- The Washington Times - Tuesday, February 27, 2001

The Prince George's County, Md., school board last night postponed approval of an $8 million computerized human resources and finance system, believing it needs additional time to decide whether proper procedures were followed during the contractor selection process.

"We need to make sure the proper procedures were followed," board member Robert Callahan said yesterday before the board took up the issue.

But negotiators of the contract with Oracle say that the selection process was "thorough, clean and fair," and that there is no need to delay the contract.

"There are very few contracts that went through the scrutiny we put this one through," said Michael Madden, deputy director of the Government Finance Officers Association, a nonprofit group that helps local governments with finance management that was hired to help negotiate the contract. "It was detailed, complex and fair."

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 and payroll budget-finance functions more efficiently. After negotiations with primary contractor SunGard Bi-Tech broke down, they chose Oracle to install an Enterprise Financial System over a nine- to 12-month period.

But some school officials question 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 also question why Oracle dropped its price by half for the same products and services; if the liability agreement that caused SunGard Bi-Tech to balk was intended to do so; and the ties between an Oracle subcontractor and a senior state official.

Some school officials believe Oracle came in with a high bid because its officials believed they wouldn't face any competition.

Mr. Madden disagrees.

"The cost came down after six to seven months of cost negotiations," he said. "This is very common. We negotiated the cost of every component to the contract."

Another concern was the stringent liability clause in the original proposal that SunGard Bi-Tech wouldn't agree to, sources said.

Mr. Madden said that because these type of projects are so "intrusive and invasive" to a system, the risk to a government entity grows "exponentially."

"You have to have some security to be able to recoup some of your losses should the system fail," he said. "We wanted to make sure that we had enough potential for damage recovery that gave Prince George's some alternatives."

Oracle will be presented with similar terms and conditions during contract negotiations, he added.

Questions also have surfaced about connections between Oracle's subcontractor, Carnegie Morgan, and Maryland House Appropriations Committee Chairman Howard "Pete" Rawlings, 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.

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. 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 not clear whether Oracle has worked with Carnegie Morgan before or who chose the subcontractor.

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