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Wednesday, April 27, 2011

Procurement controversies -- Sarasota, Florida

Review: Sarasota County purchasing flaw-riddled
The consultant hired to help fix problems with Sarasota County's purchasing practices found things in such disarray that he joked to his co-workers that he ought to get hazardous duty pay.

The report is preliminary and draws few conclusions, but Brady and Berry depict a working environment that lacks the checks and balances that are supposed to govern spending — a system left wide open to waste and fraud.

The Clerk of Courts and county government are also reviewing practices after the bribery arrest of a county mid-manager in late March. So far, six county employees have lost jobs for violating ethics and purchasing policies.

The preliminary findings show problems at almost every step of the process.

Purchasing involves six different computer systems, the rules are in a constant state of flux and the county has no set procedures for determining job specifications.

Builders and contractors have long complained that specifications were being written narrowly to steer contracts to companies favored by county staff.

The NIGP's preliminary findings also show more clearly why a company would offer gifts and trips to an employee like Rodney Jones, a former project manager arrested last month in a corruption inquiry. Project managers have wide latitude to renegotiate a contract with a vendor who is doing work for the county.

The following column provides some local perspective on things to do to make the Sarasota procurement regime more effective. I've only listed some of them, ones particularly pertinent to the consideration of Guam Legislative Bill 160-31 currently being heard today. You should read them all.

County should follow these purchasing rules By Eric Ernst
Each year, Sarasota County government spends millions of dollars on goods and services. Its expense budget represents a sizable chunk of the local economy, and creates jobs for those who do the selling or the work.

With that in mind, here are 10 suggestions that most reasonable citizens would probably support:

• Eliminate the $2,000 charge for protesting any phase of the bidding and contract award process. This charge does nothing but intimidate critics and discourage smaller businesses from complaining even if they have legitimate issues to raise.

• Stop piggybacking in most cases. Sarasota has belatedly adopted rules to stop the practice of amending existing contracts to avoid putting new work out to bid. That's good because it opens the process to more competition and presumably better prices.

• Avoid declaring "emergencies" to waive bidding procedures. There aren't that many real emergencies.

• Establish fair bidding procedures. Sometimes, county staff have set up bid specifications in a manner so narrow that only one firm, probably their choice, would qualify. This bid rigging makes a mockery of the process.

• Ban vendors from setting bid specifications for contracts on which they will bid.


Same song, second verse:

Warning signs before county purchasing scandal
The warning signs date at least to late 2007, when a mid-manager in county government sent a detailed letter to commissioners outlining many of the same abuses being uncovered today. Mark Utz said that when he tried to fix problems, he was "flippantly discounted."

He also lost his job. Utz says it sent a message to other would-be whistle-blowers.

"Now they're going to go in and get religion and be ethical and do due diligence?" he said. "That's not the way it was. Nobody listened, nobody took corrective action. The reality is, the executive team and Mr. Ley had no incentive to fix that."

Perhaps the most persistent person in pointing out flaws has been St. Petersburg-based engineer John Minder. A prolific emailer, Minder has sent the county hundreds of notes warning of favoritism and mismanagement.

Minder says he filed 26 bid protests over the past two years, more than half of the total protests filed. The county denied all of his protests.

Last year, the county initiated a $2,000 charge for some appeals, and Ley took to forwarding Minder's notes to other county staffers for answers.

Minder wound up being one of the first to warn commissioners — in February of this year — about a criminal investigation of Wellington-based Chaz Equipment Co. A month later, commissioners and Ley said they were shocked by Jones' arrest. The charges centered on Jones' relationship with Chaz, which got a contract for sewer repairs via piggyback, a purchasing shortcut that allows for reuse of a competitive bidding process from elsewhere.

Problems with the way the county uses piggybacks were evident three years earlier.

You simply must read the whole story.

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