Sunday, February 22, 2009

Opening Up The Phone Book

Opening Up The Phone Book

How long do you think a business would remain solvent if every time they needed to make a purchase they waited until a supplier came to them instead of opening up the phone book and shopping around for the best deal?

Since becoming the Chair of the Modernization Committee, I have enjoyed being contacted by different individuals who have shared with me both their ideas for change in government and their stories of government inefficiencies or abuses.

Here is an example of a story about an abuse that allegedly occurred a few years ago.

The spouse of a person running for political office received a contract from the state for thousands of dollars where no one else even bothered to bid for the job. Following the award of the contract there was very little way to determine if the individual ever performed or followed through with the contract requirements in any significant manner. Further, it was not even clear the person was qualified to perform the contract in the first place. The bid was awarded either while or shortly before the candidate started running for office creating the fear that taxpayer money was being funneled through a non-performing vendor and possibly financing a campaign for office.

This story illustrates what I believe to be all too possible when dealing with a large government that controls billions of dollars of other people's money. The opportunities for abuse are simply everywhere.

In the last few years several studies have demonstrated the need for Oklahoma to modernize procurement practices and last week I asked approval for an idea for reform on the House floor that will hopefully address some of these problems.

The idea was initially presented by a consulting firm know as Treya Partners. Treya said the state should allow state procurement officials to engage in strategic sourcing in order to source a high number of quality vendors, analyze the various industries they are sourcing from and be allowed to negotiate with the potential vendors in order to get the best possible deal for the taxpayers. After negotiating a contract state buyers will continue to monitor the contract in order to make sure the vendor actually performs. If the vendor did not do a good job, their failure could be documented so hopefully state officials could make sure that the vendor did not get any future opportunities to waste taxpayer dollars.

Now, this is obviously a common sense step that any business would no doubt be sure to incorporate. Can you imagine what would happen to a business who awarded contracts without ever opening up the phone book and finding the best provider? However, this is the government, so it appears as if for many years there may have been little incentive for government officials to actually do the hard work to find the best service providers and then use the time and energy to make sure that they are actually performing.

Hopefully this system will also provide the checks and balances necessary to avoid examples like the one listed above. I don't believe there should ever be an occasion where a contract is just awarded to one bidder because they were the only bidder capable of bidding on a project.

The focus of the House Modernization effort has been to try and save taxpayer dollars by adding more efficiently to the procurement process. However, I am optimistic that a side effect of these reforms will be to make it harder for abuses like the above example to occur.

The strategic sourcing idea was one component of House Bill 1410 which was approved by the House last week and is now headed to the Senate.

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