State lawmakers reviewed sweeping purchasing reform proposals Monday in response to recent audits of the state's use of federal stimulus funds to buy oversized Internet routers and build microwave radio towers - part of a $126.3 million high-speed Internet expansion project in West Virginia.
"Open, competitive bidding should be the gold standard," said Sen. Herb Snyder, D-Jefferson, who heads a joint House-Senate committee examining state purchasing rule changes.
State Purchasing Director David Tincher suggested more than a dozen ways to tighten purchasing laws at Monday's legislative interim meeting. The proposed reforms include expanding the state's bribery law, giving the state purchasing director the power to halt questionable contracts, and requiring the Purchasing Division to handle state agency purchases for projects funded by federal grants.
"Someone needs to be 'the buck stops here,' " Snyder said. "You need the authority to step in."
Earlier this year, the Legislative Auditor's Office found that state officials wasted at least $7.9 million - and more likely $15 million - by purchasing high-capacity routers for rural libraries and other small public facilities. The routers cost $22,600 each.
Auditors also determined that state officials bought the oversized routers using a 2007 contract for Internet telephone service. The contract made no mention of routers.
Last month, the Legislative Auditor released a follow-up report, finding that state officials circumvented purchasing laws and ignored a directive to stop construction of a $38 million microwave tower project designed to improve emergency communications.
On Monday, Tincher told legislators that state agencies sometimes use federal grant funds to buy equipment and supplies, but his division doesn't know about the transactions.
"There isn't a central agency that defines grants and has internal rules about this," Tincher said.
The tower audit revealed that state officials used a Lewis County contract to hire Premier Construction of Jane Lew to build the structures. Tincher's office only learned about the tower project and contract through news accounts, he said.
"If [the Purchasing Division] doesn't see it, they can't be responsible for it," Snyder said.
Several of the proposed reforms would crack down on state officials who violate purchasing rules.
State law now penalizes purchasing division employees and state agency purchasing officers if they break the law. Tincher suggested that other high-ranking state administrators who take part in purchasing decisions and violate rules also face penalties. Those officials could be held personally liable and face bribery charges if they receive kickbacks, according to Tincher's list of possible purchasing changes.
Other suggested reforms under review:
n Transfer individual state agency purchasing officers to the Purchasing Division.
n Limit the list of state agencies exempt from the purchasing office.
West Virginia universities, the School Building Authority and the Division of Highways' road-construction office are among 35 agencies that follow their own purchasing regulations.
n Mandate training for state agency supervisors and purchasing officers.
n Increase the number of audits of state agency purchasing practices.
n Revise state law so that purchasing rules apply to services provided by companies - not just equipment and supplies sold to the state.
n Fix contradictions in laws that apply to contractors, engineers and architects.
Reach Eric Eyre at email@example.com or 304-348-4869.
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