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West Virgnia Auditor Finds Cisco Router Purchase Not Performed Legally

Unknown Lamer posted about a year and a half ago | from the plan-for-success dept.

Networking 280

coondoggie writes "West Virginia wasted millions in federal grant money when it purchased 1,164 Cisco routers for $24 million in 2010, a state audit concluded. A report issued this month by the West Virginia Legislative Auditor found the state used a 'legally unauthorized purchasing process' when awarding the router contract, paid for with federal stimulus funds, to Cisco. The auditor also found Cisco 'showed a wanton indifference to the interests of the public' in recommending the investment in its model 3945 branch routers, the majority of which were 'oversized' for the requirements of the state agencies using them, the report (PDF) stated."

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COUNTDOWN TO ZERO !! (1)

Anonymous Coward | about a year and a half ago | (#43013191)

And nothing happens !!

Re:COUNTDOWN TO ZERO !! (4, Insightful)

Impy the Impiuos Imp (442658) | about a year and a half ago | (#43013257)

And even if something did, it's just part of the cost of doing business for both companies attached to the tit of government and those officials getting off on shoveling out other peoples' money.

Re:COUNTDOWN TO ZERO !! (1)

Anonymous Coward | about a year and a half ago | (#43013349)

It's the "teat" that provides the milk of government largesse. Being attached to a tit means someone glued a small bird on your hat.

Re:COUNTDOWN TO ZERO !! (5, Funny)

CodeheadUK (2717911) | about a year and a half ago | (#43013471)

Possibly a British-ism. Tit is a common slang word for a breast LIke boob, jubblie, nork, funbag, chesticle or Bulgarian Airbag.

Re:COUNTDOWN TO ZERO !! (0)

Anonymous Coward | about a year and a half ago | (#43013747)

In common usage here in the US, women's breasts are tits, not teats. Teats are generally attached to cows, goats, etc. It's been that way since the 1960s that I'm aware of.

Re:COUNTDOWN TO ZERO !! (5, Insightful)

Tokolosh (1256448) | about a year and a half ago | (#43013537)

Three things will happen:

1. Someone will step forward to say that he predicted this would happen, but nobody would listen to him.
2. Some low-level functionary will have his life ruined.
3. Some high-level functionary will get a lobbying job or be appointed to a government regulation agency.

Re:COUNTDOWN TO ZERO !! (2, Insightful)

afeeney (719690) | about a year and a half ago | (#43013645)

Don't forget that the person who actually did predict that this would happen or even protested at the time is now effectively demoted or had to find another job, for being a "poor communicator" or "not a team player."

Re:COUNTDOWN TO ZERO !! (0)

Anonymous Coward | about a year and a half ago | (#43013817)

I predict, that somebody will predict this prediction. Then where will we be, huh?

Do we need to rehash old stories? (-1)

Anonymous Coward | about a year and a half ago | (#43013205)

Re:Do we need to rehash old stories? (5, Informative)

Anonymous Coward | about a year and a half ago | (#43013443)

It's not a rehash, it's an update. If you had bothered to read any of the links you would see that these are the state's official findings on the matter, and it puts Cisco in the position of potentially not being able to bid on state projects in the future.

Obvious error (0)

Anonymous Coward | about a year and a half ago | (#43013209)

They should have bought Apple.

It's honestly slightly astonishing... (5, Funny)

fuzzyfuzzyfungus (1223518) | about a year and a half ago | (#43013217)

This library [arstechnica.net] has a 3945 [cisco.com] .

Somebody at Cisco must have made quite a bonus...

Re:It's honestly slightly astonishing... (4, Insightful)

Xest (935314) | about a year and a half ago | (#43013353)

It's the same worldwide, when I worked in public sector in the UK some years back it was absolutely no different.

The companies know it too, which is why public sector contracts are seen as so lucrative most the time. This is also why I made the move to private sector, sure I miss my 38 days leave a year + 15 more through accrued flexi time and my final salary pension scheme, but ultimately I'm not working with the kind of idiots who are responsible for this sort of thing, and that's worth more than any amount of leave or pension (and besides, private sector career progression is more about talent, than how old you are, so it's been a good move career wise too anyway).

This isn't to say I'm some kind of right wing capitalist that Republican's love, on the contrary, I'm quite socialist in my views, but at the end of the day you can still give too much money to a particular public sector department, and this is exactly what happens when you do, and it's the same wherever you are in the world.

Re:It's honestly slightly astonishing... (5, Insightful)

Anonymous Coward | about a year and a half ago | (#43013423)

When I worked public sector, the first priorities weren't getting the best price or best value. They were, in order:

1) Buy it from a registered state contractor (most of which had ridiculously jacked-up prices)

[or, if a state contractor didn't have it]:

2) Find a state contractor and get a "quote" on it (translation: Have a registered state contractor buy it for you and then attach a hefty fee on top of what they paid, rather than buy it directly and save money)

Re:It's honestly slightly astonishing... (4, Informative)

Trepidity (597) | about a year and a half ago | (#43013441)

I don't see it as particularly a public/private difference, but a difference of well-run and poorly-run organizations. That might correlate, but I've seen plenty of examples on the opposite sides as well.

On the private-sector side: have you ever looked at how Enterprise procurement works? Cisco makes a ton of money doing exactly the same thing there. You find some Fortune 100 firm that has a lot of money but no clue about technology, and you recommend a ridiculously over-specced system, which they buy because nobody ever got fired for buying Cisco. Oracle makes their money doing that too.

And on the private-sector side: procurement in Scandinavia is much less of a mess than in the US and UK, which is why building the Copenhagen Metro cost less than 1/10 of the per-mile cost of most U.S. metro construction projects.

