Why a one-room West Virginia library runs a $20,000 Cisco router

http://arstechnica.com/tech-policy/2013/02/why-a-one-room-west-virginia-library-runs-a-20000-cisco-router/

by cpeterso • 13 years ago

388 183 13 years ago

arstechnica.com

chayesfss• 13 years ago

a company like cisco or microsoft trying to rip off state/local governments? color me not shocked.

joenathan• 13 years ago

What does Microsoft have to do with this?

obstacle1• 13 years ago

MSFT is big and a corporation, like CSCO; therefore both are evil. Pretty airtight logic.

bd_at_rivenhill4• 13 years ago

Because Microsoft is just as happy to sell overpriced packages of unnecessary functionality to clueless or corrupt government employees as Cisco is, and they have the extra property of arguing fervently against the use of free/open source software that competes against their offerings and would save even more.

paganel• 13 years ago

> What does Microsoft have to do with this?

I don't have a source handy, but around 2004-2005 Steve Ballmmer came in a short visit to my country (somewhere in Eastern Europe), he had a even shorter meeting with the Prime Minister of that time and sure enough not 6 months later a Government programme was launched and all the schools and public libraries in my country had to be equipped with Windows machines. This was around the time when people thought that tools like Open Office actually had a chance of toppling the MS Office suite.

polymatter• 13 years ago

well, I am happy that some people might realize this was a bad idea after that auditors report showing approximately all $5 million was wasted. And also that Cisco's claim that "the state had reviewed his spreadsheets and not objected" is not a reasonable excuse.

iamjason89• 13 years ago

"The auditor began digging, speaking to many people in West Virginia state government who had been involved with the project. The Department of Education told him that it "did not request or require that the routers for the state's schools have internal dual power supplies. Education would not have made this requirement because unless a school has two power sources the feature of dual power supplies would have no use." A network engineer for the Department of Education confirmed that he had not requested such a feature."

Education would not have made this requirement because unless a school has two power sources the feature of dual power supplies would have no use.

Oh is that how redundant power supplies work? You need two power sources, eh?

caw• 13 years ago

For full redundancy, yes.

You get redundant power supplies by plugging both into the same power feed.

However, you can gain some extra redundancy by plugging each power supply into a different circuit, and reducing the common point of failure (shared power source).

nickzoic2• 13 years ago

Two UPSes.

Although I've got a good war story on that one too, I had a machine with redundant PSUs emit a stream of smoke from one of the PSUs. It was happily up and serving while smoking out the machine room until the operator (rather sensibly) grabbed both power leads and pulled, at which point both fire and ssh went out ...

bd_at_rivenhill4• 13 years ago

It is if you are in a situation in which the building power source is much, much more likely to fail than the power supply is, which is definitely the case in a rural school or library. You have to get to a pretty high level of sophistication (i.e. backup generators with automatic failover) before a redundant power supply has any value.

hmottestad3• 13 years ago

It would kinda be like buying a really expensive 24 port router and then just using 2 ports.....oh wait....that's what they did already.

Dual power supplies is a bit overkill. Although I remember my high school admin got a central router with dual power supply, but when you plugged both in at once (from the same source) they drew too much power on a reboot and flipped the fuse after every blackout.

nickzoic2• 13 years ago

shrug If you want it to actually work, all the time, go with dual hotpluggable PSUs on everything every time. And two separate UPSs.

If the cheapest router Cisco has with dual PSUs is a 39xx, well, I guess that's what you need.

Of course, there's an argument there that "99.999% uptime" is pretty pointless for a town library in the middle of nowhere, but that's a whole 'nother argument.

joshlane4• 13 years ago

this kind of nonsense is what people want to prevent the federal government from doing...bring on the sequester!

tzs2• 13 years ago

If this is the kind of nonsense you want to stop, that approach is ineffective to the point of idiocy.

crusso• 13 years ago

Since the sequester is really just a reduction of an increase and not really a cut, how is it ineffective? Seems like it's the only thing that even kind of looks like a cut that might go into effect in our lifetimes.

Funny how the Feds were fine with a 2% increase in payroll taxes for consumers but a 2% cut in the increase of their budget is going to bring on Armageddon.

nikcub• 13 years ago

I have first hand experience with this, although in Australia. My first job was working for a IT development and solutions shop (this is over 17 years ago) where they won the bid to rollout the internet and network gateways across a large number of Australian government schools.

We were doing similar work for private school at the same time, and the process for the public and private school could not be more different.

For eg. in the tender process, which I was part of, for private school we would use cheaper Taiwanese routers. For the public schools it 'had to be Cisco'. The only time we ever used Cisco, outside of large enterprise clients with 1000+ seats, was with public school tenders. The private school would get a $500 white-label router, the public school s would get a $6-15k Cisco router with additional VPN module costs.

We would charge a higher consultant rate on the Cisco jobs, and would bill 3 days instead of 1. We won the contract because we were 50% cheaper than the other tenders who all wanted to install 3 and 5-series routers. How we got to the point of being able to even tender is another story that involves somebody in our organization sleeping with somebody at the government organization. The other tenderers were accustomed to dividing the work up amongst themselves at inflated prices, they didn't even know who we were and we received a lot of abuse for breaking up their little scheme.

(Edit: a further idea of how this worked, the 3 people in the gov office responsible for tenders all had very nice cars and holiday homes while the rest of the office was working away on below-average wages. You could see what was going on just by looking at the car park)

So a dozen of us roll out hundreds of these routers in public schools and after a month we find that we rolled out the wrong version of IOS, one that was vulnerable to a simple security attack. Instead of forcing us to upgrade all the routers remotely, or out of our own pocket, we instead won another few-million-dollars worth of work to send a person out and apply the upgrade to each router (which took 5 minutes, we charged a full day plus travel).

