Attorney General's Opinion
Attorney General Richard Blumenthal
March 10, 1999
Honorable Nancy Wyman
State of Connecticut
55 Elm Street
RE: December 21, 1998 Letter
Dear Comptroller Wyman:
You asked for my advice concerning the payment of an invoice issued by a State agency for the purchase of 500 computers. It is my understanding that you have approved the purchase order issued by the Department of Children and Families ("DCF"), but that upon discovery of additional information, you now ask whether you can pay an invoice submitted for that purchase. Based upon the fact that the State purchased the computers from an approval vendor, received the computers and has been using those computers, this office is unaware of any legal reason why payment to the vendor can be denied. However, DCF's decision to purchase 500 computers from the selected vendor appears to have been imprudent and, in the future, DCF should exercise greater care in selecting its vendors to avoid repetition of a similar situation. Because of DCF's actions in this matter, you should consider asking the Auditors of Public Accounts to review DCF's purchasing practices and procedures.
By way of background, the Department of Information Technology (hereinafter "DOIT") issued an invitation to bid on April 9, 1998 for the purchase of computers equipped with 200, 266 and 233 megahertz ("mHz") central processing units. On April 24, 1998, DOIT issued a multiple contract award. DOIT awarded the contract for the 200 and 266 mHz computers to ComputerEase which offered to supply computers manufactured by Compaq Computer Corporation (hereinafter "Compaq"). DOIT awarded the contract for the 233 mHz computers was awarded to ComputerPlus which offered to supply the State with computers manufactured by Digital Equipment Corporation (hereinafter "DEC") under the authority of Conn. Gen. Stat. 4a-59 and Public Act 97-9 of the June 18th Special Session.
DOIT amended the contract on May 12, 1998, allowing both companies to submit prices for optional upgrades to the base computers. DOIT issued the second contract amendment on June 19, 1998, allowing ComputerPlus to substitute the faster DEC 266 mHz computers for the 233 mHz computers. The substitution was at no additional charge to the State. On September 28, 1998 the third contract amendment provided for ComputerEase to substitute Compaq 350 mHz computers for the 266 mHz computers, also at no additional cost to the State. After the fourth amendment extending the agreement through December 31, 1998, the fifth contract amendment, dated October 19, 1998, allowed ComputerPlus to substitute Compaq 350 mHz computers for the DEC 266 mHz computers. It is my understanding that this amendment resulted from the corporate takeover of DEC by Compaq. As a result of this unique set of circumstances, two vendors had valid state contracts for the exact same piece of equipment.
After the October 19, 1998 fifth contract amendment, the contract prices were as follows:
|Windows NT Upgrade||$165.00||$8.00|
|32 megabyte memory Upgrade||$125.00||$125.00|
DCF issued purchase order number 1113330075 (copy enclosed) on October 28, 1998 to ComputerPlus for the purchase of 500 computers. The purchase order listed a base price of $1,489.00 for each computer. However, the purchase order also included the optional 32 megabyte memory upgrade at a price of $125.00 per computer and the Windows NT operating system upgrade at a price of $8.00 per computer. I note that the $8.00 price of the Windows NT upgrade did not reflect ComputerPlus' contract price of $165.00.
DCF submitted the purchase order to your office for approval in accordance with the provisions of Conn. Gen. Stat. 4-98. Furthermore , the purchase order clearly stated that it was conditioned upon approval by your office, stating "THIS PURCHASE ORDER VOID UNLESS APPROVED BY THE STATE COMPTROLLER AT LOWER RIGHT."
Next to the referenced box on the lower right side, the purchase order reads:
Approved and recorded by the Comptroller as to: 1. Propriety of charges to appropriations; 2. Prices; 3. Extensions and footings; 4. Availability of funds.
In this particular instance, for reasons which I am unaware, DCF chose to order the computers from ComputerPlus, at a higher price than the price offered by ComputerEase. It is my understanding that when ComputerPlus received the purchase order, they immediately contacted DCF and informed them that the prices on the purchase order were not the prices offered by ComputerPlus in its bid. Nonetheless, DCF instructed ComputerPlus to ship the computers and in accordance with those instructions, ComputerPlus completed delivery of the 500 computers to DCF.
To my knowledge, DCF did not reject the shipment and has been using the computers since they were delivered. Thus, the State has received the benefit of its purchase and there is no legal defense to avoid payment of the contract amount for the computers delivered to DCF.
In light of all these circumstances, you should consider formally requesting the Auditors of Public Accounts to review the purchasing practices of DCF in this matter.
I trust that this answers the questions raised in your letter.
Very truly yours,