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Wednesday, March 9, 2016

See no evil

The State of Wyoming does not keep procurement statistics, so is self-inflicted blinded to a sole source cancer, according to this article.

Competitive bidding has largely become the exception
A Budget examination of state records has found that since June 2014, the state procurement office has doled out no-bid contracts roughly 2,000 times, while awarding competitively bid contracts just over 300 times. The no-bid deals over the last roughly two years total almost $594 million and represent about 80 percent of all contracts handled by the state procurement office.

The procurement office deals with contracts for all state offices, excluding the Wyoming Department of Transportation, the University of Wyoming, the Wyoming Business Council, the School Facilities Department and the Legislative Services Office.

The Budget has pending record requests with those offices. However, Doug McGee, of WYDOT, has already said that his office doesn’t keep electronic records for bid waivers, so there is no way of knowing what percentage of contracts receive competitive bidding. “Regarding what I would call our ‘goods and services,’ the majority of them are competitively bid, but there are some occasionally which are ‘sole source’ based on meeting certain requirements. We do not track those in any way. So I don’t have a database to draw from for you,” McGee wrote in an email.

In Wyoming, competitive bidding is required by law for major procurements exceeding $7,500 or $20,000 for an elected official. However, by obtaining a bid waiver, officials can skirt the requirement. And, as the records search showed, they often do. Regardless, officials maintain that there is nothing nefarious about how often the waiver loophole is utilized.

In a statement, Gov. Matt Mead said his administration follows “the spirit and letter” of the law and noted that the bid waivers are publicly posted online.

Lori Galles, the procurement office’s purchasing manager, said that no-bid contracts are given for several reasons. Sometimes they are awarded to companies based on existing contracts or because a vendor is certified for a certain geographic area; sometimes they are awarded because of compatibility issues with existing equipment; or the need to use a particular “proprietary” software; or because a company has “expertise” in a particular area and is the only one that can meet the requirements for a project.

A Budget analysis of the most common justifications for no-bid contracts found the following:
• nearly 1,000 no-bid contracts were awarded because the company was listed as the “sole source” for the job;

• 450 no-bid contracts weren’t competitively bid but were “negotiated” in some way;

• 350 were listed as change orders, where a company revises its contract after successfully bidding low;
Records obtained by the Budget through the state’s public records act show more than 40 capitol-related contracts that eschewed the competitive bidding process.

The contracts total almost $229 million, about half of which are change orders — a process often criticized because a company can bid low and then name its price later by citing additional work, causing project costs to balloon.

The controversy surrounding no-bid contracts stems largely from a long history of corruption around the world.

In recent years, there have been several examples of no-bid contract scandals across the country, many of which have led to the ouster or even prosecution of high-ranking officials.

Barbara Byrd-Bennett, the chief executive of Chicago Public Schools, pleaded guilty to a bribery scheme in which she steered more than $23 million to an organization for roughly $2.3 million in kickbacks.

In 2015, the Fresno Unified School District in California was investigated for the way it awarded a no-bid contract to build a school.

A $90 million contract extension in Texas was canceled after an American-Statesman investigation revealed a possible conflict of interest, problems with the bidding process and minimal oversight. The investigation resulted in resignations, lawsuits and state employees being put on leave.

And Kentucky’s former Gov. Steve Beshear drew heavy scrutiny after he awarded a $3 million contract on his last day to a company with which his office had ties.

The controversy surrounding no-bid contracts even led a Pennsylvania governor to issue an executive order banning them altogether in a hope for better transparency.

But when it comes to transparency, Wyoming ranks second-lowest in the country, trailing only Michigan.

The Center for Public Integrity, a nonpartisan investigative outlet in Washington D.C., recently downgraded the state, giving Wyoming an “F” in its annual State Integrity Report.

There's more in the article at the link above, including details of a pending suit alleging the non-compete process is illegal.

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