We need to stand firm on bid reform

By WYATT EMMERICH,

As the deadline for procurement reform looms, local governments and contractors are pushing back. It would be a huge mistake if the Legislature caves.

With two retired businessmen heading the Mississippi House and Senate transparency and efficiency committees, the Mississippi Legislature miraculously passed sweeping procurement reforms this year. We need to stay the course.

Procurement is a huge deal. Including federal grants and special purpose entities, the total Mississippi budget is about $20 billion. If you include local governments, it’s billions more. Much of this work is contracted out to private companies through the procurement process.

Mississippi’s procurement laws are a mess, residing in dozens of statutes scattered throughout our state code. Loopholes abound. Oversight is fragmented. Rules are lax compared to more progressive states.

State Senator John Polk and House Representative Jerry Turner are turning this around with the help of the legislative leadership. But push back is welling up and cities and counties are intimidated by the changes.

Nobody likes change, but procurement reform in Mississippi is long overdue. Think about the Epps scandal in the Department of Corrections. That was directly linked to Mississippi’s lax procurement laws. It doesn’t need to happen again.

Most Mississippians think government work is bid out to the lowest bidder. But over the years, bids have been replaced by Request for Proposals (RFP) and Request for Qualifications (RFQ) where price is not the criteria. This allows for high bidders to get the government contracts if they have the right political connections. It should not be so.

The new legislation regulates the RFP and RFQ process to allow more fairness and more competition. We don’t need to back down on this.

In addition, the new legislation requires computerized reverse auction software to be used when governments procure commodities. Computerized reverse auctions are the wave of the future and are increasingly used throughout the country. We need to use this process in Mississippi.

For one thing, reverse auctions are more transparent. Outside software is used with built-in checks and balances. It prevents home cooking and buddy-buddy deals.

Mississippi is struggling economically. Tax revenues have declined. We need to watch every penny. Sen. Polk believes procurement reform will save at least $200 million a year.

A reverse auction is just like any on-line auction that you see on E-bay and other websites. Vendors bid for government commodity purchasing contracts in real time. The lowest price wins. Everything is documented. Everything is transparent. It is a controlled process.

This is a big change from the status quo in which local counties and cities can conduct their bids (or lack thereof) as they see fit.

Bear in mind, this process is only required for contracts in excess of $50,000. There are exemptions for small cities and counties.

There’s another big change: The new legislation creates a new independent statewide Public Procurement Review Board. Cities and counties that request exemptions to the reverse auctions process will have to make their case to this new board. This is much needed oversight.

The federal government has been doing this for decades through the Office of Federal Procurement Policy. This federal office sets standards for procurement and all federal agencies must comply with the standards. It has gone a long way toward reducing corruption. We need to adopt similar standards and review in Mississippi.

These new state reforms are a big deal affecting billions of dollars and impacting thousands of companies. Lots of money is on the line. Expect a fight.

 

Sen. Polk called me a while back warning me of the push back. He asked my support in rallying public opinion not to backtrack on the reforms. I will do my best.

I have fought for open and transparent government all my life. Open meetings and open records are crucial to our state. But open, fair procurement processes are even more important because so much money is on the line.

Lax procurement policies lay the groundwork for corruption. Corruption is one of the biggest impediments to economic growth. As Mississippi stagnates, we need to consider if our lax procurement laws are holding us back.

I have read procurement laws from over a dozen other states. When compared to Mississippi, it’s like night and day. Most states have procurement laws codified in one statute so the standards and procedures can be clearly understood.

Not so in Mississippi. Our procurement laws are like a Tower of Babel, buried here and there throughout dozens of strewn out statutes making manipulation child’s play.

Before the Epps scandal, some of the very legislators who went to jail were able to exempt the Department of Corrections from what meager procurement laws we had. Nobody noticed because it was buried in a hidden section of our state code.

Even with the reforms, the Department of Transportation and the Institutions of Higher Learning and technology purchases are still exempt. Why? What possible reason is there for the exemption? These institutions should be subject to the same regulations of all our other agencies and subject to review by the new Public Procurement Review Board.

There is still so much more to be done. We don’t need to lose the ground we have already made.

For instance, cities and counties are exempt from the new RFP and RFQ requirements imposed on state agencies. Why is this? Politics, according to Polk. This needs to be fixed.

We need to consolidate all our procurement laws in one clear section of the code. No more burying laws where no one can find them.

Progressive states employ the concept of “lowest responsive bidder.” That means you respond to the specification of the bid and you have the lowest price. But not so in Mississippi. We use the concept “lowest and best.” But what is “best”? Such a vague term eviscerates what meager laws we have.

And we still have exemptions for service contracts, emergencies, sole source bidders and the like. More home cooking. No wonder Mississippi is considered the most corrupt state in the nation.

We are making progress but this won’t be easy. Educated citizens are the key.

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