Perot's Gov't contract bids queried
contracts left a trail of troublesome audits and investigations that alleged irregularities such as unfair bidding practices, excessive charges and costly errors.
The congressional audits and investigations also contended Perot overcharged the government in some cases and concluded that some of his data-processing contracts were so poorly managed they left the government "vulnerable to waste and fraud''.
The documents outline contracts awarded under suspicious circumstances that undermined competitive bidding, including the altering of test scores and final bids in one case.
The Associated Press reviewed 13 General Accounting Office audits and testimony from six congressional inquiries, all of which focused on government contracts for Perot's computer services companies, Electronic Data Systems, which he relinquished control of in 1986, and later Perot Systems Inc. Perot has removed himself from the day-to-day operations of Perot Systems as he readies an independent bid for the White House.
The documents describe: A $33 million contract awarded in 1982 to modernise Social Security Administration operations. In the two years before the bidding, SSA allowed a subcontractor who was assisting EDS with its bid to have special office space and access to SSA. The GAO found in one instance the subcontractor was allowed to see competitors' bids. In addition, EDS bought $800 in meals for Social Security employees, and charged them to the government.
Congressional investigators alleged the government was excessively charged when Perot's company negotiated the right to charge a special "load'' fee shortly after winning a $64.4 million Immigration and Naturalization Service contract in 1984. The fee raised the cost of the contract by up to 25 percent.
"The total contract price now exceeds $100 million,'' a 1986 audit said. That audit concluded the contract "did not serve the best interests of the INS, the government as a whole or the taxpayer.'' In 1986, the government cancelled a Government Printing Office-Army contract with EDS after GAO investigators cited improprieties in the procurement that "favoured EDS.'' The GAO concluded EDS had been wrongly allowed into secretive meetings with government officials to make corrections that lowered its bid by $25 million after final and best offers had been accepted. The GAO also alleged an Army major had altered unfavourable scores in the technical evaluation of EDS' computer system and a government official working on the procurement was simultaneously lobbying EDS for a job.
Milton J. Socolar, assistant to the comptroller general, was involved in both the printing office and Social Security contracts. He allowed that the contracts in both cases "followed an unusual course.'' "From the taxpayer's standpoint the procurement is supposed to be straightforward. The process is to treat everyone evenhandedly, and when you get people playing around with the system, it doesn't particularly serve the taxpayer,'' Socolar said in an interview.
Numerous attempts over several days to seek comment from Perot and his spokesmen went unanswered.
A spokesman for EDS, which Perot sold to General Motors in 1984 and relinquished control of in late 1986, said he did not have enough time to address each allegation but that the company has strived to keep all its dealings with the government "above reproach.'' "These are GAO opinions,'' Randy Dove said. "We certainly believe in fair and open competition. And we certainly strive that there is no inappropriate behaviour in any of this.'' Even the celebrated computer programme that Perot developed in the 1960s to process Medicare claims -- garnering him millions of dollars in contracts -- came into question.
Auditors charged that Perot used $250,000 in federal funds to develop the entire programme from 1966 to 1968, then kept it for profit despite government officials' insistence it be turned over as taxpayer property.
Sen. Paul Simon, D-Ill., who was involved in congressional reviews of three Perot contracts, said such findings should be weighed by voters considering Perot's bold claims that as president he'd reduce the deficit by cutting government fraud, waste and abuse.
"I think we have to be careful about knights on shining white horses,'' Simon said. "We have to look at the record. And my experience of that, though limited, was not a favourable one.'' Simon presided over one of the larger contract flaps cited in testimony and investigative reports obtained by the AP from the GAO, Congress' investigatory arm.
In that case, Perot's computer companies was found to have destroyed thousands of older pending Medicare claims and to have hidden others from government inspection to artificially reduce a backlog that was causing the company to be fined under a processing contract in Illinois.
The company eventually lost the contract in rebidding after the GAO concluded it had made $20.3 million in errors in the first nine months of the contract alone. Similar problems with a Perot contract in Texas led congressional investigator to conclude his company had "caused financial hardship'' to Medicare policyholders.
Congressional investigations date from the very first subcontracts that EDS, Perot's original computer company, received in the late 1960s to the very last one his new business, Perot Systems, was awarded in 1988.
In most cases, records show Perot's company disputed the findings or pledged to resolve problems quickly and seldom was any other action taken, a fact that frustrated some close to the congressional inquiries. -- AP Ross Perot.
