Riley

Sebastian Kitchen

Oct. 31, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Gov. Bob Riley turned the criticism over a multimillion-dollar consulting contract back on Democrats on Friday, saying they are gearing up for campaign season by attacking a company that has performed well for the state and criticizing decisions made by career state employees.

Riley, a Republican, said he and his advisers have discussed how "to counter the buffoonery" over the contract. The answer, he said, is transparency, and he had about 20 staff members and other state officials in his office on Friday to answer questions from the media.

Riley said the administration is moving forward with the contract and will fight the lawsuit filed on Thursday by the legislative contract review committee.

State Rep. Alvin Holmes, chairman of the legislative contract review committee, said Riley is being disingenuous to tell people he is criticizing the contract for political reasons. The longtime lawmaker said he criticized contracts during the administration of Gov. Don Siegelman, a fellow Democrat. Holmes said he has vigorously fought no bid contracts, especially those related to computers, since he has been on the committee.

The administration and Democrats on the contract review committee are involved in an escalating, nearly two-month battle over an amended contract that would pay Paragon Source LLC up to $12.9 million. The state has already paid the company more than $5 million of that amount for previous work.

In addition to staff members and state officials involved in selecting Paragon, Riley was joined by Spud Seale, the attorney for Paragon and its president, Janet Lauderdale.

Seale said Paragon has performed well and it was shameful the state did not come to Lauderdale's defense sooner. Riley said Seale was probably correct.

Seale and Riley said no one has found anything wrong with the work performed by Paragon. Seale said the insinuations have hurt his client and her company.

They said there is nothing wrong or sinister about the contract or the work being performed. Riley said he has never met Lauderdale, she has never hired a lobbyist, and he has never received a campaign contribution from her.

When asked about whether Paragon had done a good job for the state, Holmes responded "there is no way for us to know because they did not give us a description of the work they did."

Holmes, D-Montgomery, and other Democratic members have expressed concerns about giving the large contract to a computer consulting company that does not have a Web site or a listed phone number and that lists personal residences as its headquarters. The finance department and Paragon have released documents to the committee in response to subpoenas, but Holmes and other members have said they want more information on the subcontractors who were paid through the contract and what work they performed for the money.

Finance department officials approached Paragon and hired the company to work with the state to help create a blueprint to update the computer system used for financial functions such as payroll and purchasing. The amended contract, which the governor signed on Oct. 23 after the Democrats held it up for 45 days, includes funding for Paragon to assist the state in moving forward with updating a portion of the almost 20-year-old system.

With the lawsuit filed Thursday, Holmes and the contract review committee members are trying to stop work and payments through the contract until they have time to further review it and are seeking to have the agreement nullified.

Acting Finance Director Bill Newton and others have defended hiring Paragon without going out for bids because it was a "sole source" and no one else had the knowledge of the state's computer system. Lauderdale, during her work for a previous company, helped install the computer system in the early 1990s during the administration of Gov. Guy Hunt.

Members of the Riley administration said they hired Paragon because of its reputation and quality of work, much as Holmes and the committee decided to hire their attorney to handle the legal issues with the Paragon contract.

The contract review committee voted earlier this month to hire attorney Tyrone Means of Thomas, Means, Gillis and Seay, P.C., and pay him $195 an hour up to $200,000 to represent the panel in handling the contract between Paragon and the finance department.

Holmes said he did not go out for bids, which is typical for legal services, but said he hired the firm because the committee needed representation and the firm is reputable.

Those in Riley's office on Friday included members of a steering committee set up by the previous finance director to assist in making decisions about updating the computer system. The panel includes the state personnel director, state purchasing director, assistant state treasurer, state budget officer, recovery coordinator, and business systems director.

Riley said the steering committee, not politicians, recommended moving forward with Paragon as a sole source provider after many meetings.

"They are in a lot better situation to make that decision than Alvin Holmes is," Riley said. "These are merit employees who do this every day for a living."

As he talked to the media, Riley had placards sitting in front of him that he had put on employees' desks after he was elected reading "Before You Buy It, Bid It." He said that has been his policy for seven years.

Newton said that about five years ago, the estimated cost to update the computer system was $100 million to $120 million. He said there is not enough money to move forward with all of it now because of the economic downturn and lack of revenue coming into the state. They want to at least update the system used for purchasing, which they said could save the state $4 million to $6 million a year. Riley said the purchasing process now has about 60 steps and a lot of paperwork and that an update would make the system more efficient and paperless.

Newton is trying to find the money to move forward.

Riley said he wishes the money was available to modernize all of the programs.

Newstex ID: KRTB-0128-39326496