Re:It's honestly slightly astonishing... (3, Insightful)

Xest (935314) | about a year and a half ago | (#43013597)

"I don't see it as particularly a public/private difference, but a difference of well-run and poorly-run organizations. That might correlate, but I've seen plenty of examples on the opposite sides as well."

Yes, this is absolutely true. The problem (at least here in the UK) is that public sector is almost universally bad because there is absolutely no accountability. In private sector, if you do a bad job, you eventually go bankrupt and lose your job, in public sector that never happens.

I'd be interested to know why public sector projects do work better in Scandinavia, is it because there is more accountability, or is it simply because they're not given so much money to work with? On a project that can be achieved with £1million for example, what should happen is:
Person 1) Here's £1million to go do x
Person 2) I can't do x with only £1million
Person 1) Okay, you're fired, we'll get someone who can

What actually happens is:
Person 1) Here's £1million to go do x
Person 2) I can't do x with only £1million
Person 1) Okay, here's £2million more

Or just outright:
Person 1) Here's £3million to go do x
Person 2) Okay

I do completely agree the problem isn't specific to public sector just because public sector is public sector, but because of the nature of public sector generally in that it tends not to be held to account or given enough incentive to do a good job (and by incentive, I mean, you get to keep your job if you don't do a shit job). Natural selection is inherent in private sector - those businesses or employees that do shit, go bankrupt or get fired, but it's not inherent in public sector due to the fact central government will just bail them out, and up taxes to cover the cost if need be. There it needs to be created artificially, and I don't think many governments do that.

This is also why the bank bailout may not have been particularly smart, but interestingly as a result of the bank bailout governments have created a lot more legislation to govern how they operate and what they can get away with precisely to create at least some of the necessary accountability artificially. Yet they wont do that with public sector even though it suffers the exact same problems - institutional incompetence fed by lack of accountability.

Re:It's honestly slightly astonishing... (5, Insightful)

nedlohs (1335013) | about a year and a half ago | (#43013661)

You missed the looping which is important, what happens is:

Person 1) Here's $3 million to go do X
Person 2) OK, I shall do it
[ time passes ]
Person 2) Ive finished, and I only spent $1 million, so here's $2 million back.
[ time passes]
Person 1) Here's $1 million to do do Y

Or:

Person 1) Here's $3 million to go do X
Person 2) OK, I shall do it
[ time passes ]
Person 2) We've run out of money but we are almost done.
Person 3) OK, here's another $1 million.
[ time passes]
Person 2) Ive finished.
[ time passes]
Person 1) Here's $4 million to do do Y

If you've worked in anywhere that sells to large businesses/government you will have seen the end of budget rush as departments rush orders to get billed before the end of the budget year so they can spend their allocated budget before they have to give anything left back and get less next round. It's always our busiest time of year.

Re:It's honestly slightly astonishing... (4, Interesting)

Trepidity (597) | about a year and a half ago | (#43013787)

In private sector, if you do a bad job, you eventually go bankrupt and lose your job

In theory and in the long-run, perhaps, but this can take a very long time, and may never happen if other things outweigh it. I have some second-hand experience with how things work in the oil industry, and procurement there is a mess in part because it really has only a marginal effect on the company's long-term survival, which depends almost entirely on a mixture of oil exploration on the one hand, and geopolitical factors like the price of oil and whether Russia is going to confiscate your mineral rights, on the other hand. Overpaying for Cisco routers is lost in the noise: if a company like Exxon is doing well, it can afford it, and if it's going to go bankrupt, it won't be because of Cisco routers.

Re:It's honestly slightly astonishing... (0)

Anonymous Coward | about a year and a half ago | (#43013719)

"(and besides, private sector career progression is more about talent, than how old you are, so it's been a good move career wise too anyway)."

Well, you're always getting older.

Re:It's honestly slightly astonishing... (1)

crazyjj (2598719) | about a year and a half ago | (#43013379)

But the Cisco salesman told them they absolutely needed a 3945, for future expansion and such!

Re:It's honestly slightly astonishing... (1)

fuzzyfuzzyfungus (1223518) | about a year and a half ago | (#43013425)

I'm vaguely sympathetic to the desire to single-source and have something you can monitor with one tool, which would exclude the obvious 'just get a $50 router, FFS' option; but under any reasonable depreciation calculation scheme, it'd probably be cheaper to get an ASA 5505 now, and throw it away if you need something bigger in the future than it would be to get a 3945 now in case you end up gluing a second trailer to your first or something...

(and yes, I know that you are joking.)

Re:It's honestly slightly astonishing... (0)

Anonymous Coward | about a year and a half ago | (#43013501)

The 5505 is exceptional old and EOL. Why would you suggest buying an EOL product? To upgrade in a few years when it won't support a new tech needed? Plus the ASA and the 3945 are very different products in terms of what they do. I'm fairly certain the 3945 (which isn't as high end a device as most people think) fills some need they have that a DLink isn't going to.

I tend not to buy Cisco anymore, but they can be very competitive when they want to be. List price is a bit of a joke, expect public sector to get 60%+ discounts. 40% for private sector on even small orders isn't hard if you (or your VAR) know the right SE

Re:It's honestly slightly astonishing... (1)

silas_moeckel (234313) | about a year and a half ago | (#43013603)

The only thing EOL about the 5505 is the AIP SSC (which was a heaping POS).

Re:It's honestly slightly astonishing... (3, Informative)

silas_moeckel (234313) | about a year and a half ago | (#43013577)

It looks like this was a voip build out. So they specked a router supporting a variety of interfaces (old school T1 and ethernet bits) that did local voip processing with PSTN backup and switching with POE. Getting a POE switch, a voip PBX, and the right router would have been far cheaper and probably used less rack space. To do it all in one box in cisco land it's about the correct box.

