Alaska withdraws plan to privatize state employees’ payroll system

The Alaska Department of Administration has canceled a request for proposals that could have led to the privatization of the state’s payroll system for 14,000 public employees. In an Oct. 29 memo, DOA Commissioner Paula Vrana wrote, “The procurement process has now concluded and the State has cancelled the RFP. Instead of pursuing a contract for these services, we will continue to move forward with the payroll structure as it is and will focus our efforts on process improvements and system enhancements within the existing structure.” Vrana’s memo came weeks after the Department of Administration said it was considering whether to outsource the state’s payroll system to a private contractor. DOA has struggled for years to pay state employees accurately. In fiscal year 2025 alone, according to a state study, employees filed more than 1,500 “notice of pay problem” reports with DOA. A state feasibility analysis suggested that privatization could cost $4 million per year.

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