The routers weren't even being used properly - the topography was net connection -> cisco router -> internal server -> switches. The internal server would do all the DHCP and everything else. These expensive routers were being used as bridges, although they were pitched as having 'forward compatibility' incase the school wanted to implement features such as user accounts (they did, although again they used a custom server, not the router).

When these projects are audited there is nobody who is technically competent enough to make an argument against who would be on the side of ditching or shrinking the projects. Some of the smarter teachers knew what was going on but didn't mind since they got access to fancy equipment (we would create user accounts for them).

My first, and not my last, experience with government bureaucracy and budgets. I would estimate that the private schools got more out of us at a tenth of the cost. Since then I had an even worse experience with the government health department, where 6-figure invoices were written and paid for goods that didn't exist (that department has since been broken up and the subject of a large corruption enquire). No surprise that I became very anti-government size and spending.

Edit: to add, we were so 'disruptive' to the backdoor deals that we were uninvited from conferences, kicked off panels, not invited to the mixer events where gov buyers met providers, a couple of years later we lost our accreditation[0] temporarily until we appealed to the Government Minister. On site we would be locked out of network cabinets, not given IP information for the net connections, etc. Our jobs were made difficult by competitors and others because of our pricing and methods. They couldn't figure out how they didn't get rid of us, because they didn't know that one of our guys had a solid relationship with somebody at the government (that person wanted to clean things up). Usually we wouldn't have been allowed anywhere near these projects and if we did win one we wouldn't be allowed back in for not playing with the system.

[0] 'accreditation' for government tenders needs to die, it is a formal method used to keep honest operators out of what is essentially a cartel. The Australian government is getting better in this regard[1], they now have an open tender website but I believe it still requires some form of accreditation that has a person in a department standing between application and approval.

[1] although not too much better. NBN Co., a government owned company that is building a $40 billion nation-wide fibre network recently suspended tender process because every single bid came in over the expected price:

http://www.theaustralian.com.au/business/in-depth/high-price...

juiceandjuice• 13 years ago

It sounds like your company ripped off the public schools, and that's why you are anti-government?

delinka• 13 years ago

Yeah, but they ripped off the public schools less than the competitors would have.

sputknick• 13 years ago

They were 50% lower than the next lowest bidder. Sounds like his company provided the taxpayers with a bargain.

bd_at_rivenhill4• 13 years ago

The fact that the government is not competent to spend taxpayers' money wisely seems like a good reason to be anti-government. After hearing enough anecdotal evidence on this topic (which very few people have both the capability and desire to thoroughly investigate in order to properly quantify it, thus the reliance on anecdotal evidence), it starts to appear as if such incompetence is an integral feature of all governments once they reach a certain size.

muboo• 13 years ago

If you don't like this kind of behaviour you are doing yourself a disservice by describing it in as simple a manner as you have. Having had similar experience it is surprising that they were allowed to tender that offer at all.

inopinatus• 13 years ago

Well, if this was his first job, perhaps it wasn't his company.

_delirium4• 13 years ago

There seems to be something very broken with contracting in the US, which seems more specifically US government operations than government in general. If you look at something where you can compare prices between countries, like per-mile subway construction costs, the U.S. is a huge outlier, with procurement costs much higher than Europe.

tokenadult• 13 years ago

If you look at something where you can compare prices between countries, like per-mile subway construction costs, the U.S. is a huge outlier, with procurement costs much higher than Europe.

The higher-than-Europe comparison I had not heard before. The higher than private industry cost of United States government contracting (and contracting by local units of government when they spend federal funds) is dictated by the Davis-Bacon Act,

http://www.dol.gov/whd/govcontracts/dbra.htm

once we understand that the law's requirement to pay "prevailing wages" means, in that context, to hire union labor even when less expensive nonunion labor is available.

vidarh4• 13 years ago

You get similar stuff at private companies too, though few private companies are large enough for corruption like that to be able to reach the same scale without getting too big to go unnoticed by auditors for long enough.

The number of times I've had potential supplier hint at extra perks or "return favours" is fairly high, and I've not even been in positions of very substantial purchasing power.

It's often not even direct exchanges that are being hinted at either, but "simply" seemingly innocent networking: Buy from the "right" well connected sales guys and make it clear you're "flexible" about requirements, and they know they benefit from exploiting their network to the max helping you get lucrative jobs in big companies where you can spend more with him.

It's often only morals that prevents it from happening - I've been in plenty of situations while where my budgets were not huge, nobody knew enough to second guess my decisions, and I could've easily spent a lot more than I did without anyone batting an eyelid. Especially since just the very act of bloating your budget in many places makes you look more impressive and important and translates into status (and looks good on your CV...)

_delirium4• 13 years ago

This was my 2nd-hand impression growing up with a father who worked for a large oil company. The extent to which nobody was really at the wheel in these kinds of negotiations was fascinating. As far as I could tell, many things sort of worked, when they did, because engineers had a cultural desire to "get it right", mostly for their own satisfaction. But the company itself didn't seem to either have an effective way of policing it, or maybe even really an interest. Somewhat as in government, low- and mid-level contracting didn't excite anyone in management, who were focused on issues that really "moved the needle", like securing and overseeing new exploration deals, not how much someone spent on a piece of equipment that wasn't even in the 6-figure range anyway.

jacques_chester• 13 years ago

One main difference is that public companies are required by law to have independent auditors.

Government departments are not.

