Supervisors OK $20 Million Extra for Firm

The Los Angeles County Board of Supervisors agreed Monday to pay Unisys $20 million to cover some of the losses the company has incurred in building the county welfare department’s new computer.

The firm initially sought $25 million to cover its cost overrun, but agreed to lower the price because, its executive vice president said, it wanted to show good faith in its dealings with the county.

“We need to have happy clients,” Lawrence Russell told the board, “and we don’t need to have meetings like this.”

Supervisors were angry at Unisys for asking the county not only to cover its losses with the $25 million, but to fund another $27-million increase in the system because of changes in welfare law. The combined increase represented a 60% change in the contract that Unisys was awarded when work began in 1995. Without more money, the computer giant was poised to quit the project.

The increase touched a nerve in board chambers still haunted by ghosts of failed computer systems past, as supervisors peppered Unisys with questions about whether the system would function--whatever its cost.

“This board sees this every two weeks,” Supervisor Gloria Molina said, before proposing that the county maintain a database to track vendor performance on computer systems. “This is just an escalating area, and we’re going to have to beef up our [monitoring] of it,” she said later.

Supervisors also criticized county administrators for not driving a harder bargain and not telling them about the problems for months.

“I don’t like to be taken for a fool,” Supervisor Zev Yaroslavsky told an array of county staff members, hired attorneys and Unisys executives. “I don’t like to be manipulated by staff.”

Russell and county bureaucrats working with Unisys said that the project is coming along well and that the system is expected to work.

Russell and the supervisors also agreed to let an independent third party review Unisys’ performance on another controversial computer system, a $6-million project for the county’s health department that is not running.

The specter of litigation loomed over that project and briefly threatened to derail the welfare office contract until Russell and the supervisors agreed on the review.

Before the money goes to Unisys, the project has to be approved by state and federal agencies that are largely funding the project.

Unisys officials, noting that they have worked for months essentially without a contract, said they did not deserve some of the attacks directed at them by the lawmakers.

“Some of the rhetoric that surrounded this controversy was really not right,” Russell said. “We were here to serve the county.”

After his testimony, Russell said Unisys is still losing money on the project, even after the extra funding. “We could have been out of here a year ago and could have been better off,” he said. “I think we acted in a statesmanlike manner.”