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NewsChannel 5 Investigates: Friends in High Places

Excerpts of E-Mail Messages Regarding Computer Contracts

(Story created: 3/1/04)

In October 2001, deputy governor Wendell Moore left the Sundquist administration to become a Capitol Hill lobbyist. Steve Leonard, special assistant to the governor, writes in e-mails below that he "introduced" Moore to SCB Computer Technology's CEO, Scott Cobb.

"After Wendell left, I suggested he talk with SCB as they didn't seem to have any representation when all the other vendors did," Leonard wrote. SCB hired Moore.

Following are excerpts from e-mail messages recovered from Leonard and others, in response to a federal grand jury subpoena.  In some cases, there are gaps because related messages were deleted before back-up tapes were made.

Oct. 17, 2001:  Leonard meets with Scott Cobb (CEO) and Jeff Cobb (COO), SCB Computer Technology (1-2:30 pm)

Oct. 19, 2001:  Leonard meets with Wendell Moore (12-1 pm) 

Leonard meets with Scott Cobb & Gary Ellis, SCB, and Wendell Moore (2-3:30 pm) 

Oct. 24, 2001:  Leonard e-mails Scott Cobb.  "The groundwork is complete to engage the work we discussed.  It would be helpful to know more about your proposal, timing, etc."

Nov. 21, 2001:  Scott Cobb writes letter to Leonard.  "SCB Computer Technology Inc. (SCB) appreciates the opportunity to submit a proposal to conduct an Information Technology (IT) Review/Study for the State of Tennessee." 

Nov. 28, 2001:  Moore e-mails Leonard.  "Any thoughts on the SCB proposal?  They called my [sic] this morning to see if I had heard anything.  Again, thanks.  I'll be in Memphis ... and will likely see Scott Cobb before I leave town.  Let me know if there is anything I can tell him."

Leonard replies to Moore.  "I would hope that I can get the nods I need sometime next week.  The stars do seem to be aligning.  A challenge is it seems difficult to get time with the Gov these days."

Moore replies to Leonard.  "I will tell Scott that you are running all the traps on their proposal to get it done and that you will let me know as soon as you can.  Again, thanks for everything."

Dec. 14, 2001:  Leonard e-mails finance official Mike Morrow.  "Does the SCB contract allow us to simply get some ‘consulting services' under that agreement.  That is what I am really looking for."

Dec. 20, 2001:  Leonard e-mails the acting chief information officer Vic Mangrum, regarding "Strategic Advisory for OIR."  "As part of the initiative to assist in crafting a plan for OIR to follow that dovetails with the appointment of a CIO, we should identify and secure the services of a strategic advisory company.  A third party, outside group who can do some basic research and provide an objective set of findings and conclusions together with a set of recommendations." 

Jan. 9, 2002:  Leonard e-mails Morrow, regarding "strategic consulting OIR."  "What is the progress report on getting this vendor snared?"

Jan. 16, 2002:  Leonard e-mails Morrow, regarding "OIR Strategic Direction."  "The idea of pulling the outsourcing piece out is a good one.  Ideally, we would engage SCB for the main agreement with a kind of general engagement part in there if we choose to expand or have them do something else and then SAIC for the other part."

 Jan. 29, 2002:  SCB presents proposal for consulting contract. (1-3 pm) 

Jan. 30, 2002:  Accenture presents proposal for consulting contract (1-3 pm)

Leonard e-mails resume to Moore

Feb. 1, 2002:  SAIC presents proposal for consulting contract (1-3 pm) 

Feb. 1, 2002:  Moore submits first lobbyist registration for SCB Computer Technology. 

Feb. 5, 2002:  Mangrum e-mails Leonard.  "Attached is the spreadsheet that has the results of the vendor evaluations.  SAIC is the clear winner in both categories with Accenture a close second and SCB a distant third.  Based on these evaluations, I will proceed with notifying the vendors this afternoon that SAIC is the sole winner for the contract - unless I hear otherwise from you."

Feb. 5, 2002:  Leonard replies in e-mail to Mangrum.  "We had discussed hiring two vendors and had set out the criteria to include and [sic] emphasis on having a Tennessee origin or presence.  Let me ask you to recalibrate based on the need to have two firms engaged with the emphasis placed as we had previously discussed."

Feb. 6, 2002:  Mangrum writes memo to Leonard.  "It is our strong belief that applying such a weighting factor is not allowable under these circumstances, and especially after we have communicated to the participating vendors our method for scoring.

"At this point, we see the following as acceptable options available to us:

  • Award the entire contract to the highest scoring vendor (SAIC)
  • Award part of the contract to the highest scoring vendor (SAIC) and the other part to the second highest scoring vendor (Accenture)
  • Abort the entire effort and possibly seek other means for obtaining a consulting contract.

