An administrative law judge has ruled--and the state parks department has agreed--that the department abused its discretion when it awarded a lucrative campground and Hearst Castle reservations contract to Mistix, a firm that had no track record and was the highest bidder.
Parks and Recreation Department officials said Monday that they would rebid the five-year contract, awarded a year ago. They said, however, that it would take two years to award a new contract.
Meanwhile, department officials said, Mistix will continue to operate the system, which accounts for 1 million reservations a year and brings in about one-sixth of the department's revenues.
Mistix was selected in late 1985 over two more established computer ticketing companies--Ticketron and Ticketmaster. Ticketron, which had held the reservations contract for many years, filed an official protest that resulted in an administrative hearing.
Administrative Law Judge Muriel Evens, who presided at the hearing, criticized parks department officials for a shoddy investigation of competing firms to determine which was the "best responsible bidder," as required by law.
"The people of California require an appropriate evaluation before the award of a five-year, $15-million contract," she wrote in a proposed decision sent to the department a month ago and made public Monday. "The people did not get one."
William S. Briner, director of parks and recreation, adopted much of her strong language in ordering Monday that the year-old contract be rebid.
Briner said, however, that it would take the department nearly two years to award a new contract and even longer if Mistix files a legal challenge.
Asked why it would take so long, the department's staff counsel, F. C. Buchter, responded that it normally takes one year, but "this time we have to do it right."
Meanwhile, Briner said, Mistix, which has since been acquired by publicly held G-TECH, will continue to hold the contract "for the best interests of the state." G-TECH provides computer services for the state lottery. Neither Mistix nor G-TECH officials responded to requests for comment Monday.
Department officials have said that Mistix got off to a shaky start but has since provided good service.
Briner said in his order that the two-year process of awarding a new contract would be "stayed" in the event of "any litigation."
When asked to explain that provision, Buchter said: "If any one of the people . . . sue . . . it's going to put the whole matter into abeyance, because that's the first thing anybody would ask for in a suit--to hold things up."
In her findings of fact, Evens said that an evaluation committee composed of seven parks department officials did "no real check" on Mistix' financial statement and scored the bids with "no logical basis."
Mistix had included much false information on its financial statement, she said, including its list of shareholders, revenue from sales, accounts receivable and gross profit.
"Had the committee properly inquired, or even asked for verification" she said, "it would have learned that Mistix . . . was not financially able to complete the contract."
"Had they checked (references), they should have learned that none of the references listed was a client of Mistix, as Mistix had no clients."
She added that, at the time of the contract award, Mistix also had no software.
Nonetheless, she noted, the evaluators gave Mistix more points than Ticketron or Ticketmaster for "references and evidence of previous successful performance of similar projects."
Ticketron underbid Mistix by about $2 million. Hearing testimony made it clear, however, that some parks officials were disappointed in Ticketron, which had held the contract for most of the last 16 years. They said they believed that Ticketron, which has many clients and handles reservations for many sports events and rock music concerts, was not providing good service to the department.
She also said that two members of the evaluation committee, Clark Woy, manager of the reservations system, and John R. Vogelsang, head of the department's accounting section, did not share all the significant information they had about Mistix with their fellow evaluators.
This "censored" information included the result of a visit by Woy and Vogelsang to Mistix headquarters in La Jolla, where they saw a small office, no mainframe computer and no software, Evens said.
She also said that Vogelsang was aware, but did not share the information, that a Mistix principal, Lee DeLay, had been president of another firm that had defaulted on the same parks department contract nine years before.
Evens said she noted that at the time of the contract award, "there was no deal with G-TECH (to take over Mistix)." Briner disputed that in his decision. He said that shortly before he adopted the evaluation committee's recommendation to award the contract to Mistix, G-TECH "supplied a letter to Vogelsang guaranteeing the financial backing of Mistix."
At any rate, Briner said in his order, "all issues concerning financial capability, involvement of Lee DeLay and previous history of client service (have) become moot over the past year of successful performance (by Mistix)."