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MONDAY, JULY 22, 2002

A contract dispute that is part of a heavily criticized trust reform project could end up costing the Department of Interior more than $1 million.

Last March, the Office of Special Trustee (OST) terminated a $3.2 million contract with ITQ LATA, a New Mexico technology consulting company. According to a court report prepared at the time, the Albuquerque-based firm failed to live up to its end of the bargain, causing delays to a key effort to fix the broken trust fund.

In subsequent negotiations, however, OST agreed to pay the company $1.1 million despite cost overruns, poor projections and no workable goods. ITQ LATA would pocket the money in addition to $350,000 already collected for its apparent incompetence.

OST's offer was made as part of a routine settlement proposal. The Interior's Inspector General Earl E. Devaney has raised concerns about the deal but according to a recent report he prepared for Congress, only $30,000 is in dispute.

ITQ LATA was hired by OST in November 2000 to improve the management of trust fund records. The firm was to create an electronic archive of documents for tribes and individual Indian beneficiaries.

According to a court report, problems surfaced quickly. The company and its subcontractors failed to develop a plan to perform the work, a mistake that required an extra $350,000 to correct.

After three months, the firm finally delivered just one computer CD-ROM. But the product failed a quality assurance test and was unusable.

ITQ's failures are indicative of a trust reform program that has seen heavy fire for more than a year. Special Master Alan Balaran, a court investigator in the Cobell v. Norton litigation, in two reports said records management has been in shambles.

U.S. District Judge Royce Lamberth subsequently sanctioned Ken Rossman, who was in charge of records at OST, for making attacks on the court. Rossman was reassigned to a higher-level position late last year.

Lamberth also prevented OST from shipping 32,000 boxes of documents to a federal records center. The department subsequently instituted a policy forbidding the transfer of any trust fund documents.

Relevant Links:
ITQ LATA - http://www.itqlata.com
Office of the Special Trustee - http://www.ost.doi.gov
Indian Trust: Cobell v. Norton - http://www.indiantrust.com

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