Agency already violating new policy?
After The Dispatch revealed that the Ohio Department of Administrative Services awarded $15 million in unbid contracts to favored informationtechnology consultants, the agency promised to clean up its act.
Administrative Services enacted a policy this year in which it pledged to obtain price quotes from at least three pre-qualified vendors before awarding state contracts, with any falling short of that standard to be taken before the Controlling Board of state lawmakers for approval.
A report commissioned by Ohio’s inspector general indicates the new policy to ensure competition and protect taxpayer dollars apparently didn’t survive three months without
violation.
“Anecdotal evidence ... suggests inappropriate ( i. e. abusive) contracting may have occurred with the intent to circumvent the new three quotes/ Controlling Board notification requirement,” wrote the analysts from Procurement Integrity Consulting Services. “Data indicates a circumvention of the competitive requirements.”
Regardless whether the intent was “self- serving ( and) malicious” or motivated by “mission success,” state practices to route contracts to preferred vendors “does not send a message of any commitment to procurement integrity” within Administrative Services’ information- technology office, the report said.
Administrative Services spokesman Tom Hoyt said agency officials did not know what the report was addressing in its suggestion that the new policy had been sidestepped. The report provided no specifics.
The expert report underlined the finding of the office of Inspector General Randall J. Meyer that the agency committed wrongdoing in ducking competitive practices and handing out pricey unbid contracts to consultants who advised Chief
Information Officer Stuart Davis and other top state IT officials.
The report ripped Administrative Services’ procurement practices, finding that no- bid contracts were given to Columbus- based Advocate Solutions and Stonyhurst Consulting, of Middleburg, Virginia, for years with little justification, few demands for accountability, no performance measures and little regard for taxpayers’ dollars.
The examination found that Advocate Vice President Rex Plouck, a deputy state chief information officer who once worked with Davis, was paid up to $ 216 an hour — a rate 21 to 38 percent higher than five other similarly qualified contractors.
Stonyhurst co- owner Steve Zielenski commanded similar hourly rates for his no- bid work, which cost 20 to 34 percent more than the work of similar IT consultants, the report said. If a competitive process had been used on some work he received and other equally qualified consultants chosen, the state could have saved nearly $ 439,000, the report said.
The agency’s use of no- bid contracts “was not done to obtain the best cost for the benefit of the state” and deprived qualified vendors of a “fair, open and transparent” process in which they could win state work, the report said.
The Dispatch uncovered that Advocate, which employs several former state IT officials, received at least $ 12 million in unbid work between 2011 and early this year while Stonyhurst received at least $ 3 million. Administrative Services’ purchasing analysts long had objected to the lack of competition for consulting work, with their concerns overridden by superiors such as Davis.
The Procurement Integrity report also was critical of the so- called “letter of interest” that was used to give work to Stonyhurst. The letter allows state agencies to request the award of an unbid contract to a specific vendor, an approach that “can be abused as it gives the perception of selecting a preferred favorite contractor” and “can create a corrupt environment” inviting bribes and pay- toplay schemes, the report said.
Meyer has signaled that more investigative reports on Administrative Services’ contracting practices are forthcoming. He asked the agency’s leaders to respond to his recommendations to improve its handling of IT contracts. Lawmakers from both parties have called for reforms in the wake of Monday’s report.