Toronto faces scrutiny over IT purchasing

Toronto mayor Mel Lastman will be the first to testify at an inquiry that will examine the details of controversial computer hardware and software leasing deals that have haunted the city for more than a year.

On Monday, the Toronto

Computer Leasing Inquiry will begin in an attempt to determine why the City of Toronto paid more than $85 million to Mississauga leasing company MFP Financial Services for computers and software contracts originally priced at $43 million. It will also examine why the city acquired 10,000 Oracle database enterprise software licences – a number a city auditor report says is a “”fraction”” of what it actually needed.

Earlier this year the Superior Court of Justice appointed a commissioner, Madam Justice Denise Bellamy, to oversee what is expected to be a month-long look into the IT purchases that took place prior to Y2K. In some cases, the purchases also applied to consideration of the city’s needs following amalgamation that created the megacity. The inquiry’s mandate is to look at all aspects of the leasing contracts for computers and related software between the city, MFP Financial Services and the city and Oracle.

Toronto City councilman David Miller, among others, has pushed for the inquiry, and says one major factor was the pre-Y2K rush to answer all technology demands before the clock rolled over to the new millennium. He suggests the city handed staff decision-making power it didn’t usually have.

“Because of the year 2000, we had given some unusual authority to staff to undertake computer and software purchases. So, they were able to go outside the normal purchasing roles and that’s when the Oracle transaction was done,” says Miller.

Miller says responsibility also ultimately rests with elected officials.

“I wouldn’t say it was a lack of due diligence. It was a political oversight issue and so I guess from that perspective, the first thing I want to see out of the inquiry is the truth,” said Miller.

It is also Miller’s hope the inquiry will shed light on how to avoid such mis-steps in the future. “What lessons can we learn about how a public organization deals with technology vendors? Oracle was quite aggressive,” says Miller.

MFP Financial president Peter Wolfraim believes the inquiry will show the responsibility for the city’s financial woes lies not with company but with those who signed on the dotted line. Council, he insists, should have known all the deals that were being entered into.

“From our perspective, the focus will fairly quickly turn to the governance of the city.”

Others expected to testify during the first days of the inquiry include MFP Financial president Peter Wolfraim and City of Toronto director of purchasing Lou Pagano. Oracle Canada will also testify.

If the city had a big problem with the Oracle deal, spokesperson Paul Stulberg says the city hasn’t pressured the software vendor to change the contract.

“We’ve kept the lines of communication open with the City of Toronto, nobody has asked for any money back or any refunds and the City of Toronto is a customer we hold in high standing and we’re committed to working with them,” said Stulberg.

The Inquiry is scheduled to start at 10 a.m. Monday, Sept. 30, at the East York Civic Centre, 850 Coxwell Avenue and sit Mondays through Thursdays from 10 a.m. to 1 p.m. and 2:30 p.m. to 4:30 p.m.

A full story with a complete timeline that chronicles the city’s purchasing decisions will appear in the October issue of EDGE.

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