Ban on Tech Sales by State Advisors Passes Senate

Prodded by fallout from the state’s questionable $95-million Oracle software licensing contract, the Senate voted Thursday to ban companies from advising the state on computer-related products and then trying to sell the state the same goods.

With a 36-0 vote, the Senate approved a bill by Sen. Debra Bowen (D-Marina del Rey) to close a loophole in state purchasing law. Her bill would end a 19-year-old conflict-of-interest exemption for computer-related goods and services that allows information technology consultants hired by the state to bid to provide products recommended under the consulting contract.

Bowen’s SB 1467 is similar to bills that were vetoed by Govs. Pete Wilson in 1998 and Gray Davis in 1999. Had one of those bills been signed, supporters said, it might have prevented the Oracle contract, which state auditors called one-sided and unnecessary in a scathing report last month.

“You’re literally having the salesman draft your purchase order, and that’s the way it works routinely with high-tech procurement in the state,” said Sen. Steve Peace (D-El Cajon), who carried the earlier, vetoed bills. State contract experts had urged vetoes, arguing that limited competition in the technology industry justified an exemption to the conflict-of-interest law.

Bowen’s bill heads next to the Assembly. Davis has taken no position on it, a spokesman said, but is “looking at it closely.”

The state signed the Oracle agreement without validating the claims of cost savings touted by Logicon, a go-between company that stood to earn $28 million from the deal, which state officials are seeking to rescind. A year before, Logicon was hired by the Department of Information Technology to write an overview of the state’s software licensing options. Although the company never completed the work and was not paid, its apparently conflicting interest in the Oracle contract “sure would have raised a lot more red flags” if legislation closing the loophole had been in place, Bowen said.

Also on Thursday, the governor named John Clark Kelso as interim director of the Department of Information Technology. The governor suspended department Director Elias Cortez earlier this month as lawmakers began investigating the Oracle contract.

Kelso, 42, directs the Institute for Legislative Practice at the McGeorge School of Law in Sacramento. He briefly served as state insurance commissioner after Chuck Quackenbush resigned in July 2000.