser/TNS
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Hawaii’s unemployment crisis is expected to worsen, raising concerns that the state’s unemployment system could become overwhelmed as it was during COVID-19.

Maui’s initial unemployment and disaster unemployment assistance claims have soared to more than 15,000, and the state’s multimillion-dollar project to strengthen the unemployment insurance safety net and prepare it for the next economic downturn is back at the starting block.

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State Department of Labor and Industrial Relations spokesperson Bill Kunstman said as many as 13,179 initial unemployment claims were filed on Maui from Aug. 10 to 30. Kunstman said federal disaster unemployment assistance claims (DUA), which were made available Aug. 24 for certain Maui beneficiaries beginning the week of Aug. 13, already have exceeded 1,237.

The island’s unemployment crisis is expected to worsen and the University of Hawaii Economic Research Organization is estimating Maui losses at $13 million a day, raising concerns that the system could become overwhelmed as it was during COVID-19. This level of unemployment on Maui has not been seen since the pandemic plunge, and Kunstman said the state is only at the stage of asking for proposals from vendors to take on the roughly $87 million Hawaii Unemployment Insurance Modernization project.

Kunstman said DLIR canceled the project after Public Consulting Group, a third-party conducting the project’s statutorily required independent verification and validation process, recommended to either pause the project or to terminate the contract and re-procure due to litigation that arose between Solid State Operations and its software vendor Netacent.

“After reviewing the advantages and risks associated with each option, we decided the vendor would not realistically meet their required goals and deadlines and that the best way to move the project forward is to procure another vendor to develop and implement the web-based application to replace the aging, legacy mainframe system, ” he said.

Kunstman said DLIR paid SSO about $1 million based on milestones met for the HUI MOD contract, which was awarded in January 2021. He added, “Wherever possible, we will reuse any work products and results developed to date to implement as part of the new program.”

Kunstman said he could not comment on the project’s new timeline as it is currently in the request for proposal process.

However, Public Consulting Group estimated in its April 2022 IV &V report that terminating SSO’s contract and re-procuring it would likely increase modernization costs $20 million to $40 million and delay the modernization by at least two to three years.

Kunstman said the HUI MOD project is needed because the “current legacy application on the mainframe needs replacement.”