The Miami Herald | EDITORIAL

Bad business


OUR OPINION: State needs to overhaul its contracting, out-sourcing procedures

WLRN Radio and The Miami Herald will be hosting a town hall with Florida legislative leaders on Feb. 25 at 6:30 p.m. Tell state representatives what should change in Tallahassee by reserving your free seat now.

If a private business did business the way the state of Florida does business, it soon would be out of business. A report on state contracting procedures — the way the state goes about buying goods and services from the private sector — makes it clear that the system is haphazard, inconsistent and desperately in need of a thorough overhaul.

At stake is some $50.4 billion, which is how much the state spent on vendors this year, out of a $70 billion budget. This includes just about everything the state does, from buying cars to leasing buildings and purchasing cell phones and computers, from leasing parking spaces and out-sourcing prison services to writing contracts for healthcare services.

Florida’s taxpayers are ill-served by the state’s failure to maintain a cost-efficient procurement system. The only winners are the army of lobbyists in Tallahassee who know how to navigate the labyrinth of rules and lead their client-vendors to the pot of gold — a fat contract with the state. Among the abuses:

• The Department of Management Services is not allowed to seek competitive bids for legal services, health services, artistic services, lectures, training and education services and substance abuse and mental health contracts — an estimated total $8.4 billion a year.

• Legislators have also carved out exceptions for 32 vendors whose services don’t have to go through the state’s Web-based contracting database, known as MyFlordaMarketPlace. This online system handles only about $1 billon of the state’s contracts.

• David Wilkins, a retired executive tapped by Gov. Rick Scott to review contracting, found a the state’s guidelines woefully inadequate. Some agencies adhere to strict performance standards, but some don’t. Uniform contract standards are non-existent, and often the providers can lowball their bid to get in the door and then file cost overruns.

• If a vendor doesn’t deliver, often there are no penalties, either. Florida Chief Financial Officer Jeff Atwater has spent $48 million to settle dozens of bad contracts and grants that he described as “hogwash” because the state did a poor job in cutting the deals. Mr. Atwater’s office figured it was cheaper to settle the contract at a loss than take the seller to court.

• The loophole lobbyists and their clients love: Insert language directly into legislation to get what you want. In 2012, a lobbyist close to then-House Speaker Dean Cannon wanted to allow billboards on state lands. Surreptitiously, language to get that done was inserted into a must-pass bill to fund water management districts. Next thing you know, the board that runs the Everglades had granted a company led by its own former board member a lucrative, 10-year contract to manage the so-called “public information systems” on its lands.

The deal was canceled after a public outcry, but the loophole still exists and will no doubt be used to bilk the state out of more money if lawmakers don’t put a stop to this sleazy practice. Senate President Don Gaetz, who says he wants to reform the way contracts are let, can show that he means business by refusing to tolerate secret appropriations any longer.

There are many other ways to improve the state’s contracting process, like giving Mr. Atwater’s office the power to review contracts before they’re signed, creating a uniform contracting process and shifting more vendors into the state’s online contracting system.

The issue should serve as a test for Florida’s legislators: Does their primary allegiance lie with lobbyists whose cash fuels their campaigns or with the public they have pledged to serve? In a state as enamored of out-sourcing and privatizing as Florida is, lawmakers have a duty to make sure taxpayers are getting their money’s worth.

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