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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 61 which will provide a formal protest procedure for state contracts exceeding ten million dollars which was heard in the Government, Military, and Veterans Affairs Committee on March 4.
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 decisions. 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.
A recent contract failure, that being the contract that was awarded to Saint Francis to provide child welfare services in Douglas and Sarpy Counties is the most egregious example of why we need this legislation. Saint Francis submitted an unreasonably low bid to win the award, and returned to the state less than two years later to ask for more funds than what competing bidders were requesting to provide these same services and the Department of Health and Human Services rewarded Saint Francis for doing so.
This sloppy, mismanaged procurement for child welfare services, which did not follow the Department of Administrative Services’ own procurement manual, RFP, or Nebraska law, puts the children of Nebraska at risk. All of these issues would have been discovered by an independent third-party review of the procurement decision that allows for discovery, depositions, and judicial review.
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. While allowing for juridical review may slow down the procurement process slightly, these are contracts that cost our tax-payers tens of millions of dollars and could put our most vulnerable citizens at risk and it is better to do things correctly rather to do them fast.
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.