TO: All Senators
FROM: Don Gaetz, President
SUBJECT:Senate Contract with Spider Data Systems
DATE: December 7, 2012
You may have seen a number of news reports as well as a report published today by Integrity Florida regarding the Senate’s contract with Spider Data Services.
Prior to becoming Senate President three weeks ago, I learned a $5.5 million no-bid contract was negotiated in 2011 between the Senate and a company named Spider Data Systems to develop and operate a “Transparency 2.0†website. The stated purpose of the contract was to develop a website to make it easier for legislators and legislative staff to track state spending and contracting. I saw the contract for the first time after I was sworn in on November 20.
I asked the Senate General Counsel to review the contract and we met with the vendor yesterday and learned the following:
After investing 5 million taxpayer dollars in this product, the Senate does not own it. Moreover, the Senate has no right to use it beyond December 31, 2012, unless the vendor is paid an additional $1 million per year.
Under the current contract terms, the $1 million per year in additional payments would only allow 600 “licenses†to be issued by the vendor to legislators and their staff to use the product, with no availability for the media or the public.
The vendor said they turned the completed product over to the Senate in December, 2011. At yesterday’s meeting, the vendor said they did not know how many, if any, Senate employees were actually regularly using the site or for what purposes.
In answer to a direct question yesterday, the vendor stated the “Transparency 2.0†website is owned by Spider Data and is not available to the public. The vendor stated yesterday that allowing the media and the public access to the site would require an undetermined additional investment of taxpayer money over and above the $5 million already spent and beyond the $1 million in annual “maintenance fees.†I asked the vendor to provide those cost figures.
The vendor acknowledged 100 percent of the data on their site is already public information and is obtained on a monthly basis from the Governor’s Office of Policy and Budget and the state-owned Transparency Florida website, which is already available to all legislators, staff, media, and the public.
The vendor acknowledged that under the terms of contract the data on its site is only updated monthly and does not include fund transfers within and between agencies which are significant. The effect of not including fund transfer data means the site contains incomplete information which could be misleading if relied upon. By contrast, the existing public site, “Transparency Florida,†does include all fund transfers and is refreshed with accurate data daily.
Ironically, the developers of Transparency 2.0 were unable or unwilling to reveal all of the names of the company’s owners or individuals or entities with financial interests in their company despite the Senate’s current contractual relationship pursuant to the $5.5 million no-bid contract. I asked for that information to be provided.
Additionally, it is my understanding a Memorandum of Understanding to transfer the Spider Data contract from the Senate to the Governor’s Office was executed by the Senate President’s Office in the spring of 2012. Following staff changes, the Governor’s Office declined to sign the Memorandum and has not taken over responsibility for the contract, expressing concerns to my office over the manner in which it was procured and their authority to take over the no-bid contract.
I am awaiting answers to a series of additional questions asked of the vendor yesterday in order to gain a fuller understanding of the relationship between the vendor and the Senate, costs of maintaining the product, steps necessary to ensure accuracy of data, and costs of making the product available to the media or the public.
I am committed to improving transparency in public spending and contracting. That’s why in 2012, I sponsored legislation for the Chief Financial Officer that would have created strict public accountability and tough performance standards in state contracting. That’s also why I asked Chairman Negron to lead an intensive budget review with specific examination of contracts.
I intend to take the following steps:
1. Considering the importance of budget transparency and the known and as of yet unknown costs, I will ask the members of the Senate to decide how and whether to proceed with the Spider Data relationship or some other initiative that will achieve the same or similar transparency functions related to state spending and contracts.
2. After reviewing the product, Transparency 2.0 contains many valuable features, as do a variety of products and services brought before the legislature each year. The question we must answer is which product will provide the most value to the taxpayers of Florida. Our state’s competitive procurement processes are designed for this purpose. I have learned the current existing public “Transparency 1.0/Transparency Florida†site is maintained for $100,000 per year (not $1 million) and is available to the public. Since the Spider Data “Transparency 2.0†website is fed entirely with information gleaned from already publicly available websites. I asked for information on costs and a potential timetable for improving existing public websites with more user-friendly features in order to do a cost and functional comparison with the Spider Data product.
3. Today I asked Senator Ring, Chair of the Committee on Governmental Oversight and Accountability, and an acknowledged expert in web-based business and information, and Senator Hays, Chair of the Appropriations Subcommittee on General Government, to develop and consider legislation that would create a user-friendly, accurate, cost-effective, web-based transparency tool for state revenues, spending, and contracting that would be available to the public as well as legislators. Qualified vendors, including Spider Data, could engage in a public procurement process to compete to supply that product.
I have asked Senators Ring and Hays to keep the Senate updated as we move forward.