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How STAARS Fell on Alabama

Susan Britt

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By Bill Britt and Susan Britt
Alabama Political Reporter

The revelation first reported by the Alabama Political Reporter, that a $47-million-dollar software package known as STAARS caused a meltdown in the State’s ability to pay its bills in a timely fashion, or properly process inter-agency payments, leaving hundreds of millions of dollars in a software limbo, has raised questions about how the contract was awarded.

Acting State Finance Director Bill Newton, and his Chief Legal counsel, Richard Cater, have stated STAARS, as supplied by the Canadian software giant, CGI.com, is simply an upgrade of software purchased in 1982. Therefore, they did not have to put it out for bid.

Cater compared STAARS to Microsoft’s operating system upgrade from Windows 7 to Windows 8.

The original 1982 contract, signed by then Gov. Fob James, was for a Local Government Financial System (LGFS) known as “The Package” provided by American Management Systems Incorporated (AMS). AMS was acquired by CGI in 2004.

SEE 1982 CONTRACT

The COBOL-based software license contract was for 15 years, and would expire in 1997, if not renewed. The maintenance agreement was for 12 months with a yearly renewal clause. The contract table of contents shows the State of Alabama signed renewal amendments to the original 1982 maintenance contract until 1994. State records show no amendments were signed for the next 17 years.

SEE TABLE OF CONTENTS

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In November, 2012, Amendment 11 was signed by Assistant Finance Director Rex McDowell “extending” the license and maintenance agreement for 15 years, until September 30, 2027.
In the State’s presentation of the STAARS program they say, the software (LGFS), “is no longer maintained or supported by the vendor…[CGI.com].

Amendment 12 signed on January 13, 2013, by then Finance Director Marquita Davis, altered the original language of the 1982 license and maintenance agreement, to allow the State to purchase a suite of CGI software, as well as bundled software solutions from other companies.

Fifteen days later, Gov. Robert Bentley signed the Statement of Work #1(SOW1) that outlined the implementation of STAARS at the State’s Department of Medicaid. No amendment was made to the formal contract for this portion.

Amendment 13 accompanied by Statement of Work #2 was signed by Bentley on September 2013, authorizing the software implementation agency wide.

The original 1982 contract was awarded to AMS/CGI, under a Invitation To Bid (ITB).

Gov. Bob Riley’s legal advisors instructed the committee that eventually approved the STAARS program, that it must follow the same ITB procedures.

During the Gov. 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.

A 2008 memo from then State Comptroller Robert L. Childree, Chair of the SMART Business Systems Committee under Gov. Riley, and Finance Director Jim Main, outlined the terms under which the committee was directed to purchase the ERP solution: “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).”

http://www.alreporter.com/2008-memo-states-staars-must-be-bid/

The goal of the committee was to purchase a “complete off-the-shelf solution,” which Newton and Carter have confirmed, STAARS is an off-the-shelf program.

According to State statute, purchases subject to competitive bidding must be made through the release of an Invitation to Bid (ITB) and the contract or purchase order awarded to the lowest responsible bidder meeting all of the mandatory specifications stated in the ITB.

Cater said the Department of Finance discovered it could purchase STAARS under the existing 1982 contract stating, if it were put out for bid, it would have cost the State over a hundred million dollars.

According to the STAARS presentation documentation, the State purchased CGI Advantage a registered trade-mark product of CGI.com.

A STAARS Presentation to Alabama Association of Regulatory Agencies in September 2014, explains why the State was, “implementing a new system,” stating “The State’s current mainframe Central Accounting System was implemented over 25 years ago, [the] Mainframe software platform is no longer maintained or supported by the vendor…[CGI.com]. [The] new system replaces state agency systems with one integrated state of the art [sic] software package.”

The Department of Finance claims CGI Advantage is an upgrade signed under a continuing maintenance contract from 1982.

The contract executed in 1982 shows yearly signed “amendments” until 1994. Newton and Cater have stated this was a continuing “maintenance” contract.

In 1994, the signing of the contract’s renewal abruptly ended.