Re:Actually, it is quite simple... (3, Informative)

Anonymous Coward | about a year and a half ago | (#43013539)

No, the reason that the 3945s were recommended was because the state wanted routers with redundant power supplies, and the 3945 is the lowest model Cisco makes with redundant power...

Re:Actually, it is quite simple... (1)

Skapare (16644) | about a year and a half ago | (#43013677)

They who wanted dual power supplies? I can see maybe some being used in some places like the State Police. But for all the small schools, too?

Re:It's honestly slightly astonishing... (1)

s0nicfreak (615390) | about a year and a half ago | (#43013547)

So... technological needs are judged by the appearance of the outside of the building? Guess my plan of letting the outside of my house look like I'm too poor to have anything, so that no potential burglars realize there's a bunch of expensive technology-related stuff inside (or of spending all my money on computers and video games rather than fixing the outside of my house... however you want to look at it) should work!

Re:It's honestly slightly astonishing... (1)

Anonymous Coward | about a year and a half ago | (#43013555)

This library [arstechnica.net] has a 3945 [cisco.com] .

Somebody at Cisco must have made quite a bonus...

The 3945 is also used to heat the building in the winter.

Re:It's honestly slightly astonishing... (0)

Anonymous Coward | about a year and a half ago | (#43013625)

I am willing to bet that the redundant power supplies, that the spec. required, are both plugged into the same circuit, if not the same receptacle.

Re:It's honestly slightly astonishing... (0)

Anonymous Coward | about a year and a half ago | (#43013845)

It's only open 3 days a week so generally uptime isn't something to worry about :)

Re:It's honestly slightly astonishing... (1)

Anonymous Coward | about a year and a half ago | (#43013759)

Is it possible that it was cheaper to standardise and buy x thousand of the same unit rather than assessing x thousand premises for their individual needs?

A biz trying to make a sale? (2)

Anonymous Coward | about a year and a half ago | (#43013219)

And a customer that doesn't know what they're buying? Say it ain't so!

Caveat emptor - get smarter buyers.

Re:A biz trying to make a sale? (2)

Virtucon (127420) | about a year and a half ago | (#43013359)

Competitive bidding and requirements development are cornerstones of all government procurement processes. I guess the WV procurement team needs a refresher course in doing that because if they'd gone to HP or any other provider they would have provided their hardware solution which could have demonstrated that what Cisco proposed was overblown. Nobody likes competitive bidding but it does help weed out these kinds of things.

Re:A biz trying to make a sale? (0)

Anonymous Coward | about a year and a half ago | (#43013461)

But you shouldn't have to have such a process for a tiny branch library. You should be able to spend your $49.95 for the kind of router you need and not have some state agency tell you you need one that costs $20k.

Cisco Sucks BUT... (-1, Flamebait)

CajunArson (465943) | about a year and a half ago | (#43013221)

I'm holding the government bureacrats and Cisco's feet to the fire on this one BUT... if Cisco hadn't sold "oversized" routers to those government agencies, we'd just be hearing about how Cisco intentionally pawned off "insufficiently specced gear" that would be "obsolete overnight" on the West Virginia government instead... there's no way to win with an inherently bad idea.

Speaking of which, after over $1 Trillion in stimulus to "rebuild infrastructure" (yeah right), the State of the Union address was asking for more money to... rebuild infrastructure. Did it already fall apart again?

Re:Cisco Sucks BUT... (5, Insightful)

Luckyo (1726890) | about a year and a half ago | (#43013289)

There's a whole lot of room to go down in specs before you could even consider talking about "insifficiently specced gear".

It's kind of like using that argument when someone needed a shovel and got sold a truck with a plough.

Re:Cisco Sucks BUT... (5, Insightful)

LurkerXXX (667952) | about a year and a half ago | (#43013335)

Apparently you are totally unaware of the state of bridges in this country if you think our infrastructure is fine.

We've got lots of infrastructure that is falling apart. West Virginia just happens to have IT clueless folks running the place spending money where they shouldn't, and the biggest networking IT specialist around recommended something insane.

Re:Cisco Sucks BUT... (0)

Anonymous Coward | about a year and a half ago | (#43013431)

I've been told we need to spend $1 Trillion on things like this. Obama passed the stimilus saying it would be used for this. It became part of the baseline budget so we are now on our 4th year of nearly $1Trillion stimilus to pay for this. You are telling us that we STILL need to pay for this.

Apparently having the federal government pay for these things will not happen. We have now spent over 4 times the estimated cost on it in a 4 year period and it is still not done. It is either a lie that it needs to be done, or they will never actually fund it, either way you are now required to pay $1 Trillion a year every year from now on to not have it done and be told to pay for it.

Meanwhile, cutting $85 Billion from the budget will apparently destroy the federal government and the economy.

Anyone who listens to the government about spending and believes them is a total moron.

Re:Cisco Sucks BUT... (1)

CajunArson (465943) | about a year and a half ago | (#43013457)

Did I ever say the infrastructure is fine? NO
I said: Obama wanted "stimulus" to "rebuild infrastructure" He got it. Now all of the sudden it's like that stimulus never happened and he has amnesia about it. Could it be that it was completely wasted on things like.. overpriced routers... instead of being spent on the precious "infrastructure" like we were promised? Could it be that West Virginia's government didn't want to use all that taxpayer money it got for something useful? Could it be that handing gobs of cash to unaccountable politicians is just as bad an idea as giving liquor and card keys to teenagers?

Re:Cisco Sucks BUT... (1)

nedlohs (1335013) | about a year and a half ago | (#43013729)

None of it is "wasted". Every dollar counts on the GDP side of the ledger and funnels to big business. Exactly as designed. Makes the numbers look better and sends money to those deserving people who funnel money into Washington lobbying.

