Another IT Cost Overrun Sails Through Board of Supervisors

Print More

In what has become typical fashion when it comes to large cost overruns on computer contracts, the Orange County Board of Supervisors unanimously approved a $1.9-million extension to Xerox Corp. earlier this month without any public discussion.

A county staff report cites delays in the contracting process for a new vendor to assume the county’s data network and voice services — delays that have been occurring for more than a year, according to the report.

The Xerox deal, which originally expired two years ago, is now worth $17.4 million. It was extended 42 days to July 31.

At about $1.4 million per month, the extension, which apparently involves the same scope of work, is worth much more than 10 times the previous monthly average of $102,000. The staff report doesn’t explain the reason, and Chief Information Officer Mahesh Patel didn’t return a message seeking comment.

Ballooning information technology or IT costs are a sore spot in Orange County, with tens of millions of dollars spent on unexpected contract increases and extensions drawing the ire of labor leaders and county supervisors as well as the eyes of auditors.

Such no-bid deals and overruns have persuaded union leaders and supervisors that the county’s computer contracting has been mismanaged.

Two of Orange County’s top IT managers have been forced out in recent years, and another high-level manager was charged with seeking bribes from a subcontractor.

While IT contracts are a critical part of the 17,000-employee county bureaucracy that serves 3 million residents, the debate is often extremely technical and difficult to follow.

Last week’s extension to Xerox comes amid a controversial effort to hire new contractors for the county’s voice and data systems.

Last month, supervisors awarded the first of two replacement contracts for data center and desktop computer support to SAIC, a firm that recently admitted defrauding New York City on a massive computer contract.

Manhattan’s federal prosecutor described the case as “one of the largest and most brazen frauds ever committed against the city of New York.” SAIC admitted that high-level company managers ignored several warnings of the fraud.

Although supervisors raised some questions about the fraud case, they ultimately approved the $74-million contract by a unanimous vote.

Last week’s action on the Xerox contract was the 19th amendment supervisors have made to the deal, which dates back to November 2000 and was originally set to expire at the end of June 2011.

County staff say they plan to bring the second and final replacement contract before supervisors in mid-July.

You can reach Nick Gerda at ngerda@gmail.com, and follow him on Twitter: @nicholasgerda.

Comments are closed.