The next amendment was signed 17 years later, by Assistant Finance Director Rex McDowell in November 2012, two months before the State signed an agreement for $1.6 million to implement a STAARS’ pilot program at the State offices of Medicaid.

None of these contracts were brought before the Joint-House Contract Review Committee.

A 2002, Attorney General’s Opinion issued by then AG Bill Pryor found, that software updates have to be bid unless it is custom software and must come before contract review.

“This section expressly provides that any contract, including a contract such as the one being discussed here, which is made without its submission to the Committee, ‘shall be void ab initio,”’ Attorney General Bill Pryor Opinion, December 10, 2002.

www.alreporter.com/questions-arise-on-no-bid-software-contract/

Newton and Cater have repeatedly stated STAARS is not custom software, this is also reflected in STAARS documentation.

The amendment to the contract in 1994 was not given a number as the others, it should have been labeled Amendment 10. The next Amendment signed by McDowell in 2012, is labeled Amendment 11.

Amendment 12 was signed by then Finance Director Marquita Davis on January 15, 2013.  This Amendment alters the language in the maintenance agreement to allow the State to contract to purchase software.

The next Amendment 13, signed by Gov. Robert Bentley on September 30, 2013, outlining the statement of work and authorizing the implementation of STAARS agency-wide.

The public policy in Alabama as expressed in its Constitution and statutes regarding the expenditure of public funds for goods and services is that everything must be purchased through a competitive bidding process unless expressly exempted by law.

This policy arises from the Constitution in Title 41, Chapter 16, Article II, Code of Alabama. The purpose is not to get the lowest possible price, but to have an open and competitive process that allows any qualified vendor to compete for the business; and, to fight fraud, corruption and political favoritism.

If it were found the STAARS’ contract required a competitive bid, then under Section 41-16-21(c), the contract would be void.

“Void” means there is not and never has been legal authority for the State Comptroller to issue a State warrant to pay for goods or services under such a contract. In such instances, the funds should be recoverable by the Attorney General.

Everyone doing business with the State is presumed to know the laws governing purchasing.

Statements made by Newton and Cater, along with documentation on STAARS, and the Amendments, when viewed along side State statutes governing purchasing such software, presents a trail of yet unanswered questions. Primarily, was the contract entered into in violation of the competitive bidding law, Section 41-16-20, et seq., Code of Alabama 1975; or was it purchased under an exception to that law?

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Opinion | Dodge the Economic Impact Payment card fees

Joey Kennedy

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My wife received her $1,200 stimulus payment as a direct deposit several weeks ago. I did not get one, even though we file a joint income tax return, she makes more money than I, and our money is deposited into the same bank account.

I just figured there was some kind of mix-up. That’s fine; mostly I’m patient when I’m getting “free” money. I’m not teaching this summer, so the money will come in handy when it comes.

Then this week, a lawyer friend and his wife received their stimulus money on a prepaid debit card. Luckily, my lawyer friend is a lawyer. He always reads the fine print.

More than likely, I would have thrown the fine print part of the stimulus in the trash, and maybe the debit card, too, because the whole thing looks like some sort of scam. And my friend says that in some ways, it is.

About 4 million of the debit cards were sent out by “Money Network Cardholder Services,” with a return address in Omaha, Neb. They are issued by MetaBank, N.A. There is no indication on the envelope that this is indeed the stimulus money approved by Congress. There is a flier inside that says “Enclosed is your Economic Impact Payment Card.” According to reports, the debit cards have been tossed into the garbage by people who think they are some elaborate scam or a solicitation for one of those high-interest credit cards.

They are valid, and your money is loaded onto them for you to spend like any Visa card. Except there are some catches, and this is what my friend is miffed about. He believes unsophisticated folks (that could be me) and marginalized people who receive the cards will succumb to the various fees that an unaware card user can incur.

Most services have no cost. Buy what you want, call for a balance inquiry, transfer the funds to your personal bank account, and use in-network ATMs that carry the AllPoint brand and you won’t be charged.