In Australia independent audits rely on the Australian National Audit Office, which is profoundly and deliberately underfunded because of its annoying habit of discovering embarrassing incompetence and wastefulness.

cdavid• 13 years ago

Waste in terms of inflated costs is more likely a function of size more than public/private dimension. 20k $ is literally not worth lowering down to get the money in some industries I have witnessed. I have yet seen obvious examples of corruption, and incompetence + incentive is the prevalent explanation: the bigger a project is, the better it is for the people at the top of it obviously, and enough bureaucracy to make it a local optimum.

One typical example I had is not receiving a replacement laptop when working for a bank because replacement hw is too expensive, so I could not work for essentially one month. My consulting rate would have paid for a top of the line laptop in 2 days. But those are of course two different cost centers, so it will never surface.

ryguytilidie• 13 years ago

How are people not being arrested for this daily?

DanBC• 13 years ago

Buyer beware. It's a bit harsh if the buyer is ignorant.

gchpaco2• 13 years ago

Those charged with enforcing the rules are not infrequently in bed with those violating the rules; "regulatory capture".

HeyLaughingBoy• 13 years ago

What law did they break?

damian20002• 13 years ago

In my experience, the govt. schools themselves have extremely limited IT admin resources available to them to help with this sort of thing. A senior high school I know a little about only has one person doing IT admin, over 1500 students, each with their own email and network login, and is running a combination of Macs and PCs/Windows.

contingencies• 13 years ago

Also, the same employer had an extremely low-rent situation going on at the only train station in Sydney I ever witnessed a commuter straight out punch a ticket inspector in the face at. They under paid as well. One learns quickly that in capitalism, it's whatever you can get away with...

MattBearman• 13 years ago

I've seen examples of this all over the UK as well, when ever it's a Government tender the quotes were always much higher than they need to be, and they always HAVE to have the most expensive, 'enterprise' equipment, whether they need it or not.

I've never understood it myself. Governments are funded by tax money, and the people involved in these companies that love overcharging the Government pay taxes. Congratulations on ripping yourself off.

EvilTerran• 13 years ago

the people involved in these companies that love overcharging the Government pay taxes

One thing I've learned from Private Eye: many of our government contractors don't pay taxes -- or at least not British taxes, or a negligible amount thereof.

mogrim2• 13 years ago

> I've never understood it myself. Governments are funded by tax money, and the people involved in these companies that love overcharging the Government pay taxes. Congratulations on ripping yourself off.

Any additional taxes are diluted amongst the general population, while my sales commission is mine and mine alone...

intended4• 13 years ago

Its the level of management and attention to detail your organization can afford.

At some point people will probably need to fully fund and empower an independent audit organization staffed with the kind of detail oriented savants that will start cutting through a lot of fat.

As has been mentioned above, there are many times that people end up doing work only because they are wired to try and do it cheaply/well.

The rest of the time no one is at the helm.

gaius3• 13 years ago

Most of them are contractors, i.e. they're not on PAYE, they can use the dividend trick.

someperson• 13 years ago

This is outrageous. Borderline corruption (especially the people in-charge of the tendering processing basically getting kickbacks)

Aren't there any avenues to get people fired over this? Talk to a investigative journalist maybe?

megablast2• 13 years ago

I hope you wrote this up detailing the people involved? I guess you it would cause a lot of trouble for you, but if you could do it anonymously, that would go a long way to changing this behavior.

Tloewald• 13 years ago

This all stems from the outsourcing mania of the 80s which was driven by the idea you could save money by firing your internal IT people and outsourcing everything. It's been a boondoggle throughout the western world.

ropable• 13 years ago

Sometimes I feel like the only long-term Australian (state) government-employed IT professional reading HN that doesn't regularly witness widespread corruption, incompetence and overspending. Seriously, in almost ten years, the very worst thing I've seen is someone being fired over stealing an old desktop PC instead of disposing of it via proper channels.

I've always worked with people that, even if not cutting-edge geniuses, are generally more than competent. They don't accept dodgy tender because they know the value of what they're buying, and they certainly don't overspend on gold-plated crap because our budgets are always stretched to the limit.

I would genuinely like to work for one of these mythical government departments where money flows like water. In my experience, the budget is always barely enough to fulfil our role and all these stories about profligate government waste are little more than hearsay.

Then again, I've never worked in the Health or Mining industries.

gaius3• 13 years ago

I love that this story starts "sleeping with somebody" and ends with "solid relationship". There's a RomCom script in there somewhere, if the IT thing doesn't work out.

redshirtrob• 13 years ago

I'd like to know how much of that $5 million savings would have been burned up in the capacity studies. My guess is a lot.

Given the choice between a fixed cost and an unbounded cost (being the capacity study referenced throughout the article) I'm not surprised they went with the fixed cost.

I'm not saying WV didn't get swindled, but I can sure see how this might have happened:

WV Rep: Do we really need these $20k routers for all our locations?

Cisco: We really couldn't say what your exact needs are without a proper study.

WV Rep: What will that cost?

Cisco: It's really hard to say. We'll have to visit all of your locations and speak with the IT Manager there. We'll have to measure average and peak load. Of course, we'll want to plan for future growth so we're not at this same point in two years...

The real crime is that they didn't open the RFP to multiple bidders. A little bit of competition can go a long way.

bd_at_rivenhill4• 13 years ago

Actually, the real crime is that they don't sue Cisco to be allowed to exchange the original routers for new ones with appropriate capacity along with a refund in the price difference, with Cisco eating the depreciation and the legal fees.

The grant implementers should also be fired for cause, to wit, incompetence).

vidarh4• 13 years ago

Here's a capacity study for you:

E-mail all the IT managers, and ask them:

- How many users do you have? - What is the total size of the community you serve? - Do you need new equipment?