"I am concerned that you may not be pleased with the outcome of this effort."

Feb. 7, 2002:  Leonard e-mails Mangrum.  "After considerable thought, we should defer this project for now.  I will give you my rationale when we speak but it makes the best sense for the State that we set this aside for now."

Feb. 15, 2002:  Deputy governor Alex Fischer e-mails Leonard.  "What was the final resolution of the IT services contract?"

Leonard responds in e-mail to Fischer.  "Deferred.  It looked odd and we need to get Richard involved anyway." Richard Rognehaugh was the newly hired CIO.

Feb. 28, 2002:  Leonard has conference call with Moore (3-4 pm)

Moore e-mails Leonard. "I forgot to ask you how soon I could get Scott Cobb in to meet Richard.  I assume Richard started today."

Leonard replies in e-mail to Moore.  "No worries.  Check Scott's schedule for next week and let me see.  I had a good opening with him today and have set aside another 2 hours tomorrow and we are absolutely where we need to be."

March 4, 2002:  Leonard e-mails Rognehaugh.  "[P]lease phone Scott Cobb as we discussed and have that 1 on 1 as outlined in my rambling review of that whole scenario.  Even if you get together later, just a call would help redeem the situation."

March 19, 2002:  Moore e-mails Leonard. "I have a bootleg copy of Richard's planned reorganization and final draft discussion talking points I will fax to your office."

March 26, 2002:  Moore e-mails Leonard.  "Apparently the dinner went well last night.  Scott was very impressed with Rich."

Leonard replies in e-mail to Moore.  "Richard liked him and evidently they had some detailed conversations that will be good for both of them."  He adds, "Know anybody at Gibson Guitar?  They are looking for a CFO.  We are trying to arrange tickets for the big fight.  Are you going?"

Moore replies in e-mail to Leonard.  "Should I call Mayor Rout in Memphis and ask him.  He helped recruit them to Memphis.  I am assuming the corporate office is here in Nashville, right?  Yes I need a ticket, are you going?"

March 28, 2002:  Moore e-mails Leonard.  "Steve, are you in today?  I have to run by you if you are available this afternoon."

April 5, 2002:  Leonard e-mails Moore:  "I just spoke with Alex and teed up the idea.  He likes it, but you need to let him tell you about it.  As far as I know nobody knows we even talk!"

April 16, 2002:  Scott Cobb writes letter to Rognehaugh, noting that SCB had offered in November 2001 to conduct an IT study for the state.

April 22, 2002:  Moore e-mails Fischer apparently about SCB coming up the loser in a Tennessee Department of Transportation computer contract. "I really appreciate your help on this.  Lastly, where should I have the SAIC/SCB dinner?  I think it should be outside the downtown area.  Who pays?"

April 23, 2002:  Leonard e-mails Moore, regarding UT-Memphis professor Karen Fox.  "Mission accomplished with her.  She will phone Scott.  Be sure not to mention this to Alex if you know what I mean." Fox was spearheading an effort to develop a telehealth/homeland security program for Sundquist to present to the Southern Governor's Association.

Moore replies in e-mail to Leonard.  "thanks.  Should I tip Scott off and what should I tell him?"

April 24, 2002:  Leonard replies in e-mail to Moore.  "I would wait.  It will have more impact if he tells you!"

Moore replies in e-mail to Leonard.  "Can you send me some background info on the telemedicine SGA project?  Also, thanks for your encouraging words on Friday.  I walked into my house with a much better mindset than I otherwise would have had.  I really think this SGA opportunity could be a great project for SCB."

April 29, 2002:  Moore e-mails Leonard with copy of e-mail to Fischer regarding TDOT contract. 

April 30, 2002:  Moore e-mails Leonard.  "I left an [sic] voice mail to see if you wanted to have lunch today.... If we don't connect give me a call this afternoon sometime so that I can update you on a couple of things regarding SCB and SAIC and OIR."

Leonard e-mails Rognehaugh.  "Go ahead and call Alex Fischer on the TDOT bid.  He can give you more background."

May 2, 2002:  Leonard e-mails finance commissioner Warren Neel about a proposal by Rognehaugh to bring computer services in-house, ending computer contracts with companies like SCB.  The plan would save millions of dollars.  "Even though it is a money-saving measure, I am going to ask Richard to delay the OIR conversion of state contractors to employees for a few weeks.  My concern is the sensitivity with the legislature, PR etc.  Do you agree?"

Leonard e-mails Rognehaugh.  "At the cabinet meeting today we discussed the sensitivity of a variety of issues at this juncture and it occurred to Warren and me that we need to have you slow down on the conversion of contract employees.  This should only be a few seeks [sic] hiatus while we try to get the budget done.... Yes, I do understand the conversion saves money - it is simply the need to maintain as much stability as possible to pre-empt any leverage from legislators and possibly pull the project in as part of our deal making."

