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Going
Downtown
Waiting for my cab to arrive to take me to City Hall, I mentally reviewed
my presentation checklist. I’d prepared 10 handout folders. They
included a one-page outline of my talking points, customer references,
corporate accomplishments and plenty of business cards. My own notes covered
an expansion of my points, anecdotal experiences and plenty of facts to
back me up. I’d never been to City Hall before, but I
was ready. My shoes were shined, my hair was trimmed and I was wearing
my best suit. As the cab pulled into the drive I checked myself one last
time in the mirror.
I looked sharp.
“Where to?” the cabbie inquired.
“I’m going to City Hall,” I replied.
“You gonna see Vera?”
“I hope not,” was my response.
The driver had some words for me.
“You know”, he said “it costs me $125 a day to run this
cab and business is so slow I’m barely making $100 a day. And she
wants to raise my business taxes.”
We commiserated. The city did not care about small business. Vera wanted
a baseball stadium. Vera wanted to cap I-405. Vera wanted to cover the
reservoirs. They built a beautiful convention center but there was no
place for the conventioneers to stay. It seemed that the city gave tax
breaks to the rich developers but stuck it to the little guy.
When we got there I tipped him five bucks.
“You tell Vera hi for me,” he said as he drove off.
I climbed the steps and contemplated my mission. My mission was to convince
Commissioner Saltzman and his advisors that it was not necessary to spend
millions more dollars to get a water billing system up and running. They
could do it for less... much less.
The Green Approach
The trouble all began in 1996 when City Commissioner Erik Sten ended up
with the water bureau in his portfolio. With his vast life experience
of 28 years he determined that “sustainability” meant that
heavy water users should pay more and those who conserved should pay less.
Great theory, but the concept had to
be translated into computer code that would produce bills accordingly.
Enter Severn Trent Systems, a subsidiary of Severn Trent Ltd., a huge,
multi billion-dollar corporation headquartered in the United Kingdom.
Severn Trent provides water and sewage services to much of England, Scotland
and Wales. Evidently, in developing systems to handle the tracking and
billing of their vast enterprise, they ended up with what they thought
was a marketable suite of software. Hence, Severn Trent Systems, a spin
off software company.
Severn Trent did not have exactly what Commissioner Sten and his crew
were looking for. But it was close and, according to Severn Trent, it
could be modified to meet the initial requirements of the City. Sten and
the City bought it and agreed to a $6.5 million deal for a state of the
art system. At the time, the possibility was discussed that the system
might eventually let you dial in via the Internet and monitor your number
of flushes month to date.
The only problem was they couldn’t get it to work.
In February of 2000, despite warnings from Water Bureau staff that the
system contained at least 49 flaws, Erik Sten and his project manager,
Mike Rosenberger, gave the go-ahead for the system to be implemented without
parallel testing. Chaos ensued. Some businesses and householders got water
bills for hundreds of thousands of dollars. Others got no bills at all
for months and months. Lost revenues and overtime expenses ran up an incalculable
figure with some estimates as high as $30 million. No one will admit whether
Severn finally threw in the towel or whether the city could never actually
define its requirements, but the whole deal ended up in the crapper.
Conflicts ensued. The city wanted to hold Severn accountable for the damages.
Severn thought they should be paid for all their extra work attempting
to customize the system. In June 2001, Mayor Katz quietly pulled the Water
Bureau from Sten’s portfolio and gave it to poor Dan Saltzman. Erik
Sten, who might have been politically destroyed by his responsibility
for the fiasco, instead was re-elected for another term on the council.
His focus has since shifted to another utility issue: the prospect of
city acquisition of Portland General Electric.
Secret negotiations eventually resulted in a settlement. In January 2003
the Oregonian reported that Severn Trent had agreed to reimburse the city
$7 million, but would continue to be retained by the city for $385,000
a year to maintain the system.
Why was Severn Trent retained to continue supporting the botched system?