That would have quickly revealed that many of them had so few users that these routers were total overkill, and had so few potential users that even 100% simultaneous usage in some cases would not max out the capacity, and that some of them did not have a need for new equipment.

I agree with you that multiple bidders would be essential. But a tiny little bit of due diligence and investigation on the behalf of WV would have gone a long way.

That said, sometimes this is what backfires too: I've seen a government contract recently where a lot of extra work was carried out to meet the requirements of a "security consultant" that refused to sign off on a system because of "issues" that were clearly generated only to ensure that he could pad his list of "problems" he identified to help justify his fees.

pbhjpbhj• 13 years ago

Wouldn't the central procurement already know the max capacity of the lines (DSL, fibre, whatever) that had been installed, already know what routers/switches were in use and already know the populations being served? That's pretty basic audit information that I'd expect could be pulled up from a central database lickity-split.

Eyeballing those figures should be all you'd need - but yes if there was no central record of past procurements an email survey (or better yet online using a survey system) would apparently be pretty quick.

jcromartie• 13 years ago

I doubt the one-room library open three days a week has an IT manager. But yes, obviously they know where the equipment needs to be so somebody must be able to make an educated guess.

Nelson69• 13 years ago

Capacity study? Hahaha Like they're going to go to the schools and someone there will "know" how much internet they need. They can't even go to the schools and get a good estimate of how many students they expect to be attending in 10 years, almost all the schools in the US are reactive to that sort of thing, they build new ones when the old ones are either so broken down that they can't fix them or they are over capacity. If you go to the schools you get one of two things: 1) a tiny internet straw that 2000 kids share and it's useless or 2) an OC48 to a tier one peer that 163 kids and teachers use for email.

There is something more fundamental, there were probably schools that had nothing close to reasonable internet access. (Likely a lot of them were in places where they can't get great internet at home either.) The masses were fed up with it, especially as they thought their kids were being left behind so they beat on their representatives and they just got a blob of cash to fix it, costs be damned. You think it was going to make the parents happy when they announce that it's going to take 7 years to get DSL to their child's school?

It's a monster of our own creation. No idea how you solve it... the people that doll out the money have no idea how to do the work or how to estimate if an estimate is good or not; they're just too far away it and the public's memory is too short term.

They probably did open an RFP to multiple bidders.. That's just game theory though, you think the bidders want to leave money on the table? Every where I've seen government bids produced, they increase the costs.

noonespecial2• 13 years ago

It seems absurd but I'm going to have to side with the state/library on this one. It can literally cost more to make a choice to use the cheaper unit than to just buy the big one.

"Some libraries need smaller routers. Ok. Which ones?" could easily run in the millions before any routers were purchased. Unfortunately, that's just the nature of government purchasing.

jessaustin3• 13 years ago

This is bullshit. They could have put the network engineer from the Department (the guy who confirmed he had not requested dual power supplies) on this for a week, and he would have had a solid estimate for far less. Put him on it a month and he could have had an itemized order with the exact models to order from Cisco or from any of its competitors. If he were busy with other duties, any other network engineer in the state's employ could have done the same. If they were all too busy, a consultant could have been hired on for a month's engagement at two to three times the FTE cost.

damian20002• 13 years ago

Agreed - it sounded like the Cisco guy just spec'd up the absolute maximum needed for one or two locations, then just decided to roll out the same spec across all 1000+ locations, obviously trying to maximise sales. Cisco was probably shocked when the government approved it all.

noonespecial2• 13 years ago

Oh how I wish it worked like that. And who knows, perhaps out in WV it can. But I was once an appointed advisor (one of three) to a committee that was in charge of reviewing the qualifications of a similar outside consultant and making a short term contract recommendation to the department that would approve the hiring. I'm here to tell you...

pmorici• 13 years ago

That's nonsense the article shows pretty convincing evidence that even the largest IT department in the state, the state legislature, didn't need equipment this powerful. Even if they did want to standardize on one device across the state to gain administrative efficiency they should have picked something cheaper.

cyrus_• 13 years ago

But "some libraries need bigger routers. Ok. which ones?" would cost much less (especially given that the answer would have been none of them.)

sfall• 13 years ago

they could have used a population list to figure out that a voip server for a library that can handle as many voip lines as 50% of the residents of the town.

spikels2• 13 years ago

Great - justify incompetence with lazy reasoning. Why bother figuring out what each library needs just assume they are all as big as the largest public library.

I though I was cynical but if this it truly "the nature of government purchasing" I am clearly not nearly cynical enough.

Q: Wouldn't the internet service provider be willing to throw in a router for free? I got one with my $20/month service. I bet these libraries are paying a bit more than me.

jessaustin3• 13 years ago

Gosh, it seems like state bureaucrats can't figure out how best to spend money, and don't care to hire anyone who can. How might one's political preferences change in response to this shocking revelation?

dustcoin• 13 years ago

Almost no one will change their preferences. Liberals will blame "evil corporations". Libertarians and conservatives will blame "big government".

mpyne• 13 years ago

Well, think about it economically. What's the incentive for those who are skilled and capable to go into the public sector instead of private enterprise. Elections suck, the press sucks, your fellow public servants suck, having to deal with the general public, etc. etc.

Some days I wonder how we don't seem to encounter tons more corruption and incompetence at all levels of the U.S. government.

bluedino• 13 years ago

Remember the wasteful spending back in the UNIX workstation days - a Sun 10 in every administrator's office for e-mail, and nobody ever had the training to use the things?

hmottestad3• 13 years ago

My high-school admin bought a Mac Pro with dual CPU. It was powerful enough to run all the school servers at once, yet he only used it to remote desktop into the real servers.

cynwoody3• 13 years ago

Those who can, do. Those who can't, teach. Those who can't teach administrate.

