Strategic Business Partners, a software firm that grew from a start-up to a multi-million dollar enterprise within a decade thanks to securing big contracts with the government of Wayne County, Michigan, recently found itself the subject of speculation, after the county rescinded a $9 million multi-year contract awarded to the company earlier in 2011.
The spending practices of Wayne County officials have been the subject of controversy recently, which according to the Detroit Free Press is probably the reason why county executive Robert Ficano rescinded the big SBP contract in November and announced the county will take bids for the project.
The Free Press quoted a Ficano spokesperson, who said, "In the climate that we're in right now, all contracts are basically under scrutiny."
This sentiment was echoed by a county commissioner, who told the Free Press that he and his colleagues will begin examining contracts more closely, as the county is under pressure to reduce costs.
The contract cancellation drew attention to the relationship between SBP and Wayne County, the source reported; this has led to speculation about an improper relationship between the company and the government, because there was not a bidding process for a majority of the contracts awarded to SBP since 2005. In response, county officials have said that SBP is the only local software company with the expertise to handle many projects.
Given the current economic climate, in which many municipalities are looking to save money and cash-strapped taxpayers are sensitive about how their dollars are being spent, tech companies would be wise to expect that any software contracts or other IT contracts they enter into with public organizations could be scrutinized. A little extra care in crafting these documents would likely be well worth it.