By Bill Britt
Alabama Political Reporter
MONTGOMERY—The $47 million STARRS accounting software system was signed under a no-bid contract with CGI. Acting Finance Director, Bill Newton, claims the contract was simply an up-grade of the million-dollar-a-year maintenance contract the State has held with the company for over two decades.
This is the reason Newton has given for the no-bid contract that he convinced Gov. Robert Bentley to sign.
During the Gov. Bob Riley administration, the SMART Business Systems Steering committee was selected to carry out the purchase and implementation of a statewide ERP solution. ERP is short for, Enterprise Resource Planning.
“Enterprise Resource Planning (ERP) is a business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions,” according to Webopedia.
The STAARS system, supplied by CGI is the software solution Newton was determined to purchase.
This week, alreporter.com received a 2008 memo outlining the terms under which the committee was directed to purchase the ERP solution. In the memo, under the auspices of then Gov. Bob Riley and Finance Director Jim Main, any purchase of such a system would need to be contracted through an RFP.
“A request for proposal (RFP) is a solicitation, often made through a bidding process, by an agency or company interested in procurement of a commodity, service or valuable asset, to potential suppliers to submit business proposals.”
The memo explained, “The next phase of the SMART Business Systems has been dictated by a legal interpretation of a major procurement issue, which was brought to the attention of the Steering Committee during the work on the RFP. The Steering Committee has been advised by legal counsel, that the law in Alabama requires the use of a competitive bid process for the procurement of software when acquiring an “off-the-shelf” product. Since the stated goal for the SMART Business Systems ERP project is the use of a complete off-the-shelf solution, it has become apparent to the Steering Committee that the project must change our approach to accommodate the more complex development of very specific and very detailed specifications before the release of an Invitation To Bid (ITB).”
An Open Records Request for minutes from the SMART Business Systems Steering committee was requested by this publication over a month ago. Finance has slow-walked the process in what we can only interpret as part of an overall cover-up of the systems purchase and implementation.
The 2008 memo also states, “the law in Alabama requires the use of a competitive bid process for the procurement of software when acquiring an “off-the-shelf” product.”
This is also how such a purchase must be handled according to a 2002 Attorney General’s Opinion issued by then AG Bill Pryor, who found that software updates have to be bid unless customized.”
Newton recently admitted to a joint budget committee of the House and Senate that the CGI solution was an “off-the-shelf” product, which led to the failed implementation, which left the State in arrears to thousands of vendors.
Many of those vendors are entitled to charge interest for the late payments. At the joint committee Newton said, the State was not required to pay interest until after 90 days. However, State code 41-16-3 requires payment of Interest to State vendors after 30 days, not the 90 that Newton said.
Newton has stated that STAARS was simply an upgrade. This also raises the question as to why Finance continued to pay CGI $1 Million a year for ten years, without renewing the contract or presenting it to the Contract Review Committee?
Sen. Arthur Orr (R-Decatur) recently stated that contract renewals must come before the Contract Review Committee.
Newton and others have threatened State workers who dare speak with the media.
Newton’s resistance to make public records available is disturbing, and could prove that STAARS and Cisco telephones are just the tip of a black iceberg floating in the Department he controls.