A majority of the San Diego City Council, concerned that city data-processing officials mishandled the awarding of a lucrative contract to install the city’s new telephone system, is demanding an eleventh-hour explanation about whether some firms were treated unfairly in the competition for the project, which will cost from $12 million to $18 million.
Led by council members Ron Roberts and Abbe Wolfsheimer, the group will try to force a review of the contract award at Monday’s council meeting. According to aides for Roberts and Wolfsheimer, the pair will be joined by council members Ed Struiksma, Wes Pratt, Gloria McColl and Bob Filner in a procedural maneuver to raise the subject, which will require six votes.
Stressing that he was not alleging impropriety, Roberts said Friday that he wants to know why the San Diego Data Processing Corp. failed to meet with representatives of the seven companies that submitted bids for the contract, relying instead strictly on written material.
“I don’t feel comfortable that they’ve necessarily asked all the questions they have to, that they can do it so simplistically,” Roberts said.
But Mayor Maureen O’Connor, who is vacationing in Europe, is waging a long-distance battle against reviewing the decision by Data Processing Corp., a nonprofit corporation created by the council that in 1986 was given authority to independently handle the telephone contract.
O’Connor’s top aide, Ben Dillingham, issued a memo late Friday afternoon in which O’Connor contends that, “in setting up the San Diego Data Processing Corp., the council established a legally separate entity, and it would be a violation of the independence of the board for the council to insert itself into the contract award process.”
O’Connor asked City Atty. John Witt to rule on whether the council could legally review the decision. If such a move is legal, the mayor said, she would like it delayed until she returns May 22.
According to one City Hall source, competition for the project has become so heated that a losing bidder has threatened to cut back on the company’s charitable donations in San Diego if it does not win a piece of the contract.
Negotiations to Begin
The data-processing corporation’s board of directors agreed Tuesday to begin negotiations for a final contract with Siemens/Telplus, which corporation staffers had ranked ahead of six other bidders, including Pacific Bell and AT&T.;
The contract, which would bring Siemens/Telplus from $12 million to $18 million over the next 10 years, depending on the outcome of detailed negotiations, covers installation of equipment for 6,000 telephones, with the capacity to later add computer and teleconferencing capacity.
Three of the losers--Pacific Bell, AT&T; and Bell South--complained that data-processing staffers did not ask a single question about written bids, which in some cases were hundreds of pages long.
“It’s like hiring a city manager from a pile of resumes without ever interviewing,” said Terry Churchill, area vice president for Pacific Bell. “What’s all the hush-hush? What’s the rush?”
Robert Metzger, executive vice president of the data-processing corporation, said his staff relied solely on extremely detailed written proposals to set up a process that could not be open to accusations of favoritism.
“What we did was try to structure a process that was completely objective, beyond question,” Metzger said.
That posture, Metzger said, was partly motivated by the 1982 Telink scandal, in which there were allegations that contractors had provided San Diego County administrators with cocaine, prostitutes and bribes in an attempt to influence the awarding of a $24.5-million contract for a new telephone system. Several of those involved were eventually convicted, and 10 others had convictions overturned on appeal.
Getting the Best Deal?
Roberts and others believe that the zeal for impartiality may have set up a competition in which the city is not getting the best deal. “I’d like for them to come in. I’d like for them to share with us, prior to entering into a $15-million contract, why they’re so confident that they’ve got everything so under control.”
A consultant hired by the San Diego Convention Center, which would be part of the phone contract, also believes that the process was flawed. In an April 24 memo, Norman York, project team manager of Tel/West, called the procedures “highly irregular for a complex bid situation.”
“Experience has shown that making assumptions for the vendor is hard to defend, could affect the ultimate price or job quality and is a poor choice when the vendor is readily available to supply the correct information,” York wrote.
Roberts also complained that data-processing corporation members refused to give his staff information on cost savings over the city’s existing system, whether the corporation had considered the cost of moving the new telephone system when a new City Hall is built, whether it had discussed the advantages of leasing or buying the system and whether local contractors had been favored as directed by a council policy.
In an interview, Metzger said all those factors were taken into consideration and were used to conclude that Siemens/Telplus is offering the best deal. Although all seven bidders offered roughly the same prices, Siemens/Telplus was given substantially higher marks for project management and technical expertise, according to an analysis of the bids released by the data-processing corporation.
Metzger, who said the city needs to quickly resolve the contract and begin bringing the new system on line in certain departments, said that discussions with the vendors would not have helped his staff make a decision.
“No amount of oral briefings, unless we took a week or two with each vendor, would have really provided any more detail than we had,” he said.