By Guest Blogger Rick DiNapoli
You will pardon me if I remain seated with hands folded while the city council takes its bows for “resolving” the Cisco-City Hall telecom kerfuffle.
When the story first broke about the “fixing” of the specifications for the new City Hall phone system to favor Cisco, our public officials first response was one of embarrassment and tail-covering. The real embarrassment, however, was that no one at City Hall had the courage to stand up and say that San Jose prefers to do business with its local companies. Instead, we chose to treat Cisco like a priest in a day-care center. And we wonder why companies don’t want to locate here.
So $1.8 million was saved in selecting Nortel Networks’ (headquartered in Canada) phones over Cisco on the re-bidding of the contract. The overall cost of the new City Hall is almost $400 million – more than triple the cost of simply purchasing the far more prominent and interesting Sobrato building. We paid almost $50 million to a New York architect to design a rather ordinary-looking office building with some decorative scaffolding - and we are supposed be happy about saving $1.8 million off the backs of one our own? Perhaps if it was not located in high-cost and business-unfriendly San Jose, Cisco would have competed better on the re-bid. Off-shoring is now okay, I guess.
Cisco is a great corporate citizen. It employs our neighbors and supports countless worthwhile charities. We should be proud that it chose San Jose for its home, and we should not be shy about telling upfront anyone who will listen that we choose to do business with those companies that choose to do business with us.
Rick DiNapoli is an attorney, author, and San Jose Downtown Association Board member.
How much did it cost to fix the problem v. how much we allegedly saved by going through a new “process”?
Think Nortel knew what the Cisco bid was going to be? If Cisco lowered their original estimate, would that not be proof they over-charged in the first place? Do you think any bureaucrat would have dared choose Cisco over a less expensive company?
If they had, the Mercury News investigative editorial team would have had their scalp.
Ceasar’s wife must be in charge of the process. The fact that this process in inefficient and ultimately costs everyone more time, money and is equally open to inherent conflicts of interest is irrelevant.
It’s the process, we can sleep at night knowing our elected officials were not influenced by political contributions or local considerations and simply took the cheapest qualified competitor out there—regardless of their business practices.
Did the RFP take into consideration what the 1.8 million spent locally would do for our economy v. $1.8 million in savings? I think not.
It was the City’s poor execution of selecting Cisco, the never ending search for corrupt politicians and our own lack of common sense allows these types of decisions to be made.
Welcome to government. This is a refreshing perspective.
Old news. BORING.
San Jose goes with a Canadian company over our own hometown company – 3 cheers for all!
I think the bullets were not out of the feet of our wonderful elected officals when it came time to pat their backs for the job of Re-selecting their new vendor. I still feel their pain !
I fully agree with the author above by thinking that if they saved the 1.8 million dollars, why could they not do it with other items…like getting rid of the one-of-a -kind glass dome that will cost almost in three years to clean what it saved in supporting a vendor who supports nothing in San Jose as Cisco does, did, and who knows in the future if they will. We will lose certainly more then we saved.
The other day I rode lightrail from Civic to Santa Clara to go to Zanottos’ and I overheard two City Hall consultants / employees talking about the new City Hall. One said it should have been 3 times the current size. Then they were laughing and commenting about the telecom system to be installed and how everything is Mikey Mouse.
They were laughing so hard I began to laugh as I deboarded the train.
Sure the city could have saved if they’d taken Sobrato’s white elephant spec building off his hands.
Then again, they could have saved much more if they’d taken Chuck Reed’s suggestion and re-built on the current City Hall site.
But that would be considered blasphemy among the downtown-centric boosters. Popular in the neighborhoods though!
Can anybody out there really name one corporation that’s ever been loyal to and afforded preferential treatment to the local government entity that happens to administer the public’s business in the territory that same corporation is headquartered in? I think not. Why, then, should the corollary be true? Local preferences on government purchases of goods and/or services may make sense if all else is equal in relation to what competing businesses happen to be offering. It doesn’t make sense under any other circumstance.
