$1 million state payoff doesn’t compute

Thursday, March 21, 1996 | 11:59 a.m.

CARSON CITY -- State legislators are taking the state Department of Taxation to task for paying nearly $1 million to a private company for a computer system that doesn't work.

"This is a major mistake," Assemblyman Dennis Allard, R-Las Vegas, told Taxation Director Michael Pitlock. "You paid the money prior to acceptance. That amazes me."

Assemblywoman Chris Giun-chigliani, D-Las Vegas, said there were "glitches" in the contract between the Taxation Department and Best Consulting, which installed the faulty system.

"We goofed up because these are not proper contracts," Giunchigliani said.

The comments came at a Wednesday meeting of the Legislative Interim Finance Committee, which agreed to release $447,900 in emergency funds to fix the problem.

The contract between the state and Best Consulting was negotiated before Pitlock was named director. He said a performance bond was required for the first phase of the contract but not the second part where the problem occurred.

In addition, he said, periodic payments were made exhausting the full $949,240 called for in the contract, but the agency has not accepted the system because of its deficiencies.

Best has left the job, but Pitlock said he will sue if necessary to make sure the system is fixed at no extra cost to the state.

He said Best employees were working on fixing "major fundamental flaws with the system," but the company pulled its workers off the job March 1.

Assemblywoman Sandra Tif-fany, R-Henderson urged Pitlock to stay out of the courts. She said the state bought existing software that was working in other states.

Tiffany suggested part of the problem was the responsibility of the Taxation Department, not Best Consulting.

But Assemblyman David Humke, R-Reno, said Pitlock was doing the proper thing in examining the possibility of a suit, saying Best Consulting breached its contract with the state.

Pitlock blamed part of the problem on the fact that the five deputy attorneys general assigned to his agency are experts in taxation but none is a specialist in contracts.

"They are great on taxation, but it doesn't mean they give good advice on contracts. I would like something more," Pitlock said.

State Budget Director Perry Comeaux told the legislative committee that he and Attorney General Frankie Sue Del Papa are heading a committee to look at possible changes in the way the state contracts with private companies.

He said the state must "make sure it gets what it pays for."