State outsourcing plan down to one bid — again

When Gov. Sonny Perdue took office in 2003, one of his first acts was scrapping an ambitious $1.8 billion plan to outsource the state’s computer networking and telecommunications.

The plan, inherited from Gov. Roy Barnes, bothered Perdue because only one company ended up bidding. Now, after years and millions of dollars in consulting fees to try again, he faces a similar problem.

In December, Perdue announced the Georgia Technology Authority was seeking two contracts worth a total of $1.2 billion to $1.4 billion and lasting five to seven years.

A revamped bidding process, headed by Perdue’s technology director, Patrick Moore, and aided by a consulting company TPI, was supposed to avoid the dilemma that faced the previous administration. TPI has been paid $3.6 million so far.

Initially, it seemed to work, with three large companies expressing interest: IBM, Northrop Grumman and EDS.

In recent months, two companies have withdrawn, leaving the state with just one bidder, just like in 2003.

Several months ago, Northrop Grumman dropped out, and late last month, EDS notified the authority it was dropping out.

With only one bidder for the two enormous contracts, the authority now is put in that familiar awkward position: The state can either start contract talks with IBM, dramatically reducing its negotiating power, or it can scrap the deal.

If Perdue withdraws the contracts, the authority must continue running computer networks for major state departments with what Perdue has described as “inefficient and ineffective technology.”

The authority assumed it would get several bids, and it already has reduced its staff in anticipation of the outsourcing.

Julie Ballesteros, spokeswoman for Northrop Grumman Information Technology, would not discuss why the company dropped out. EDS officials did not return calls. Officials at IBM declined to comment.

Joseph Kim, an attorney with Georgia’s Department of Administrative Services, called The Atlanta Journal-Constitution during the reporting of this article and asked the newspaper to delay publication. He said it would hurt the state in negotiations.

Georgia Technology Authority spokesman Michael Clark and Perdue spokesman Bert Brantley both declined to comment. The two contracts for telecommunications and networking for 13 state departments and agencies were scheduled to be awarded in October.

Perdue presented the plans as his biggest program yet to outsource state government, a stated Republican policy objective.

Perdue outlined a plan that would include about 200 state worker layoffs and the move of about 500 state employees to whichever companies got the contracts.

“Technology is the underpinnings of a well-run enterprise,” Perdue said at the time. “Frankly, we are due for some sweeping changes.”

Staff writer James Salzer contributed to this article.