Santana: Xerox Collapse Should Fuel Calls for Outside Oversight

The only thing worse than watching the county’s $200 million Xerox IT contract blow apart on video is actually trying to watch the debacle on the lousy county video player that taxpayers overpay for each year.

Last week’s last-minute legislating, admittedly forced upon county officials by Xerox because of corporate merger timelines, put a disheveled supervisors’ Chairman Todd Spitzer in front of a barely cobbled together quorum at 7:30 a.m., attempting to deal (largely silently) with the massive implications of an IT contract that was bilked by former supervisors for campaign contributions and stuck taxpayers with a lemon IT system.

Virtually every countywide elected official – like the assessor, treasurer-tax collector and clerk-recorder – have told supervisors they won’t use the system because its unreliable.

It’s a gem of a meeting, only 16 minutes long, and one that every taxpayer should watch, a virtual advertisement for outside fiscal supervision of Orange County government.

The officially titled, “special” meeting was the final act in an expensive ballet for taxpayers, one that lasted almost a decade — with all kinds of vendors quietly negotiating their way through a shadowy RFP process (chock full of campaign cash).

At one point in 2013, the process went public and quickly crowned Xerox as the solution for a troubled IT system on a 3-1 vote with Supervisor Shawn Nelson dissenting.

Flash forward to 2015 and it’s largely crickets as the whole thing falls apart.

With millions on the line, two supervisors – Andrew Do and Michelle Steel –couldn’t even make the meeting. Supervisor Lisa Bartlett phoned in late from a board meeting at the local toll roads agency.

In the end, when it came to policymaking on IT, there were only two supervisors sitting on the dais.

Nelson – who voted against the original contract – was the only one doing any talking.

And he was swinging away.

In fact, the next time Nelson raves to me about the wonderful transparency of our county contracting process, I’ll make sure to show him a video clip of him publicly frustrated by the latest speed-IT contract-dating approval session from the dais.

Nelson himself argued that he doesn’t expect Xerox to complete the tasks they have agreed to.

The county is probably in store for “a long year of arbitrations,” Nelson said.

What’s even more odd is the new measure of success at the county.

“Even if they continue to fail, we are better off with this agreement than with the current situation,” Nelson stressed.

These are the same folks that keep traveling up to Sacramento and keep insisting to state legislators that they don’t need a contracts monitor (SB331) to protect them from themselves.

Keep in mind that these are the folks that started the whole municipal bankruptcy thing, being the first in 1994.

It’s the same board of supervisors that for a quick, cheap campaign headline of fiscal prudence in 2005 crafted a bankruptcy refinancing package that severed a key legislative tax intercept from Sacramento that now costs taxpayers $73 million a year in lost property taxes, every year going forward, forever.

Remember that the bankruptcy debt – which cost the budget about $90 million annually in bond payments – was set to sunset in 2026.

State Sen. John Moorlach – who was our treasurer-tax collector when the board authorized the botched refinancing package back in 2005 – complained publicly recently about Sacramento’s penchant for meddling in Orange County’s government affairs in a Daily Pilot commentary.

Moorlach and his colleagues also argue against a county ethics commission, which is now making it’s way toward the ballot.

Yet watching this multi-million dollar Xerox IT contract fall apart – literally just after all the outgoing supervisors get elected to state Senate seats – has to make one stop and take notice.

At least it should make someone like Eileen Decker, the newly appointed U.S. attorney for the Central District (which includes LA and OC) stop and take notice.

I can’t remember the last county IT chief that didn’t either abruptly quit to spend more time with family, retire or be fired. And my memory goes back a decade.

Now, almost simultaneously as the Xerox contract unravels, legislation sponsored by the Orange County Employees Association – the Civic Reporting Openness in Negotiations Efficiency (CRONEY) – continues to make its way through the legislature.

In May, the bill made its way out of the state Senate. In June, it came out of the Assembly Local Government Committee and it’s now headed for Appropriations.

It will be interesting to watch this debate play out against the backdrop of the crumbling and embarrassing Xerox contract.

Lashing out against the heightened oversight envisioned by SB 331, Moorlach recently wrote that it “grinds to a crawl the gears of government.”

Yet if the Xerox contract is the best that full-time county supervisors can negotiate, maybe that’s a good thing.

  • Paul Lucas

    What would it take to get the US Attorney into the OC anyway? WTF?

  • OCservant_Leader

    County Procurement is the core of the corruption by the OC Board of Supes!

    The IT debacle is just one example. It shows how most contract awards are decided before “process” starts. Once the proposed vendor makes the right donation to the right supervisor – it’s green lighted. Then they use their County network to come to that conclusion.

    The 5th Floor fixer gets to work- calling in the EA Fraternity who then rely on thier county worker bees (Band of Brothers/little sisters) to make it happen.

    The IT Contract isn’t designed to actually make sense or be a successful resource. If the inner workings of the County is in complete chaos – the corruption can easily continue.

    A good IT system has a way of collating data…and the Board of Supes cannot risk a program connecting the dots. The public could have access to good source data. How would you pull of Medi-cal fraud or cut checks to donors and retirees?

    They need to continue to control the information released to the public via spreadsheets with manufactured funny numbers.

    This IT contract is a win-win for BOS.

  • octaxpayer

    I ask again. Where is the accountability on the County side? You had Christina K. as oversight and she was responsible for the contract. Yet, she gets promoted to CIO??? You had the PMO office managing the project. They seem to always fail with projects, yet they continue on. You had KC R. CEO/IT director as the voice of all IT for the County to ensure all would be OK. Although, you had many County manager even some under KC saying different. He would say just be quiet and we will work it out. He told Pat Bates under live cameras that this wound all work. Many of us managers just shook are head in disbelief. So, I guess no one at the County should take any responsibility. This is all Xerox’s fault. Come on BOS wake up. Take some action for a change. Make these people accountable. Quit wasting tax $$$.

  • David Zenger

    The County’s procurement process was a complete joke when I was there, and I have no reason to assume it’s gotten any better (actually, the guy in charge now used to be the go-to fixer for 5th Floor “special projects”). There was almost no centralized quality control. Nobody paid any attention to the Contract Policy Manual. The abuse of sole source contracts by both staff and the Board was flagrant and rampant. The way staff review committees operated was pretty haphazard to – both in process and documentation. I know – I was on two of them.

    Still, the idea of burdening the procurement process with public scrutiny seems really counterproductive, and is not analogous to collective bargaining where the public deserves to know the outlines of impending agreements.

    • octaxpayer

      The sole source contracts is still a issue. Look how the PMO office snuck by BOS the sharepoint or o.365. No other vendor got to bid to host. The IT folks did show how they could host a enterprise solution at lower cost, but PMO office distorts the facts. More wasted tax $$$.

      • David Zenger

        There was a big problem with assertions of sole source for IT projects across the board, especially those in years 5-10 (or even more). Those assertions failed to meet the threshold for sole source justifications but they were made, mostly just for convenience, and approved anyhow, despite my objections to staff.

        But that was not the fault of CEO/IT, but rather the culture of disinterest that was cultivated under Mauk’s “decentralized model” where everybody was doing something differently and almost nobody was doing it well (in capital project construction the results were extraordinarily costly).

        Overarching this mess is a Board that knows nothing about IT, knows nothing about contract or project management (despite the feeble ovine bleatings of “Metrics, metrics!” by Pat Bates) and is mostly just interested in the cash and carry side of the whole thing.