In The News › City contract process improved watchdogs say

Feb 25, 2014

Source: The Advocate

Filed under: City Government, Contracting, Orleans Parish

City contract process improved watchdogs say

By Andrew Vanacore

The Advocate

February 25, 2014

Inspector General Ed Quatrevaux remembers Mayor Mitch Landrieu approaching him at Parkway Bakery just after Landrieu was elected in 2010. “I’d like you to tell me the best way to do professional services contracts. Tell me how they do it in Utah,” Quatrevaux recalls the mayor asking.

To the question, “Why Utah?” Quatrevaux says, Landrieu responded, “Well, they’re clean out there.”

Fairly or not, politicians in New Orleans have no such reputation for cleanliness, and the “professional services” contracts that City Hall hands out to law firms, architects, technology companies and other businesses are a big part of the reason. Unlike construction jobs, those contracts don’t have to go to the lowest bidder, so former Mayor Ray Nagin could direct them to dishonest businessmen who reciprocated with bribes, according to the federal prosecutors who won a 20-count conviction against Nagin this month.

Four years after Landrieu vowed to finally make the process honest, government watchdogs say the mayor has in fact made dramatic, night-and-day improvements in how contracts are doled out. Committees inside City Hall decide on contractors instead of the mayor, and they do so at public meetings. Quatrevaux reviews solicitations for city work and follows up when suspicions arise.

With another four-year term ahead of him, Landrieu argues that clean contracting practices will help attract more businesses and jobs to New Orleans, and he earned a vote of confidence this month in winning re-election by another landslide.

Yet even the mayor acknowledges that the new practices are not a guarantee against graft. Another Ray Nagin might find it harder — even much harder — to steer work toward favored firms under the new contracting regime, but it would not be impossible. That’s in part because Landrieu is willing to leave the selection process to others in his administration but not to independent experts from outside City Hall, as was recommended more than a decade ago.

Transparency is one goal, he says, but so are efficiency and accountability: He wants the people running things and selecting contractors to know they could lose their jobs if those selected don’t perform.

And that might be the most sobering conclusion for voters who just witnessed the conviction of a figure — Nagin — who once persuaded the city that he was the one to clean up local government. Ultimately, voters have to trust whomever they hand the reins to.

“At some point in time, you have to rely on the people you elect to do the right thing,” Landrieu said. “And if they do the wrong thing, you have to send them to jail.”

The main reason close observers — including Quatrevaux and the Bureau of Governmental Research, a longtime critic of the city’s contract-awarding practices — have more confidence in this mayor is that Landrieu’s contracting procedures give him fewer opportunities to influence the outcome of a competitive selection process without it becoming obvious.

Nagin created similar selection committees to decide on contractors, but they gave the mayor three different options to choose from, and the committees themselves included only three people: his own chief administrative officer, the head of whatever department needed a contractor and, if that department head wanted, a member of the department’s staff. Only contracts worth $150,000 or more required the participation of an outsider “with specialized knowledge or expertise,” chosen from a list of nominees submitted by civic groups. Information technology contracts, by executive order, were exempt from the process altogether.

Nagin’s committees also did not meet in public; when the City Council tried to force them to, Nagin simply stopped using them, changing the process through another executive order.

And when he took the stand this month, prosecutors jolted the former mayor with written evidence that Three Fold Consultants, a company whose founder admitted paying Nagin bribes, somehow got into a “pool” of eligible contractors even though a selection committee had given the firm the thumbs-down.

Like Nagin’s selection process, Landrieu’s new system is the result of an executive order, and a successor could undo the reforms with a simple rewrite. It will be up to voters and the City Council to make the changes permanent with amendments to the City Charter, something Landrieu says he will pursue “soon.”

In the meantime, Landrieu’s administration argues that steering a favored contractor through the selection process today would be a lot harder.

His selection committees make the final decision and operate in public, so the media, members of the inspector general’s office and even bidders can attend. The committees are made up of five people: the mayor’s top deputy and finance chief, or whomever they designate; the head of the department requesting the contract; the employee who will manage the contract; and someone in local government with relevant expertise.

The acknowledged weakness in this setup is that all of the committee members owe their jobs to the mayor to one degree or another. At one point, the BGR recommended establishing committees of independent experts from outside City Hall who would vet contractors in various fields, a cumbersome process but one that would make any pay-to-play scheme all but impossible.

Andy Kopplin, who as Landrieu’s top deputy and chief administrative officer sits on many of the committees, argues the existing process is almost air-tight, adding that shifting the responsibility for vetting bidders to outside City Hall would come with drawbacks. The experts choosing companies wouldn’t be responsible for making sure the work got done and wouldn’t have the same incentives to make hard decisions, Kopplin said.

He noted the required makeup of the committees often means there are classified employees involved — people who are not mayoral appointees and whose jobs are protected by civil service rules. And the city has a chief procurement officer now, whose classified staff members sit in on the meetings and take notes.

“Most often you’ve got a wide variety of people by the nature of that committee who don’t all report up the same chain of command and who are not all at-will employees of the mayor,” Kopplin said. “You would have to have five people colluding and do it in front of the chief procurement officer and her staff in a public meeting, which strikes me as a very difficult proposition.”

Kopplin pointed to the high-profile vetting of bidders last year to revamp the former World Trade Center building. In that case, rival bidders suspected that Landrieu had a clear favorite among the three hopefuls, the Tricentennial 300 Consortium. It didn’t help that the mayor has talked so much about planning for the city’s tricentennial in 2018 or that Kopplin at one point acknowledged that his heart was with the company’s proposal.

Yet another company, Gatehouse Capital Corp., won the bid after a series of committee meetings that drew dozens of people, the bidders themselves and the media. Under the old process, Kopplin said, “It would have happened behind closed doors; a decision would have been made and it would have been announced.”

Quatrevaux, whose office reviews all of the city’s solicitations to make sure they aren’t written to favor one company or another, agrees that it would be difficult for Landrieu to meddle much with the contracting process, mostly because he believes his own office would know about it quickly.

“We see a lot of things and have a lot of people who communicate with us regularly in city government,” Quatrevaux said. “Before this office, you had to go all the way up to the federal level to get any kind of law enforcement, and they had limits. They can’t just go into some city or state government and demand stuff. They’ve got to have search warrants and all that stuff, and we don’t.”

Federal authorities generally intervene only when there’s evidence the law is being broken, whereas Quatrevaux has no such bar. He has more than once issued reports critiquing one proposal or another, including an ambitious reimagining of the Municipal Auditorium that was proposed at the tail end of the Nagin administration.

BGR President Janet Howard said Quatrevaux’s office is the linchpin of the city’s new contracting process and the reason it is so much improved. BGR proposed the committees of outside experts before the IG’s office was created in 2008, but after that it felt comfortable with a simpler structure, one that more or less matches what Landrieu put in place.

Howard added two caveats to an otherwise upbeat assessment: She would rather have the new chief procurement officer placed under civil service protection — Landrieu argued that “civil service deals in mediocrity and you need excellence” — and she sees Kopplin’s place on the selection committees as problematic, given his role as Landrieu’s No. 2.

“You always have a risk that a mayor could say to everyone on the committee, ‘This is who I want,’ ” Howard said. “There’s nothing you can do about that. They’re all in City Hall; most of them are mayoral appointees.”

She added, “There’s always a good-faith element in these things, which goes back to the quality of your elected officials. You can’t say that you have a system devoid of vulnerabilities. You can say you’ve had a sea change.”

Feb 25, 2014

Source: The Advocate

Filed under: City Government, Contracting, Orleans Parish

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