Re:Cisco Sucks BUT... (1)

ranulf (182665) | about a year and a half ago | (#43013351)

There's also the case that it's isn't Cisco's responsibility to ensure it's buyers aren't buying something they don't need. From TFA:

"The Legislative Auditor believes that the Cisco sales representatives and engineers had a moral responsibility to propose a plan which reasonably complied with Cisco's own engineering standards,"

Maybe a moral responsibility, but certain not a legal one. They proposed a solution that'd perform the task required, the customer said "yes, we want that" and handed over the money. If they're not prepared to do due diligence, that's not Cisco's fault unless Cisco had been commissioned to make a report to evaluate exactly what was required to equip each site for the cheapest price possible. The article suggests that it was more like "we have x sites that need routers, some as big as y" and Cisco sold them x routers capable of doing y.

Re:Cisco Sucks BUT... (2)

msauve (701917) | about a year and a half ago | (#43013515)

"Maybe a moral responsibility, but certain not a legal one"

Not so certain. The auditor's opinion, and first recommendation from that section of the report:

It is the opinion of the Legislative Auditor that the Cisco representatives showed a wanton indifference to the interests of the public... The State Purchasing Division should determine whether the actions or inactions by the Cisco representatives fall under the purview of [section] 5A-3-33d of the West Virginia Code and are grounds for debarment.

That section states:

Grounds for debarment are:...Any other cause of a serious and compelling nature amounting to knowing and willful misconduct of the vendor that demonstrates a wanton indifference to the interests of the public and that caused, or that had a substantial likelihood of causing, serious harm to the public.

Re:Cisco Sucks BUT... (1)

nedlohs (1335013) | about a year and a half ago | (#43013757)

And you can cross vendors off the list of vendors you will consider for future contracts for doing things which aren't illegal, so how does that make any difference?

Re:Cisco Sucks BUT... (3, Interesting)

vulcan1701 (1245624) | about a year and a half ago | (#43013387)

The way to win would have been to hire or use a CCDA or CCDP certified consultant. The design associate/professional track is for consulting on Cisco networking device options, feature sets and port density.

Unfortunately, most consultant firms hire with only CCNA certification which means you are knowledgeable enough to be dangerous.

Re:Cisco Sucks BUT... (1)

Shimbo (100005) | about a year and a half ago | (#43013593)

The way to win would have been to hire or use a CCDA or CCDP certified consultant. The design associate/professional track is for consulting on Cisco networking device options, feature sets and port density.

No, the way to win would have been to conduct a proper tender exercise. Write a specification, and hire an independent consultant to help review bids against it, if you aren't smart enough to do that in house.

Re:Cisco Sucks BUT... (1)

Skapare (16644) | about a year and a half ago | (#43013627)

And how is it that a consultant certified for one company can advise across the realm of many companies that should have been open to the bidding process?

Re:Cisco Sucks BUT... (4, Insightful)

DarkOx (621550) | about a year and a half ago | (#43013393)

Most equipment has a finite life. Yes we have all see that 15y/o Cisco box in the back room everyone is afraid that if the UPS allowed to power down the fans in the Cisco or its power-supplies would never spin back up. Mostly competent business or state agencies depreciate stuff faster than that and replace it.

You should be able to reasonably estimate the needs of a facility like a library 3-5 years out. Then you build yourself a little head room. Take your most critical estimated capacity requirement multiply by 1.4 and size accordingly. Even that can lead to some over kill; like putting a 2811 where an 1841 might do, but its usually enough prevent any nasty surprises that require replacing equipment before the end of its service life. On balance it works out okay cost wise and may leave you with some residual value in the equipment that you can then resell. No reasonable person would have faulted Cisco for doing what I just described but some of the reports on this clearly show them over specifying by 5 or 10 times and more.

Re:Cisco Sucks BUT... (1)

RazorSharp (1418697) | about a year and a half ago | (#43013413)

You should care about the state of infrastructure. If your bridge collapses, it will fall on your head!

Re:Cisco Sucks BUT... (0)

Anonymous Coward | about a year and a half ago | (#43013449)

$1 trillion in stimulus for infrastructure? IIRC, the stimulus was less than a trillion, and and only about $100 billion went to infrastructure. Considering that studies have estimated that the US needs about $2 trillion in infrastructure repairs, let alone upgrades, the amount spent from the stimulus was far to small to even come close to doing was is necessary,

Re:Cisco Sucks BUT... (1)

Trepidity (597) | about a year and a half ago | (#43013467)

"Stimulus" and "infrastructure" don't tend to go together well, especially in the U.S., which has a fairly decentralized regulatory system requiring coordination between local, state, and federal agencies, multiple levels of agency review, and the opportunity for nearly anybody in the vicinity to sue over anything from environmental concerns to contracting concerns to NIMBY reasons. That all takes a long time, while the purpose of stimulus spending is to build stuff now. So the way that circle is squared is to put stimulus money towards so-called "shovel-ready" infrastructure projects, those which are already approved and ready to go. On occasion those are real infrastructure projects which just happened to, by stroke of luck, be ready right when the stimulus bill came down. But in a lot of cases they're more boring maintenance stuff rather than long-term infrastructure. In a lot of cities, for example, the majority of the money went to repaving roads.

Re:Cisco Sucks BUT... (0)

Anonymous Coward | about a year and a half ago | (#43013491)

Different subject. The President is talking about roads and bridges, not IT infrastructure. And if you think we're done repairing and replacing old bridges that need replacing, I've got a cracked abutment I would like to show you.

Being a crook is not illegal (1)

amoeba1911 (978485) | about a year and a half ago | (#43013225)

So they got boondoggled. There's really nothing they can do. Someone is counting their ill-gotten gains at everyone else's expense, and that's business as usual for the world. That's always how it is, people unjustly enrich their pockets at everyone else's expense. It's not illegal to be an unethical crook.

