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Local View: Procurement reform needed

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kate high

The latest episode in the long-running debacle of Nebraska’s failed procurement system involves the mismanagement of the $27 million no-bid Nomi contract for COVID testing, which inexplicably mushroomed to $69 million according to recent auditor’s findings.

To be clear, there's no evidence Nomi did anything wrong, but it points to an ongoing problem.

Another state contract gone wrong, once again taxpayers snookered out of millions. The controversies involving Nebraska’s inept procurement system stretch back to the 1990s multimillion-dollar contract for a DHHS computer system (NFOCUS) which turned out unreliable, requiring binders full of “workarounds” and decades of reprogramming.

Add to that the troublesome 2016 $400 million annual contract with Centene  for Medicaid Managed Care, the canceled $84 million Medicaid eligibility and enrollment upgrade after an estimated $60 million outlay with nothing to show for it, the 2019 failed $197 million St. Francis Ministries contract for abused and neglected children which required an additional $158 million bailout, and now the Nomi contract with “gaps in performance.” A hundred million here, a billion there, it starts to add up.

It is disheartening to see the bungling of this magnitude, but taken as a whole, these contracts point to three underlying factors contributing to Nebraska’s ongoing procurement woes:

1. Nebraska has not joined the majority of states who have adopted all or part of the American Bar Association’s Model Procurement Procedures. This is a detailed code for state and local governments that ensures equitable treatment for everyone who deals with the procurement system.

2. Contracts with the state of Nebraska are not subject to judicial review by any court, unlike many states including Iowa, Colorado and Missouri. In the case of the $1.2 billion Centene contract, the losing bidders’ only recourse was a written protest and a meeting with the director of the Department of Administrative Services, a Gov. Pete Ricketts appointee whose decision was final and not subject to further review.

3. Nebraska’s weak, outdated campaign finance laws magnify the state’s procurement disasters. Nebraska law has no restriction against “pay-to-play” except for lottery vendors. Pay-to-play in simplest terms is making campaign donations in hopes of receiving favorable treatment. Add to this, Nebraska has no limit on the amount any individual or non-individual may donate to state offices, unlike most states which limit contributions from individuals and limit or ban contributions from corporations. Nebraska law allows vendors to shovel unlimited sums to elected officials while their bids are under consideration. It is entirely legal and utterly unethical.

With the latest contract, past is prologue -- the heady brew of money and politics once again overpowered rational, data-based decision making. Promises were made, checks deposited, and taxpayers were stuck with the tab.

This all seems so avoidable, yet decades pass with nothing done. How many more legislative committees will convene, investigate and report with no action taken? Frankly it’s a waste of everyone’s time and money, unless you are one of those unethical public officials who profit so handsomely from it.

Kate High lives in Lincoln, retired from the Nebraska Department of Health and Human Services and researches the role of money in politics. She has presented her findings to civic groups around the state and conducted OLLI courses.


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