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This week, I’d like to highlight another important piece of legislation that I introduced this legislative session that will help fill a serious gap in the state’s procurement process. I introduced LB 21 which will provide a formal protest procedure for state contracts exceeding five million dollars which was heard in the Government, Military, and Veterans Affairs Committee on February 20.
Currently, Nebraska law does not provide an express right of judicial review of an agency award decision. The current appeal process is very limited, allowing a disappointed vendor to write a protest letter and a meeting with the Director of the Department of Administrative Services. Following the meeting, the Director will make the final decision. This puts Nebraska at a disadvantage. LB 21 would allow for an unsuccessful vendor to protest an award decision, and within 60 days of receipt of the protest, the Department of Administrative Services will hold a hearing. After the decision is made, any party to the decision could then appeal the decision to court.
Without judicial review of procurement decisions, this puts Nebraska at a disadvantage. Over half of all states and the United States Government provides for a judicial review of procurement decision. During the hearing, the Committee heard testimony that without an appeal process which includes judicial review, many companies are being dissuaded from investing in Nebraska. LB 21 will show vendors that they will be treated fairly during an appeals process and would give them certainty that errors in the process can be corrected.
Time after time, we receive news that a state contract has been terminated after millions of dollars in state funds have been spent due to the vendor not being able to complete its work. The most recent was in December when contracts with two technology companies were terminated. The two contracts were terminated after $12 million dollars of state tax money was spent.
This is not the only example. In 2007, the State awarded a $50 million dollar contract to a Medicaid Management Information System project to a company with 75 employees even though a larger company with 20,000 employees and a history of completing similar projects. After the contract was awarded, the contract was terminated when the State found out that the smaller company wouldn’t be able to complete the contract, costing the state $7 million in tax dollars.
Kerry Winterer, the former CEO of the Nebraska Department of Health and Human Services who terminated the contract, testified in support of the legislation. He said the bill will create an efficient, effective and unbiased process that would provide confidence in the state as well as vendors. Former United States Senator David Karnes testified in favor of the legislation on behalf of the IT Alliance for Public Sector, who represents companies who often bid on state contracts such as Oracle, Facebook, Dell, and Microsoft.
I look forward to working with the Government, Military, and Veterans Affairs Committee to advance this important piece of legislation to help make the state’s procurement process more fair and transparent in order to save the state, and most importantly, the taxpayer, their tax dollars.
As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is firstname.lastname@example.org, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.