Dig into no-bid state contracts
Even agency’s own experts sounded warnings
Under what circumstances is it ever legitimate for state officials — whose department is supposed to make sure taxpayers get the best deals — to skip competitive bidding while chuting top-dollar contracts to consultants who are former colleagues?
Taxpayers don’t need to be purchasing experts to see the problem. An unbid contract makes it hard to determine whether a bidder’s price is fair or exorbitant. And — lacking the safeguard of impartial oversight, say, by the state Controlling Board — doing business with former associates, even if they are highly qualified, has the appearance of impropriety.
Apparently, none of this occurred to the Ohio Department of Administrative Services, which handles most state purchasing and computer-system needs for other state agencies.
A Dispatch investigation published last Sunday revealed that DAS officials have, for years, awarded questionable informationtechnology contracts.
Reporter Randy Ludlow found that DAS officials disregarded their own directives requiring three competitive bids; ignored warnings and objections of their own purchasing experts, who cited the lack of competitive quotes and “excessive” hourly fees; and at times paid more than $200 an hour for services. Further, documents showed that other consultants hired by DAS were performing the same work cheaper and with better ratings.
Even if DAS’ process was legal and permissible, no business would operate like this. Most consumers do comparison shopping.
Administrative Services, however, stands firm that its no-bid selection process is permissible under a waiver from the Controlling Board and was in the best interest of taxpayers.
“We have gone with contractors with demonstrated track records of knowledge, experience and results that in the end serve the citizens of the state well and save money,” a spokesman said in an email.
As for the agency’s own directives requiring a minimum of three competitive quotes, DAS says this applies to goods, like a pencil or pen, not services, like a technology contract.
Two companies in particular benefited: Stonyhurst Consulting of Middleburg, Virginia; and the Advocate group of companies, which is based in Columbus and secured at least $14 million in unbid state work since 2011. Many Advocate employees assigned to work with the state’s Office of Information Technology were formerly senior state employees who worked with top Administrative Services IT executives.
On Thursday, State Auditor Dave Yost told his staff to start digging into the no-bid contracts, though noted this is “an incredibly convoluted area of the law riddled with exceptions.”
But Yost also was concerned with a lack of transparency by DAS officials.
Top agency officials had refused to speak with The Dispatch about the no-bid contracts, stating, “The complexity of this subject matter does not lend itself to an interview.”
Yost found this head-shaking, saying: “The statement suggesting information was too complex to talk about. That’s not a red flag. That’s a flashing red light with sirens. It’s the public’s money, and we always need to be ready to explain ourselves and our decisions.”
The state also dragged its feet in complying with the newspaper’s public-records requests. It took four months for records to arrive, and then pertinent pages (which sources had slipped to Ludlow) were missing.
He asked again. He was told, “Please identify what (missing) pages you are referring so we can search further.”
Ohio’s public-records laws do not require the public to be clairvoyant.
People with nothing to hide don’t. These no-bid deals with former state associates deserve a thorough review. Regardless of whether DAS acted properly, taxpayers lost because this was a poor way to do business.