For Immediate Release
Contact: Steve Halvonik 717 787-1381
Auditor General Jack Wagner Faults Administration For Rejecting Recommendations on Procurement Reform
Says competition is the American Way, but not always present in contracting
HARRISBURG, Pa., Oct. 27, 2009 – Auditor General Jack Wagner said today that if the Rendell administration did not voluntarily change the way it bids state contracts he would press the General Assembly for new legislation to make bidding more competitive and less expensive to taxpayers.
Wagner held a press conference today to address the Rendell administration’s response to a Department of the Auditor General audit, released last week, which found lack of competition, transparency and accountability in the state’s awarding of $592 million worth of contracts to a single information technology vendor.
“Competition is the American way, but, unfortunately it is not in the state government procurement process,” Wagner said. Noting that he had detected a trend toward less competition in contract bidding, Wagner added, “This has to change.”
Wagner’s auditors found that there was no competitive bidding on 34 of 59 contracts awarded by the administration to the information technology vendor. It also found that the original value of the contracts swelled by 55 percent because of administration-approved change orders, sole-source contracts and emergency contracts awarded to the vendor.
The Rendell administration said the no-bid contracts were a “reward” for quality service, and that they saved money for taxpayers.
“Clearly, there is a profound difference between the governor and me with regard to competition in the procurement process,” Wagner said. “The Philadelphia Phillies had to win their way into the World Series, and the Steelers and Eagles had to beat their opponents this past week to get victories. Nobody rewarded them; they had to earn it.”
Wagner said he was disappointed by the administration’s refusal to accept his audit’s recommendations, and that if it did not voluntarily reform the bidding process, he would ask the General Assembly to curtail excessive spending in the procurement process as a result of change orders and sole-source and emergency contracts.
Wagner’s audit made 37 recommendations to improve the procurement process and make it more transparent to the public. He recommended that:
- DGS ensure that agencies develop procedures to document preparation and approval of Requests for Proposal (RFPs) and that agencies’ RFP evaluation committees follow procedures and document committee meetings.
- DGS should ensure that state agencies are utilizing the knowledge transfer provision of contracts to guarantee that state employees can operate all computer systems.
- DGS should develop and enforce ethical standards to prevent real or perceived conflicts of interest involving state employees approving procurement contracts.
- The procurement process should be centralized with all contracts coordinated through DGS.
Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts more than 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s Web site at www.auditorgen.state.pa.us.