Procurement controversies -- Pennsylvania, USA

Up for bid: Pa. state contract process needs overhaul

Every political candidate The Patriot-News has interviewed this year has vowed to do one thing above all: Cut spending.

A prime area for reducing costs that the next governor and state Legislature should look at is state contracts.

As Patriot-News writer Jan Murphy reported last month, the Department of General Services awarded a contract to provide criminal background checks of teachers, mortgage brokers and foster parents to Cogent Systems, the firm that had been doing the services for the last few years.

This didn’t sound that unusual until we learned that another bidder, L-1, bid $35 million less than Cogent to perform the same service.

DGS disqualified L-1 in the final round of bidding on the grounds the firm was not financially viable, something the company disputes. L-1 provides services for PennDOT and the state attorney general’s office, among other government agencies. It’s hard not to believe something is awry in this bid.

A contract to upgrade severely outdated computer systems at the Department of Revenue went to Accenture this summer. Another bidder, Fast Enterprises, recently filed a lawsuit alleging the state ignored its $12.4 million lower bid and stifled competition.

Just this week it came to light that the group tracking people concerned about Marcellus Shale drilling as if they were major Homeland Security threats was hired on a no-bid state contract.

A Pa. Emergency Management Agency spokeswoman said “there was no other company at the time who could fulfill the requirements.” Yet the group hired, the Institute of Terrorism Research & Response, is a nonprofit that was paid more than $100,000 when there’s a special state police unit that’s supposed to do this kind of work.

These latest red flags come only a year after a major report released by Auditor General Jack Wagner’s office pointed out improper and possibly biased bid processes at state agencies. Wagner’s report focused mainly on $592 million worth of no-bid contracts awarded to Deloitte Consulting LLP and made 37 recommendations for improvement.

Gov. Ed Rendell has too often lacked adequate justification for no-bid contracts in his administration. For instance, when Wagner’s audit came out last year he told the media, “When somebody is performing well, you want to reward that performance.”

The Legislature has a role to play in cleaning up state bidding as well.

Rep. Glen Grell, R-Hampden Twp., is one of the authors of legislation calling for such basics in the bidding process as transparency, public review of contracts and no “pay to play.” These reforms should be no-brainers, but, unfortunately, we seem to need to put them into law. How many more red flags will it take before there’s change?

In this “do more with less” era, saving money on contracts through a truly competitive process should be the norm.