A Proposed Procurement Review Task Force in Miami-Dade

Anonymous

Tue, 05/13/2014 - 04:57

County Related

The mayor of Miami-Dade County has announced the formation of a
Procurement Review Task Force to, according to his May 6 memo
(attached; see below), "improve and simplify our procurement
process." 
 
The principal goals of the task force are:<blockquote>

To ensure that all procurements continue to be conducted with the
maximum level of transparency, fairness and integrity." 
 
To "make procurement more efficient, easier to navigate for
vendors," in other words, to significantly reduce "non-value added
requirements. This also includes a full review of any changes needed
to promote and implement Public-Private Partnerships and innovations
from the private sector."</blockquote>

Balancing these two goals is one of the most difficult aspects of
procurement. It is very hard to simplify the procurement process and
reduce its requirements, while preserving transparency, fairness,
and integrity.

The mayor's reference to "non-value added requirements" leads me to wonder whether the mayor's view is skewed toward the second goal. The term "value added" refers to what is added to
goods in production. It is a
business, not a government term. The use of the term in this context, where government meets business,
implies that the values of business will be given more attention
than those of government. 
 
The values of government ethics and transparency, and other values
such as diversity, do not clearly "add value" to the procurement
process. But they do add a different sort of value that can be very
important to a community, especially trust in those who manage the community. 
 
Government ethics rules also can save
taxpayers a lot of money by preventing such things as political
favoritism and inappropriate waivers of rules, specifications that
favor a certain bidder, bid rigging, kickback schemes, gifts to
procurement officials and their families, and ex parte
communications with procurement staff. Preventing these things can save many millions of dollars a year, but they are also valuable in terms of how the community
as well as potential contractors view the fairness of the government
(unfair processes keep some of the best contractors from bidding). 
 
In this post, I would like to look (1) at other jurisdictions that
have gone the procurement task force route and (2) possible reasons why Miami-Dade
County has chosen this route. 
 
State Task Forces 
As with everything else, the amount of information about state
procurement task forces is greater than that about local government
procurement task forces. For example, there is <a href="http://www.govtcontracting.org/government-nonprofit-contracting-task-fo…; target="”_blank”">a
2013 report from the National Council of Nonprofits</a> about
state procurement task forces, with a focus on those involving
social services and other contracting work done primarily by
nonprofits. And there is a 2010 Pew Center report entitled <a href="http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Governme…; target="”_blank”">States

Buying Smarter</a>, which focuses on procurement reform in
Minnesota and Virginia. Here are links to state procurement task
force reports in <a href="http://www.capitol.hawaii.gov/committeefiles/special/INTERIMREPORT.pdf&…; target="”_blank”">Hawaii</a>
and <a href="http://www.bpw.state.md.us/Reports/2011%20Task%20Force%20on%20Proc%20of…; target="”_blank”">Maryland</a>. 
 
Municipal Task Forces 
There have been a few procurement task forces in American cities,
mostly during mayoral transitions. Houston had one that led to <a>a
huge 2012 procurement manual</a>. However, it seems to have
operated in secrecy and to not have filed a report (I could not find one online). The manual begins with a
section on Ethics in Contracting, and says almost nothing about
efficiency. It is very rule-oriented, and some of the most important
ethics-oriented rules involve state law. 
 
A 2010 mayoral transition task force project in New Orleans included
a City Contracting Task Force, whose recommendations led to several
executive orders (attached; see below). These executive orders (1)
created a Procurement Office to oversee the procurement process and
draft comprehensive written procurement procedures; (2) created
basic guidelines, to be supplemented by written procedures, for
handling contracting for professional services; and (3) created an
advisory committee to reform Disadvantaged Business Enterprises
programs and certification. 
 
Relevant to the second subject of the executive orders is a 2011
report from the Public Law Center in New Orleans entitled "Deliver
Us From Temptation: Best Practices in Procurement of Professional
Services" (attached; see below). The Public Law Center's director,
David Marcello, served on the task force, presented twelve
recommendations to the task force, and co-chaired its Professional
Service Subcommittee. A number of the center's recommendations were
integrated into the executive orders. 
 
Also see <a href="http://www.law.tulane.edu/uploadedFiles/Institutes_and_Centers/Public_L…; target="”_blank”">a
2001 report on Public Contracting for Legal Services</a> from
three New Orleans-area research institutes, including the Public Law
Center. It contains some useful best practices relating to
professional services contracting. 
 
Finally, the District of Columbia created a Contracting and
Procurement Task Force as part of the transition process of a new
mayor. The task force filed a report in December 2006 (attached; see
below). 
 
The focus of each of these three task forces was different, as was
the impetus. The District of Columbia's major problem appears from the
report to have been negligence and staff members not following the
rules. One reason was a failure to update and compile procurement
rules and regulations, which sounds very similar to the problem with
the District's ethics rules and regulations. Similarly, the
District's standard operating procedures were not easily available. 
 