Re:Being a crook is not illegal (2)

Threni (635302) | about a year and a half ago | (#43013245)

What could be done is expecting Cisco to pay back the difference between what they got and what they should have got next time a contract comes up somewhere...they have to be $x cheaper than their rivals charge for the same spec kit. There has to be a price otherwise they won't change.

Re:Being a crook is not illegal (1)

thogard (43403) | about a year and a half ago | (#43013513)

Many states and the federal government used to have rules that would fine your company if the profit exceeded 25%. The fine of a 26% profit margin was about 10%. At 27.5% the fine would break even with the profit. Maybe it is time to bring back those kinds of rules or enforce them when they are still in the law books.

Re:Being a crook is not illegal (3, Insightful)

silas_moeckel (234313) | about a year and a half ago | (#43013541)

It looks like the state wrote a RFP the specified cisco kit and specific cisco kit at that. It looks like they wanted a single box for routing, switching, wireless, secure voip with PSTN fallback, waas, and POE. Cisco charges a HUGE premium to put all that into a single box. The VOIP and WAAS are baby servers each and add the switch in you have filled the add in slots. Anyways this is not something to blame on cisco the IT guys picked a winner by what they specked and how they specked it. Having worked with government IT before it's easy to get stuck doing something stupid, case in point agency was looking to upgrade there 80's 56k frame relay bridged network. I came in as a sub, they had specified a cisco 7500 as the core for a upgrade to DS3's and that it be bridged. Well noting that they were an all IPX shop I recommended routing it took longer to get that change put into the contract and I had auditors questioning if I was trying to give them something lesser. They extended the project and had be connect up the locations via preexisting fiber they are paying 130k a month for DS3's to facilities they have dark fiber to. I had to fight to let the dark fiber be the primary routed path as they did not want to loose face with there 7500 DS3 5 year contract boondoggle, in the end they went from 56k frame to gige fiber with a 45mbs DS3 backup network. At the end of the day if you let the gov IT guys spec more than what they want to do they can easily start picking winners as far as manufacturers, in the case of that 7500 I'm very sure he wanted it as a resume point that he worked with them.

Re:Being a crook is not illegal (1)

Trepidity (597) | about a year and a half ago | (#43013485)

If you're hired as a consultant, you're supposedly being paid to attend to the interests of a client, and there is some level of complete disregard of those interests which should rise to the level of fraud.

Re:Being a crook is not illegal (2)

RazorSharp (1418697) | about a year and a half ago | (#43013495)

It's still a bad situation for Cisco. I remember a similar story about them several months ago that happened in California. When a company builds a reputation for dishonesty and ripping off their customers, other potential customers will stop even considering them as an option. Even if this type of news doesn't get the same type of attention as the latest high-profile murder case, Cisco's competitors are paying attention and this will become a part of their sales pitch.

It's not illegal to be an unethical crook.

Crook - someone who has committed a crime or has been legally convicted of a crime

Your point may be valid but your choice of words is not.

Great Going! (1)

For a Free Internet (1594621) | about a year and a half ago | (#43013227)

All music is now to be performed in the following key: A minor! With the following instruments: accordion, flute, piano (upright only, NO HARPSICHORDS!) and cowbell. The following names are henceforth prohibited: Jerry, Jerome, Jay, Jason, Jesus, Jill, Jack, James, Julieta, Julie, Jojo, Jayjay, Jayella, Jerkwad. Please confirm your acceptance of these new regulations by commenting below, or by not commenting below. Thanks and HAVE A NICE DAY!

Re:Great Going! (0)

Anonymous Coward | about a year and a half ago | (#43013703)

Confirmed.

Newspeak (2)

AmiMoJo (196126) | about a year and a half ago | (#43013233)

"Not Performed Legally"?
"'legally unauthorized purchasing process"?

So, the opposite of legal... would be illegal.

Also: "Cisco showed a wanton indifference to the interests of the public"

Really, a profit driven company tried to fleece the public? I'm shocked, shocked like a man making toast in the bath!

Re:Newspeak (5, Insightful)

Luckyo (1726890) | about a year and a half ago | (#43013301)

In a decent world, this would get the company blacklisted for all government-funded future purchases for a certain time. Which would make company care a LOT about not fleecing the public.

Re:Newspeak (1)

MurukeshM (1901690) | about a year and a half ago | (#43013437)

Blacklisting Cisco is being mooted as a possible punishment according to Ars.

Re:Newspeak (1)

Luckyo (1726890) | about a year and a half ago | (#43013465)

"But that would be regulation".

Possibility gets taken off the table.

Re:Newspeak (1)

Shatrat (855151) | about a year and a half ago | (#43013685)

It would be regulation if the state was telling others how to make their purchasing decisions. The state altering its own purchasing decisions is just good decision making.

Re:Newspeak (5, Interesting)

penix1 (722987) | about a year and a half ago | (#43013523)

Disclaimer: I work in the office where this occurred although NOT a part of this mess...

Having said that, if anyone has ever tried to work with the WV purchasing division you come to realize they practice real hard to rise to a level of incompetency the likes of which would make a pinhead blush. This isn't the first time officials have tried to "get around" them. Joe Manchin himself used a practice called stringing to avoid using them when he was governor. Projects languish over there for years meanwhile the clock is ticking on the funds available. I have had a contract sit there for 18 months with no end in sight.

I am not trying to excuse what was done simply trying to get others to see a broken system in this state. When you make things so difficult to work with of course people try to find a way a way around it. That is human nature. This incident has less to do with any sort of corruption (although some did exist in the Cisco sales rep and his representations) than it had to do with trying to meet the conditions of the grant quickly which was one of the conditions itself. Remember, stimulus funds were supposed to be used for "shovel ready" projects. Few states met that requirement....

