California rescinds controversial Oracle deal

California rescinds controversial Oracle deal

California Attorney General Bill Lockyer yesterday announced that the state has cancelled its troublesome $95 million software-licensing contract with Oracle Corp. The state is relieved of any further financial obligations regarding the contract, he said.

Rescinding the contract was done in agreement with Oracle. 'Oracle Corp. is pleased to have resolved this matter to the satisfaction of the state of California,' said Jim Finn, Oracle's vice president of worldwide corporate communications. 'We look forward to working with the state in the future.'

California Assemblyman Dean Florez, who was removed July 2 from the audit committee that investigated the contract, said that the 'unwinding of the Oracle software contract is a welcomed resolution to a rotten deal.

'From the beginning, my agenda was to get our money back,' Florez said. 'We did. Any price I paid politically was worth it.'

The contract was a sole-source, six-year deal signed May 31 last year for Oracle 8i database software. Members of the Legislature last summer objected, citing a California law that required they be notified before any state agency signs a contract for more than $500,000. An ensuing state audit raised questions about the contract's savings projections, made by Northrop Grumman Information Technology, an Oracle reseller that helped negotiate the deal.

Florez said he appreciated Gov. Gray Davis' cooperation during the hearings on the contract, 'his response in removing individuals from his administration who showed a lack of judgment by championing the contract without verifying its savings, and his commitment in heeding our call to rescind the Oracle agreement.'

Several state officials lost their jobs as a result of investigations into the contract, including CIO Elias Cortez and the director of e-government, Arun Baheti.

Florez reiterated his call for further investigation into the Oracle agreement. 'Yes, we got our money back, but individuals who may have broken the law should be aggressively pursued and punished,' he said.

About the Author

Trudy Walsh is a senior writer for GCN.

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