Deloitte Full contract as 12/18 15K a day fine sounds good!

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Deloitte Full contract as 12/18 15K a day fine sounds good!

Postby RandyScott » Mon Dec 16, 2013 3:51 pm

A lot of the press is running with a story that Deloitte is going to be fined $15,000.00 a day starting December 20, 2013 if they do not fix CONNECT.

That sounds good as it gives the people an inkling that there is some form of punishment penalty being applied. When you look at DEO daily updates they dont put that 15K daily fine in writing. It is all from the mouths of or emails of the DEO office of communication to the media to publish. The media is going with it.

Government release of documents trend toward an idea of transparency. The contract and amendments on DEO site are there all 275 pages of them. But they are all in image format meaning text is not recognized for easy search. So I took the 275 page image and recognized every word of it so it can be searched. It is a large file. Search terms that should be tried are "contract shall not exceed" shows on pages 3, 123, 134, 162, 193, 221, 226, 232, 248, 260, and try "contract price" shows on pages 66 (3 times) ,67 (5 times) 96 (2 times) , 102 , 104, 110, 125, 126 (7 times), 128, 129, 134, 163, 184, 187,190, 196, 197, 201, 202, 222, 223,227, 228, 232, 234, 235, 244, 255, 257, 261, 263.

So here is the truth. The base price of page three of the contract states "The Agency's financial obligation under the Contract shall not exceed $39,843,769."

The DEO agency in 2012 June negotiated a reduction of $4,500,000.00 from the contract price. The agency on November 21, 2013 reduced the contract by $1,000,000.00 more for a total of $5,5000,000 and earned a 500,000.00 credit against future billing. So most would think that would be subtracted from the contract price of $39,843,769? NOPE! By the time the most recent amendment was created ""The Department's financial obligation under the Contract shall not exceed $45,630,339," the amount of the contract was upcharged for extras. SO subtract from 45,630,339 the two reductions of $5,500,000.00 and DEO paid more than the shall not exceed amount listed in the base contract.

With the 500,000.00 credit the press is reporting if you multiple 15,000 * 35 days = $525,000.00. Since that fine is not listed anywhere in the news release I conclude that "fine" is the credit spread out over the 35 day payment extension authorized under the November amendment.

In other words DEO and Deloitte both know this will not be fixed and the so called fine covers them for the next 35 days to complete the 500K credit.

Confused ? Sorry it is all there. This is not a fine. This is the 500K credit for the known 35 days after Dec 20 AND Deloitte has made more then the base contract even with the reductions and their not done yet. On December 20 they were supposed to collect

$615,000
$67,836
$131,059
$108,398
$378,604
$155,887
$1,586,843

Now they will just have to wait 35 days for that.

Anyway dig in your self I placed the contract here and have it text searchable for you.

I find nothing in there about them fixing anything by December 20, 2013. That date is the date of goals and payments. If they fail to meet those benchmarks the amendment only pushes the payment dates up 35 days going forward. December 20th was a payment date. Now it will default and all future scheduled payments will be extended 35 days. That simple! They already know it will not be fixed in 35 days hence the 500,000 credit (15K * 35 days 525k). Ask Deloitte what their daily charges are to DEO I bet it is 15K!

As far as the 15K fine the press is reporting in my study that equals the $500,000.00 credit spread out over the 35 days of payment extensions starting December 20, 2013.
Attachments
UCCBIS Contract_Final_2013_12_16_downloaded.pdf
Contract OCR optimized for word/text search really large file 33 Mbs.This one includes all amendments through 11/21/2013
(31.41 MiB) Downloaded 271 times
2013_11_21_amendment_Deloitte_connect.pdf
Contract Amendment although included in the full contract above I placed it here separately to
(849.98 KiB) Downloaded 283 times
RandyScott
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