WestCoastJustin2• 13 years ago

Probably going against the grain here, but what about the operations staff who are charged with supporting these 1,164 routers? What about warranties and parts replacements? There is a price for standardizing on a piece of hardware at such a large scale. When you standardize, sure there is going to be hardware overkill in some places, but in the big picture this is just a price of doing business at this scale. What is the price of service calls out to this location when the hardware is down? You have a tool-chain that supports this hardware, you have experts supporting the network (security, patching, etc), and you have contracts in place to make sure it is operational.

rdl2• 13 years ago

There's a point in standardizing, but they probably should have standardized on 2-3 different branch router products, vs. one.

WestCoastJustin2• 13 years ago

Yeah, I agree. I'm just saying I can kind of see where they are coming from.

hmottestad3• 13 years ago

Decent point.

If you have 5 office buildings with 50-500-500-500-2000 people in them (respectively), then standardising is probably a good idea since now you can use the same company to fix problems in all the builds and not have to take special care with the small building.

However. If you have 30 builds with 5 people in each. Sending a new, preconfigure, router by fedex is so much cheaper.

That is how my phone company treats me. If my home router dies, or has an odd problem that they can't figure. They just send me a new router by mail and I switch it out with the old one and send that one back.

amalag• 13 years ago

Nothing wrong with standardizing, so standardize on a $100-$500 router instead of a $20,000 router. The point is that some guy made a killing selling gear only a place with 10,000 users needs.

InclinedPlane4• 13 years ago

That's a hypothetical that so far as I'm aware is not reflective of reality.

spikels2• 13 years ago

Thanks! Nice job at sowing seeds of doubt when faced with with clearly damning evidence of incompetence. You clearly have a brilliant future in government procurement.

Next task: make the case standardizing on Ferrari 599s for all government vehicles. All of you arguments will hold in that cases as well.

http://en.wikipedia.org/wiki/Ferrari_599_GTB_Fiorano

Random_Person• 13 years ago

I am one of those charged with maintaining this equipment. Spread throughout our state, there are 8 Education Services Agencies that manage their region's networks. I personally installed ~115 of these routers...

What's the price? Not a lot.

We are state employees, and as such, are paid state employee wages. I am compensated for mileage, but beyond that, there is no charge to the individual districts. Part of the cost of these routers was a 4 year Cisco Smart Care plan which replaces the hardware within 24 hours at no additional cost. What that really means is, they ship it to me and it's my responsibility to replace and return the failed part. Much of what I do is remote configuration changes and very little on-site time.

EvanAnderson• 13 years ago

I haven't something quite this egregious happen firsthand, but it fits the pattern for the interactions I've had when working for a "partner company" reselling big-name networking gear.

homosaur3• 13 years ago

Corruption is awesome when you're on the nipple end of the government tit. Nice work if you can get it, Cisco.

fnordfnordfnord• 13 years ago

Cisco may not have anything to do with it. It may be down to a salesman in the middle who is on commission. I once saw CCTV cameras deployed with Jena lenses, I guess for similar reasons. The auditors (if there were any) weren't knowledgeable enough to know better.

edit: After further reading, Cisco did in fact shamelessly participate in this gigantic boondoggle.

scotty79• 13 years ago

In my country government officials are usually paid to be this stupid. I can't imagine USA government officials are this stupid for free.

I know ... never attribute to malice what can be sufficiently explained by stupidity, but come on! Someone sure got at least a nice car out of it.

robryan2• 13 years ago

Is this really ciscos fault though? They weren't being paid to tell the government what they needed in these schools.

pekk4• 13 years ago

Doing antisocial things for money is corruption in the public sector. The same grade of evil in the private sector is fiduciary duty and entirely acceptable, regardless of how high the cost to third parties.

shalmanese• 13 years ago

Previous discussion on the issue with a lot of the same arguments that have been rehashed here: http://news.ycombinator.com/item?id=3962029

mrb• 13 years ago

Cisco: "the criticism of the State is misplaced and fails to recognize the forward-looking nature of their vision"

My sarcastic retort would be: "no, you fail to recognize the forward-looking nature of their vision because you did not recommend this other even more expensive and more powerful router!"

nicw• 13 years ago

This almost happened at the California State University (CSU) level. An RFP went out, Alcatel bid $22MM, Cisco $123MM.

http://www.networkworld.com/news/2012/102512-cisco-csu-26371...

""Everybody had to comply with this spreadsheet," he said. "Every campus had two border routers, two cores, and two server farm switches. All the vendors had to propose exactly the same solution" based on the average number of servers deployed at each CSU campus. "All of this is based on exactly the same data to all of the vendors. It's exactly the same formula for all of the vendors.""

js2• 13 years ago

Meh, I'm much more upset by the mountain top removal going on in WV, clearly visible in the satellite picture of Clay, WV included in TFA.

jrockway• 13 years ago

You can blame Cisco for that, too. See, one of their interview questions is "How many teaspoons would it take to move Mt. Fuji," and they needed to do a small initial study.

rachelbythebay• 13 years ago

Oh, the FCC E-Rate program. So much corruption, so much waste. There were people who would purchase something for a school with the most % of kids on free or reduced price lunch, since that was used to set the "FCC match" percentage. So, if 90% of the kids were on that plan, we'd only pay 10% of the actual cost.

So, they'd order something for the school with the highest percentage and would then park that equipment there for a year (to fulfill the requirement that it must be used there). A year later, they'd move it somewhere else.

