UNC contracted with, paid software developer that didn’t exist
What else could that money have been used for?
$85,690 is a small amount of money for a university with a budget the size of UNC’s. But it could have covered four years of tuition for two in-state students with money to spare.
In late 2014, the University of Northern Colorado contracted with a company to develop a pair of web and smartphone apps for online teaching. UNC paid a hefty upfront fee to the software developer and made scheduled monthly payments as work progressed.
There was one problem — the software developer, Bossage Inc., didn’t legally exist, and it did only a fraction of the work UNC paid it for. Ten months into the project, when UNC officials finally realized the university was being defrauded, the university was more than $85,000 in the hole.
That is a minuscule amount of money compared to UNC’s annual revenues and expenditures, but the experience led university officials to make improvements to its purchasing process and forfeit the money. UNC officials did not elaborate on those changes.
The project in question arose out of the Innovation@UNC initiative, which started in 2013 to fund the development of new teaching techniques and programs in response changes in technology and growing competition in higher education.
One such program was the development of two “Guided Information Exploration” apps for UNC’s Audiology and Speech-Language Sciences department, which in its project application said the apps would help students “connect the dots” in abstract physical principals to practical applications.
UNC held a bidding process to select a developer for the apps. Don Finan, one of the professors who spearheaded the project, said the choice of Bossage was a “group decision,” but that final authority rested with Cristal Swain, the university’s chief procurement officer. In November 2014, UNC and Bossage signed a “statement of work,” a contract outlining Bossage’s duties, the project timeline and payment structure.
At that time, UNC paid Bossage $40,590 upfront, according to the statement of work, with monthly payments of $4,510 scheduled from January 2015 through the project’s estimated completion in September 2016. Bossage was supposed to develop one app throughout fall 2014 and summer 2015 and release it in time for the 2015-16 school year. The company would then assess the first app while it developed the second during spring and summer 2016, with the second app ready for deployment by fall 2016.
But in summer 2015, Finan said, he grew suspicious because there was “not the progress we expected.” Bossage had also asked UNC for more money to host the apps on its servers, which UNC said in a statement “seemed inconsistent with the progress on project milestones.”
By late September 2015, when UNC had paid Bossage $81,180, Bossage claimed to have worked 540 hours on the project, according to emails provided to The Tribune. Finan took his suspicions to another software development company, which analyzed what little work Bossage had completed to that date and concluded Bossage had worked “at best around 40 hours in total,” and that the “work is incomplete and the quality of work is substandard.”
On Sept. 25, 2015, Finan recommended immediately terminating the contract with Bossage, but UNC made one more monthly payment of $4,510 on Oct. 1, bringing the total it spent on the project to $85,690. Only after that did Dan Satriana, UNC’s general counsel and husband of Cristal Swain, the university official who secured the contract, conduct due diligence and find Bossage wasn’t what it said it was.
According to an email between Satriana and a person claiming to represent Bossage, Bossage registered articles of incorporation in Delaware in 2005 but never filed any additional paperwork. Delaware listed Bossage as inactive at the time the company contracted with UNC. Bossage filed two more articles of incorporation with Delaware under the names Bossage Technologies Inc. and Bossage Tech Inc., but neither of those were active companies when Bossage contracted with UNC, either.
Bossage also claimed to have offices in New York and California, but it wasn’t registered in either of those states. The address Bossage claimed in New York City didn’t exist. The address it used in San Jose, Calif., was a strip mall that housed, among other things, a laundromat and a nail salon. A visit to Bossage’s supposed website shows a single page reading “this website is under construction.”
Satriana also contacted the University of New Mexico and New York University, which Bossage officials had said the company did business with in its project proposal, and discovered neither of those universities had records of doing business with Bossage. UNC said in its statement it asks for references during bidding processes but doesn’t always check them.
Finally, Satriana looked up the LinkedIn profiles of the people who claimed to represent Bossage and found they had mixed “different first and last names of you and others who have been in contact with UNC,” the email said.
Satriana terminated UNC’s contract with Bossage in the same email, more than a month after Finan made that recommendation.
UNC said in its statement it didn’t try to recoup the money because of the “expected costs of doing so versus the likely benefits.”
Finan said UNC looked into finding a different developer for the apps, but the project petered out.
“We have a continuous improvement approach to our purchasing process,” UNC’s statement said. “The unsatisfactory performance of this vendor informed process improvements that we have made in the purchasing office.”
— Tommy Wood covers education and Evans city government for The Tribune. You can reach him at (970) 392-4470, firstname.lastname@example.org or on Twitter @woodstein72.