Oracle deal may break California

California’s Department of Information Technology (DOIT) may be eliminated due to its role in signing a massive exclusive contract to buy database software from Oracle Corp.

The DOIT, formed in 1995, has oversight responsibility for the state of California’s IT planning and development. Along with the Department of General Services, the DOIT was instrumental in securing a six-year, US$120 million enterprise licensing agreement with Oracle, which brought a firestorm of criticism from lawmakers over possible violations of single sourcing law. California state auditor Elaine M. Howle called the agreement for Oracle8i databases “a largely one-sided contract” that could cost more money than standard software licenses would have.

This week, one of the department’s defenders, San Jose Assemblyman Manny Diaz, decided not to reauthorize funding for the DOIT.

“As far as DOIT is concerned, it ceases to exist on July 1,” said a Diaz spokeswoman, who confirmed that Diaz had amended a previous bill to continue the DOIT. Diaz’ original legislation would have extended the DOIT’s sunset date through December 2003, while allowing the department to help set statewide policies and standards for procurement. According to the San Jose Mercury News, Diaz said his decision to amend the bill was due to the Oracle deal.

The DOIT has 69 employees, mostly IT professionals, said a department spokesman. The DOIT maintains that it still has a purpose in helping the state save money in IT procurement, he said.

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