I wrote about this particular router instance last year and linked it with my own FCC story from the year before that. http://rachelbythebay.com/w/2012/05/08/router/

yergi• 13 years ago

This is so old that it was on the frontpage of Digg before Reddit was popular.

trout• 13 years ago

Visualizing this conversation..

IT Director to Sales Guy: "We just got $20M in grant money for getting broadband across the state. Can you get me some numbers?"

Sales guy to engineering team (partner or internal): "Hey I need lots of boxes. They've got 1300 sites."

Engineering team: "Ok.. what do they need?"

IT Director: "Pretty sure my network guy says everything has to have redundant power supplies and at least 1 ethernet connection. To do a survey for each site would take over a year due to bureaucracy, and I've got 3 months on this grant"

Engineer to Sales guy: "Ok I built out those routers. Do they really need redundant power supplies everywhere? 3900's seem big."

Sales guy: "Ya, that's what they said. Anyways this came out below budget. Thanks!"

IT Director: "Looks to be under budget, meets our needs, thanks!"

.. meanwhile IT management/engineers aren't involved. Somewhere, someone didn't slow this project down to do due diligence. That or somewhere buried in some document is a requirement for redundant power supplies, but that sounds less likely the case.

vacri3• 13 years ago

That is also a valid point - if the way your system is set up, it would cost more than the difference to send someone out for the survey to verify a cheaper model is enough, just throw in the higher model. Though in this particular case, it's clearly not what happened.

intended4• 13 years ago

> Somewhere, someone didn't slow this project down to do due diligence

In it a nutshell.

If anything, there should have been multiple flags raised.

1) A ball park figure should have been estimated on what this should cost, broken down by equipment type.

2) That should have made it clear that switches would be fine for multiple use cases, and the overall estimate should have dropped. *

3) Back and forth with provider as haggling over components proceeds. Massive attention to detail would be shown here.

4) First quote received from Cisco. Due diligence proceeds, issues raised. Customers says NO, just to buy negotiation room. (fine they have a grant, maybe not so aggressive)

5) Updated quote, go back to 4 if issues.

6) Quote acceptance. Now monitoriing of execution.

There should have been many opportunities for flags to have been raised, even before the quote was received. And most definitely after it would have crossed the ball park figure.

* It looks like the clause for redundant power was what tripped it up. Someone said we need X, and then somehow it became the TRUTH for all routers/switches.

So its entirely possible (if not likely) that Cisco said "based on your constraints, these are the only components which match your requirements", and the Government bought it.

Which is face-palm/head-desk territory.

ericcumbee• 13 years ago

"did not request or require that the routers for the state's schools have internal dual power supplies. Education would not have made this requirement because unless a school has two power sources the feature of dual power supplies would have no use."

What if one power supply fails? I expect better from ars.

wilfra• 13 years ago

Nice commission for that sales rep.

This is the dark side of enterprise sales. Microsoft and many others have surely done many such deals over the years - and paid out handsome bonuses to the reps/execs who made them happen.

MertsA• 13 years ago

Just nit picking but there are several places in the article that are incorrect such as

"The West Virginia legislature at peak times can have over 600 internal users and numerous guests accessing "multiple Web servers, up to eight simultaneous live audio webcasts, multiple SQL servers, and multiple Google search appliances located in the Legislature's server farms." Despite all this, the legislature doesn't even use a router but instead runs a cheaper Cisco switch... and it has never exceeded capacity."

It's pretty clear that not only does the author not know networking basics, his sources don't either.

papsosouid2• 13 years ago

Why is that clear? Cisco sells plenty of "layer 3 switches", they are switch hardware with basic routing functionality available in the IOS. It is entirely likely that the quote is referring to a catalyst 29xx or something which is like 1/10 the cost of the routers the article was talking about.

guynamedloren• 13 years ago

This makes me sick to my stomach. The worst part is that there's nothing we (the taxpayers whose hard earned money went to to pay for these things) can do about it, nor is there much we can do to prevent it from happening in the future. I really really hate to admit it, but that's the truth.

pekk4• 13 years ago

Did you consider any of the tools of democracy? Although it can take time, that should work just fine if most people actually agree on what to do.

If you are in a minority of the population which wants to unilaterally impose its will on everyone else because they are more important, however - then I guess that democracy is no good and only an armed coup will do. Let's hope that people don't start thinking that way, because then we are all in trouble.

DanielBMarkham• 13 years ago

What's worse than overpaying millions for a few routers? Overpaying billions.

At the federal level, specifically to prevent such things from occurring, there's this huge byzantine procurement process. A process that is literally worth tens of billions of dollars to game.

So if you have product foo and want to see a zillion copies of it to the feds instead of some freeware or cheaper solution? 1) Convince somebody on the inside of the procurement system that yours is the best product, 2) they write up the specification so that no other products will qualify (many times just copying directly from your brochure) even though it's technically an "open" bid, and 3) have somebody with lots of procurement knowledge help guide the paperwork through the system. At the end of the day, it's all just paperwork, no matter how much money is involved.

And that's just what I've observed in IT. I'm guessing IT is the worst, since all the products somewhat look alike. But I'm not sure. Quite frankly, its way too depressing to think about much.