However, there are fees for using out-of-network, domestic ATMs ($2 after the first withdrawal), $3 for ATM withdrawals in another country, even getting a balance from your ATM, either in-network, out-of-network, domestic and international (25 cents a pop).

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If your card is lost or stolen, you’ll pay for that as well. It’ll cost $7.50 for a new card, and if you want it expedited, that’ll be $17. If I lose my bank’s debit card, or if the card is stolen (both of which have happened to me), my bank replaces the card for free in about five days. If you lose your “economic impact payment card,” it could cost you $24.50 to have it replaced in a timely manner.

And here’s where you can really run up charges: If you use a bank teller for a cash withdrawal on the card, there’s no charge for the first withdrawal, but $5 for subsequent withdrawals using a teller.

If only a small percentage of users end up paying fees because they used the wrong ATM or prefer to get their cash from a human teller, that could add up to millions of dollars for somebody up the line, and that somebody is not going to be you or me.

I’m not complaining. I’m just urging caution if you’re one of the millions of people who received one of these debit cards. Be aware they are coming and don’t fall into the fee-trap that comes with them.

I’m no financial wiz – my family and friends can attest to that – but if I get one of those debit cards, I’m just going to transfer the whole amount into our checking account. If you don’t have a bank account, and many people don’t, I would just cash it out then cut up the card.

But be aware these cards are going out, and if you’re waiting on your stimulus check, you might get a debit card instead. Don’t throw it away. Buy something. It’s what they want you to do.

Joey Kennedy, a Pulitzer Prize winner, writes a column each week for Alabama Political Reporter. Email: [email protected]

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Governor awards grants for bulletproof vests

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Gov. Kay Ivey has awarded grants totaling $46,960 to help state law enforcement agencies and the University of Alabama Police Department equip officers with new bulletproof vests. 

“Making sure our state’s law enforcement officers have updated protective equipment is vital to increasing officer safety,” Gov. Ivey said. “I am pleased to assist these agencies in their efforts to provide up-to-date models of protective vests.”

The Alabama Law Enforcement Agency is using $27,783 to purchase new bulletproof vests for state troopers across Alabama.

Grant funds of $12,490 will enable the Alabama Department of Corrections to purchase bulletproof vests for officers in the department’s K-9 Unit.

The University of Alabama is using a $6,687 grant to purchase new bulletproof vests for university police.

The Alabama Department of Economic and Community Affairs is administering the grants from funds made available by the U.S. Department of Justice. “ADECA joins Gov. Ivey in support of our state’s police and corrections officers,” ADECA Director Kenneth Boswell said. “These grants will assist these three groups in their efforts to make the jobs of our law enforcement officers safer.”

ADECA manages a wide range of programs that support law enforcement, economic development, infrastructure upgrades, recreation, energy conservation, water resources management and career development.

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National

100+ clergy call on governor to take action on coronavirus effects in underserved communities

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Clergy with Faith in Action Alabama (FIAA), a federation of Faith in Action, are calling on Alabama Governor Kay Ivey to address the racial inequities in Alabama highlighted by the COVID-19 pandemic, in a public petition that was sent to her office today.

“I am honored to join with more than 100 clergy across race and faith lines throughout the state to impress upon our Gov. Ivey to provide needed leadership to save the lives of our most marginalized,” said Dr. A.B. Sutton, Jr., pastor of Living Stones Temple in Fultondale and the chairman of Faith in Action Alabama’s board of directors. The future of our state depends on it.”

Among the demands in the letter, which has been signed by over 100 clergy, FIAA is calling on Gov. Ivey to commit to greater access to testing in African American and rural communities; to increase emergency resources to food banks, nonprofits and churches so that they can support individuals suffering from the economic effects of the coronavirus; and to support Medicaid expansion so that underinsured and uninsured Alabamians can gain access to affordable quality health care.