Re:Newspeak (4, Insightful)

jimbolauski (882977) | about a year and a half ago | (#43013569)

"Not Performed Legally"? "'legally unauthorized purchasing process"?

So, the opposite of legal... would be illegal.

Also: "Cisco showed a wanton indifference to the interests of the public"

Really, a profit driven company tried to fleece the public? I'm shocked, shocked like a man making toast in the bath!

Cisco did not fleece the public they put in their proposal and the government accepted it, this has all the markings of money burning a hole in the auditors pocket. The auditor had $24 million to spend so they spent it, they don't care if they had a cheaper option, they wanted the best they could get for the money they had, even if they didn't need it. Unfortunately the way government spending works is you are expected to spend every dime they give you. If you don't spend it all then you are punished by getting less or none next time around.

Re:Newspeak (0)

nospam007 (722110) | about a year and a half ago | (#43013707)

In a land where people have oversized bodies in oversized clothes, oversized homes, eat oversized menus, drive in oversized cars, buying oversized routers is a no-no?

Must be a skinny bitch complaining.

Isn't waste the whole point of grants and stimuli? (1, Flamebait)

PolygamousRanchKid (1290638) | about a year and a half ago | (#43013255)

Spending someone else's money on something they can't afford themselves, and don't really need anyway, in the name of fixing the economy . . . ?

Re:Isn't waste the whole point of grants and stimu (1)

wbr1 (2538558) | about a year and a half ago | (#43013285)

Spending someone else's money on something they can't afford themselves, and don't really need anyway, in the name of fixing the economy . . . ?

Only in part. It is also to repair, replace, and create new ifrastructure, thereby allowing businesses to do more. That 'more' dtill requires the businesses to spend on expansion that uses said infrastructure. Right now the only thing businesses spend on this government to buy laws.

Re:Isn't waste the whole point of grants and stimu (0)

thrich81 (1357561) | about a year and a half ago | (#43013323)

I suspect that was the sentiment among those who opposed the feds subsidizing loans to bring electricity to those bumpkins in the rural areas in '36. See Rural Electrification Act of 1936.

Re:Isn't waste the whole point of grants and stimu (0)

Anonymous Coward | about a year and a half ago | (#43013381)

Yes, because truly, this is the infrastructure America needs to be successful and grow its economy in the 21st century! Oh, and because the money is from the federal government, it's free, and hasn't cost any part of the economy anything ever and it never will. The economics are just like MAGIC, I tell you - that is to say, fake, illusory, and maybe even fraudulent!

Re:Isn't waste the whole point of grants and stimu (1)

Virtucon (127420) | about a year and a half ago | (#43013399)

uh, mods, this isn't flamebait. It's a good point. The whole ARRA was to push "shovel ready" projects and stimulate the economy. In this case all it stimulated was Cisco's quarterly results.

Re:Isn't waste the whole point of grants and stimu (1)

h4rr4r (612664) | about a year and a half ago | (#43013517)

But the righties are always telling us about this making jobs. I thought giving all the money to the "job creators" is exactly what they wanted to do? Thus they will hire people, not because they have work for them but because they have too much money or something.

Re:Isn't waste the whole point of grants and stimu (0)

Anonymous Coward | about a year and a half ago | (#43013639)

Well, those giant money bins [wordpress.com] for them to swim in all their cash to build themselves, you know...

Re:Isn't waste the whole point of grants and stimu (1)

DarkOx (621550) | about a year and a half ago | (#43013447)

Yep I am sure this created all kinds job hours over seas keeping the production line printing up router PCBs a little while longer. After being sold at Cisco's (I would guess based on price breaks I have seen them give VARs) 140% markup a whole lot of good US tax payer dollars help fill the deposit capital requirements of a European bank. After all we know Cisco never re-repatriates profits; okay maybe these particular dollars hit US entities and tax roles but they just offset other dollars that would have been brought back for payrolls, dividends, expense otherwise so its wash. Glad Obama is doing so much "investing" in winning our future.

More auditors please! (2)

jsprenkle (2009592) | about a year and a half ago | (#43013275)

we should make them a superhero class!

A fool and his money (1)

ebonum (830686) | about a year and a half ago | (#43013291)

The people who bought these should be punished. Publicly. Then they should be barred for life from public service.
Then the people who hired these fools should be punished. Publicly. And barred for life from public service.

Come on people. Firing is easy. It is hiring that is hard.

Re:A fool and his money (1)

characterZer0 (138196) | about a year and a half ago | (#43013363)

The people who voted for the people who hired these fools should be punished. Publicly. And barred for life from voting.

Re:A fool and his money (2)

Larryish (1215510) | about a year and a half ago | (#43013369)

Those Responsible for Sacking the People Who Have Just Been Sacked, Have Been Sacked.

Re:A fool and his money (1)

Tokolosh (1256448) | about a year and a half ago | (#43013591)

A Møøse once bit my sister ...

Overprized (most likely) and oversized ... (4, Interesting)

garry_g (106621) | about a year and a half ago | (#43013313)

Looking at the regular wholesale price in Germany (which is most likely higher than in the US), a price of $20k per piece would require e.g. a voice bundle. Plus, with a purchase of that many devices, Cisco would allow for a project price that would save at least another 20-30% on the purchase ...
As for the oversized, unless they were setting up every site with full 1G or more, they are oversized by at least one or two models ... 29xx series will in most cases handle any "regular" speed used in WAN environments, even with partial 1G speeds ...