According to the Oregonian, Saltzman said it was because Severn still
retained copyright and control of the system source code.
Keys to the Hood
In order to fully understand the situation, you have to understand what
source code is. Stay with me now, it’s easier than you might think.
When a programmer develops software they write their instructions to the
computer in a human readable language. There is a wide variety of these
languages but some examples are C++, Visual Basic and Java. If you are
a little older, you’ll remember languages like Cobol and Fortran.
The written instructions in the selected language are the source code.
The programmer then runs a program that compiles, or converts, these human
readable instructions into the 0s and 1s
that the computer understands. The computer understandable code is called
“object” code. The conversion is a one-way street. In most
cases there is no way to convert the object code back into the human readable
source code.
Many of us use programs like Microsoft’s Word. When you click on
“Tools” in Microsoft Word, the program pulls down a list of
things you can do. The object code provides that functionality. If you
don’t like what’s on that list, too bad. You can’t change
it. The only way you could change it would be if you had the source code
and knew how to modify it. But you don’t have the source code. You
only have the program, the object code. So you couldn’t change it
even if you wanted to. Part of what led to Microsoft’s legal problems
over the last few years was that they wouldn’t allow other companies
access to the source code for Windows.
Look at it a different way. You just bought a brand new automobile. There’s
a key to open the hood. But you don’t have the key; the dealer has
the key. In order to change your oil or replace your air filter you have
to go to the dealer who has the key. The key is the source code. Without
it, you are totally at the mercy of the dealer to service your car. You
might figure, no big deal. I can get the key from another Ford or Chevy
Dealer. But in the case of business software, your car was not made by
Ford or Chevy. It was made by Thomason or Tonkin. They are the only ones
with the key, and if they go away, you’re out of luck.
Request for Proposal
As business software developers, with combined experience of over 50 years,
my partner Fred and I watched the fiasco unfold with a mixture of amusement
and bewilderment. We’ve written hundreds of systems of all types.
Billing systems. Inventory Control Systems. Purchasing Systems. Accounts
Receivable Systems. How could the City of Portland Water Bureau billing
system be so complicated as to require millions upon millions of dollars
in development? How different could it be from PGE, PP&L or Northwest
Natural? They read meters, send out bills and post payments. What’s
up with this?
It is rare that we ever hear of a government technology acquisition that
comes in on time and on budget. Usually, as in the case of the DMV computer
upgrade or the botched Water Bureau billing system, we hear of four, five
or six-fold cost overruns and target dates missed by months or years.
Often, the government agency will have to regroup and start all over again
while the taxpayers dutifully pick up the tab. How is it this happens
over and over again? The answer is the Request for Proposal (RFP) process.
What is an RFP? Well, when it comes to government purchasing, an RFP is
a combination wish list and contract, spelling out in intricate detail
what the product is supposed to do, how it is supposed to do
it, how it will be paid for and who will be allowed to submit a bid. These
voluminous documents, which require a team of attorneys to properly interpret,
will put fear in the hearts of many prospective vendors. After unfortunate
experiences with one RFP from the
U.S. Postal Service and another from the Oregon Department of Revenue,
we developed our own
unique approach of responding to RFP’s. We throw them in the trash.
For some vendors, however, RFP’s can be a godsend. We used to have
a client with a forms printing business. He was very adept at responding
to IRS RFP’s for forms 1040 and related schedules.
“How do you always manage to get the IRS contracts?” I asked
him one day.
“It’s easy,” he replied. “I always bid them below
my cost.”
“How do you make any money?”
At this point my client chuckled.
“Because they always change the specs,” he said, with a twinkle
in his eye. “Every change from the original RFP is at an additional
charge and we stick it to ‘em.”
