California agrees to cancel Oracle contract
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Logicon, the Oracle reseller that negotiated the contract, agreed over the weekend to cancel its portion of the deal, clearing the way for the state to end the six-year contract for database management software, according to Davis spokesman Steve Maviglio. Oracle and Logicon executives are meeting this week with Tim Gage, the state’s finance director, to cancel the contract and work out the financial details, Maviglio said. “It’s a complicated legal and financial undertaking,” Maviglio said, adding that the talks to completely undo the contract could take several weeks. “There are some parts that have already moved forward. We’re trying to unwind the whole thing.” Spokesmen at Oracle and Logicon said on Monday that they were unaware that the state had accepted their offers to end the contract. A fourth-party to the deal, Arizona-based Koch Financial Services, which arranged the financing, said Monday it had no comment. Maviglio said Monday that the state was unaware of any official offer from Oracle last week. “They said that, but they must have been talking to themselves because we didn’t know about it,” Maviglio said Monday. Maviglio said the ongoing talks revolve around money that has already changed hands and sales tax issues. According to a Logicon attorney, Koch has already paid $52.7 million to Logicon, which passed $35.5 million on to Oracle. Logicon also paid $3 million in sales tax. Maviglio said the state, which signed the agreement last May, has not begun to use the software. The contract became a political hot potato when it was reported that under the deal, which was not put out for competitive bidding, the state was buying more Oracle licenses than it had employees to use them. Critics accused the state of buying far more in Oracle resources than was needed. Since then three state officials have resigned or been suspended, state legislators have started hearings into the matter, and there are allegations of suspiciously timed campaign donations and calls for a federal investigation. More : news.com |