Re:Overprized (most likely) and oversized ... (0)

Anonymous Coward | about a year and a half ago | (#43013683)

Mind you, that $24 million price-tag probably includes related incidentals such as shipping, installation, configuration and possibly even the salaries of the IT responsible for the running of those routers. When you see a nice round number like that in government purchases, it is almost always for more than simply the product itself. Its quite possible Cisco did give them a wholesale or bulk price that isn't immediately evident from the article.

Of course, that's not to say that there wasn't malfeasance (or at least incompetence) on both sides; the grant for not determining if such powerful routers were actually needed, and Cisco for not suggesting a different option.

Been there, done that (5, Informative)

Virtucon (127420) | about a year and a half ago | (#43013339)

I can attest that while Cisco makes great products their sales folks and technical sales consultants are very unscrupulous at times. At a company I was working for we were looking for competitive bidding on a new Wifi Infrastructure. We were currently using old Cisco equipment however management wanted to have an open process and do a competitive bid. The Cisco sales staff and their channel support did everything they could to undermine the competitors even though our bake off showed that in terms of some features, the competitors had better features and security. Ultimately when they sensed that they would lose, they used a product roadmap meeting with our CIO as an opportunity to throw my management and my entire team under the bus at our "flawed" thinking.

Hard sell techniques? Yes. Unprofessional? Definitely.

In this case, it sounds like the Cisco sales rep was looking at his bonus, which was probably very very lucrative considering the total sales contract price. Any Network Architect or Engineer worth his salt wouldn't have recommended this overblown hardware based on the requirements. Hopefully West Virginia will use this opportunity to fix the holes in their procurement process so this doesn't happen again because I don't see Cisco ever giving them a refund.

Re:Been there, done that (2)

K. S. Kyosuke (729550) | about a year and a half ago | (#43013463)

Ultimately when they sensed that they would lose, they used a product roadmap meeting with our CIO as an opportunity to throw my management and my entire team under the bus at our "flawed" thinking.

So, was their evil plan foiled or not?

Re:Been there, done that (2)

silas_moeckel (234313) | about a year and a half ago | (#43013659)

Nobody's sales staff is as bad as EMC. After loosing a bake off due to inability to meet minimum performance requirements (which everybody else had done) with there SE's allowed to do any tuning to the SAN and OS over 2 days. They went up two levels to the CEO face to face out of work and proceeded to trash testing methodologies, then insisted that doubling the server buy would make there stuff perform (to the tune of 15m, more than the SAN gear in total), and for the ultimate in wrong started making plea's that if they did not win the business the sales guy would loose his house calling the CEO's wife.

Cisco's M.O. (3, Informative)

pedestrian crossing (802349) | about a year and a half ago | (#43013343)

I'm not surprised, this is Cisco's M.O.

Every quote I've ever gotten from them has been massively inflated by speccing higher end equipment than is necessary. They always give the big pitch for the bigger product - usually to upper mgmt, whether it is overkill or not. Everyone wants to believe they are "the enterprise", so Cisco talks them into enterprise-grade equipment.

Not to say that the state employees shouldn't have questioned the quote. But odds are that the only technically knowledgable people involved were Cisco's people, and they are the pros at fleecing the sheep.

20000$ per router (0)

Anonymous Coward | about a year and a half ago | (#43013421)

24million$ / 1164 = 20618$
What kind of beast is that!? I could understand some bureaus ordering 2 or 4 each, but 1164 at once!?
What the fuck is that about, someone needs the following process:
a) get fired
b) get sued for obviously wasting taxpayer money
c) get barred from working for government ever again.

Re:20000$ per router (1)

Skapare (16644) | about a year and a half ago | (#43013835)

Apparently it was for hundreds of locations around the state ... large and small.

Bureaucracy (0)

Anonymous Coward | about a year and a half ago | (#43013433)

Whenever you see complaints about bureaucracy and red tape in government, think back to this, and realise it's not all bad.

For contracts and purchasing, you can choose between big piles of paperwork for everything, or running a regional budget like a big petty cash tin.

Nice spin there... (0)

pla (258480) | about a year and a half ago | (#43013477)

Cisco 'showed a wanton indifference to the interests of the public' in recommending the investment in its model 3945 branch routers

No, please, don't throw millions at us. Here, take this $50 Linksys router instead.

I hate corporate America as much as the next guy, but in this case "Wanton indifference" translates as "performed their legal duty to maximize shareholder value". In a perfect world, should they have said no? Sure. In this world, making that call would have gotten them (rightly) sued by shareholders.

Re:Nice spin there... (4, Insightful)

ScentCone (795499) | about a year and a half ago | (#43013573)

performed their legal duty to maximize shareholder value

I'm getting tired of people translating this meme into reasons why a sales rep performed jackassery like the sale in question. Yes, the company owes its shareholders a true and ongoing effort to make their shares valuable. Part of that effort includes making the company valuable by maintaining its market-worthiness through the stewardship of its reputation with its customers. When a sales rep oversells like this, and it comes out in the press, it erodes the value of the company, and is counter to the make-shareholders-happy mandate.

The "corporate America is inherently bad because publicly traded companies must do wrong-headed things because they're required to" attack on businesses is just wrong. Thousands of businesses, every day, increase their near and long term value by being valuable to their customers. Nobody likes to talk about that in ranty internet forums because it takes all the fun out of shouting about The Man etc.

What Cisco did in this case was demonstrably not in the shareholders' interests.

I hate corporate America as much as the next guy

What you hate are the people and incidents that make you hate those people and incidents. In the meantime, millions of people at work in thousands of companies do sensible things every day, and have loyal customers as a result. But that never makes the news because it doesn't provide something to bitch about, and where would Slashdot be without that?

