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L.A. County's Contract Laxity

December 23, 1998

The Los Angeles County Board of Supervisors faced only unpalatable choices this week in dealing with yet another computer services contract gone awry. One option was to use family aid money to bail out the contractor, Unisys, which is installing the county's computer system for tracking welfare cases. Or the board could hold firm and risk having Unisys pull out of the deal, costing even more money and time in the long run.

The supervisors grudgingly agreed to pay Unisys more money. But taxpayers deserve to know why the county is again wearing a dunce cap on a high-tech project.

Unisys won the contract in 1995 to produce the county's new welfare computer system. Its low bid was $86 million, a full $61 million below the next-lowest offer. Eyebrows should have been raised, even though Unisys insisted it could deliver.

By last June, lo and behold, Unisys said that it had significantly underestimated the cost of the project and needed more money, leading eventually to Monday's poor options. Meanwhile, Unisys had also threatened to sue for full payment on another county computer system, a system that--you guessed it--isn't working.

Much of the money for the welfare computers came from state and federal sources. The supervisors said that they felt bound by state and federal standards that call for taking the lowest bid. But that rule isn't hard and fast.

Orange County has its own way of keeping track of such high-tech projects: sending them before the county grand jury for extended and thorough scrutiny.

Last week, the state legislative analyst produced "best practices" standards for state technology projects. Those include: Base buying on best value, not lowest cost; establish measurable objectives for the contract, and pay the contractor "only upon acceptance of tested project deliverables," such as a working computer system. Even three years before these rules were set, the county could and should have followed such common sense. If the L.A. County supervisors embrace these standards, they will be less likely to find themselves in no-win situations in the future.

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