City to Reopen Bids on New Phone Systems

Under pressure from the San Diego City Council, the city’s data processing corporation has agreed to reopen bidding for a lucrative contract to supply a new city-government telecommunications system.

The San Diego Data Processing Corp., a nonprofit corporation given authority by the council in 1986 to select a vendor for the $12-million to $18-million contract, will accept “best and final” offers from the seven firms competing for the pact and will hold oral briefings with all of them. No other companies may enter the bidding, however.

The recommendation to reopen bids has convinced the San Diego Convention Center staff to recommend that the phone contract for the convention center be bid separately, to ensure that phone service is available when the new facility opens in October, according to a memo to the council Friday from Robert Metzger, executive vice president of the data processing corporation.

Plans call for the convention center telecommunications contract to be part of the citywide contract. The convention center’s board will review the situation June 8.

The decision Thursday by the data processing corporation’s board of directors is a blow to Tel Plus Communications, chosen by data processing officials over the six other firms based on highly detailed written bids. The data processing corporation was prepared to begin negotiations with Tel Plus on details of providing 6,300 phones for offices citywide and 800 more for the San Diego Convention Center.

But on May 16, five council members intervened at the 11th hour, led by Councilman Ron Roberts and Councilwoman Abbe Wolfsheimer. They persuaded data processing corporation officials to delay the negotiations and further explain the process by which the bids were compared.

After a private review of the bid process Tuesday, a discussion that included access to the confidential bids and supporting information submitted by all seven companies, Roberts said he is even more convinced that oral briefings must be held with the firms.

“It is very clear to me, and I think to (data processing officials) at this point that there is a flaw in the procedures that they used,” he said.

Roberts said that data processing committees comparing the seven bids put so little emphasis on cost that, “if a company came in and said, ‘we will do this for you for free,’ (the data processing corporation) would not have recommended that we select them based on their criteria.”

Metzger has said that the written bid process was designed to avoid accusations of favoritism to any firm, a posture partly motived by the 1982 Telink scandal, in which there were allegations that contractors provided San Diego County administrators with cocaine, prostitutes and bribes in an attempt to influence the award of a $24.5-million telephone contract.

Fair Competition

Several of those accused were ultimately convicted, but 10 others had their convictions overturned on appeal.

Karen Mattis, district sales manager for Tel Plus, which is owned by Siemens Information Systems, said that Roberts’ claim “certainly doesn’t sound realistic” and contended that her company won a fair competition because its product and plans were superior.

“Of course I’m disappointed,” Mattis said. “It’s really aggravating to me that the process was over, and now we’re opening it up again, for what? Because a couple of vendors were unhappy, because they were sore losers. What happens if they’re unhappy again after this? Will they open it up again?”

Mattis said that Tel Plus so far has not discussed filing a lawsuit over the change of procedures. She said that she believes Tel Plus will be chosen again after further review.

Mayor Maureen O’Connor has so far been the most biggest champion of the existing data processing selection system. During a European vacation that ended Sunday, O’Connor, through her chief of staff, demanded that the council stay out of the selection process.

But Terry Churchill, area vice president for Pacific Bell, which placed second in the competition and complained about how it was run, said Friday, “We pursued it because we just didn’t think the other way was fair.

“I think this is a good step forward. Let’s see what comes out of council.”

If approved by the council, the new procedure will cost the city an undetermined amount of money by delaying acquisition of the phone system about eight weeks. “Temporary arrangements” for telecommunications services to Building Inspection department staffers preparing to move into two renovated floors of the City Operations Building in August will be required at city expense, said Bruce Gorton director of network support for the data processing corporation.

‘Blue Ribbon Committee’

The plan approved by the data processing corporation’s board of directors Thursday calls for creation of a “blue ribbon committee of experts in the field of telecommunications” to listen to daylong oral presentations from each company, and to recommend a final choice.

The five-member panel, to be selected by data processing staffers, would include Gorton and four outside experts from private firms, Gorton said.

The committee also will examine other concerns raised by council members, including whether the new system will be adaptable to the planned relocation of City Hall and whether Siemens USA’s European parent company violates a city council policy by conducting business in South Africa.

Mattis said that Tel Plus, Siemens Information Systems and Siemens USA do not do business in South Africa.