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Gov. Software Contract May Violate Bidding Rules: Report

Cognos deal to provide the state government with performance management applications for $13 million may have been improperly awarded.

A $13 million contract for performance management applications for the Massachusetts state government may have been improperly awarded to Cognos last year, according to a published report.

The state inspector general, Gregory Sullivan, concluded that the contract did not conform to state bidding rules and bid requirements in the special bond bill approved in 2007 that appropriated funds for the contract, according to a story in Monday's Boston Globe newspaper. The story says that Sullivan, in a letter to Leslie Kirwan, the state's secretary of administration and finance, recommends that the contract be voided and the state seek a refund.

This morning, Cognos spokesman Steve Milmore said in a statement that Cognos "fully complied with the process required by the [state] for bidding this transaction."

According to the Globe, Salvatore DiMasi, state house speaker and a powerful Msschusetts government official, had an active interest in the contract and he and his staff pushed for the contract to be awarded to Congos, including meeting with the state's CIO about the deal. The Globe story quoted a DiMasi spokesman as saying the official had no involvement in the awarding of the contract.

Oracle and SAS Institute were among other vendors that submitted bids for the contract. Massachusetts Governor Deval Patrick asked Sullivan to look into the contract in December.

The Globe story said that Joseph Lally, formerly sales vice president for Cognos' government business, was a key figure in the deal. The Globe story described Lally as a friend of DiMasi and a lobbyist for Cognos. Today he is a co-founder of Montvale Solutions, a Boston-based solution provider that resells software from Cognos and other vendors. Montvale's Web site says Montvale specializes in servicing state, local and county governments, the healthcare industry, law enforcement agencies, and schools and educational institutions.

The Globe said the Cognos software has only been implemented in the office of Finance and Administration and not to other government agencies.

Cognos was acquired by IBM in January for $4.9 billion.

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