The network giant is reviewing people and processes following an investigation by the officials for the City of San Jose, unofficial capital of Silicon Valley, which uncovered significant and pervasive participation by Cisco in a high-profile IT project’s bid process.

The investigation by San Jose city attorney and auditors has prompted the city’s Chief Information Officer (CIO) Wandzia Grycz to resign, two months after she downplayed the extent of Cisco’s participation in the contract.

A Cisco spokesperson told ComputerWire yesterday Cisco’s investigation is being conducted in parallel with the city’s own investigation, but she was unable to say when the company’s investigation would be concluded.

At the heart of the case is the charge that Cisco participated extensively in the Request For Proposal (RFP). Also in question is the city’s decision to standardize on Cisco voice and data equipment without conducting any formal cost-benefit analysis. Final bidding came down to three vendors – Unisys, SBC and Norstan – who all offered Cisco kit.

The project is for a voice and data network at a prestigious, $388m new city hall building, designed as a showcase for local government in the heart of the high-tech industry. The network is now being re-designed and re-bid, while auditors have recommended a series of measures tightening up procedures to prevent future abuses of the system.

San Jose is Cisco’s corporate home, with 13,000 employees on campus.

According to San Jose, Cisco’s participation in the project began in May 2003, more than a year before the contract was awarded in June this year.

Cisco designed the city’s so-called Converged Network System (CNS), assisted San Jose staff prepare in detailing the RFP and helped prepare a list of equipment that included 18,000 items. City staff were also coached by Cisco on answering technical questions by competing vendors during the RFP process.

Grycz had denied Cisco’s involvement in developing the RFP. They did not have advanced notice of the RFP, they did not involve themselves in preparation of the RFP, Grycz told a council meeting on June 14, adding CNS was not a vendor driven process.

However, a report covering the investigation published yesterday said: In our opinion, the CIO’s representation to the city council is clearly at variance with the documented record.

A Cisco spokesperson told ComputerWire Cisco had worked on the RFP at the request of the city, adding the company has participated in other equipment bills. It’s appropriate for the customer to have a full appreciation of what we have to offer, she said.

Investigators also rejected a decision made by Grycz, her deputy and others to standardize on Cisco, which was justified on the basis it would cut costs associated with re-training staff. Investigators noted staff have not prepared any cost-benefit analysis but had inputted a financial benefit based on an overriding perception of cost savings.

Cisco’s spokesperson denied company participation in San Jose’s decision to standardized on Cisco network equipment.