Skip to comments.CA: Senate probes 'irregularities' in troubled purchasing contract (CGI-AMS)
Posted on 03/30/2005 7:27:47 PM PST by NormsRevenge
SACRAMENTO (AP) - State officials improperly handled bid documents concerning the award of a multimillion dollar purchasing contract that eventually went to a Virginia company with no experience in the field, according to testimony Wednesday before a Senate panel.
Officials also said they changed scores from pass to fail for the company's only rival for the work, which caused the competitor's disqualification.
That led Sen. Joe Dunn, a Garden Grove Democrat leading the investigation into the state's "strategic sourcing" contract, to say "there's something more than meets the eye with the bidding" and call for more hearings.
At issue is a contract awarded by the Schwarzenegger administration last June to CGI-AMS to help the state cut its nearly $5 billion annual purchasing bill. The company was supposed to use aggressive negotiation methods and new tactics to shave $96 million from this budget year's spending bill.
So far, however, the company has only saved an estimated $8.5 million during the budget year that ends June 30.
While lawmakers want to know more about the company's performance, Dunn said he was troubled by what he learned Wednesday about how CGI-AMS won the contract. For example:
- A DGS staff member without authorization opened the CGI-AMS bid before the sealed documents had been delivered to the department's evaluation team - a violation of department policy.
Janice King, a deputy director at DGS overseeing procurement, said there was no evidence the bid had been compromised and the process was allowed to go forward without interruption.
Although King said the employee had been disciplined, she made no effort to determine why the staff member had violated department rules.
Dunn said he did not understand the department's action.
- General Services also disqualified the only other bidder for the purchasing contract on what appeared to be a technicality. The rival, Accenture, included a cover letter with its bid package that used phrasing that indicated the firm was not willing to comply with all of the state's requirements.
King said Accenture's bid was rejected and never opened because officials thought the company intentionally included the language in its letter.
But DGS officials acknowledged the six-member evaluation team had discussed the bids, and at least of the team changed their scores for Accenture from pass to fail. Those scores knocked Accenture from the bidding process.
King said Accenture could have protested the DGS decision but it didn't.
General Services Director Ron Joseph told the Senate panel the strategic sourcing program posed many challenges but not enough to hurt the chances for future savings.
Joseph acknowledged that CGI-AMS donated $25,000 to one of Schwarzenegger's political funds during the bidding process, but he said the company won the contract on the merits. No one in the governor's office ever contacted him about the contract, Joseph said.
Although they knew CGI-AMS had no experience in strategic sourcing, officials said they gave the company the contract because of its experience in other areas of government and because its partner, Texas-based A.T. Kearney, had done such contracts.
But DGS officials told investigators they did virtually no background check on the company's track record in other states and therefore knew little about troubled CGI-AMS contracts in Florida, Iowa, Ohio, Virginia and elsewhere.
Anna DeFazio Gadbois, a CGI-AMS vice president, defended the company's record and disputed claims of "failed contracts."
She also said the company's contract with a communications company part owned by Schwarzenegger's chief fund-raiser, Marty Wilson, has ended. CGI-AMS, she said, had hired Wilson's partner, Beth Miller, to help on the project but that contract ended March 15.
Meanwhile, a request from Assemblyman Mark Leno, D-San Francisco, to audit the CGI-AMS contract failed in the Legislature's Joint Audit Committee Wednesday.
Leno, citing many of Dunn's concerns, had asked the committee to approve the review how the contract was being managed. But the proposal fell one vote short of passage, although Leno can bring back the issue at a later date.
On the Net:
California Performance Review report on strategic sourcing
CGI-AMS Home page
Gov.'s home page
...since actually SPENDING LESS seems to be out of the question for all but a handful in Sacramento.