Note: This document is copyright, but I encourage you to paraphrase its points in your own words.
July 29th, 2002
Civic Center Plaza
1200 Third Avenue, Suite 1200
Mayor Dick Murphy
202 "C" Street, 11th floor, San Diego, CA 92101
Michael T Uberuaga (City Manager)
202 "C" Street, MS 9A, San Diego, CA 92101
Charles G Abdelnour (City Clerk)
202 "C" Street, 2nd Floor (MS 2A), San Diego, CA 92101
Re: Microsoft Corporation
Dear Mr Gwinn,
It is my belief that the above named company qualifies under the provisions of the San Diego Municipal Code for debarment as a contractor for the City of San Diego. It is my understanding that you are charged with taking appropriate action in such cases, and I therefore write to bring the matter to your attention.
Section 22.0803 states in relevant part:
(a) [T]he City Council may declare by resolution that a bidder or contractor is ineligible to bid on City procurement and public works contracts for a period not to exceed three years for any of the following reasons:
(7) conviction under a state or federal statute or municipal ordinance for fraud, bribery, theft, falsification or destruction of records, receiving stolen property or of any other similar crime;
(10) any offense or action which indicates a lack of business integrity and which could directly affect the reliability and credibility of performance of the contractor on future contracts with the City; or,
(11) any debarment of the contractor by another governmental agency.
(b) The City Council
... may permanently debar such bidder or contractor for a conviction under federal or state antitrust statutes involving public contracts or the submission of bid proposals, for any corrupt practices involving the administration or award of a contract with the City, or permanent debarment of the bidder or contractor by another governmental agency.
The company in question has been found in violation of federal anti-trust statutes in 1994, and again in 2001. The record of those cases provides ample evidence of a long history of actions indicating a lack of business integrity. Further the company has been convicted of violation of intellectual property law in France in 2001.
I would also like to take this opportunity to draw your attention to the mounting concern among governments worldwide as to whether the interests of the people are best served by the use of proprietary software and closed document formats. Legislation is currently being drafted in Argentina, Brazil, China, Germany, Mexico, Peru, Spain, and the United Kingdom, either to block products from this company, or to encourage open source alternatives.
Regarding the company's reliability and creditability of performance in future contracts, I invite you to consult the terms of your license agreements with this company, and determine for yourself whether they in fact offer any warranty or guarantee whatsoever. I also invite you to investigate this contractor's past history at resolving performance shortfalls in previous contracts.
In all fairness, it must be said that the information technology industry has lent itself to the establishment of monopolies, and that, once in that position, the temptation to exploit the monopoly at the expense of the customers must be almost overpowering. The only way to remedy such a situation is for influential and forward-looking participants like the City of San Diego to play their part in encouraging diversity, competition, and openness.
It must be said that it will probably prove burdensome to move away from the solutions provided by this company, but unfortunately this very effect is one of the consequences of an exploited monopoly. You can take heart from the fact that the two major alternatives may well have a lower total cost of ownership. As Steve Ballmer, Microsoft's CEO, recently conceded, "We haven't figured out how to be lower priced than Linux." In Largo, Florida, the city switched its 1,000 employees to Linux and found that it saved them at least $1 million per year. The Gartner Group recently concluded, "Macs are up to 36 per cent more cost-effective than competing Wintel products." In addition, reliance on this contractor can come with hidden costs; the City of Virginia Beach was recently required to pay this company an additional $129,000 because they were unable to locate paperwork for all their software.
For further details of the cases cited above, please consult: United States v. Microsoft Corp., No. 94-1564, 1995 WL 505998 (D.D.C. Aug. 21, 1995); United States v. Microsoft Corp., 65 F.Supp. 2d 1 (D.D.C. 1999); and United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001).