State Auditor Doug Hoffer did something unusual on Friday: he pre-released one of his reports, embargoed until this morning at 10 a.m. Usually, he just releases them when he releases them.
The reason he did so, I infer, is that this may be the most explosive document to emerge from his office, and he wanted to give us media folks time to digest it. The report is entitled “Sole Source Contracts: Extraordinary Use in Ordinary Times.” The topline: state agencies issue a whole lot of contracts without any competitive bidding. And while sole-source contracts are absolutely justified in many circumstances, the quantity is staggering — and, too often, the stated rationale for bypassing the bidding process was wafer-thin.
Background: In the course of his work, Hoffer had repeatedly come across instances of sole-source contracts. Eventually he decided to assess the scope of the situation. His team reviewed nearly 1,000 contracts issued during FY2015 by five state agencies. (Reviewing all state contracts would have been a monumental task.)
The report paints a picture of administrative laziness at best, corruption at worst. Some key passages from the Executive Summary:
The SAO [State Auditor’s Office] found that while sole source contracts are intended for extraordinary circumstances, this selection method is commonplace for some departments and agencies. … Sole source contracts accounted for 41% of these contracts, and they valued $68 million, or 27% of the total amount.
… While some sole source selections were justified, many were not. Numerous memos lacked a justification for using a sole source selection, and others lacked evidence to substantiate claims. We identified memos based on erroneous information and time constraints that appeared to be of agencies’ own making. …Furthermore, familiarity with contractors often took precedence over an open and competitive process.
… The high frequency of sole source contracts across the five departments and agencies in this analysis raises serious questions about the effectiveness of the State’s contract management.
Yeah, it sure does.