And therein lies the rub. An RFP for purchasing five Chevy Astro vans
probably works pretty well. You specify the model, the color, the engine,
the interior and the trim package. The dealers can then all sharpen their
pencils, see how much they can tighten up their pricing and give you a
bid. No problem. But an RFP for technology, particularly software technology,
is not so cut and dried. In an RFP for software the issuing entity tries
to describe the look, feel and functionality of a computer program in
a written document. Imagine trying to describe the look, feel and functionality
of a product like Microsoft’s Word or Windows by writing it down.
It would be like trying to write a description of the Mona Lisa.
In the case of software, the vendor will insist that the intent of the
RFP is met. The issuing party will disagree. Arguments ensue. Anything
not envisioned by or specifically outlined in the RFP becomes a change
order and the vendor “sticks it to ‘em.” The Severn
Trent bid award was the result of an RFP. How much would you like to bet
that disputes over the verbiage of the RFP contributed to the complete
failure of the attempt to implement the system?
Thanks for Your Insights
I first wrote to Commissioner Saltzman in December of last year when I
read that the decision had been made to replace the Severn Trent system.
I pointed out to him that it might make sense to simply approach one of
the other local utilities that had a working system and see about licensing
their software. PGE, PP&L and Northwest Natural all have balance forward,
meter based billing systems. They seem to get their bills out without
any difficulty. In addition, I wrote:
“I would advise you to be wary of the RFP process. Presumably it
was an RFP which led to the Severn Trent contract and another RFP might
well go the same way.”
I had never written to a city official before. I didn’t really expect
a reply, but about a week later I received a very gracious letter from
the Commissioner. He thanked me for my suggestions and informed me that
the Office of Management and Finance (OMF) was heading up the procurement
of the new system. He also let me know that the city was committed to
an open and public process in selecting a replacement system and that
the RFP process was the best method for facilitating that. On the bottom
of the letter next to his signature was a handwritten note. It read:
“Thanks for your insights and suggestions.”
A few days later I received e-mail from the city. It contained a link
to the City of Portland Bid Host Site. When I clicked on the link, I was
presented with RFP 101935, the RFP for the new Water Bureau Customer Information
System (CIS). I downloaded the RFP. It was 145 pages. I resigned myself
to a long weekend of study.
There’s No Blueprint!
The RFP was disturbing. To begin with, I did not see how the city could
have produced a 145-page document in the three week interval between the
time they announced they were going to dump the Severn Trent system and
the time they posted the RFP on their website.
I also found it curious that the RFP contained a Y2K compliance clause.
If you remember back to the late 90s, Y2K compliance meant that the processing
of dates in a system would work properly after December 31, 1999. I couldn’t
understand why an RFP written in December of 2002 would have a Y2K compliance
clause.
Then it dawned on me. The new RFP was probably the same RFP, with minor
changes, that was used to recruit Severn Trent.
I don’t know about you, but if I’d entered into a contract
that ended up cleaning me out just a few years back, I’d probably
insist on a completely new contract the next time around.
And there was more.
Respondents to the RFP were required to provide a
bid for hardware along with their software, but at the same time the City
said they may or may not buy the hardware from the vendor or in fact may
not buy any hardware at all. Since most software companies don’t
sell hardware, this would really complicate the respondents’ ability
to bid.
But then I came across something that really blew
me away.
Vendors responding to the RFP were required to provide a fixed bid to
convert the data in the Severn Trent system to their own formats. But
no file layouts
or specifications were provided for the Severn Trent System.
You probably do data conversion all the time and don’t even know
it. If you have WordPerfect on your home system but Microsoft Word on
your office system you may often do a “save as” of your documents
and specify the file format for the program you are going to use next
time you access the document. The program you are using handles the conversion
for you. It can do this because it knows how the other program wants to
“see” the data; it has the specifications.
Asking a software company to give a fixed bid on data conversion without
providing the specifications of the data to be converted is like asking
a contractor for a fixed bid to build you a home without knowing how many
bathrooms or bedrooms the home is supposed to have. Obviously, a contractor
wouldn’t give you a bid. But these software vendors have to, in
order to even respond to the RFP. What would you bid? One million? Two
million? The vendor has to imagine the worst-case scenario and bid it
accordingly.
