Liquor board’s actions come under fire

The state has paid $7.4 million to Alvey Systems of St. Louis, the manufacturer, with no penalties thus far even though Alvey’s system has not yet met the contract requirement of shipping 21,250 cases per day.

New administrative director Pat Kohler said Wednesday that software bugs are being fixed and all the state’s liquor has been shipped out of Seattle for two weeks.

But shipment shortages have not stopped. Two sources in different parts of the state, who did not want their names used, told The Associated Press that major and random shortages have occurred since the two-warehouse setup began last fall.

Kohler, former assistant director of the state General Administration Department who began work Jan. 1, said delays due to software problems alone have cost $980,000. But she said the difficulties are not unusual for such a complex system.

She defended the agency’s decision to replace an antiquated warehousing system in an old building that needed millions of dollars in repairs.

The high-tech Alvey system will decrease billing errors, improve the accuracy of inventory records, improve customer ability to order in advance, and reduce employee lifting by 60 percent, thus creating a safer workplace.

Looking back, most of the delay was caused by unforeseen problems in bidding, she said. The first two rounds brought bids that were too high or did not meet specifications. The contract was awarded in May 2000after two years and a rewrite.

Then a five-month city permit process caused delays, according to Alvey Systems. The system was installed by July 2001. But when managers tried to ramp up in the fall, they found it failed to operate reliably.

"The system would ship, but ship short, because we simply could not feed it fast enough," Rick Phillips, then acting administrative director, said in November.

The system was shipping short by 4,000 to 6,000 cases a day in late October, Phillips said.

With the holiday rush approaching, managers and Alvey quit testing and moved most distribution back to Auburn. As many as 35,000 cases of liquor must move daily to the agency’s 315 stores during the rush.

In November, 20 percent of shipments were handled through Seattle and 80 percent through Auburn, said Liquor Board spokeswoman Tricia Currier.

Tests resumed in January. During the first week, 25 percent of shipments were made through Seattle and 75 percent through Auburn, said Board spokesman Bob Riler.

In the second week, Alvey said 10,000 to 12,000 cases per day were shipped, which was all the liquor needed in the slow season. On Tuesday, Kohler said, 17,000 cases were shipped.

That’s still short of the contract performance level of 21,250 cases. Alvey hopes to meet that level during tests in February and March.

Ken Thouvenot, Alvey’s vice president of project management and marketing, said this is a normal installation with delays caused partly by the two-month testing halt during the rush season.

He noted the complex system requires a liquor board computer to communicate with warehouse management software, which must communicate with factory floor software, which must communicate with logic control equipment.

"Then all of that is working in conjunction with a complex mechanical system," said Thouvenot. "It takes time to get all of that."

While, Kohler said there’s no reason to impose penalties on Alvey at this time, Robert Nelson, a spokesman for Gov. Gary Locke said the state will decide whether to seek damages after an evaluation of the system is completed in February.

"We do expect the liquor control board to be run efficiently, and we don’t think the delays associated with this project, while regrettable, are typical of state government, nor should they be," Nelson said.

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