TALLAHASSEE -- In the last two years, Florida Chief Financial Officer Jeff Atwater has agreed to let the state lose $48 million.
That’s the amount of taxpayer money Atwater spent to settle dozens of bad contracts and grants that he said could have been avoided had the state done a better job cutting the deals.
“We could have built two elementary schools with that money,’’ said Atwater, a former Senate president whose office writes the checks.
In each case, the state concluded it was not going to get what it paid for, Atwater said. “So we said, ‘This is hogwash and you know it. ’ ”
Rather than taking the company to court, the state agreed to settle the contract at a loss.
With $50.4 billion of the state’s $70 billion budget spent on vendors this year, Florida is one of the largest buyers of goods and services in the Southeast, but its contract management is haphazard and inconsistent.
Now, Atwater, Gov. Rick Scott and his secretary of the Department of Management Services, Craig Nichols, are inching toward some improvements that will change the system.
Atwater is asking the Legislature for “pre-audit” authority to review contracts before they are completed to make sure the state is getting its money’s worth.
Nichols has published a guidebook for contract negotiators, including a set of uniform standards. His agency has increased the number of agencies using the state’s online purchasing program, MyFloridaMarketPlace, to get better discounts, and DMS is working to streamline the state’s patchwork of contract procedures.
Scott has urged his agency heads to attempt to re-negotiate their top contracts to produce savings, and he recommended spending $353,000 in his 2013-14 budget to hire four full-time people to train contract managers across the state.
The state’s contracting process has been the target of criticism for years, most recently from former Senate budget chairman JD Alexander who bashed state agencies for using different methods and even different codes to buy cars, lease buildings or purchase cell phones and computers.
In 2011, an independent group hired to review the state’s online purchasing program, the 10-year-old MyFloridaMarketPlace system, found that half of the eligible state contracts were covered by the program and that the system was “hampered by poor project governance, lack of standard procurement processes… uneven executive sponsorship and continued dependence on older shadow systems and workarounds.’’
An analysis by the Herald/Times found hundreds of contracts, known as evergreens, are given terms that allow them to automatically renew, with little or no standards. Other vendors get in the door as the lowest cost bidder, but the cost is allowed to balloon with budget amendments. Dozens of contracts have been on the books with the same vendor for more than 20 years.
One of the loudest critics has been the Koch brothers-funded Americans For Prosperity, which lists as its top legislative priority the increase in oversight and transparency of the state’s contracting process. The Republican Legislature and governor’s failure to properly police the state’s contracting system has earned the organization’s charge that the process “rewards cronyism and picking winners and losers.”