Denver Auditor Tim O’Brien took the rare step Tuesday of refusing to sign off on a $6.1 million city contract that will provide database management software for several departments.
The problem: a staff member in O’Brien’s office found during a standard review of the contract that the costs didn’t appear to add up.
O’Brien said in a news release that he agreed to sign the contract with the Bias Corporation, making it official, after the city’s technology services agency agreed to submit a contract amendment to the City Council. That amendment, expected to be approved in March, will lower the contract total by $500,000.
A city spokeswoman clarified later Tuesday that officials had negotiated the contract’s total downward before it was finalized, but the original maximum value went unchanged in the document’s terms.
“If anyone wonders whether I actually read the 3,500 contracts I sign each year, here’s their answer,” O’Brien said in the release. “There was a $500,000 discrepancy between the $6.1 million approved by Council and the actual software and license expenditure numbers in the contract. The contract amount was $500,000 too high.”
Jenny Schiavone, a spokeswoman for Denver technology services, confirmed that the agency would seek a contract amendment.
“The $500,000 amount the Auditor referenced would never have been spent because it was not the final contract price agreed to by the parties,” she wrote in an e-mail.
Five city officials, including Mayor Michael Hancock, sign off on all large city contracts, with the city auditor the last to do so.
Rarely does that function attract attention from the public, but it has on occasion — as when outgoing Auditor Dennis Gallagher in July 2015 between the city and the state for the $1.2 billion Interstate 70 expansion project and storm-drainage projects.
O’Brien soon after he took office.
The Bias software and maintenance contract won council approval 11-0 on Feb. 20.
A at an earlier committee meeting broke out the annual payments to Bias as set by the contract, starting with $3.9 million this year and $919,000 in 2018. The city then will pay Bias $258,000 a year in 2019, 2020 and 2021.
Those numbers add up to $5.6 million. But the contract still says the maximum amount that can be paid to Bias is $6.1 million, apparently reflecting the earlier total before it was reduced in negotiations.
O’Brien credited the catch to Jeffrey A. Garcia, his director of contracts and accountability. Garcia said in the release that the council approval of the higher amount would have set aside extra money that could go toward other city services.
The city has paid $1 million a year for Oracle software services in the past two years, but council documents said the city was seeking an increase in the number of software licenses, along with five years of maintenance.
Several departments use software tied to the contract. Oracle software powers the police and jail management systems, Denver Human Services systems, a city time-keeping system, human resources and financial software, and city login security software, among other functions.