Pennsylvania treasurer denies payment on no-bid computer contract

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HARRISBURG -- The state treasurer will not make nearly $3.48 million in payments for a no-bid computer services contract, citing concerns that the Corbett administration did not obtain needed approvals from the attorney general, did not justify the amounts of money requested and saying it should not have granted a no-bid contract in this instance.

But Corbett administration officials said Treasurer Rob McCord previously approved payments for similar contracts without objection.

"Our concern is that this contract is being singled out and is the subject of allegations by the treasurer that he has never raised before about similar contracts in all the years he has been treasurer," said Nils Hagen-Frederiksen, press secretary for the Office of General Counsel.

Mr. McCord, a Democrat, is widely considered a potential gubernatorial candidate in next year's election against Republican Tom Corbett, though he has made no formal announcement of his candidacy.

"This is a case of the Corbett administration cutting corners regarding contracting practices, inflating contract values beyond the original approved amounts and using a no-bid process without adequately justifying the reasons," said a statement from Mr. McCord's office, explaining the refusal to pay Pennsylvania Interactive LLC parent company NICUSA.

The Kansas-based firm was billing for services related to the development of a new website and online services for state agencies. According to information on NICUSA's website, it builds websites and provides online services and secure payment processing for more than 3,500 federal, state and local government agencies nationwide.

Mr. McCord's office believes the administration did not receive the proper approval from the attorney general, amending an already-approved contract that called for a $100,000 payment, to subsequently call for the company to be paid up to $5 million.

"Such a substantial amendment to the contract amount requires resubmission to the attorney general for approval, which was not done in this instance," said the treasurer's statement. Further, invoices did not contain such information as names of individuals performing services, the number of hours worked or their hourly rate.

The administration should resubmit the contract to the attorney general, according to the treasurer.

"We're reviewing our options at this point," Mr. Hagen-Frederiksen said.

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