Martin O’Malley is onto something: Maryland’s system for obtaining billions of dollars in contract services is horribly broken.
He describes the state’s procurement fiasco as “one of the constant pebbles in our shoe.”
Make that a boulder.
Bollixed contract awards are gumming up modernization and improvement projects. Years of delay are routine in big contract disputes, which drag on interminably. Arguments rage over bidding irregularities, violations of procurement law in the bidding process and faulty decisions by procurement officers that skew outcomes.
The most recent embarrassment: a $4.5 million rejected contract for a child-support call center. An appeals board charged the procurement officer with “gross errors,” inexcusably late changes in the contract specifications and mystifying conclusions about the bidders’ qualifications. It overturned the award, calling the process “deeply flawed,” “unreasonable, illogical and improper.”
That’s pretty blunt. It grabbed O’Malley’s attention at the last Board of Public Works meeting.
And why not? He and the other two members of that board find themselves increasingly playing ultimate arbiter on these huge contracts — even though they have no expertise in construction, engineering or procurement complexities.
What once was a model procurement system emulated by other states now requires a major overhaul. There’s no accountability in the system. If mistakes are made, they don’t get fixed — they get buried. Bureaucrats refuse to rock the boat. Procurement officers lack professional qualifications, receive little training and are not well paid by government standards.
It’s no secret that when merit-system employees screw up or lose favor with supervisors, they wind up in the personnel or procurement office, the backwater of state government.
“No child says he wants to grow up to be a procurement officer,” notes Del. Dan Morhaim of Baltimore County, who has taken on the unenviable task of promoting procurement reforms in the legislature.
That involves technical and arcane discussions of the contracting process. “It is tedious, boring and bureaucratic,” Morhaim admits. Yet these procurement competitions involve billions in taxpayer dollars for building and running critically important programs.
The outcome can turn on the poor judgment of one procurement officer.
Take, for instance, the state’s $2.3 billion pharmacy benefits management contract. A national drugstore chain was disqualified from the bidding. Why? Because the chain had stated it would buy $8,000 of “TBD” (to be determined) equipment from a minority-owned office supply company.
Those three letters, TBD, were deemed “unresponsive” by the procurement officer. On that flimsy basis, the company’s entire proposal was thrown out — even though its bid was $100 million lower than the eventual winner’s.
Such skewed results are not unusual. The state is ill-served by its disorganized, poorly trained cadre of procurement officers.
Each agency handles procurements differently. Some tolerate zero mistakes in book-sized bids; others ignore clear violations of bidding rules. No one is totally in charge.
O’Malley’s budget secretary, Eloise Foster, admitted as much when she told the governor that the botched child-support call center contract was caused by unqualified procurement officers and evaluators.
Scott Livingston thinks he has a better idea. As an assistant attorney general, he helped write the state’s 1979 procurement law under Gov. Harry Hughes. That document once was viewed as a template for other states.
Livingston, a partner at Rifkin, Livingston, Levitan & Silver, agrees with O’Malley that it is time for a re-evaluation. He favors a centralized procurement agency that would handle all of the state’s contracting competitions.
This agency’s director could hold procurement officers accountable and give them uniform training. Everyone would use standardized procedures to conduct contracting competitions. When questions or complaints arise during the process, they could be resolved by procurement experts within the agency.
O’Malley also suggested that outsiders review Maryland’s procurement standards. That can be accomplished by appointing a work group. A small panel of experts — perhaps led by the recently retired chief of legislative audits, Bruce Myers — could review the current situation, survey the nation for best practices and come back with recommended changes.
Another needed reform: Remove the Board of Public Works from its role as the final decision maker on contract appeals. It is a lose-lose proposition for the three politicians on the panel, who don’t have the background to sit in judgment on these highly technical and complicated legal and procedural questions regarding what did or did not take place during the procurement process.
It’s a waste of time, too, for top state officials to sit for hours twice per month listening to arcane contract quarrels.
Maryland’s procurement system today lacks uniformity and predictability. The bidding rules and requirements often defy common sense. So do the decisions of procurement officers. Bidders can be disqualified for the most minor of reasons. Too often, what happens is neither fair nor impartial.
Revisiting the procurement law makes sense. The governor is right that a study is needed to “pull this apart and put it back together” to ensure that contract awards are “more timely and predictable.”
When it comes to getting the best deal for taxpayers (a combination of lowest price and highest quality), the state’s procurement law too often flunks the test.
Barry Rascovar is a state government columnist and a communications consultant. He can be reached at firstname.lastname@example.org.