When vendors have been unable to meet the terms of the state contracts, the resulting cancellations have cost Nebraska millions in recent years.
If the state were able to nip potentially problematic contracts in the bud, before they cost taxpayers too much or resulted in embarrassing failures, it should presumably save money. Fiscal prudence benefits all Nebraskans.
Sen. Mark Kolterman has proposed creating an appeals process for companies that believe agencies have awarded contracts in error. He believes – as does the Journal Star editorial board – the addition of judicial review to state contracts exceeding $5 million will provide another layer of security to ensure Nebraskans’ tax dollars are spent wisely.
The Journal Star’s Chris Dunker detailed shortcomings in Nebraska’s existing procurement laws and how single-source contracts and the lack of a judicial review process have been problematic. A company that felt it should have been able to bid on a 2017 Department of Labor contract awarded without a bid, for instance, had no formal avenue to protest when the deal was awarded to another vendor.
At the time, business attorneys and state senators worried the lack of such recourse – which most states have in some fashion – hurt Nebraska’s reputation. Driving away bidders and deterring competition, they surmised, costs us all.
Then, consider a pair of technology upgrades that Nebraska formally canceled last December, for instance. The projects cost the state – and its taxpayers – about $6 million apiece before new administrators pulled the plug following a reviewing of the progress.
Nebraska got little more than heartburn for that $12 million. State officials decided to make do for the time being with one system while pursuing an update through a different vendor for the other. A transition to streamline payroll and personnel operations was estimated by the Department of Administrative Services to run $12 million over budget before it was canceled.
We applaud these officials for cutting their losses – which are all of ours, too – before additional cost overruns. We believe that Kolterman’s proposal decreases the likelihood the state finds itself in this type of fiscal pickle going forward.
The Seward senator expressed a willingness to craft “a process everyone can live with.” That process will need to be designed to address such matters expediently, calming state officials’ concern over an appeals process they fear could delay projects.
But cost-effectiveness by and confidence in state government must drive this idea. As Labor Commissioner John Albin told the Journal Star about the 2017 contract: "I'd rather suffer a little bit of embarrassment being late than a lot of embarrassment in a failure."
As would all Nebraskans, we presume. Hence, extra protection against a failure makes sense for the state's procurement process.