Too many have missed what really lies behind the Cisco “debacle.” It is in retrospect clear that the City should have hired an independent consultant to conduct the procurement process that City staff lacked the expertise to adequately spec in their bid process. That wasn’t done, probably because that same undertaking would have added costs and time to a project that was already behind schedule and well over budget. Still, an argument can be made that the Cisco “debacle” wouldn’t have happened and most certainly never would have been written about in the SJMN if SJ City staff had been afforded the same degree of “wheeling and dealing” freedom that a private sector procurement team would exercise around a similar purchase. The point being, don’t expect the deliberative transparency we all demand out of government to produce either efficient or expeditious decisions and outcomes. When government does try to cut through what so many in the private sector contemptuously call “red tape,” government is likely to endure the very thing that occurred with Cisco.
The Cisco deal encapsulated:
“Politics is the art of looking for trouble, finding it, misdiagnosing it and then misapplying the wrong remedy.”-
—Groucho Marx
Thanks to my friend Dick Spotswood, a columnist for the Marin Independent Journal for the quote.
This underlying thread that somehow the Cisco mess is the fault of the Merc for reporting it is disturbing. Would we better off having our government run amok as long as we don’t know about it? I am glad the Merc has finally awoken after so many years of slumbering and letting the general public know what so many of us who have been following this “inside baseball” already knew.
Some of today’s comments hit the mark—this project has been driven by the mantra of “I don’t care how you get it done, just get it done and get it done on time.” That is a recipe for an over budget not ontime project which will be probably be the case if the City is honest with its citizens.
” Can anybody out there really name one corporation that’s ever been loyal to and afforded preferential treatment to the local government entity that happens to administer the public’s business in the territory that same corporation is headquartered in? “
A example of a responsible corporate citizen directly contributing to improving their local community – Sprint Corp in Kansas City
Where are the local company efforts to support their local community, or are we just not aware ?
1) Sprint Corporation in Kansas City pledges to give $20 million – http://www2.sprint.com/mr/cda_pkDetail.do?id=240
2) Sprint pledges up to $2.5 million up to $62.5 million ) for 25 years for $ 250 million Sprint Center is part of Downtown redevelopment efforts arena -http://www.visitkc.com/media_room/whats_new/index.cfm?page=sprint_center.htm
3) Sprint commits $6 million to local schools http://www2.sprint.com/mr/news_dtl.do?id=2091
4) Sprint gives $300,000 to local schools http://www2.sprint.com/mr/news_dtl.do?id=5046
5) Sprint and Rebuilding Together Volunteers Pitch in to Help throughout the Year – http://www2.sprint.com/mr/news_dtl.do?id=1216
6) Sprint and Kaboom playgrounds http://www2.sprint.com/mr/news_dtl.do?id=2067
You can say many thinks about Spring but they do support their local community.
The Stupid Merc now has an online poll.
Where do u think those idiots got the idea form.
Here of course b/c they’re not ORIGNAL.
They are copy cats.
NOW SAN JOSE INSIDED NEEDS AN ONLINE POLL SO WE CAN STOP TALKING ABOUT STUPID THINGS TO DEATH AND START ACTING.
Cisco is big on philanthropy – http://newsroom.cisco.com/dlls/feature_topic_archive_2004.html#Community_&_Philanthropy
I truly doubt that Nortel has done as much for the valley as Cisco has.
Current Nortel headlines..
“The company isn’t only on the receiving end of the legal probers. It is suing some of its former executives for the salaries and bonuses they received as a result of the false accounting (see Nortel Sues Former Executives ).”
http://www.lightreading.com/document.asp?site=lightreading&doc_id=70467
San Jose and Nortel – an ethical match made in heaven?
Mr. DiNapoli is completely correct in defending Cisco which is one of the few jewels in the industrial sector of San Jose, and which needs to be encouraged to stay here, not slandered.
Nevertheless there was a serious coverup by individuals in City Hall, and that is the heart of the scandal.