May 16, 2002:  Leonard e-mails human services commissioner Natasha Metcalf.  "Call Wendell Moore at ....  He reps a company I think very highly of.  A discussion with their CEO, Scott Cobb will be helpful to you.  I actually spoke with Scott in depth well over a year ago and got some advice on how to proceed with OIR, CIO, etc. It is also a Tennessee company."

Leonard e-mails Moore.  "I just suggested to Natasha that she phone you.  She is looking for a company to write the RFP for TSCES management/maintenance that Accenture has now.  I suggested that she meet with Scott through you."

Leonard e-mails Moore again.  "I just hung up the phone after giving her details of how I had met Scott and introduced you etc.  She told me she would phone you right away.  I also emailed her your phone number.  You know her well, so if you don't hear anything by this afternoon, give her a call and tell her we had spoken on another matter and I mentioned she might be calling you."

May 16, 2002:  Karen Fox e-mails higher ed official Cathy Cole (and copies Leonard).  "I met with Scott Cobb from SCB today, following a suggestion from Steve, and I believe SCB could help us significantly in the first phases of the SGA implementation."

Leonard forwards that e-mail to Moore.  "Karen talked with Scott and it was a magical moment evidently.  She is finding a way to get UT to contract with SCB to get the telehealth project planned. FYI only."

May 17, 2002:  Leonard e-mails Moore (apparently in reply to another e-mail).  "He knows your involvement, so do what makes sense to you.  I often think the more subtle approach speaks louder.  We are trying to find the funding mechanism, perhaps through Health.  She is bought in with Scott at this point, we just have to make sure it goes carefully and smoothly.  So far so good.  Did you speak with Natasha?"

Leonard e-mails Moore (apparently in reply to another e-mail).  "That sounds great. I will keep stoking the fires as much as possible.  I am lunching with Richard next week and will get some good discussion going there.  Had lunch with McGill yesterday.  They have some interesting things going on with computer based training etc.  It might be worth while to just check in with him one day and let him talk you through what they are involved with."

Fox e-mails Leonard that health commissioner Freda Wadley "would not play at all with scb idea."

May 23, 2002:  Leonard meets Moore "at 2525 bldg with Alex F."

May 30, 2002:  Leonard e-mails Rognehaugh.  "Any word on the TDOT bid review?"

Rognehaugh replies in an e-mail to Leonard.  "Called Alex a couple of time [sic] for a little more background before calling TDOT... but no return call, spoke with TDOT to ensure that scoring criteria was pre-established, sound, and scored ‘fairly.' SCB finished 3rd.  Which vendor is pushing the button?" 

June 6, 2002:  Leonard e-mails Neel.  "I followed up with Richard on the items from this morning's meeting.  He clearly is off the original course which, as you will recall, insourced important positions and outsourced other, routine service-oriented jobs ending with a net outsourced.  I am not sure where or how his thinking changed, but perhaps as you speak with him you can point out that part of selling the important insourcing jobs is outsourcing others and for a variety of reasons, not just economic in nature.

Leonard has conference call with Moore "re TennCare." (4-5 pm)

June 11, 2002:  Leonard replies to an e-mail from Neel.  "I was asked by Alex to have Richard look into a bid at TDOT where there were some concerns.  I know nothing more than that.  After Wendell left, I suggested he talk with SCB as they didn't seem to have any representation when all the other vendors did.  He did so and they contracted him.  SCB was one of the 5 or 6 companies I spoke with about a year ago about getting some technical and strategic advice.  I liked them because they were medium sized, a Tennessee company and when I spoke with them they gave me good info and no BS.  That is the extent of it for me.  I have encouraged Richard to look to them for help but his vendor bias has taken him in a different direction or the staff bias has had a similar effect on him."

June 12, 2002:  Leonard e-mails Neel.  "I am going to sit once more with Richard and lay out all the chronology of this SCB thing and try to explain that he is rowing against the tide of the bureaucracy in OIR and that is the source of his recent difficulties."

June 19, 2002:  UT finance official Steve Rowland e-mails Fox.  "This is one of 5 contracts under a master contract arrangement.  When a state department needs services, they submit a statement of work [SOW] to his office.  The five companies that have contracts submit price proposals and the lowest is given the job.  He said that they don't have any mechanism in place to work with agencies that are not tied into the State's financial management system."

Fox e-mails Leonard.  "This is going to be hard considering the tight time frame we are under."

June 20, 2002:  Fox e-mails Neel with overview of telehealth/homeland security task force.  "We project that outsourcing and operational funding for these tasks would require $40K to $50K."

June 22, 2002:  Fox e-mails Rognehaugh.  "Talked to Steve.  Could we possibly talk Monday regarding the consulting firm re: SGA and Howard computers?"

