Discredited State Contract Awards

October 03, 1993

If there was any doubt about the dangerous disintegration of the state's contract awards process, two recent developments make it clear this system ought to be reformed. Hundreds of millions of dollars are being awarded in a system ripe for manipulation and favoritism.

Take the case of the state telephone contract. This $10 million award gives the vendor a five-year monopoly on private branch telephone exchanges (PBXs) in state offices. Yet the way it was awarded in May leaves the impression the deck was stacked against other bidders.

The state's own formula for determining the winner was ignored. The winner's equipment failed to meet technical standards. The computation of each bidder's price proposal was so flawed the state couldn't even come up with coherent sets of figures when requested to do so by an appeals board. And in a truly bizarre move, the state tried to give the winning bidder the edge by using such criteria as addresses, telephone numbers and federal ID numbers to rank each company's proposal.

No wonder the Board of Contract Appeals last month threw out the PBX award as irrational and in violation of state procurement laws.

None of these flaws was flagged by the three members of the Board of Public Works, who are supposed to act as watchdogs on such matters. And once again, the attorney general's office failed to do its public duty: the state's lawyers stubbornly defended the state Department of General Services and its illegal bidding process rather than acting as independent legal fact-seekers.

This case lends great weight to Senate President Thomas V. Mike Miller's call for a joint legislative task force to consider establishing an inspector general's office to monitor contract awards. The attorney general's office, as legal agent for the state, has an inherent conflict of interest. And the clear losers are the taxpayers.

Further buttressing the case for procurement reform was another recent decision on a controversial state contract. After three months of stonewalling, top state officials now concede they erred by not giving other firms a chance to bid on a high-technology "distance learning" network for state high schools and colleges.

But just to make sure the initial award to C&P Telephone Co. is secure, the state's budget secretary, Charles L. Benton, said he wants to put this round of competitive bids on such a fast track "it would be unlikely that other providers would be able" to end up winning the award. So much for a level playing field.

The joint legislative task force will hear dozens of other horror stories in the months ahead. That will add to the momentum building for an overhaul of the state's procurement methods. It is overdue.

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