In The News › Editorial: Stop wasteful outsourcing

Nov 11, 2010

Source: The Times-Picayune

Filed under: Contracting, Orleans Parish

Editorial: Stop wasteful outsourcing

Thursday, November 11, 2010
The Times-Picayune

The Nagin administration’s wasteful spending in no-bid contracts has been illustrated through infamous examples, like the $10 million crime-camera boondoggle.

But a review of 2009 contracts by the Bureau of Governmental Research found the city’s contracting problems were more pervasive. The review calls for City Hall to reform how it decides what services to outsource and how it manages vendors — and Mayor Mitch Landrieu should pursue reforms in those areas.

BGR said that during the Nagin administration city officials evaded competitive bidding by adding massive amounts of work to existing contracts and then kept lax oversight of the firms’ performance. Officials classified about half of the city’s 822 contracts last year as “professional services,” meaning they weren’t bound to select the vendor with the lowest price. BGR suggested some services were misclassified to get around that restriction.

The competitive bid law also doesn’t apply to contracts valued at less than $15,000, and half of city deals under that threshold were barely so. BGR said that raised questions as to whether officials used the exemption to avoid competitive bidding.

The report also listed numerous contracts that were increased considerably without bids, possibly costing taxpayers millions in overpayments. A technology contract with Ciber Inc., initially capped at $5.5 million, ballooned past $40 million without seeking alternative offers.

The excessive spending was not limited to the city administration. BGR criticized the City Council for its high spending on utility consultants. The politically connected firms billed the council $5.8 million in 2009.

Mayor Landrieu in June announced several contracting reforms, chiefly a more open selection process for professional vendors that includes recommendations from committees of city employees. The mayor can sign a contract with the recommended firm or explain in writing why he decided not to do so, but he cannot choose another firm. The city also has eliminated some contracts and brought those functions in house. Meanwhile, the City Council passed a law requiring some of its contractors to list all subcontractors.

That’s progress, especially in making the awarding of professional contracts more transparent.

But as the BGR report shows, the contracting deficiencies that the Landrieu administration inherited go way beyond a lack of transparency. Mayor Landrieu and the City Council need to work together to more aggressively reform city contracting. They should put more contracts out for competitive proposals, set procedures for the classification of all professional services to prevent potential abuse and continue to find additional services that can be performed in-house.

That’s the fiscally responsible route.

Nov 11, 2010

Source: The Times-Picayune

Filed under: Contracting, Orleans Parish

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