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GOODS AND SERVICES TOMBLIN SCRAPS CONTRACTS FOLLOWING ROUTER AUDIT, STATE AGENCIES MUST SOLICIT FORMAL BIDS


Publication: THE CHARLESTON GAZETTE
Published: Friday, May 31, 2013
Page: 1A
Byline: ERIC EYRE STAFF WRITER

Gov. Earl Ray Tomblin's administration plans to cancel eight contracts that state agencies use to buy everything from office furniture to computer equipment.


The decision will affect dozens of companies that sell goods and services to state government. State agencies use the contracts to hire consultants and purchase millions of dollars of products each year.


The cancellations follow a legislative auditor's recommendation that the state scrap a controversial "secondary bid" practice that was used to buy high-capacity Internet routers for $24 million.


Secondary bids allowed state agencies to tap existing statewide contracts and buy items from a list of preapproved vendors. Auditors questioned whether the practice was legal.


Last week, state Purchasing Director David Tincher notified state agencies that the state would cancel all such statewide contracts effective June 30. The state has the right to end any contract within 30 days for any reason.


"By canceling these secondary bid contracts, it will open up more opportunities for vendors to competitively bid on individual projects," said Diane Holley-Brown, spokeswoman for the state purchasing division. "More competition will most likely yield to lower prices for the state."


Starting July 1, state agencies must solicit and review formal bids for purchases over $25,000.


The change is expected to stretch out the time it takes for agencies to secure goods and services.


The agreements being scrapped include a much-used statewide contract that allows agencies to hire technology consultants. More than 30 companies are eligible to provide technology advice under the contract.


Other contracts on the chopping block allow state agencies to buy office furniture and Internet telephone communications equipment, and to hire companies that provide moving, hauling, tree removal and recycling services.


The state Purchasing Division has already started to notify companies about the contract cancellations.


"There have been no complaints received thus far," Holley-Brown said Thursday.


During the past legislative session, House of Delegates members killed a bill that would have outlawed secondary bids. Companies with state contracts complained about the legislation, saying they would lose valuable state business.


Tomblin proposed the bill in response to a scathing legislative auditor's report released in February.


State auditors found that high-ranking government officials circumvented purchasing regulations when they used federal stimulus funds to buy more than 1,000 Internet routers as part of a statewide high-speed Internet expansion project. The audit concluded that the administration wasted at least $7.9 million - and more likely $15 million - by purchasing oversized routers using secondary bids.


State officials spent $24 million on the Cisco 3945 series routers, using secondary bids on a 2007 statewide contract for Internet telephone equipment. The contract made no mention of routers.


The Purchasing Division and Department of Administration never reviewed the $24 million purchase.


State agencies typically use secondary bids for routine, day-to-day purchases. The practice allows agencies to buy products and services quickly, bypassing formal and comprehensive purchasing rules.


In April, House members passed a resolution to create a task force that will study purchasing regulations throughout the year. The task force plans to analyze the American Bar Association's "Model Procurement Code" and may adopt purchasing reforms outlined in the document.


Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.



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