The approval for the purchase should have been made by the West Virginia Purchasing Division and not the State Office of Technology, the auditor's report states. And it should have been open for competitive bid, the report says.
"The process used to purchase the Cisco routers was not equal, fair or consistent with the intent of the purchasing statute," the report states. "Vendors of non-Cisco branch routers such as HP, Brocade, Juniper and Alcatel-Lucent were not given notice or any opportunity to bid on the statewide expansion of broadband."
And because the secondary bid process excluded all other branch router makers, the state cannot be certain that it received the best possible price for the routers, including the lowest possible price Cisco was willing to offer through its partner vendors, the report states. It then cited the CSU situation and the May 2011 Purdue University Hansen Cluster project in which Cisco won a competitive bid by discounting its gear 76%.
"While the Legislative Auditor cannot say with certainty that a more open competitive bid process, required wherever possible by West Virginia law, would have resulted in a lower cost for the branch routers purchased by the BTOP grant, it is a basic principal of our free-market economy that competition between vendors leads to lower prices and higher quality products," the report states. "Yet, instead of using an open competitive bid process to attempt to receive the lowest possible price and highest quality product, the State of West Virginia simply relied on Cisco's goodwill."
Cisco CEO John Chambers is a native of West Virginia.
Jim Duffy has been covering technology for over 25 years, 21 at Network World. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy.
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