And that scandal is by no means completed. We still await word from Chuck Reed as to why he led the city council in stopping further investigation into the coverup when it started to reach into the city manager’s office.
The existence of many thousands of documents was disclosed by the investigator, but not reviewed because of Reed’s arguments to the city council.
There’s a very large problem with Mr. DiNapoli’s HomeBoy philosophy: this is public money we’re talking about. The City has a responsibility to follow certain practices to protect the taxpayer’s interests.
Cisco, as a local company, could have shown it’s good corporate citizenship by offering a discount and at the same time the contract fair and square. Instead Cisco took part in a process that was ethically questionable thus forcing the City consider other vendors.
I do not question the assertion that Cisco contributes much to the community in terms of jobs and support for nonprofits. But that’s a red herring. At a time when City services are being cut and employees laid off why should San Jose pay millions more to Cisco, and in the process violate the public trust, just because the company is “local”?
Richard Robinson has the Cisco problem anaylzed very well, too.
This is what happened, according to Rowen’s Rules of Local Government:
1) The Cisco ideas were considered very well done and were going to work well.
2) Somebody at City Hall, probably within the Manager’s office, got lazy with all the disclosure regulations and all the needs to cross the t’s.
3) Somebody somewhere else at City Hall decided that the t’s were not crossed well enough and, Bingo, the Cisco Mess.
Now what can be learned.
Dando
Yeager
Reed
Cortese
Lezotte
all have one thing they can do today, and that is insist in full ethics and public disclosure policies city wide.
Reed should declare ALL of San Jose, a Disclosure Zone.
That is to say that Chuck, or whomever that talks the ethics talk, should have SJ, like the Nuclear Free Zones, proclaim itself the Disclosure Zone citywide.
Which means, that NO ONE IN SAN JOSE, is going to get a dime, an inch of city cooperation, any cooperation from the city, if they are not transperant.
Example,
San Jose State.
Throughout the university, it is covered by the Brown Act. However, three of the biggest money rich divisions at SJSU, Spartan Shops, the Student Union, and the 5 million buckaroos at the Associated Students of San Jose State, are governed like the old dukedoms of the Middle Ages.
Okey, McDokey, Chuck and Company, no one at Cisco, at East Side Union, at Alum Rock, at San Jose State, and SJCC, or the County, gets any city cooperation if they conduct their affairs in darkness, or are not cooperative with any citizens at all. Disclosure is the game, and your influence and power as public figures to enforce it and encourage everywhere are the stakes, care to play?
Arturo Ellsworth and James Rowen are probably right about the causes, .
“ the City should have hired an independent consultant to conduct the procurement process that City staff lacked the expertise to adequately spec in their bid process”.
Developing an RFP of that complexity was probably beyond the capabilities of the city’s IT department. The various city staffers appeared to have compounded their errors after that…. “
Then the bit about crossing t’s etc..
So what about the ‘Disclosure Zone’? I think that there is a better organization to start with for a Disclosure Zone than San Jose State:
• The South Bay Labor Council. This organization is about as secretive as the Skull and Bones Club at Yale, when it comes to finances.. (and it appears.. lobbying activities..). It has an inordinate amount of power in San Jose, and flouts currently acceptable principles of disclosure..
In calculating the claimed $1.8 million saved by re-bidding and selecting Nortel, I’d bet the farm that the lost time to cover butts and re-do the RFP, spin the story, investigate and then drop it when it got too close to the top were not included.
Not to mention other important items that were put off while the pols and managers got their stories straight.
A minor debacle part of a major debacle called The Taj Gonzal.
And what’s with all the scaffolding as a permananet design feature—places for people to jump from when they’re caught with their hands in the cookie jar? The facade has more bars than the main jail.
John Michael O’Connor
Nobody has said anything about Nortel having a better solution.
I work with both products and Nortel has better solutions for this size application.
CISCO is currently trying the same tactics in San Antonio.