Subpoenas in $13 million no-bid contract - WSFA.com Montgomery Alabama news.

Subpoenas in $13 million no-bid contract

State Finance Director Bill Newton defends the no-bid contract. State Finance Director Bill Newton defends the no-bid contract.
The state legislature's contract review committee wants to know who is getting what in the multi-million dollar no-bid deal. The state legislature's contract review committee wants to know who is getting what in the multi-million dollar no-bid deal.

Written by: Eileen Jones - bio | email
Posted by: John Shryock - bio | email

MONTGOMERY, AL (WSFA) - It's been a hot button issue in Alabama for years, the state's policy of handing out some contracts without putting them out for competitive bids.

That may change, however. Wednesday, for the first time ever, subpoenas went out from the state legislature's contract review committee. Members want more information about a $13 million no-bid contract by Governor Bob Riley's office.

Thirteen million dollars of taxpayer's funds is the amount of the contract for Paragon Source, a computer company the state's finance department wants to hire to upgrade state computers.

"Governor Riley has never met any of these people. Doesn't know them from this company. He's never been contacted by a lobbyist about this company nor has anyone on his staff, and he's never received a campaign contribution from any of these people," said State Finance Director Bill Newton defending the contract.

The finance office says the state awarded a no-bid contract to Paragon several years ago because it was the only computer company that could do the work the state needed, and since its work was good then the relationship continued.

"I'm not saying they didn't perform and do a good job," Rep. Alvin Holmes (D- Montgomery) said. "Ok, they did a fine job. They did a fine job. Provided us the amount paid to each individual and that person's address and what did he do for the money," Holmes went on to demand of Newton.

The CEO of Paragon has never appeared before the committee, and that's why the members issued subpoenas for records. They want find out exactly who is being paid and how much. 

"The whole point of this is to bird dog no-bid contracts," explained Rep. Jeff McLaughlin (D- Guntersville). "The contract shows 44 different pay grades. They got eight employees. That's misleading isn't it?" McLaughlin asked of Newton. "Will you look at that with me?"

Newton started down the list. "The top rate is a $175 an hour, and it goes from there. There's a few in here, excuse me that's the top one on the list. The top actual amount being paid out is $230 an hour."

The other problem that concerns committee members is the fact that Paragon has no web site, no phone number and no address other than a residence.

The company has already been paid about half of the $13 million it's contracted to get. It's the other half the committee wants to examine.

The committee, however, can only hold up a contract. It has no power to actually stop a contract.

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