The petition comes three weeks after FIAA faith leaders met with Gov. Ivey, Dr. Scott Harris, director of the Alabama Department of Public Health and Gov. Ivey’s chief of staff Jo Bonner; and several weeks after an op-ed published on AL.comdemanded her immediate attention to this issue. Nearly half of the state’s COVID-19 deaths are African Americans, and layoffs from the coronavirus are more likely to happen in black communities.

Just last week, FIAA visited the Jefferson County Jail to distribute masks and hand sanitizer to incarcerated individuals through the LIVE FREE Masks for the People campaign. Inmates across the country have been unable to adequately distance themselves from potential virus carriers and are at a much higher risk for contracting it due to such close confinement.

“As faith leaders, we know that taking action on the issue of systemic racism is an essential way to give praise, honor, and glory to the God of Liberation,” said Dr. Sutton. “James 2:26 says that ‘Faith without works is dead.’ we are putting our faith into action. There is no clear sign as to when the pandemic will be truly be curbed. We cannot continue to act in ignorance when our people are dying.  We need Gov. Ivey to provide bold moral leadership to respond to this grave reality.”

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Economy

Ag commissioner encouraged by Trump order to DOJ to investigate packers for cattle market manipulation

Brandon Moseley

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Alabama Department of Agriculture and Industries Commissioner Rick Pate (R) thanked President Donald J. Trump (R) for asking the Department of Justice to investigate the Big Four meatpackers for possible market manipulation of the price that farmers and ranchers get for their beef cattle.

“I want to thank President Trump for asking the U.S. Department of Justice (DOJ) to expand its investigation into allegations that large U.S. meat packing companies manipulated beef prices farmers received for their cattle at market. USDA has been investigating meatpacker pricing activity since last fall, after live cattle prices plummeted following the Holcomb, Kansas, meat plant fire,” Pate said. “On April 6th, I sent a letter to U.S. Senators Richard Shelby and Doug Jones requesting they join fellow U.S. senators calling on DOJ to investigate meat packing companies’ influence on the cattle market.”

U.S. Senator Doug Jones (D-Alabama) was part of a bipartisan group of 19 Senators who sent a letter to the DOJ urging the AG William Barr and the Department of Justice to investigate possible unfair manipulation of the live cattle markets to fix prices in favor of the packers and against farmers and ranchers.

Jones calls for investigation of potential price fixing by meatpackers

“Cattlemen across America seriously question the ability for their children to take over what are frequently multi-generational, family-owned operations that have served as the engines for their communities and our country’s food supply,” Jones and the Senators wrote. “The precarious market situation for feeders and producers could lead to a widespread collapse of this entire industry, making it susceptible to the forces of vertical integration, which may beset the industry far more quickly than once anticipated. It is critical for the DOJ to act expediently to investigate these concerning circumstances and evaluate potential competitive harms.”

“Four meat packing companies in the U.S. control more than 80 percent of the beef supply and there continues to be a tremendous gap between the cash cattle price farmers receive and the price consumers pay at the store,” Commissioner Pate wrote. “Since the coronavirus outbreak, boxed beef prices have more than doubled, while live cattle prices have dropped about 20 percent.”

Pate is optimistic that cattle farmers will benefit from the DOJ investigation.

“I am encouraged that the investigation seems to be moving forward,” Pate said. “It’s important that cattle farmers who work hard to produce the beef we all enjoy receive a fair price for their cattle.”

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The Senators were joined in urging for a DOJ investigation by 11 State Attorney Generals.

Missouri Governor Mike Parson (R) said, “As a third-generation cattleman myself, I understand the stress many in the cattle business have faced for years. Cattlemen and cattlewomen across the United States are simply asking for transparency and accountability from our meatpackers in the beef business. I applaud Attorney General Eric Schmitt for showing leadership on this issue. It is important our farmers and ranchers understand that Missouri supports them.”

The Big Four meatpackers are: Tyson Foods, Cargill/Excel, JBS Swift, and National Beef.

R-CALF USA (Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America), a ranchers’ group, filed suit against the Big Four last year alleging illegal market manipulation and monopolistic behavior. R-CALF is urging Congress to bust up the large food processing companies.