Finally, in the contract addendum portion of the RFP I noted the following
with interest:
“All work products resulting from this contract will become the
property of the City of Portland.”
Do Not Hesitate to Contact
Me
Upon completing my review of the RFP, I once again wrote to Commissioner
Saltzman. I pointed out that that the new RFP appeared to me to be a knock-off
of the original. I suggested that, since the original RFP could not be
implemented by Severn Trent, the new RFP might well end up producing similar
results. I discussed the fact that the inclusion of the hardware bid from
non-hardware vendors clouded and confused the RFP. Finally, I insisted
that it made no sense at all to ask for a fixed bid to perform the data
conversion without supplying the vendor the technical specifications of
the Severn Trent system.
I also took the opportunity to throw a sales pitch at the Commissioner.
When I reviewed the RFP I spent a good deal of time thinking about how
a company like ours would approach the project. It did not seem that complicated.
It would require: A customer database. A billing rate matrix to determine
the appropriate charges. An interface to accept the upload of scanned
meter readings. An accounts receivable to track the charges and payments.
Not at all unlike dozens of systems we had designed and coded over the
last 18 years. We already had the customer database and accounts receivable,
basic modules that we had tailored to the needs of many clients. Rate
matrixes and scanned data upload interfaces were also within our repertoire.
I did some quick calculations. Two of our staff working for 18 months
exclusively on the project would cost the city just under $500,000. I
didn’t see how it could be so complicated as to require more than
that. NASA probably didn’t spend more time than that developing
software for the Space Shuttle.
But I knew the city would never buy that small of a number. They just
don’t think in those terms. So I wrote the following:
“It is my feeling that our company, if allowed to undertake this
project utilizing a custom development approach could produce the basic
customer tracking and billing portions of the system in 12 to 18 months
at a cost to the City that should not exceed seven hundred thousand dollars.”
Eleven days later I received a response from the Commissioner. He informed
me that he had forwarded my comments and concerns to Mr. Dick Hofland
who was coordinating the procurement process at OMF and had requested
that Mr. Hofland respond to my concerns. In addition the Commissioner
wrote:
“Please do not hesitate to contact me with future questions or comments
after you have heard back from Mr. Hofland.” He cc’d Mayor
Vera Katz and Tim Grewe, Chief Administrative Officer of OMF.
A Thoughtful Response
In early February I received Dick Hofland’s response to my concerns.
In his preamble he wrote:
“I apologize for not being able to get back to you sooner. As you
can imagine, getting a replacement project off the ground for replacing
the City’s customer information system is quite a chore, but you
raise some important issues that deserve a thoughtful response.”
I was assured that, although the Severn Trent RFP was thoroughly reviewed
in developing the new one, the RFP was not a “knock-off” of
the first one. The city, in fact, had already reviewed a number of existing
systems and had determined that they would fit their needs.
The requirement for a hardware quote in the RFP was simply there to determine
the optimum operating environment and approximately what it would cost
to acquire it. “Just because we ask for the price from the vendor
does not imply that if we choose their software we will also select exactly
the hardware they propose, or buy it through them.”
With regard to the fixed estimate for data conversion without specifications,
Mr. Hofland replied, “You are absolutely correct that an accurate
cost for data conversion can only be known after a careful evaluation
of table layouts.” But he assured me that the city would only entertain
bids from firms “who have a clear, demonstrated, recent track record
in providing and installing their product in similar water and sewer
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utilities.” He also told me that firms who were still “in
the running” after the preliminary screening would be given access
to the information they needed to estimate the conversion.
Finally, with regard to our approach, custom development, I was told that
attempts at customization were the root cause of the failure of the Severn
Trent system. The city felt that a custom development approach was simply
too risky.
