The West Virginia Senate on Friday unanimously passed Gov. Earl Ray Tomblin's purchasing reform bill, designed to prevent reckless spending of federal grant money and stop government agency administrators from circumventing state law when awarding contracts.
"Competitive bidding, from this day forward, is the gold standard in West Virginia," said Sen. Herb Snyder, D-Jefferson, who heads a legislative committee that worked with Tomblin's office on the bill last summer and fall.
The bill follows two scathing Legislative Auditor reports last year that targeted West Virginia's use of $126.3 million in federal stimulus funds to expand high-speed Internet across the state.
Auditors found that government officials wasted at least $7.9 million - and maybe up to $15 million - by buying oversized Internet routers for the project. A follow-up audit revealed that agency administrators skirted purchasing laws for a $38 million microwave tower project designed to improve emergency communications. State officials also ignored directives to stop tower construction.
"They're the reason for this bill being brought before us, otherwise we might not be talking about purchasing at all," Snyder said. "We're trying to tighten the [purchasing] regulations and make defined statements."
Under the bill (SB356), government agencies that used federal grant money to buy equipment and supplies must follow state purchasing regulations.
"If you receive federal grant money, for instance, federal stimulus money, then you're subject to West Virginia purchasing laws," Snyder said Friday on the Senate floor. "You're not exempt."
The bill also gives the secretary of administration and Purchasing Division director the power to stop any contract or purchase that doesn't comply with purchasing laws.
In addition, the legislation puts limits on the government's "secondary bid process," which allows state agencies to buy products and services quickly, bypassing formal and comprehensive purchasing rules.
Agencies typically use the secondary bid system for routine, day-to-day purchases.
In 2010, state officials used secondary bids to buy more than 1,000 Internet routers for $24 million. The routers were designed for public facilities with hundreds of Internet connections, but the state installed many of the devices in small schools and libraries with only a handful of computer terminals.
"I believe everyone admits we bought too large of routers," Snyder said.
In the follow-up report, auditors said Homeland Security Director Jimmy Gianato and Emergency Communications Director Joe Gonzalez mismanaged the $38 million tower project, circumvented purchasing laws and ignored directives to stop construction.
The audit spotlighted the state's decision to award the tower construction contract to Premier Construction of Jane Lew, alleging that Gonzalez and Gianato improperly used a Lewis County contract - instead of a state contract - for the 17-tower project. Gonzalez and Gianato have refused to comment on the audit.
The purchasing reform bill also requires that state agency managers attend annual training seminars on purchasing rules. The legislation now moves to the House of Delegates.
Reach Eric Eyre at email@example.com or 304-348-4869.
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