|ABOUT THE DEPARTMENT | NEWS | AUDITOR GENERAL HOTLINE | CONTACT | JOIN | FAQS|
Auditor General Jack Wagner Says State Contracting Reform Could Save Millions of Dollars
HARRISBURG, Pa., Jan. 11, 2011 – Auditor General Jack Wagner said today that his department has uncovered systemic problems with the state’s $4-billion-a-year procurement process that, if corrected, would provide hundreds of millions of dollars in sustainable savings.
Wagner cited several examples of structural flaws in the contracting process discovered in his audits, including:
“The commonwealth’s contracting process urgently needs structural reform,” Wagner said. “Tightening this process would create transparency and save taxpayers at least $200 million a year if we could realize savings of only 5 percent.” Over four years, the savings would approach $800 million.
Under the Procurement Code, DGS is responsible for the procurement of all supplies, services, and construction needed by state agencies, ranging from office supplies to computers to real estate. The Procurement Code specifies that contracts must be competitively bid, but it provides for the use of emergency and sole-source contracts under certain exceptional circumstances.
A review of DGS’ contract data illustrated that the current procurement process has too many no-bid contracts, sole source contracts, emergency contracts, and change orders, which eliminates competition in the bidding process, Wagner said.
Wagner’s analysis found that from June 2008 to December 2010 the commonwealth awarded 511 sole-source contracts and 272 emergency contracts worth more than $250 million.
“Competition is the key to American enterprise,” Wagner said. “It generates new ideas and it’s the best way to assure taxpayers that they are getting the best price available on goods and services.”
Adding these savings with proposals offered at previous media briefings, Wagner has suggested savings totaling $1.31 billion for fiscal year 2011-12. Previous press conferences highlighted potential savings of $225 million in charter and cyber-charter school funding; $436 million by eliminating eligibility errors in the Medicaid program, $201 million by offering state employees an early-retirement incentive, $250 million by consolidating commonwealth prescription drug purchases, and $3 million through a moratorium on a scheduled 1.7-percent cost-of-living increase for approximately 1,500 leadership positions in state government.
“With Pennsylvania facing its greatest economic crisis since the Great Depression, and with the commonwealth facing a potential $5 billion budget deficit next year, we must do all that we can to save taxpayer money without compromising necessary services and programs,” Wagner said.
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 thousands of audits each year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s website at www.auditorgen.state.pa.us.
Home | About | News | Hotline | Contact | Join | FAQ