A “cc” to Commissioner Saltzman was conspicuously absent.
Undaunted and unsatisfied, I took one last swing at writing to the Commissioner.
I asked the following:
If in the process of developing the new RFP all the available software
packages had been reviewed then why put out an RFP at all? Wouldn’t
that process have already identified the one with the best fit?
Why ask the respondents for a quote on hardware when it was recognized
that most of them didn’t sell hardware and that you didn’t
intend to buy hardware from them?
Why would you give the specifications needed to accurately estimate the
data conversion after you had received the bids? Why accept a bid based
on the bidder having no information and then provide the information after
you’ve selected the bidder?
Finally, what’s this bit about only considering firms with a “clear,
demonstrated, recent track record?” As far as I could find out,
Severn Trent Systems was a worldwide leader in environmental software.
Wouldn’t that be
a clear, demonstrated track record?
I pointed out to the Commissioner that there were three ways to approach
the acquisition of business software. 1. Buy a package with the intention
of changing it. That’s usually
the worst option and was what was attempted with the Severn Trent System.
2. Buy a package and change the way you do business to fit it. Normally,
at some point in the process business practices are identified that simply
cannot be changed and the software has to be customized after all. 3.
Have a system written to your specific requirements. You get exactly what
you want, and you own it when you’re done.
I also pointed out that the money blown on the first attempt would have
taken care of the Portland Public Schools budget shortfall for a couple
of years.
I mailed my letter on February 24th.
I’m Supposed to Make Some Time for You
Weeks went by and I couldn’t get the matter off my mind. I couldn’t
understand how the City could pay millions of dollars for software that
Fred and I routinely create for our clients for thousands. I couldn’t
understand how a city official like Commissioner Saltzman wouldn’t
jump at the chance to pull off a political coup, to be able to say that
he got the job done for a fraction of what had been blown by his predecessor.
I couldn’t understand why I didn’t get a call.
So I started making noise. I talked to Lars Larson, Don McIntire, my barber,
cab drivers, business associates. I talked to anyone who would listen.
And then I talked to Jim Redden at the Portland Tribune. He was very interested.
He queried Saltzman’s office about the concerns expressed in my
last letter.
A couple days later Jim called me.
“You won’t believe this,” he said.
“What?” I asked.
“They told me they have every intention of talking with you,”
he replied.
On April 17th I received a call from Commissioner Saltzman’s appointment
secretary.
“I’m supposed to make some time for you,” she said.
The next day the Tribune ran an article by Jim Redden entitled “City
Closes in on Fix for Billing Troubles.” In the article I learned
there were four firms “in the running.” Their bids were reported
to be 2.9 million, 4.5 million, 5.2 million and 7.8 million.
How Do They Think?
In preparing for my presentation, I thought it might make sense to attempt
to gain some insight into the thought processes of our city officials.
The easiest way was to look at their websites.
I had to chuckle when I looked at Commissioner Sten’s website. On
his “accomplishments” page he listed rate reform for water
utility users. He didn’t mention the fact that his botched system
was incapable of calculating or providing the discounts.
Then I looked over Commissioner Saltzman’s website. One of his listed
policy issues was “sustainability.” When I clicked on the
link, I was provided the following:
“Sustainability is synonymous with integrating ecology, economics,
and social justice for long-term global stability and prosperity.”
Now I don’t think I’m the dumbest guy in town, but maybe I’m
not as bright as I thought because I really didn’t understand what
that meant. I certainly didn’t understand how getting water bills
out
would contribute to global stability. But further down on the page I noted
that “sustainability” also meant:
“Doing more with less, in many cases substituting information and
intelligence in solving problems rather than additional material or energy
resources.”
I could relate to that. Perhaps the Commissioner would agree that getting
a
job done for a half million or so, rather than
five or six, would indeed be “doing more
with less.”
