Board Retracts $1-Million IBM Contract : Bids: County supervisors fear the deal may have been improperly weighted to favor the information systems giant. New proposals will be sought after a restructuring.
SANTA ANA — A $1-million computer equipment contract was withdrawn from consideration by the Board of Supervisors on Tuesday after officials feared that the deal may have been improperly weighted to favor information systems giant IBM.
The company was the low bidder on the project. But Supervisor Harriett M. Wieder said competitors “screamed†when they learned that IBM, which had won an earlier contract to install the equipment, planned to more than double the installation costs if a competing firm was awarded the contract to supply equipment.
In its proposal, IBM indicated that it would charge $21,000 to connect its own mainframe system, needed to run the county’s welfare and finance operations. IBM would have charged its competitors $48,000 for installing the same equipment.
Wieder said the difference on those costs effectively gave IBM an “inside track†to secure the low-bidder position as the mainframe supplier.
“It just wasn’t the way to go,†Wieder said, adding that the gap on installation costs was not discovered until the bids were reviewed by the county’s General Services Agency.
“That’s when the other competitors screamed. GSA had no way of knowing earlier,†she said.
An official with Comdisco Inc., the second-lowest bidder on the project, confirmed that the company had lodged a formal protest on the issue with the county but declined further comment.
IBM spokesman Michael Dutton said only that the company “bid very aggressively and intends to bid again†when new proposals are requested. Dutton was not able to address the county’s concerns about installation cost differences.
Supervisor Gaddi H. Vasquez said that while he did not believe there was an attempt by any of the parties involved to “create a questionable scenario,†there were, nonetheless, problems of “perception.â€
“Once I was made aware of these issues, I was very uncomfortable with some elements of the (contract) process,†Vasquez said. “There are better ways to conduct this business.â€
GSA Director R.A. Scott said the bidding process would be reopened and “restructured†but would not exclude IBM or any of the other bidders. Scott said IBM would also remain the county’s choice to install any mainframe selected, noting that it was the only company qualified to do so.