BTW, the best way to do #1 is simply hire people retiring out of the procurement system. Yep, there are laws against direct hires, so you hire somebody from DoD to help shepherd a Commerce Department contract, or a DHS procurement expert to help with a DoD job, and so forth. If you do this correctly, the poor schmucks left handling the paperwork will be so happy that you can offer extensive support in making sure everything is done correctly that this is another huge plus in favor of your getting the bid.

stdbrouw• 13 years ago

The trouble is that you actually do need some of this flexibility in the procurement process. If your department needs Photoshop, you don't want some goofy non-technical auditor telling you that he googled around and thinks GIMP will do just fine. Or you want one particular contractor because just last year they did an amazing job on something that was pretty much exactly what you need.

jimmaswell• 13 years ago

gimp generally would do just fine, wouldn't it?

yason• 13 years ago

Nothing is as expensive as free money.

Tichy• 13 years ago

Startup Mountain camp anyone? This sounds like a great place to host a hacker convention now?

jeffdavis2• 13 years ago

I was surprised how much blame this article lays at the feet of Cisco. What did they do except sell the customer what they wanted? Sure, they might have been more noble if they put on the breaks in the name of the taxpayers, but that could hardly be expected.

It takes a lot of nerve for someone who just wasted my money (federal dollars) to try to blame it on the other party for fulfilling the order.

megablast2• 13 years ago

It is not one or the other, it is both of them.

If Cisco wants to be treated like untrustworthy rip off artists, then they acted the right way. People will take note.

ripter2• 13 years ago

If I go to an Apple store and buy a $3,000 computer is it apple's fault that I only needed an iPad? Hell no. I'm the one that ordered a $3,000 computer, signed off on the agreement, and forked over the cash.

Cisco acted like a business, you can't blame them for that.

dalke2• 13 years ago

Did we read different articles? The one I read says "The report finds plenty of blame to go around. The ultimate cause of the fiasco, it says, was the fact the grant implementers did not conduct a capacity or use study before spending $24 million." This does not place the ultimate blame on Cisco.

You say "what [West Virginia] wanted", but the article shows how Cisco was unable to show that they knew what WV wanted. For example, Cisco claims that WV specified internal dual power supplies but there is no record that WV ever had that requirement. Instead, "what WV wanted" is defined only as being whatever WV signed off on at the end.

As to if Cisco's behavior is expected or not, the Ars article says: "[Cisco] had a moral responsibility to propose a plan which reasonably complied with Cisco's own engineering standards" but that instead "Cisco representatives showed a wanton indifference to the interests of the public in recommending using $24 million of public funds to purchase 1,164 Cisco model 3945 branch routers."

Ars even links to section 5A-3-33d of the West Virginia Code. The likely relevant clause is "(B) Performance in violation of standards established by law or generally accepted standards of the trade or profession amounting to intentionally deficient or grossly negligent performance on one or more public contracts;", and the auditor's report shows examples of how Cisco's actions were likely in violation of their own published standards.

This is not a crime. As the article says, the strongest remedy regarding Cisco is that Cisco might be "barred from bidding on future projects."

jeffdavis2• 13 years ago

"Cisco was unable to show that they knew what WV wanted"

Yes, they have a contract. That is the best indication possible that the customer wants what you are selling.

If I trust someone else with my money, and they transfer that trust over to a salesperson, then they have violated my trust.

I don't want to hear about "blame to go around" and "the salesman should have sold us less stuff". Maybe apply some shame or sanctions to the salesperson, I suppose, but I really don't care unless there was some kind of kickback involved.

Allowing the stewards of your money to redirect blame onto Cisco for selling too much stuff seems so overwhelmingly naive that I don't know where to begin.

jgoney• 13 years ago

Before I read the article, I was hoping for a feel-good piece about how someone hacked together a massive WiFi system using such a router to supply Internet to some isolated community in rural West Virginia. It didn't turn out to be exactly that.

meaty• 13 years ago

This doesn't suprise me.

I am related to an ex-sales exec at Cisco UK. They are a bunch of shysters who will desperately oversell anything to anyone. The person in question was responsible for selling such kit to managers who didn't even know what it was but they apparently needed it. You know the sort who populate senior positions in the public sector. They are rife in the healthcare and council sectors in the UK. Incompetent morons waiting to be milked for our cash.

The asshat is now selling VoIP and video conferencing solutions to medium sized businesses (via their executives) which is the next cash cow he can milk.

hiddenfeatures• 13 years ago

Maybe I should get myself checked, but is anyone else thinking about the big opportunity here?

You wouldn't need more than your average crow bar to get into this thing. I bet they don't have a decent alarm system (if any).

Seems like a relatively low-risk, high-reward situation to me.

gritzko• 13 years ago

Well, just another me-too story. When I was somewhat younger I had to "deploy" one Cisco product which was definitely a result of an "incentivized" sale. That sweet sweet setup involved login-password authorization (assisted by a Cisco router) where the user had to type in "public" and "1" as a password because... the enterprise actually had no end-user accounts and absolutely no possibility to introduce them...

As far as I understand, such an incentivized sale was a common practice. Once the management somehow achieved consensus (i.e. the right balance of risks, benefits and favors), engineers were left with making things appear OK.

I am inclined to think that Cisco made a strong bet on this kind of a business model at some point.

g2bsocial2• 13 years ago

Burn in hell, CISCO, bunch of pricks.

g2bsocial2• 13 years ago

OK, the "Burn in hell" comment added little value, and so the downvotes from Mods understandable, but take into account I'm a West Virginian, and this is genuinely upsetting to us.

rlpb• 13 years ago

From the article:

> the legislative auditor concluded that the company "had a moral responsibility"...

Since when do corporations have any kind of responsibility, other than to make as much profit as possible? Expecting anything else is futile. If something needs to be fixed, it is in mechanisms to restrain this kind of behaviour where it is in the public interest. Demanding that corporations have morals is not the solution.

mgkimsal4• 13 years ago

If corporations have the concept of 'personhood' attributable, they can probably have the concept of 'moral responsibility' attributed as well.

