Whistle-blower says city jobs sent to India

Lawsuit claims vendor violated contract

Written by

Craig Gustafson

11:46 p.m., March 22, 2012

A whistle-blower lawsuit claims that the firm hired to take over the computer help desk for San Diego city operations — saving money for taxpayers — did it by outsourcing the jobs to India in violation of its contract.

A lawsuit by a former employee of En Pointe Technologies, which the city hired in 2010, was filed under seal in November and was made public last week by a Superior Court judge.

The employee accuses the company of an elaborate cover-up to hide the offshore work from city officials and says sensitive information, such as police records, may have been vulnerable to abuse.

The city conducted an investigation and found no evidence to back up the allegations. The City Council reviewed the matter in closed session Feb. 7 and voted against joining the litigation.

An En Pointe spokeswoman said the company wouldn’t comment on the lawsuit. The firm touts itself as a “trusted adviser to thousands of IT organizations nationwide, including commercial enterprises, government agencies, and educational institutions” on its website.

The contract with Gardena-based En Pointe was the city’s first foray into outsourcing under Mayor Jerry Sanders, who has pushed privatization of certain services as a way to reduce the costs of city government. The work had been performed for 30 years by the San Diego Data Processing Corp., a nonprofit city agency, but had never been competitively bid until Sanders took office.

The annual help desk costs were about $2.3 million when En Pointe won the competition with a bid of $1.2 million, for a savings of 48 percent. The only subcontractor listed was Mission Valley-based Gray Systems Inc., a local minority-owned business.

The U-T reported in January 2010 that the En Pointe deal would lead to some off-hours work being performed by employees in India. That led several council members to raise concerns and forced the mayor to alter the contract to require all of the work remain in California.

The whistle-blower lawsuit filed by ex-En Pointe employee Todd Dominguez raises questions about whether the company complied with that provision of the contract. He alleges his former employer subcontracted the work to India-based Allied Digital Services, which had employees in India and Gardena perform the duties.

Dominguez, an account manager, also says En Pointe had Allied Digital workers put fake name plates on their cubicles for a site visit by city officials to the Gardena offices and had them use dummy “enpointe.com” emails for any communications with the city. He said he was fired Oct. 3 after he raised concerns that the firm might be violating its contract.

Dominguez is seeking damages from En Pointe to the city for the deception. If the lawsuit is successful, he would receive a portion of an any amount awarded.

Matthew Borden, the attorney representing Dominguez, said the most troubling aspect is that a vast array of city data was put in the hands of unknown individuals working overseas.

“It’s a security concern when you have people that are willing to lie to the city and deal falsely with them and actively conceal material information from the city,” Borden said.


The lawsuit doesn’t accuse any city officials of wrongdoing.
Jay Goldstone, the city’s chief operating officer, said the city’s review found the allegations were unsubstantiated.

“This investigation included, among other measures, site visits and a review of security measures that had been put in place at the outset of this contract,” Goldstone said. “We are confident all support services provided by En Pointe were done at their Gardena offices.”

En Pointe was one of nine companies that sought the contract after Sanders announced in 2009 that he was putting all of the $45 million in information technology services provided by Data Processing Corp. up for bid. He continues to move forward with those plans, but no other contracts have been awarded.

Councilwoman Sherri Lightner, who voted against the original En Pointe contract, said the lawsuit raises concerns.

“These are serious allegations and ones that highlight the need to ensure that the city has adequate oversight of any third-party contact,” she said in a statement. “We need to make sure that any deal the city makes provides real value — saving taxpayers money while delivering the services San Diegans deserve.”

UT San Diego