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State kills disputed contracts

The state has canceled two contracts worth $173-million and asked the Florida Department of Law Enforcement to review how two major technology companies won the deals.

Thursday's decision came two months after legislative auditors questioned how BearingPoint of McLean, Va., and Accenture of New York City won the contracts.

"Until we know we have a clean, transparent procurement process that is above reproach, the State Technology Office can't move forward," said Simone Marstiller, Florida's new chief information officer, who inherited the contracts from her predecessor, who now works for BearingPoint.

Marstiller made the decision after facing continued concerns from lawmakers about how the contracts were awarded. The cancellation is effective 90 days from today.

In July, the Legislature's auditor general released a scathing audit that said former state technology chief Kim Bahrami failed to follow state law throughout the writing and awarding of contracts.

Bahrami signed contracts so vague that the state's potential financial exposure couldn't be adequately forecast, the audit found.

The seven-year contracts, awarded in August 2003, included an estimated $126-million to BearingPoint for maintaining and overhauling the state's computer hardware; $46.7-million to Accenture for software maintenance; and another $86.7-million to Accenture to run a computer help desk. Marstiller quietly canceled the latter contract last month.

Marstiller said Thursday that her own review of the project file uncovered some questionable communication before the bid process began, between the State Technology Office and a company that eventually bid on the process. She declined to elaborate.

An FDLE spokeswoman said Thursday the agency's investigation focuses on the relationship between the state office and BearingPoint.

BearingPoint spokesman John Schneidawind declined to comment.

Bahrami could not be reached for comment. She has not commented publicly since abruptly resigning in February. She went to work for BearingPoint in July.

Under state ethics laws, Bahrami would have been barred for two years from working for a vendor on a contract she oversaw while in state government. But BearingPoint officials said last month that her work in their Virginia office does not include the Florida contract.

BearingPoint and Accenture are among the more prominent companies in Tallahassee to have benefited from Gov. Jeb Bush's privatization efforts.

Canceling the contracts is just the latest in a series of problems for the beleaguered state office that Bush created in 1999. His goal was to centralize all state government technology to maximize buying power.

Bush's first appointee was Roy Cales, who helped Bush stay connected to the Internet while on the campaign trail in 1998. But Cales resigned in 2001 after an arrest on charges that years earlier he had forged a bank loan application. He was acquitted of the charges. Bahrami succeeded Cales.

Last week, Senate President-designate Tom Lee, R-Brandon, warned state technology officials he was not impressed by their office.

"The performance of the office that you happen to work out of has been less than stellar, by my observation over recent memory," Lee told Marstiller and her associates as they appeared before a legislative committee.

"I think we probably ought to be looking very closely at all the expenditures coming out of there," he continued, "particularly ones where it looks like the cart gets a little ahead of the horse sometimes. We need to make sure there is a proper check and balance."

Marstiller's decision comes on the heels of other scandals involving private companies that do business with the state.

Earlier this summer, Department of Children and Families Secretary Jerry Regier fired two employees and later resigned after it was discovered they all had enjoyed gifts from lobbyists who have contracts with the agency, including BearingPoint's Tallahassee lobbyist.

And Accenture has come under fire in recent months for its work creating a voter database of "potential felons" so flawed that state officials were forced to scrap it in July after intense public scrutiny.

The U.S. Department of Veterans Affairs, meanwhile, plans to try to recoup some of the nearly $117-million it paid BearingPoint for a trial computer project that failed at Bay Pines VA Medical Center in Tampa.

But Marstiller praised the work of BearingPoint and Accenture for her office. She credited them with saving the state an estimated $2-million in maintaining the state's IBM mainframe system.

The technology office hopes to launch a new bid process for the "MyFlorida Alliance" project as early as Oct. 30. Marstiller said BearingPoint and Accenture "at this point will be welcome to rebid."