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D.C. Technology Office Scandal Revives Questions of Cronyism

By David Nakamura
Washington Post Staff Writer
Saturday, March 14, 2009

Last summer, Vivek Kundra, then the D.C. government's chief technology officer, introduced a massive overhaul of the way his agency hired about 300 consultants.

Responding to vendors' complaints that the contracting process was unfair and rife with cronyism, Kundra received $75 million from the D.C. Council to create the Information Technology Staff Augmentation program to foster greater transparency and accountability. Kundra hired a company to help the city weed out unqualified résumés, established a central online database to advertise contracts and disclose who won each one, and posted video solicitations for jobs online. The ITSA program, he told council members during an oversight hearing in August, was a more open and more fair way of doing business in the District.

But this week, the technology agency was rocked by a bribery scandal that brought the allegations of cronyism back into full view and raised questions among consultants about whether anything has changed. Federal authorities have alleged that Yusuf Acar, a manager in charge of information security, conspired with a contractor named Sushil Bansal to bilk the city of money in a scheme that involved "ghost" workers and kickbacks. Both men have been arrested.

Questions submitted to Mayor Adrian M. Fenty's office about the technology office's contracting process, including whether the hiring decisions by project managers were reviewed by higher-ranking authorities, were not answered yesterday. Kundra, who left the technology office last month after President Obama appointed him the nation's chief information officer, has not been identified as a suspect in the D.C. case. He has been placed on administrative leave pending the outcome of the federal investigation and declined to comment.

"We have to find the right balance and find the right checks and balances," said council member Mary M. Cheh (D-Ward 3), who recently took over the committee that oversees the technology office.

City Administrator Dan Tangherlini said the scheme that Acar and Bansal are accused of running predates the implementation of ITSA in October.

Consultants who work with the technology office said yesterday that the bribery allegations emphasize their long-standing complaints that the agency lacks sufficient oversight to ensure that contracts are awarded fairly. They described a system in which project managers have virtually unabridged authority to issue "purchase orders" for consultants and then decide which ones receive the contracts.

Furthermore, they said, some managers making the hiring decisions used to work for the consulting companies that are making bids, and some of the consultants once worked as full-time city employees. Bansal worked for the city before founding Advanced Integrated Technologies about six years ago.

"How can we even trust these people anymore?" asked Laurie Collins, owner of a small information technology consulting firm that has worked with the city. Collins and other consultants complained that a group of fewer than 10 firms win a disproportionate bulk of contracts, even though the city has 97 registered technology vendors.

Bansal's firm won 14 of the 167 contracts, including two awarded by Acar, issued through ITSA so far.

Under ITSA, the city hired Optimal Solutions and Technologies to oversee the contracting process. That company set up a Web site to post job openings and solicit résumés. The résumés of qualified candidates are then sent to D.C. project managers without company affiliations, a tactic aimed at trying to eliminate potential company biases from the managers making the hiring decisions.

But consultants said it is easy for vendors to sidestep that safeguard by telling the managers ahead of time which résumés to look for.

Tim Booker, owner of the consulting firm MindFinders, said managers have developed close relationships with specific vendors and are hesitant or unwilling to award contracts to other firms. Because of that, it is difficult for the city to ensure that it gets the best value and services for each contract.

"Managers are not willing to break old habits," he said. "What it requires is leadership and training and oversight."

Under their alleged scheme, Acar approved contracts for Bansal's company for the purchase of goods and services. But Bansal billed the city for some services that were not provided and workers who did not exist, splitting the proceeds with Acar, according to the affidavit. Bansal's company has received $13 million in city contracts, including some from other managers in the technology office and at least one other city agency.

Michael Master, owner of the consulting firm GiniCorp, opposed the implementation of the ITSA program last summer during a D.C. Council hearing. But yesterday, he said he did not blame the system for failing to stop Acar and Bansal.

"There's a longtime culture of bending the rules in this city," Master said. "Whether the process is transparent or not, which the whole ITSA thing was supposed to be, you can put in all the rules and laws, but bad people will always find a way to get around it. This just proves that."

Staff writer Nikita Stewart contributed to this report.

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