[ga] Re: Why did ICANN apparently award a $650K contract without any competitive RFP?

[George Kirikos <gkirikos@xxxxxxxxx>]

Having received no response in over 2 weeks, I've submitted various questions 
related to this issue to be answered at Thursday's Public Forum. I'll copy 
ICANN's answers, if any, from the Transcript to this mailing list, to have some 
"closure" to this issue.

From: George Kirikos
Company: Leap of Faith Financial Services Inc.
Location: Toronto, Canada

According to section 1.c of the minutes of the June 27 Board meeting:

http://www.icann.org/en/groups/board/documents/resolutions-27jun13-en.htm#1.c

ICANN "negotiated in good faith" terms for a $650,450 contract related to the 
development of the Automated Registrar Onboarding System (AROS) with a 
3rd-party vendor. The Board authorized the proposed agreement.

I was surprised to read that it was "negotiated in good faith" rather than 
being put out to a competitive tender. ICANN maintains a list of open and 
closed RFPs at:

http://www.icann.org/en/news/rfps

and the AROS contract is not listed. ICANN has procurement guidelines which 
state:

http://www.icann.org/en/about/financials/procurement-guidelines-21feb10-en.pdf

in section 3.2 that "a broad solicitation…..is **recommended** for use whenever 
the estimated purchase contract exceeds $150,000 and is **required** whenever 
the estimated contract exceeds $250,000." Note the word "required" is open to 
only one interpretation. 

While section 3.3 lists a number of exceptions, they apparently apply only to 
contracts worth less than $150,000 (see opening sentence of section 3.1). One 
of the exceptions is, for example "When the incumbent provider demonstrates a 
clear historic pattern of charging reasonable prices and providing consistently 
good quality service." This exception appears ripe for abuse by ICANN staff, 
since how does one know "reasonable prices" are being charged, when one doesn't 
know what competitors would have charged for the exact same contract?

1. Did ICANN issue a RFP for the AROS contract? If not, why not?
2. If there was no RFP, how does ICANN know it received the best possible price 
for the contract terms?
3. Are there any other contracts exceeding $250,000 that ICANN has entered into 
in the past 12 months that have been awarded without competitive RFPs? If so, 
which ones and with which vendors?
4. Will ICANN follow its procurement guidelines, meant to ensure that "vendors 
and service providers are selected fairly and objectively with the highest 
ethical standards and appropriate levels of disclosure" by issuing competitive 
RFPs for any past contracts that slipped through the cracks?
5. I brought up this issue on the ICANN GA mailing list on June 29, with copies 
to ICANN's CEO, CFO and Chairman, but did not receive a response. This happens 
all too often to ICANN stakeholders. What mechanism, outside of asking 
questions 3 times a year at ICANN Public Forums, does ICANN have in place for 
getting answers to important questions of concern to the public the other 362 
days of the year?

Sincerely,

George Kirikos
http://www.leap.com/ ;






________________________________
 From: George Kirikos <gkirikos@xxxxxxxxx>
To: GNSO GA Mailing List <ga@xxxxxxxxxxxxxx> 
Cc: "fadi.chehade@xxxxxxxxx" <fadi.chehade@xxxxxxxxx>; 
"xavier.calvez@xxxxxxxxx" <xavier.calvez@xxxxxxxxx>; "steve.crocker@xxxxxxxxx" 
<steve.crocker@xxxxxxxxx> 
Sent: Saturday, June 29, 2013 8:23 AM
Subject: Why did ICANN apparently award a $650K contract without any 
competitive RFP?
 

Hi folks,

I read that ICANN has awarded a $650,450 contract to Solution Street for the 
development of an Automated Registrar Onboarding System, see:

http://www.icann.org/en/groups/board/documents/resolutions-27jun13-en.htm#1.c

I was surprised to read that it was "negotiated in good faith", rather than 
being put out to a competitive tender. ICANN maintains a list of RFPs at:

http://www.icann.org/en/news/rfps

and I don't see it listed there. $650K is a lot of money. Indeed, ICANN's own 
procurement guidelines:

http://www.icann.org/en/about/financials/procurement-guidelines-21feb10-en.pdf

(section 3.1) recommend that there be a formal RFP for purchases exceeding 
$50,000, and indeed a documented one for purchases exceeding $150,000. This 
would of course ensure that the community receives the best possible price for 
the services received. Section 3.2 even states that it is *required* when the 
estimated contract exceeds $250,000, with a "broad solicitation."

While there is supposedly an exception noted (in section 3.3, but only 
apparently applicable for section 3.1, not the $250K+ contracts in 3.2) for:

"When the incumbent provider demonstrates a clear historic pattern of charging 
reasonable prices and providing consistently good quality service."

that seems to be ripe for abuse by ICANN staff, since how do you know 
"reasonable prices" are being charged, when you don't know what competitors 
would have charged for the exact same contract? Remember this is the same ICANN 
staff that contracted with Verisign for 7% annual price increases for the 
dot-com contract, but then were overruled by the Department of Commerce, who 
instead froze prices.

I find it particularly interesting that the contract was apparently awarded to 
"Solution Street", whose Joel Nylund was one of the managers involved with 
Verisign's infamous SiteFinder:

http://yro.slashdot.org/story/03/10/29/1417215/sitefinder-the-verisign-slides
http://web.archive.org/web/20031031153615/http://secsac.icann.org/captioning-15oct03.htm

"Scott Hollenbeck: the web bug exists. That was asked at our last session of we 
have plans to cut back on the information that's being passed from via -- the 
web bug to the URL. We have one of our development managers, Joel Nylund, if 
you wanted to say anything more about that."

http://www.solutionstreet.com/who-we-are.php
http://www.linkedin.com/in/joeln

I strongly suggest that ICANN follow its procurement guidelines, and open this 
contract, and all other contracts, to competitive RFPs that are widely 
advertised, to ensure that the best possible price is obtained from the most 
competitive vendors. Perhaps we'll even see Solution Street be the winner of 
the contract, if they are the most competitive vendor, but at an even lower 
price. That's the benefit of competition. ICANN should not be "partying like 
it's 1999" when they're ultimately spending domain registrants' money. Perhaps 
ICANN's staff should be reacquainted with their own procurement guidelines, so 
that this does not happen again.

Sincerely,

George Kirikos
http://www.leap.com/