- The Washington Times - Monday, February 26, 2001

The Prince George's County, Md., school board will decide today whether to approve an $8 million computer contract to upgrade and integrate the human resources and finance divisions amid complaints over the selection process.

"The process was all wrong," said a school technology official privately. "It is never about letting the best man win here."

In an effort to bring the school system into the 21st century, county school administrators decided two years ago they needed a system to perform human resources, payroll, budget and finance functions more efficiently. After negotiations with the first contractor broke down, they chose Oracle to install an Enterprise Financial System over a nine- to 12-month period.

Some school officials are questioning whether the initial contract which was more than $2 million less than the contract currently being considered was pushed out because of internal biases toward Oracle. They are also questioning ties between an Oracle subcontractor and a senior state official.

The board began looking for contractors in January 2000. A selection committee made up of technology and other school staffers unanimously chose SunGard Bi-Tech as its first choice from the nine proposals it had received. Oracle was the alternate.

On June 22, the board authorized schools Superintendent Iris T. Metts to execute a contract with SunGard Bi-Tech at a cost of $5,633,932. But contract negotiations broke down after SunGard Bi-Tech would not agree to indemnify the board for $10 million should it fail, school sources say. The school system turned to Oracle.

Oracle had originally offered its software and services for $13,116,444, school documents show. In December, the company revised its bid to $7,981,320. It is not clear why the company's price dropped by almost half for the same product and services.

Oracle hired Baltimore-based Carnegie Morgan as a minority participant to receive 17 percent of the professional services portion of the contract, almost $850,000 of the $4,989,816 for that portion.

The board delayed the approval of the contract in January after District 2 board member James Henderson complained that the minority participant was not county-based. Oracle then hired Greenbelt-based OAO Corp. for a portion of the contract.

Sources close to the negotiations say that "from day one, the administration wanted Oracle and would do whatever it took to get Oracle."

That is why Oracle came in with such a high original bid, they add: Oracle thought it wouldn't face any competition.

Even after the selection committee went with SunGard Bi-Tech, sources say that top school officials tried to get selection committee members to change their minds.

"[School administrators] kept trying to propose reasons why we shouldn't choose SunGard Bi-Tech, even though this company is a 90 percent fit to our business practices," one school staffer said privately. "We were devastated when the deal fell through."

After the board approved SunGard Bi-Tech, sources say the administration put unusually stringent liability requirements on the company.

Typically, school systems ask for liability clauses in the amount of a contract plus costs incurred should the system fail then recoup the rest through litigation, said Cathy Muse, Fairfax County's (Va.) assistant director of purchasing. The school system's RFP didn't specify a required liability.

"I can't think of any reason they would include a requirement like that," she said. "It sounds like they entered negotiations to fail them."

School sources said the amount of the liability was suggested by the Government Finance Officers Association, a nonprofit, professional group that helps local government with finance management.

It is not clear whether the school system will require the same amount of liability of Oracle. That will be negotiated after the board approves Oracle as their choice.

Others involved in the selection acknowledged their concerns about the administration's bias toward Oracle, but said that after SunGard Bi-Tech was chosen, the administration did everything it could to sell the company to the board. They say that the selection process was more than fair.

Questions have also surfaced about connections between Oracle's subcontractor, Carnegie Morgan, and Maryland House Appropriations Committee Chairman Howard "Pete" Rawlings, a Baltimore Democrat. Mr. Rawlings' son, Wendell Rawlings, is a senior project manager for the company's resources management division. Sources say he is not working on the proposed Prince George's contract.

Still, the Baltimore company was involved in a series of blunders by the Baltimore city schools last year over lucrative no-bid contracts that led to the resignation of two top school officials, according to the Baltimore Sun.

In one instance, the former Baltimore schools business manager, Wilbur C. Giles Jr., hired Carnegie Morgan Resource Management in September 1999 to manage a $12.3 million project to reduce energy costs in 30 schools.

To finance the project, Mr. Giles hired a close friend who received $1 million in fees eight times the industry standard. Neither contract was put out for competitive bid nor approved by the school board.

Baltimore schools Chief Financial Officer Roger Reese, who signed off on the contract, and Mr. Giles resigned last year under pressure.

Also, Baltimore-based Information Control Systems Inc. was hired for $5.2 million last year to upgrade the school system's computers a contract that ballooned to $11.3 million in one year. Carnegie Morgan was a subcontractor on that project.

And when the Baltimore school board tried to suspend payments and extricate itself from the contract while awaiting internal and external audit reports, Mr. Rawlings stopped them, saying the company shouldn't be punished for the ineptitude of the school board.

He told the Sun that he was unaware that the contractor used Carnegie Morgan as a subcontractor, and that he had nothing to do with the firm getting the work in the energy contract.

Mr. Rawlings is one of the principal legislators pushing for the takeover of the Prince George's county school board.

Officials from Oracle, SunGard Bi-Tech and Carnegie Morgan declined to comment for this article. Mr. Rawlings was unavailable for comment. Sources close to information technology and familiar with procurement asked that their names be withheld.

Carnegie Morgan has tried and failed on four separate occasions to win a school contract, according to Milton McCloud, who oversees contracts for the school system. The company is on the school system's approved minority contractor list. It is unclear whether Oracle has worked with Carnegie Morgan before or who chose the subcontractor.

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