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Thursday, August 20, 2015

A counterproductive way to deal with emergency no-bid acquisitions

New board approves millions in no-bid contracts (Read full story at the link)
The revamped Personal Services Contract Review Board is part of a contracting reform bill the state Legislature passed this year after much debate, with the Senate watering down sweeping House proposals.
It appears the Legislature, in its wrangling over contract reform, may have inadvertently given agencies a potential out on competitive bidding.

Numerous agencies requesting approval of contracts and exemptions from bidding quoted the new law that allows exemption if “utilization of a competitive bid procurement would have been counterproductive to the business of the agency.” Now agencies appear to be using it as their reasoning for not competitively bidding contracts.

The legislation was driven by a Mississippi Department of Corrections bribery and kickback scandal. Former state Corrections Commissioner Chris Epps ran one of the largest and longest-running criminal conspiracies in state history. He took about two million in bribes over eight years in exchange for steering hundreds of millions of dollars in prison contracts to a former lawmaker co-conspirator.

The contracts subject to Epps’ malfeasance had been approved by the state Personal Services Contract Review Board. After the prisons bribery scandal, state leaders — and a task force created by Gov. Phil Bryant to recommend reform — criticized agencies’ use of “emergency contracts,” exempt from bidding, for goods and services that did not appear to be emergencies.

The reform legislation revamped the board to include citizen members appointed by the governor and lieutenant governor. The board, holding its second monthly meeting Tuesday, has only four members because Lt. Gov. Tate Reeves has not filled his appointments. The directors of the State Personnel Board and Department of Finance and Administration also serve on the board.

On Tuesday, the PSCRB questioned numerous “emergency” contracts approved by agencies, including two recently inked by MDOC worth more than $60 million combined. MDOC entered into an $11.6 million emergency contract with Valley Services for feeding inmates and a $48.8 million one with Centurion of Mississippi for medical services for inmates. Both are for a year.

New board member Bill Moran of Tupelo questioned why feeding inmates and providing medical care were deemed emergencies and the contracts not put out for bid. “Why can’t you at least take the time to get RFPs?” Moran said. “This is $60 million, and nobody’s put a pencil to it. Have you not had time to do that?”

Stanley Brooks, MDOC director of prison agriculture enterprises, said the agency did attempt to get quotes but ran into problems with the previous PSCRB and the contracts were running out, so feeding and caring for inmates became an emergency. At the board’s direction, Brooks said MDOC would try to quickly get RFPs from vendors — within a couple of months — and can back out of the emergency contracts with a month’s notice.

Moran also questioned several emergency contracts worth more than $200,000 from the state Oil and Gas Board — extensions to previous emergency contracts — for companies to plug and abandon oil and gas wells. “How is it an emergency when these wells have been sitting there for years?” Moran said.

House Accountability, Efficiency and Transparency Chairman Jerry Turner, who authored the House reform bill, said this is the result of the Senate stripping out much of the House plan before it passed the bill. Turner said the new board has the authority to establish tougher rules and regulations on bidding and emergency contracts and to force state agencies to seek best prices. He said he hopes it will. “But if they can’t, we can go back in the Legislature and put new language in there,” Turner said. “We are not going to sit by and watch all those problems we’ve had still be allowed because of misinterpretation of the language.”
I might note, Guam procurement law (5 GCA § 5030(x)) defines "emergency" as:
"a condition posing an imminent threat to public health, welfare, or safety which could not have been foreseen through the use of reasonable and prudent management procedures, and which cannot be addressed by other procurement methods of source selection."

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