EliRivers• 13 years ago

In some countries corporations effectively do have morals and it does seem to work for them. Many German companies see themselves as a partnership between employees, customers and society.

lifeisstillgood• 13 years ago

There is positive corruption and nevative corruption

Positive corruption does the right thing (build roads, install broadband into poor communities) but adds cost

Negative corruption distorts right thing so much it simply does not happen (communities never get proper triads or sewage because they are the wrong tribe)

The broadband is the thing - good. If you don't want government to overpay I suggest Cisco routers is the last thin to look at - start with military contracts

mich41• 13 years ago

Reminds me of new EU members. Joining the EU was advertised as source of funds for development and catching-up with the West and now a benchmark of politicians' "performance" is how much funds are they able obtain for their electorate - the more is spent, the better.

In extreme cases one didn't even have to bribe officials to get bogus contracts because if the city didn't find a way to spend all the money it was offered, it would simply get less.

mgkimsal4• 13 years ago

Didn't read the entire post - is there some reason the state or local municipalities can't sell this stuff on ebay, get lower-powered hardware to match their needs, and pocket the diff for the locality's coffers?

yaddayadda• 13 years ago

"For those keeping score at home, this means that 75 $20,000 routers are depreciating in a state police warehouse somewhere in West Virginia." So we should be seeing 74 Cisco 3945 routers on eBay very soon. (My commission for this idea is 1 Cisco 3945 router.)

SpikeGronim• 13 years ago

I saw the exact same thing with Cisco in the NY public school system. They gave my high school something like $50,000 of equipment in a rack to support two machines that submitted grades. We stripped it for parts and put it to better use, it had some really nice switches in it. But it was clearly misspent public money. At least we did put it to use in classrooms, though not as they intended.

njx• 13 years ago

This could have been executed by the process "Wired RFP". just look for the this term and you will see references where government RFPs are wired to specific vendor. In other sense, no other vendor may qualify to bid based on the RFP requirement.

For e.g RFP bidding/winning criteria is based on point system.

1. Price accounts for 25% 2. Referrals from similar orgs 40% and so on

you see, when the price in the RFP accounts less then it is an indication that the RFP is wired to a specific vendor.

A small business who is just starting may or may not have 3 or more referrals from a public school or university.

In one of the RFP process I sat, the RFP had a typo where they had literally spelled out the name of a competitor company. I pointed out this in the pre-bidding call and the personnel acknowledged that it was a mistake.

Government RFP are a waste of time because it is the last step the government does in their purchasing process. They have already chosen the vendor and most of the time the vendor helps them write the RFP.

Fixing the RFP process may eliminate some of the overspending.

emperorcezar• 13 years ago

I grew up in West Virginia. I also was pretty involved in the computer operation at my high school. The "head" of IT was a math teacher they suckered into doing all the work.

Anyhow. I remember when they decided they needed a domain server. What they eventually came back with was a two year old model HP tower server that ran over $4k. It was insane. They could have gotten something new for much much less, but all the explanation I could get was that they had a contract and had to buy the items listed in that contract.

There is a culture of corruption and it is prevalent in not only the public, but also the private sector.

Another story is when I was in a diner years later and heard my old social studies teacher asking for a bribe from someone to get a job in the coal mines. I felt pretty bad because I believe he got his money and thus his power from years before when I told him to buy Google and others stock.

crazygringo• 13 years ago

> Getting any of the money back seems unlikely at this point, but the legislative auditor does have one solid recommendation to make. The State Purchasing division should determine whether Cisco's actions in this matter fall afoul of section 5A-3-33d of the West Virginia Code, and whether the company should be barred from bidding on future projects.

Cisco is a public company with a fiduciary duty to make money. You should assume that companies are going to try to fleece you whenever possible. Unless they committed some kind of contractual breach or fraud, they're not the problem.

The fault here is clearly with one or multiple people in the government. This is the kind of gross misconduct for which it feels like firing isn't even close to enough -- this kind of managerial incompetence really deserves at least a short stint in a white-collar prison somewhere.

papsosouid2• 13 years ago

This should surprise no one. This sort of nonsense is the entire reason cisco exists as a company. Their products are underpowered, overpriced, and their software is incredibly unreliable. Scamming big entities with closed bid processes into buying millions of dollars worth of equipment is cisco's bread and butter.

wildmusings• 13 years ago

Caveat Emptor. Cisco is out to make as much money as they can, they have no duty to save the government money. West Virginia's procurement process was irresponsible and wasteful and now they want to shift the blame to Cisco in order to cover their own incompetence. If you overpay for something, it's your fault..

jlarocco• 13 years ago

Having worked on a government contract before, this doesn't surprise me at all.

They were going to spend all the money the feds gave them. Whether they spent it on over powered routers or "consulting" or something else, it was all going to be spent by the end of the project.

There are enough projects overbudget that being on budget looks really good. And there's always a concern with being under budget that next time the feds won't hand out so much money, and you might really need it then.

ripter2• 13 years ago

'The auditor's office sent off a fairly testy e-mail to Cisco noting that the 3945 routers were not appropriate for most West Virginia deployments—even according to Cisco's own literature. "I would appreciate an explanation as to why you believe the 3945 routers are not oversized and misconfigured for hundreds of locations," the auditor concluded, "and, thus, a significant over expenditure of millions of dollars for Cisco equipment."'

Did I miss some part where they contracted Cisco to visit every location and assess it's needs and build an order according to that?

If you order a bunch of 3945 routers then why is it Cisco's fault for selling you a bunch of 3945 routers?

Why a one-room West Virginia library runs a $20,000 Cisco router

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