State wins phone case, but is faulted in process

February 04, 1994|By Michael Dresser | Michael Dresser,Sun Staff Writer

The state Department of General Services won its case before the Maryland State Board of Contract Appeals, and attorney John Thornton was outraged.

"It's a ridiculous decision," he fumed yesterday. "It's wrong on the law and wrong on the facts."

Sore loser? No, Mr. Thornton was the winner.

In a ruling that puzzled both sides, the semi-judicial appeals board on Wednesday upheld the General Services Department's decision to go back to square one in the bidding for a controversial state telephone contract worth an estimated $20 million. At the same time, the board essentially concluded that the department had made a hash of the job.

The department's bittersweet victory came in a case brought by Fujitsu Business Communications Systems over the state's handling of a contract for private branch exchange (PBX) equipment and services to replace the state government's aging phone system.

Fujitsu had asked the panel to overturn the department's decision to start from scratch after an earlier appeals board decision disqualified the original winner of the contract in a September ruling.

While the final decision went the department's way, the board's decision was hardly a ringing endorsement of the state's procurement practices.

The appeals board rejected most of the reasons the General Service Department cited for canceling the bidding and upheld its action primarily on the grounds that the scoring record was so muddled that it was impossible to determine which company submitted the best bid.

The decision pleased neither side, but it was the victors who were more outraged. "I'm sick of winning before the board for all the wrong reasons," said Mr. Thornton, assistant attorney general in the General Services Department.

"You just don't know the trouble the Board of Contract Appeals has caused the state of Maryland."

Michael Gisriel, who represented Fujitsu, was more confused than angry. The board essentially upheld most of his client's contentions, then ruled for the other side. "I find it legally )R illogical," he said. "We won but we lost."

Mr. Gisriel took heart in the apparent contradictions in the ruling.

"The board's opinion virtually invites appeal," he said, adding that he had strongly recommended that Fujitsu take the matter to the Circuit Court.

Mr. Gisriel said the board set an impossibly high standard of proof when it said it could not award the contract to Fujitsu without "mathematical or absolute certainty" that its was the winning bid. A court appeal could further delay deployment of the new phone systems, said General Services spokesman Dave Humphrey.

One of the issues on which the appeals board found in favor of Fujitsu was the matter of price. The board specifically rejected the department's contention that the Fujitsu bid was too high, finding that the department made an error of more than $6 million in valuing the Fujitsu bid at $28 million.

In spite of that finding, General Services Secretary Martin W. Walsh Jr. reiterated the department's $28 million estimate in a news release announcing the decision yesterday.

Mr. Walsh's statement, which did not note the board's rejection of that estimate, said that "we are generally satisfied with the board's decision."

Mr. Thornton was far from satisfied. "The board's wrong," he said.

He specifically disputed the decision's assertion that the state did not rebut the analysis presented by Vincent Rafferty, a telecommunications expert who testified for Fujitsu.

"Mr. Rafferty openly lied to the Board of Contract Appeals," Mr. Thornton said. ". . . He was presenting doctored figures and he knew it."

Mr. Rafferty, a consultant with Aries Group-MPSG in Gaithersburg, denied that assertion.

"To say the least, that upsets me," he said. "I tried to be honest in my dealings with them. I don't know why they're calling me a liar now."

The PBX contract has been winding a convoluted path through the Maryland government bureaucracy since January 1993, when the General Services Department issued a request for proposals (RFP) from bidders. That May, the state awarded the business to Bell Atlantic Meridian Systems, which is 80 percent owned by Northern Telecom Ltd. of Canada.

Fujitsu appealed to the contract appeals board, which handed down a ruling in September overturning the Bell Atlantic Meridian award and telling the department to choose a winner from among the remaining vendors.

In a strongly worded opinion, the board said the department's scores of the technical merit of the bids "have no rational basis and are arbitrary and capricious."

It criticized the department for scoring bids on such criteria as addresses, phone numbers and federal identification numbers.

In October, the General Services Department announced that instead of picking a top bidder from among the remaining contenders it would throw out all of the bids on the table and issue a new RFP -- a move that would give Bell Atlantic Meridian another shot at the contract.

Fujitsu appealed again to the board, charging that the department took that action to avoid awarding the contract to it.

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