Mike Callicrate is one of the co-founders of R-CALF USA and is a farmer-rancher and entrepreneur who owns a boxed beef company in Colorado Springs.

“National security is impossible without food security,” Callicrate told the Alabama Political Reporter. “The security of the State is impossible without food security. Globalization and multinational corporate control of our food systems has left us unable to feed ourselves.”

R-CALF USA believes that the Southeast region should have its own locally owned packing industry rather than being dependent on giant meatpackers located hundreds or even thousands of miles away owned by multi-national corporations.

“Job one should be for Alabama to build local/regional food infrastructure that connects Alabama farmers directly to Alabama consumers,” Callicrate told APR. “This will eventually eliminate the industrial model that is exploiting Alabama citizens and mining the State’s valuable resources. We must make future efforts bomb-proof . . . with a new commitment to antitrust law enforcement, and through support of our food dollars.”

Bill Bullard is the CEO of R-CALF USA.

“Covid19 has magnified a problem that has plagued the industry for years,” Bullard told APR. “We can not go back to where we came from. Restructuring is a necessity! “

COVID-19 exposed the danger of reliance on increasing larger and larger meatpacking plants that slaughter thousands of cattle each day with thousands of workers, many of them immigrants, working literally shoulder to shoulder disassembling animals often at breakneck speeds.

Ranchers group supports president’s order to keep meatpackers operating

Sunday afternoon, the Alabama Political Reporter interviewed Callahan Parrish, a 4th generation Cattle Farmer. Callahan also owns the Cullman Stockyard and is emerging as an Industry Advocate.

“The pandemic has unmasked many fundamental problems associated with the current beef production model. Industry infrastructure, competitive market access for our producers and food security issues top this list,” stated Parrish.

“The skeletonization of the downstream segments of our industry is the result of the packers’ efforts to vertically integrate the cattle industry as they have already accomplished in the hog and poultry industries,” Bullard said. “In a very short time, we’ve lost hundreds of thousands of cattle producers, tens of thousands of farmer-feeders (smaller feedlots), and hundreds of packers, not to mention the loss of local livestock auction yards.”

70 percent of the cattle processed by the big meatpackers is contracted in advance. Prices are determined in the cash or spot market. By hedging against the cash market in livestock auctions the packers are more easily able to manipulate that cash market R-CALF USA contends.

“Without robust competition, the hollowing out of our rural communities will continue,” Bullard said. “It is time we reversed the negative trajectory of our industry by rebuilding our industry’s competitive marketing channels. It is time for Alabama to take a lead in infrastructure overall.”

There are impediments to siting a new regional meatpacker in Alabama. Since John Morrell closed its packing plant in Montgomery in 1992 thousands of Alabama farms and ranches have gone out of business and the state has far fewer cattle than it did a generation ago. Most of the remaining farms and ranches in the state produce 450 to 650 pound feeder calves, not the 1100 to 1500 finished or “fat” cattle that the industry butchers. Order buyers purchase southern calves and ship them out west to Texas, Missouri, or the plains states for growing out and finishing.

That would need to change to support a meatpacker here. While an increasing segment prefers grass finished cattle, most American cattle since the 1950s are finished in feedlots on grain. In 1915 Alabama had 4.5 million crop acres in cotton alone. Today all the crops acres combined in the state are less than 1.5 million acres. Some industry experts say that it is easier to export Alabama calves to the grain than import western gran to Alabama cattle; however Alabama’s poultry farmers grow over a billion chickens a year. Most of the 150 million bushels of corn and 63 million bushels of soybean meal that the chickens eat is imported from out of state. There is also enormous potential for grass finishing in Alabama given the moderate winters and plenty of rainfall.

“In the midst of hardship, Alabama’s Cattle Producers and stakeholders are talking solutions . . . and that is real progress,“ Parrish stated.

(Original writing and research by Montgomery area writer Amy McGhee contributed to this report. McGhee’s parents own and operate an Angus beef cattle farm in Tennessee.)

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