Tuesday, June 17, 2014

(Orange County) O.C. Watchdog: Report [Grand Jury] validates doubts on county contracting

June 16, 2014
By Teri Sforza
Orange County Register

There has been heartburn over the dolling up of Dana Point Harbor, which started out as a $7 million, five-year contract for the project manager – but morphed into a $13.2 million, 15-year contract for that manager.
There was heartburn when Orange County awarded a $74 million contract for data and desktop computer support to a company that was accused of defrauding New York City on a computer project and paid a half-billion-dollar settlement to make things right.
There was heartburn over an internal audit a few years ago, finding that the county’s information technology department spent more than $45 million on contracts that never went out for public bid, and that it failed to track the real costs of projects, which often ballooned over time.
Ah yes, the imperfect art of contracting has long “initiated alarm” here in the County of Orange, notes a new grand jury report released Monday, seeking to smooth the way forward. It is a topic of enormous import: The county currently has contracts worth more than $3 billion with some 3,400 outside vendors, and it does so in a rather haphazard fashion, the grand jury said.
“Given the sums of money involved, it is vital to cultivate and maintain the greatest level of public confidence and trust,” the grand jury wrote in the somewhat mundanely titled “Improving the County of Orange Government’s Multi-Billion Dollar Contracting Operations.”
During its probe, the grand jury heard complaints that the county allowed potential bidders to have improper involvement in the preparation of requests for bids; that officials ignored warning signs that bid proposal evaluations were mishandled; as well as general allegations of cronyism and undue influence. “Many of the doubts appeared to have merit,” the grand jury said.
Things have actually gotten better on this front over the years, the grand jury reports, but Orange County’s main issue now seems to be that the right hand doesn’t always know what the left hand is doing. For this, one might thank Bob Citron and the bankruptcy of 1994.
“Perhaps the longest-lasting effect of the bankruptcy was decentralization of specialized functions within county government,” the grand jury wrote. “The most prominent of those decentralized functions were contracting and procurement, human resources, and information technology.
“Within a decentralized jurisdiction, such as the County of Orange, it is important that all agencies/departments operate under the same rules so that inconsistencies do not create future problems.”
The cure, the grand jury said, is the “reestablishment of centralized services in key units,” which would concentrate decision-making and policy (in, most likely, the County Executive Office).
The county must respond to the grand jury in writing within 90 days, but officials declined comment Monday, saying they’d need some time to digest it.
Orange County, by way of background, is the local arm of the state government, and it has a budget of $5.4 billion. It provides a wide range of services, including animal control, child support, jails, juvenile detention, law enforcement, beaches, parks, services for the aging and veterans, voter registration and elections, property tax collection, public health, sanitation, libraries and more.
In the interest of fairness, the county is hardly alone in its less-than-perfect handling of outside contracts.
After spending $560 million on a criminal justice computer system that was supposed to cost $260 million, the state of California killed the whole project back in 2012. Deloitte Consulting LLP – the system developer – was originally contracted for $33 million, and more than 100 contract amendments later, that contract grew to $310 million.
And the Orange County Fire Authority – a separate government that’s not part of the county itself – was recently excoriated for holding a special meeting for its current ambulance contractors, right before a new round of competitive bidding for those lucrative ambulance contracts.
Contact the writer: tsforza@ocregister.com Twitter: @ocwatchdog

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