A Boys Band
When I arrived at the Commissioner’s office
I was politely asked to take a seat. Within seconds another gentleman
appeared. He introduced himself as Mr. Mark Crapeau
of TMG Consulting Services of Denver, Colorado. While we were waiting
Mark
flipped through a coffee table book of photos of old Portland.
“It’s amazing how many of these buildings
are still recognizable,” he said. “I grew up
in Chicago and all the old buildings are
long gone.”
“My Uncle used to tell stories about Front Avenue before the sea
wall was built,” I replied. “When I was a kid I used to spend
a lot of time at Meier and Frank’s department store. It was the
tallest building in town at that time, twelve stories. They still had
elevator operators.”
Edward Campbell, advisor to Commissioner Saltzman, greeted us and ushered
us into his office. I was introduced to the Commissioner, Dick Hofland
and Tim Grewe of OMF. Business cards fell onto the table like spring blossoms
on the sidewalk.
“With your permission, Commissioner, I’ve prepared a brief
outline of my talking points,” I said, as I handed out folders.
I started my pitch. I pointed out that our company was founded in 1985
and as such was one of the oldest technology firms in Portland. I detailed
the experience my partner and I had in systems development. I stated our
opinion that the RFP process was negatively impacting the city’s
ability to acquire technology at a reasonable price.
In order to justify our $700,000 figure, I pointed out that Timberline
Software of Beaverton Oregon, a major software company, publicly posted
their product development costs on $62 million in sales at approximately
25 percent. Symantec Corporation posted theirs at approximately 15 percent.
That was how the city could have a $3 million program developed for $700,000.
They would be paying for just that—the software development.
I also pointed out that a custom development approach would free the City
from per node licensing fees, annual maintenance fees and version upgrade
fees. Most importantly,
with a custom software approach the City would have ownership and control
of the source code.
I included plenty of actual experience in my presentation, citing several
cases where our customers had been “burned” by a product only
to have us salvage the project and bring it in successfully. I thought
I was doing pretty well and was beginning to imagine that the Commissioner
and his associates were becoming excited about the city for once being
able to do something on time and
under budget.
And then the Commissioner explained that Mark Crapeau had been retained
as an outside consultant to “oversee” the project.
Isn’t it interesting that when the city looks for expertise they
always look outside of the
city? We always seem to hear about nationwide searches for Police Chiefs
or School Superintendents. Does the city administration think all the
citizens are dumb? Or are they afraid that the citizens think the city
administration is dumb?
Crapeau took the floor and began to rebut my points, one by one. At that
point my mind slipped off a bit. Suddenly, I envisioned him in a straw
hat with a bamboo cane, prancing before the Council and insisting they
had trouble, right here in river city. He became to me professor Harold
Hill from the Music Man, convincing the city that their next software
acquisition would be the equivalent of a
Boy’s Band. After all, if you can think a balance forward utility
billing system, you can implement a balance forward utility billing system.
Your stormwater disconnect discount will be arriving on the next Wells
Fargo wagon, along with Winthrop’s shiny new cornet. And like Professor
Hill, who couldn’t play a note, I doubted if Crapeau had written
a line of code since Computer Basics 101.
But I was the anvil salesman. All my protestations that he didn’t
know the territory would be for naught.
If You Can’t Sell
It, You Don’t Own It
We argued about source code. I insisted that, whatever option the city
chose, they should insist on acquisition of the source code. The Commissioner
seemed to understand. After all, he was saddled with Severn Trent for
up to three more years to the tune of a million bucks because they had
control of the source code for the current system.
“No vendor provides source code anymore,” Crapeau insisted.
“That’s a thing of the
past. Instead, for customization purposes, they provide entrance and exit
points in
the code.”
I disagreed. Our clients always receive
source code. We in fact insist on it. If some unfortunate event were to
destroy our facility, the fact that our clients had the source code would
allow us to continue to support their programs. I knew that inclusion
of source code was commonly negotiated in software contracts.