Re:Nice spin there... (1)

Skapare (16644) | about a year and a half ago | (#43013799)

What you hate are the people and incidents that make you hate those people and incidents. In the meantime, millions of people at work in thousands of companies do sensible things every day, and have loyal customers as a result. But that never makes the news because it doesn't provide something to bitch about, and where would Slashdot be without that?

... and the CEOs and other executives that allow and even encourage this kind of activity.

In a company the size of Cisco, such things might not even be seen by C-level executives. Being as this is a case in West Virginia, though, it is very likely being at least observed, if not now managed, by the CEO, since West Virginia where he grew up and first attended college, and got his law degree.

What? (1)

argStyopa (232550) | about a year and a half ago | (#43013483)

"Cisco 'showed a wanton indifference to the interests of the public' "

On what planet does CISCO bear a responsibility to the 'interests of the public'?

Seriously?

CISCO's responsibility to its shareholders, pretty much* full stop.

*I'd argue it's in its longer-term self interest to pay attention to the interests of its employees, and probably its home-community. But to the 'public in general'? None whatsoever.

The responsibility lies entirely with the 'expert' or 'consultant' hired to run the project. And if that person was so stupid that they hired a vendor as a consultant (ie someone with a vested interest in the result), then perhaps *shock* someone might even get fired for incompetence?

Re:What? (0)

Anonymous Coward | about a year and a half ago | (#43013777)

When they sell to a state or federal government agency where you agree to certain terms before you ever do even one dollar of business with them? I was in computer sales before, have a relative that works in procurement. While there maybe and usually is quirks and workarounds for many things the fact of the matter is there is always red tape type agreements before you ever do any business, and serious consequences if you fuck up and they decide to come after you.

Re:What? (2)

Somebody Is Using My (985418) | about a year and a half ago | (#43013783)

On what planet does CISCO bear a responsibility to the 'interests of the public'?

Seriously?

CISCO's responsibility to its shareholders, pretty much* full stop.

Why? I mean, as a citizen of this country, I am expected to show some responsibility to the nation and my fellow citizens. I can't just run amuck and do as I please, raping and plundering. And not just because the law says I can't but because that's part of a social contract that helps keep civilization going.

Why should a corporation - especially in America, where it is granted pseudo-personhood - be exempt from this expectation?

I need to make a living too; I have a responsibility to my family. That doesn't mean I can go out and bilk the government out of billions.

Corporations make use of public resources - mail, roads, subsidized electricity and power, an educated workforce, protection from foreign invasion. They have as much responsibility to the country as any person.

Does their charter indicate that they need to pursue courses of action that are profitable to their shareholders? Of course. But not at a cost to the host nation that supports them. To suggest otherwise is extremely damaging to the society we live in, and it's disheartening to see such ideas even bandied about.

The Problem (1)

DaMattster (977781) | about a year and a half ago | (#43013503)

The problem, as I see it, is not in the fact that they used Cisco but that it looks like it was a no-bid contract. There are other companies out there with routing equipment that compare favorably with Cisco products. I've found Cisco fanboism to be as annoying as Apple fanboism.

Dual power supplies (2)

Skapare (16644) | about a year and a half ago | (#43013535)

Most of the report focuses on dual power supplies. Are those really needed? Maybe. Probably not in most cases.

Dual power supplies perform a couple of useful functions. If a power source fails, the other power supply fed by the alternate source keeps the router running. This is good for critical operations, and in maybe a few circumstances like the state police, it might have been useful to them. The other function is to keep the router running if a power supply dies. I've found this to be rare, but not impossible, with Cisco equipment. Again, it depends on how critical things are. Students and teachers in a school might be quite upset, and some online education processes can be disrupted, but education can still go on with substituted lessons during the time it takes for a replacement to arrive.

As for capacity, the router should have been chosen to match the designated capacity level, which did vary widely. Then when any facility needed to be upgraded to a higher capacity level, the router would be swapped out to match. A hand-me-down approach could be used for another smaller facility to use the bumped out router for their capacity growth. A range of routers in a pool could make that work. OTOH, politicians might also cry foul if a few routers are sitting in storage to support hurried replacement and hand-me-down steps.

Cisco and FUD (4, Informative)

Gim Tom (716904) | about a year and a half ago | (#43013553)

This really doesn't surprise me. Having worked with a State government in the late 1990's I was in charge of a conversion from Token Ring to eithernet for a moderate sized network for an agency. Cisco seemed to assume that we were all dumb as dirt and insisted that no other brand of eithernet switches would work with their routers which we were already using and which we did want to stay with for the one router we needed.. A classic case of FUD. Fortunately, they were high bid on the overall project by a factor of over two! By using the vendor WE wanted (who also had the lowest total cost) for the switches, and keeping the Cisco router, the conversion went off ahead of schedule and way under budget and worked fine for as long as I was there. My experience taught me that they really didn't CARE what was best for the customer, they just wanted the sale.

Something wrong with plain switches? (1)

jickerson (2714793) | about a year and a half ago | (#43013619)

Pardon my ignorance, as I'm not a network-admin type in the least, but would there be something wrong with using plain gigabit ethernet switches with an optical module (or something to the effect, not sure of the terminology). Is there any future use for the system that would be hindered by using plain switches instead?

Anyone see this in the article? (1)

Anonymous Coward | about a year and a half ago | (#43013647)

The Department of Education told him that it "did not request or require that the routers for the state's schools have internal dual power supplies. Education would not have made this requirement because unless a school has two power sources the feature of dual power supplies would have no use."

Quality network engineer you have there, Dept. of Education.

In all seriousness, this is not new. DHHR in WV just fired some folks because they went public with information about a contract that was awarded to a contractor under mysterious circumstances. As a West Virginian, the answer is plain. Look for the money, tickets, campaign contributions. This is nothing new for the state, unfortunately.

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