After Jeffrey Thompson left his accounting firm, it managed to expand one key part of its business with the D.C. government. (C-SPAN)

These have been, by all outward signs, tough times for the accounting and consulting firm founded and once helmed by embattled businessman Jeffrey E. Thompson.

Since becoming ensnared in a wide-ranging federal corruption investigation nearly a year-and-a-half ago, Thompson, Cobb, Bazilio and Associates became Bazilio Cobb Associates (BCA) and recently disclosed that Thompson used company accounts to funnel illicit cash to politicians.

It is difficult to gauge what the controversy has meant to the privately-held firm’s bottom line, but throughout the upheaval it has managed to retain and even expand one key piece of business with the District government: its role in a star-crossed project to update the computer system that tracks every dollar of D.C. taxpayer money.

In a case now being litigated before the District’s Contract Appeals Board, Colorado-based Ciber Inc. alleges that the District’s Office of the Chief Financial Officer unfairly terminated its contract to develop and implement the new system, maneuvering to have BCA take over a key part of the work.

The conflict concerns the quest to replace the District’s basic accounting software — known as the System of Accounting and Reporting, or SOAR — with a new modern system. In 2010, the OCFO hired Ciber on a $9 million contract, expecting the work to be done by May 2012. But the project soon became plagued with delays that pushed the implementation date to October 2012 and beyond.

The reasons for the delays are under dispute. Ciber claims in its contract appeal that the District did not complete requisite work allowing the new accounting system to communicate with other city government computer systems and otherwise failed to make key decisions that would have allowed the project to proceed on schedule. The District cited late and poor quality work, excessive staff turnover and other deficiencies when it terminated Ciber’s contract in March.

But Ciber’s complaint, filed in May, raises questions about how the OCFO ousted the firm only to replace it with BCA, which had been hired separately to perform an “independent validation and verification” of Ciber’s work on the project.

The facts laid out in the complaint allege that the District allowed BCA to engage in a self-dealing scenario by using BCA’s expertise to find faults with Ciber’s work — faults that eventually led to Ciber’s termination — then allowing BCA to step in and take over a “major part” of Ciber’s work. That maneuver, Ciber attorneys say in the appeal, constituted “a clear conflict of interest that should have been apparent to the District.”

In its filing, Ciber notes that the city modified BCA’s contract, assigning it duties from its own contract, while BCA was helping to evaluate whether it was fit to continue on the project. A month after the scope of BCA’s contract was expanded, to the tune of $900,000, Ciber was formally kicked off the project.

The essence of Ciber’s allegation boils down to this: “The District made no conflict of interest determination regarding [BCA]’s key, pervasive role in finding purported fault with Ciber’s performance while [BCA] was seeking to perform Ciber’s work itself.”

Alfred M. Wurglitz, an attorney for Ciber, declined to comment, citing the ongoing litigation. Donald Richardson, the BCA principal listed on contracting paperwork, did not return e-mails and phone calls seeking comment; BCA is not a party to the contract appeal.

Thompson was chief executive and majority owner of the firm, then known as TCBA, when it won the original verification and validation contract. The scope of work was expanded and the contract amount increased months after Thompson left — well after it became public that Thompson was under investigation and that the firm’s offices had been raided. BCA disclosed in June that some employees, their family members and friends had given potentially illegal campaign contributions at Thompson’s behest; the firm said in a statement it has instituted “very strict policies and controls” to “ensure that no such alleged violations are repeated.”

Asked to respond to the allegations in Ciber’s appeal, OCFO spokesman David Umansky said in a statement last week that BCA’s contract was extended and expanded “due to issues with [Ciber’s] performance.” Because the implementation of the new system is ongoing, he added, “we continued to need [independent validation and verification services] to advise on [Ciber’s] performance in meeting its contractual obligations to the District.”

Ciber, in its contract appeal, is seeking in excess of $21 million in compensation and damages, plus interest and attorney’s fees. The District moved last month to dismiss the claim on procedural grounds; Ciber has challenged the motion for dismissal, and the board’s administrative law judges have yet to rule on the matter.

Last week, Chief Financial Officer Natwar M. Gandhi moved to oust his longtime deputy overseeing the accounting software project. In April, BCA’s contract was officially extended through April 2014 — nearly two years after Ciber’s work was supposed to have been complete — for work that will now cost taxpayers just shy of $2 million.