Senator wants federal contract cancelled

U.S. Senator Chuck Grassley has called for the U.S. government to cancel an ongoing purchasing contract with Sun Microsystems Inc., but the company says Grassley’s request is based on bad information.

Grassley, an Iowa Republican, has repeatedly criticized Sun for allegedly overcharging government agencies while on a government-wide purchasing schedule at the U.S. General Services Administration (GSA) called a multiple award contract. The GSA’s inspector general has accused Sun of overcharging government agencies by more than US$25 million in contracts dating back to June 1997.

Grassley, in a letter to the GSA last Friday, asked the agency to cancel Sun’s contract. He accused the company of not complying with information requests from the GSA’s contracting officer and inspector general. The information was necessary for an audit requested by Grassley, the senator said.

“I do not understand why Sun would refuse to cooperate fully with this audit,” Grassley wrote to GSA Administrator Lurita Doan. “Why is Sun apparently afraid to open its books for inspection? It makes me wonder: Does Sun have something to hide?”

Sun, in a statement released late Monday, said Grassley is “misled” about the company’s cooperation with inspectors. The company has responded to “multiple demands” from the inspector general and other agencies, the company said.

“Ironically, in the same week the senator accused us of not producing sufficient information [inspector general] officials cancelled a meeting to discuss these matters because our document production was so voluminous that they needed additional time to review,” Sun said. “We have produced tens of thousands of documents, plus transactional data covering billions of dollars in sales, while being subjected to deadlines that appear to be designed to ensure the demands cannot be met.”

The questions about Sun’s contracts surfaced in September 2004, when the GSA Office of Inspector General received a hotline complaint about the company’s pricing, according to March congressional testimony from Inspector General Brian Miller.

In July 2005, the GSA told Sun resellers the agency was cancelling Sun’s contract, because the company was allegedly charging government customers more than some commercial customers. But Sun avoided a cancellation by agreeing to drop some prices.

Sun remains a defendant in an Arkansas lawsuit alleging a multimillion-dollar kickback scheme involving IT vendors’ work on numerous U.S. government contracts.

Sun has accused the GSA’s Miller of being biased and prejudiced against the company. Part of the problem, the company says, stems from a conflict between Doan and Miller after Doan questioned the inspector general’s auditing tactics.

Miller has defended his actions, saying he’s doing his job. “The president and Congress sent me here to GSA to root out fraud, waste and abuse and to ensure that GSA programs are run with efficiency, economy, and effectiveness,” he said in his March testimony.

Doan in August 2005 rushed to keep Sun on the GSA contract even though there were continuing questions about the company’s pricing, Miller said in his testimony. Doan was worried GSA’s IT contracting division “could be destroyed” without Sun participating, he said.

Grassley, in his Friday letter, called on the GSA to give Sun 30 days to comply with audit requests and cancel the contract if the company did not comply. The GSA should follow the lead of its inspector general, who has called for Sun’s contract to be cancelled, Grassley said.

But Sun, in its statement, said Miller’s reports on its contracts “are riddled with inaccuracies and conspicuous omissions of multiple know facts.”

Grassley and Miller have not attempted to compare Sun’s contract to contracts by other IT vendors, the company said.

“The only party who would be hurt by a cancellation of the Sun GSA contract is the American taxpayer,” Sun said. “Our pricing is very often better than our competitors, and the contract offers the government extremely aggressive discounts and contractual protections.”

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Jim Love, Chief Content Officer, IT World Canada

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