In The News › Transparency lacking in city service contracts

May 19, 2008

Source: New Orleans CityBusiness

Transparency lacking in city service contracts

Transparency lacking in city service contracts
by Jaime Guillet

Spending public tax dollars usually calls for a transparent contracting process, something government watchdogs say Mayor C. Ray Nagin’s administration just doesn’t have.

New Orleans City Council President Arnie Fielkow said he is concerned with the administration’s “non-transparent” process of awarding city professional services contracts, which include contracts for accountants, engineers and various consultants.

He said the council intends to address the executive branch’s private selection process for professional service contracts May 28 at its Governmental Affairs Committee meeting.

Fielkow’s concerns reached a peak when he recently requested meeting minutes from the administration’s evaluation of request for proposals for a sports complex in eastern New Orleans but was told the meeting had not been recorded.

He said there’s seemingly no notification by the administration of times and locations for when the city reviews professional services contracts. Even city council members don’t know the total number of professional services contracts because they are not identified in one single database, Fielkow said.

Councilwoman Shelley Midura has made attempts since mid-2007 to receive financial details on one of the city’s professional services contracts — the management of the 311 information line with Dallas-based ACS State and Local Solutions. Midura said she wants to know how much has been spent for the non-emergency telephone service, how much was budgeted and any modifications to the contract.

“I want (to know) all financial aspects of 311,” Midura said. “I have some information for 2007 but I am still waiting for 2008.”

Getting contracting right is “more important than ever,” said Janet Howard, president and CEO of the Bureau of Governmental Research, a nonprofit research organization dedicated to public policy.

“The city is in such desperate need of services and to the extent we don’t get the best deal we can, the citizens pay for that,” Howard said. “It’s a finite pot of money. If the government doesn’t do its contracting right, the citizens pay for it through reduced services.”

Review process confidential

At question is the executive branch’s review process for professional services contracts. For contracts estimated between $15,000 and $149,999, the department in need of the services submits a draft request to Chief Administrative Officer Brenda Hatfield. Following city attorney approval, the administration advertises a request for proposals.

A selection review panel composed of Hatfield and the department director requesting the service — and potentially another staff member or another adviser at the panel’s discretion — scores the proposals and selects the contract. The review process is similar for contracts estimated at $150,000 or more. The only difference is the inclusion of a community panel representative for the selection. The community representative is nominated from either the New Orleans Chamber or the Urban League of Greater New Orleans.

According to a June 2005 executive order from Nagin regarding the panel review process, all deliberations are to be kept confidential and “all members of the Selection Review Panel shall be prohibited from disclosing contents of such discussions and/or deliberations to any third parties.”

“Talk about transparency,” Howard said. “(The city has) a confidentiality agreement as opposed to an open transparent approach to contracting.”

Another concern of Howard’s is that “professional services” is a “very loose concept.”

“Anything that has a service component, even if you have a piece that’s equipment, gets treated as a professional services contract,” she said. “So (the administration) puts a lot of things into professional services that shouldn’t be there. The downtown trash cans were treated as a professional services contract.”

Via an e-mailed response, Nagin’s press office answered questions about transparency saying “Requests for bids and proposals are advertised and posted on the city’s website; review committees include an outside evaluator and now also are attended by a representative from the Office of the Inspector General and final contracts are public documents.”

Inspector General Robert Cerasoli said his staff has only been “notified two or three times” of meetings.

The city council holds its professional services contracts review and selection process in a public forum. A council staff committee reviews proposals and then forwards them to the appropriate council committee. The committee deliberates in the open, chooses a proposal and then sends it to the full council for a vote.

The council currently has 19 professional services contracts totaling $9.9 million.

Easy fix available

David Marcello, executive director of Tulane University’s Public Law Center, calls the administration’s procurement of professional services “not the model of openness and transparency.”

Marcello spent a couple of years in the mid-1990s as chairman of the city’s Charter Revision Advisory Commission, which made recommendations to then-mayor Marc Morial and council members on cleaning up the professional services contract procurement process.

The advisory group’s original recommendation was for a single procurement process fixed by ordinance and applicable across the board to all city agencies, boards, commissions, public benefit corporations and other entities.

In the second phase of the charter revision process, the mayor-council review of the draft recommendations, the provision got split into two separate processes — one fixed by council rule for the award of legislative branch contracts and the other fixed by mayoral executive order for all executive branch contracts, which is by far, the larger category, Marcello said.

“That bifurcated process has proved to be a huge disappointment,” Marcello said.

“We hoped each branch might be under some public pressure to ratchet up its competitive selection procedures in order to match requirements of the other branch. Instead, it proved to be a race to the bottom.”

Blurring the line

One primary concern of opaque professional services contracting is the historical and common crossing of lines of contracts and campaign contributions, Howard said.

“You will find significant contributions to mayoral campaigns from architects and engineers that work in fields that governments call upon,” Howard said. “You end up with an implicit quid pro quo where you have to pay to play and it’s a burden that shouldn’t be placed on businesses.”

In 2002, Nagin campaigned on a platform of corruption reform and signed a pledge to BGR to uphold its procurement recommendations, the most significant of which included the “professional committee model” used in state procurement.

“The mayor did make revisions but they weren’t really to professionalize the process,” Howard said. “He turned it into more of a citizen’s participation exercise … which is really a step in the wrong direction. You’re better off just keeping it staffed in City Hall because there is better accountability that way.”

Howard and Jim Brandt, president of the Baton Rouge-based Public Affairs Research Council, said making the process more transparent is an easy task with computers and the Internet — if a politician wants to do it.

“Rather than go through something complicated like a charter amendment, our point was that if someone wanted to clean up contracts, if the mayor wanted to clean up contracting, he has the means to do it unilaterally under the existing charter just by issuing an executive order,” Howard said. “Then the city council could give that teeth by establishing penalties by ordinance for non-compliance.”•

May 19, 2008

Source: New Orleans CityBusiness

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