“But it’s their intellectual property,” Crapeau insisted.
“I agree,” I said. “But I’m not talking about
copyright, I’m talking about the City owning that one copy of their
program.”
Let me provide an illustration.
If you commission an artist to carve a statue for you that statue is yours.
If you don’t like it you can take a sledgehammer to it. What you
can’t do is make a wax impression and sell plaster copies of it.
That’s because the artist has the copyright; the artist has the
right to copy the statue. That’s the difference between copyright
and ownership.
A few years ago, while I was working with the FAA to clear up a problem
with an aircraft title, my sweetheart had made an astute observation.
“If you can’t sell it, you don’t own it,”
she said.
As it was the City was planning to buy a “license to use”
a software product, nothing more. They wouldn’t own a thing.
But remember the RFP?
All work products resulting from this contract will be the property of
the City
of Portland.
As my half hour allotment of the Commissioner’s time ended I was
assured that the City was on track this time and had every confidence
they would be successful
in implementing a new system.
“A custom approach is just too risky,” the Commissioner said.
“Well, don’t worry too much,” I said. “Even
if you blow it, it didn’t seem to hurt Erik Sten any. But I still
maintain that you have to
have the source code, particularly if you customize the program.”
I suggested that at the very least an escrow arrangement for the source
code should be insisted upon. That would be better than nothing. I’ve
since learned the city is considering such an arrangement.
In the end, I asked a question.
“Can anyone please tell me what is so complicated about this system?”
The Commissioner and his advisors looked
at one another and chuckled, but no one answered. I still don’t
know if the chuckle meant that they themselves didn’t know what
was so complicated or if they thought it was
a silly question.
Nice Suit
Back on the street outside City Hall I lit a cigarette and called a cab.
While I was waiting
I noticed a fellow pay for and affix a second “smart park”
sticker to the side window of his car. He approached me.
“Can I bum a cigarette?” he asked.
“You bet,” I replied as I handed him one.
“Nice suit,” he commented.
On the ride back the cabbie had words for me.
“You know, I’m a big supporter of public transportation,”
he said, “but in this town it seems like it’s mass transit
uber alles.”
We commiserated.
SIDEBAR
A June 24, 2003 report by KGW-TV staff reporter Jim Parker and Randy Neve
and currently available at KGW.com has also uncovered a pattern of problems
with the Water Bureau bidding process that tend to confirm Mr. Lister’s
account.
KGW reported on a combination of consultant conflicts and lack of scrutiny
over the bidding process. Their report states: “A review of the
bidding process found two potential pitfalls that could have tainted their
efforts: A reliance on a consultant with possible conflicts of interest,
and an apparent failure by the city to scrutinize the track records of
contractors on their finalist list.
“After deciding to scrap the existing computer system, city commissioners
hired consultant Mark Crapeau and his firm, TMG Consultants, for nearly
$500,000 to design the bid selection process and help narrow the city’s
software choices.”
But KGW also added troubling details: “One other potentially troubling
disclosure: The finalists Crapeau helped pick for the city are all firms
he does business with or has frequently recommended to other clients.
“KGW contacted other communities currently using the software sold
by the finalist companies and discovered that some of the buyers weren’t
happy customers after the sale.
“Cayenta’s software is considered flawed by officials in Modesto,
Calif., who recently scrapped it.
“And SAP America has gone through three CEO’s in less than
two years, with software troubles reported in Atlanta and New Orleans.
“Two other companies that made an earlier finalist cut for Portland
also had serious flaws: SCT Banner’s software cost Seattle City
Light about $20 million in project delays and cost overruns, and PeopleSoft-licensed
SPL software cost Philadelphia Gas Works $80 million in reported overruns
and uncollected bills.”
Read KGW’s full report at
http://www.kgw.com/news-
local/stories/kgw_062403_news_
water_billing_woes.254c7307.html
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