June 24, 2002:  Rognehaugh e-mails Neel.  "Until I hear otherwise, this is the work that I was given responsibility for when we met with the Governor.  Interestingly enough, I believe it is work that could be done at no cost, probably within OIR's existing staff on an ASAP basis.  Also interesting, I immediately received the "Infrastructure Asset" listing information I requested within 48 hours of my initial request from everyone in Tennessee except UT.

Leonard replies to an e-mail from Fox.  "Sounds like bureaucracy to me, but that is F&A.  If you don't have it just say so."

Leonard e-mails Fox.  "You will need to stay after Richard, but don't let the bureaucracy slow you down.  If that happens, let me know."

Fox replies in e-mail to Leonard.  "I'll stay after Richard."

Rognehaugh e-mails Neel and Fox.  "Commissioner:  We are submitting on a ‘rush basis' the SOW toward the ITPRO [state computer services] vendors.  Assuming no delays, we are asking for responses back by this Friday and should be in a position to select candidates the following Monday July 1st."  To Fox, he writes, "Karen:  As I said on the phone, there's no predicting exactly which of the 6 ITPRO vendors will win this, but the individual experience requirements should be reachable by any of them - even within this short window of time."

Fox forwards e-mail from Rognehaugh to Leonard.

June 25, 2002:  Neel e-mails Rognehaugh.  "Richard, is part of the request that Karen is making for the $50,000 a request to provide sum of the funds to her office and some to your for the purpose of the grant proposal?  There is some confusion."

June 26, 2002:  Rognehaugh e-mails Fox.  "Just to ensure we move with sufficient speed on this project, we'll volunteer now within our Office of Information Resources (OIR) to begin immediate support of any tasks we would otherwise ask a vendor to perform.  As, I said earlier on the phone, we'll have resumes of candidates Friday night... I'll screen them Saturday morning, and we should have vendor candidates ‘in a chair working' 5 business days from today."

June 27, 2002:  Information resources official Travis Johnson e-mails Rognehaugh.  "Just a heads up.  Steve Roland, the procurement person from UT, just called me.  He said that his understanding was that Commissioner Neel had advised UT that we would not be using ITPRO, but would instead transfer the money to UT and let them follow their usual procurement mechanisms.

June 28, 2002:  Rowland e-mails Rognehaugh.  "Mr. Rognehaugh, thank [sic] for taking the time from your schedule to speak with Karen Fox and me this morning.  To recap our discussion, we would ask that the current RFP out to the IT Pro contractors remain unchanged.  We do understand that the RFP indicated that this was a Nashville based project.  After the proposals are received, please send copies to me.  Based on the arrangement for the funding to be sent to the University, we will select a contractor and issue a purchase order to them."

Rognehaugh e-mails Rowland and Fox.  "Given our discussions, and if you decided to follow this ITPRO contract vehicle, it appears that not all of the details of the ITPRO terms and conditions will apply to the procurement process you are planning.  An especially significant area of divergence is ITPRO's candidate evaluation and Memorandum of Understanding award procedure, which does not fit your process as you have described it to us.  There may be others, but just for the record and for these reasons we can neither approve nor disapprove the legitimacy of this procurement approach."

July 2, 2002:  Rowland faxes authorization letter to SCB.  "This will confirm our conversation this afternoon with Karen Fox.... SCB is hereby authorized to commence work for this project under the direction of Ms. Fox."

Rowland e-mails Fox, regarding " Justification for Project."  "Karen, please send me an email outlining the timeline on the task force project....  Basically, I need support for this being handled on an urgent basis and why we had to waive the normal sealed-proposal process."

July 3, 2002:  Fox replied to Rowland.  "We must complete the Southern Governor's Telehealth/Bioterrorism project by August 14.  We were given this quick timeline on May 15 at the Governor's steering committee meeting, however, at the time it was felt that UTHSC staff and ORNL staff could handle the entire project.  The project has grown, and while we are still using this staff, it became apparent at the June 22 meeting that it would not be completed by the timeline without some outside help.  The governor has made some emergency funds available to complete this project.  It would be impossible to bid this under the normal circumstances as the next interim timeline is July 21.  It is urgent that we get some consultants on the project immediately."

Follow-up memo notes, "SCB Computer Technology was the only contractor offering all three classifications requested that had consultants ready and willing to work in Memphis.... The award was made to SCB."

July 12, 2002:  UT issues $40,000 purchase order to SCB for one month's work.

July 17, 2002:  Leonard has lunch with Moore (12-1 pm)

July 22, 2002:  Fischer e-mails Rognehaugh.  "What was the outcome of the review of the contract I inquired about at TDOT related to IS maintenance?"

Aug. 13, 2002:  Leonard has lunch with Moore (11:30 am-1 pm)

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