NewsMax.com Wires
Wednesday, July 24, 2002

Attorney General Bill Lockyer announced that the enterprise licensing agreement had been rescinded with no further financial obligations for the taxpayers after negotiations among officials from the state, Oracle and Northrop Grumman, the parent company of Logicon, the company that brokered the deal.

"Oracle and Northrop Grumman were under no obligation to help California by rescinding this contract, and we appreciate their cooperation," Lockyer said in a statement.

The six-year agreement was signed in May 2001 with the purported aim of saving state taxpayers as much as $100 million over 10 years by licensing database management software in bulk rather than purchasing the licenses as needed.

It backfired when the state auditor's office released a report April 17 blasting the agreement as a one-sided deal that had resulted in the state buying far more licenses than it needed at a cost to taxpayers of about $41 million above what it would have cost to purchase the licenses on the open market.

Gray Davis' Corporate Corruption

The report's fallout landed squarely on Democrat Gov. Gray Davis, who is up for re-election in November. Republican candidate Bill Simon made the Oracle deal and other no-bid contracts a major issue in his campaign attacks in what he portrayed as cronyism between Davis and campaign contributors such as Oracle.

The deal had not been opened to competitive bidding and was championed by high-level officials in the Davis administration. As state lawmakers convened hearings, the head of the Department of General Services resigned. The head of the director of the state's information technology department was suspended and then grilled during a May 22 hearing before the Joint Legislative Audit Committee.

Neither Simon nor Davis had any immediate comment on the cancellation of the deal.

The auditor's report also concluded that Logicon and Oracle had used high-pressure tactics to push the agreement past less-sophisticated state negotiators.

Oracle denied any wrongdoing but said in May it was willing to cancel the agreement. State officials Tuesday told reporters that Oracle would continue to be considered for state business.

"We will adopt the best practices in information technology to serve the people of California," said Clothilde Hewlett, interim director of the Department of General Services. "Toward that end, we look forward to working with Oracle and Northrop Grumman to meet California's future technology needs."

Copyright 2002 by United Press International.

All rights reserved.

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