In addition, there was no enforcement when procurement rules were
violated, largely due to the fragmentation of authority to enforce
them, again, similar to the problem in the area of government ethics
in the District. 
 
In New Orleans, the principal problem appears to have been
corruption and a lack of transparency. Solutions included more
transparency and the insulation of bid selection committees from
outside interference. 
 
The Situation in Miami-Dade 
<a href="http://www.politicalcortadito.com/2014/03/18/miami-dade-problematic-pro…; target="”_blank”">A
March 2014 post on the Political Cortadito blog</a> notes that, in Miami-Dade County,
there have been many recent bid protests, that is, protests from
businesses that lost competitive bids. And in March, the county
council unanimously rejected the administration's recommendation of
a winning bid after a yearlong bidding process for a $114 million
contract. Some county commissioners pointed to a calculation error
that should have been fixed long before. Some blamed the head of
procurement, others blamed her boss. A task force cannot
solve problems that apply to individual personnel. However, they can
suggest changes to the appointment process that will better
insulate high-level procurement officials and ensure that they have
the necessary qualifications. 
 
One commenter to the post mentions as a problem the recent change to
a strong mayor form of government. A change in form of government
can change the political dynamics of any governmental process. 
 
Another commenter suggests that the problem is the involvement of
elected officials in the procurement process. This is a problem that
most elected officials do not want to acknowledge. Involvement in
the procurement process involves not only power (which means the
possibility of its abuse), but also money in the form of gifts and
campaign contributions from contractors who are concerned that they
can play only if they pay. Insulation of the procurement process
from the political process will minimize ethical misconduct by
elected officials as well as inappropriate waivers and delays. 
 
The blogger suggests that one problem is that the bidders are being
represented by lobbyists who have good connections with county hall.
Like lawyers, lobbyists benefit when a process is stretched out over
time. 
 
There are also concerns that the complexity of the procurement
process, and the involvement of several bodies and agencies, allows
for more opportunities to manipulate it. And the process can simply bog down.
It is these concerns that underlie the mayor's desire to have a more
efficient process. Efficiency is important, but it must be
considered along with the involvement of elected officials in the
procurement process and other ethics and transparency issues. 
 
<a href="http://enr.construction.com/opinions/editorials/2014/0310-clarify-the-p…; target="”_blank”">A
March 2014 editorial in Engineering News Record</a> argues
for the filling of a loophole in Miami-Dade's famous "Cone of
Silence" provision that prohibits ex parte communications during the
procurement process. Apparently, between rounds of a bidding
competition, one bidder sent an e-mail and a big supplemental
submission to selection committee members, so that the other major
bidder did not have time to respond. The ethics commission said in <a href="http://ethics.miamidade.gov/library/opinions/2013/rqo_13-11_gimenez.pdf…; target="”_blank”">an
advisory opinion in January</a> that the submission was legal;
there is no rule expressly prohibiting such supplemental submissions
and nothing that says that the stated submission method is
exclusive. The editors conclude by saying that "such maneuvers give
qualifications-based procurements a bad name." 
 
In other words, the editors are arguing for tighter, clearer rules
rather than getting rid of rules to streamline the process. They
recognize that rules are most problematic when they are not clear
and when they allow people — whether bidders, their lawyers and
lobbyists, or elected officials — to take advantage of the loopholes
created by rules that are vague or incomplete. 
 
Conclusions 
It appears that few people are happy with the current
procurement program, but that they disagree over what the problems
with it are. This is the kind of situation a well-constituted and
-staffed task force can deal with. 
 
However, based on the language of the mayor's announcement, I have
concerns about the possible biases of a task force that he selects.
He says more about efficiency than fairness, and does not mention
the range of problems that people appear to have with the current
procurement program. 
 
For example, the mayor says in the memo that he wants "a full review
of any changes needed to promote and implement Public-Private
Partnerships and innovations from the private sector." However, it
is my understanding that public-private partnerships been
problematic in Florida, as elsewhere. Should procurement rules make
it easier to develop these partnerships, or should they try to
prevent the sort of ethical misconduct that often crop up in such
partnerships, especially when they are not subject to ethics and
transparency laws and programs? 
 
I am concerned that the task force will represent those interests
who want to simplify rules in order to remove obstacles to gaming
the system and to facilitate the involvement of elected officials. The mayor
says in his memo that there will be a county commissioner on the
task force, but not someone representing the county's ethics
commission, who would be likely to remind task force members of the
values that underlie government ethics. It is important that both
the ethics commission and the inspector general's office be represented
on the task force. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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A Proposed Procurement Review Task Force in Miami-Dade

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