Posted on 04/17/2002 5:41:24 PM PDT by Bush2000
SACRAMENTO, Calif., April 17 — A potentially illegal deal between Oracle Corp. (NASDAQ:ORCL) and California could cost taxpayers tens of millions of dollars for software that few state employees need or want, the state auditor said Wednesday.
In a highly critical review, a state audit questioned why officials in three state agencies went ahead with the $122.6 million no-bid deal last May when a survey indicated few state workers had interest in using the database software.
"We didn't know if there was a need and we committed millions of dollars to this contract," said State Auditor Elaine Howle told Reuters.
The agreement between Oracle and the Department of Finance, the Department of Information Technology and the Department of General Services was aimed at saving taxpayers money by entering into a long-term 10-year contract and purchasing the software in a large quantity.
But the audit issued Tuesday offered a blistering review of a deal in which state negotiators worked with little legal oversight and had no idea that consultant Logicon, a unit of Northrop Grumman (NYSE:NOC) ,stood to reap $28 million from the deal.
The report also asked the attorney general's office to look into whether the deal was legal because it was awarded without competitive bids as well as to investigate Logicon's role as a consultant.
Representatives for the Department of Finance declined to comment, while the other state agencies and Logicon could not be immediately reached. An Oracle spokesman maintained the deal would save California as much as $163 million over the next 10 years.
"Oracle Corporation's software sale to the State of California last year allows the State, as well as local governments, to access Oracle technology at an exceptionally attractive price, said Oracle spokesman Steve Perkins.
But the state audit revealed that almost a year into the contract the three departments are still figuring out how to pay for the software, and that as of mid-March no state workers were using the product.
Howle said the state stood to lose tens of millions of dollars on the deal, one of the most questionable she has reviewed during 18 years at the Bureau of State audits.
According to the review, Logicon used "shaky" assumptions in calculating the state savings, and auditors say taxpayers could end up doling out $41 million more than if they had bought the software separately.
"We came up with significantly different numbers," Howle said. "The disparity in the number were enormous and as we said they were grossly overstated."
Drip ... drip ...
Sorry... ;0)
Tee hee ;0)
Secondly, I'm interested in the point about software that "few state employees need or want." Oracle isn't desktop software, and many people could be using it without even knowing it.
It actually does sound like they got a good deal. They should have followed the rules to get it though.
Bill "Gun Control" Owens, a RINO, has a mandate for all state databases to migrate to Oracle within another four years. Wonder why? Of course, the managers with $4 million Informix installations ain't moving. They gave the Oracle idea the finger.
Another funny thing is that SQL Server doesn’t need an army of DBAs to make it work. As a matter of fact, Microsoft Consulting Services doesn’t do all that much work with the state because there is no need. SQL Server can work without high priced expertise, and Microsoft has many decent partners here to handle the load. Oracle requires an army of expensive developers, and they push them onto the state. Oracle's plan isn't doing so well as the state employees prefer SQL Server.
We're working hard, in between FReepin', of course!
;-)
They got it because it isn't Microsoft. It doesn't matter that no one uses or wants it, they're going to get it anyway, by God, and they'd better shut up and like it!
Heh. It'd be kind of nice if this came and bit them all in the hieny.
Tuor
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