THE MISSISSIPPI LEGISLATURE

The Joint Committee on

Performance Evaluation and Expenditure Review

Report # 577

Contracting with State Agencies: Mississippi’s Provisions for Vendor Access, Selection, and Transparency

Executive Summary

Introduction

Scope and Purpose

PEER received a legislative request to review how state agencies contract for goods, services, and construction and the transparency of the process. The requesting legislator was particularly concerned with vendors’ perspective of the contracting1 process.

PEER sought to determine best practices in public contracting and whether Mississippi has the provisions in place to encourage and protect vendors while providing for the needs of state agencies in a timely and cost effective manner. After identifying best practices in public procurement, PEER reviewed state laws and regulations regarding state agencies’ contracting for goods, services, and construction.

Scope Limitations

PEER’s review was an analysis of the framework for state agencies’ contracting processes (i. e., applicable laws and agency regulations), particularly whether the framework has shortcomings that might generate complaints from vendors. PEER did not test for state agencies’ implementation of contracting laws and regulations in this review. If the shortcomings in the contracting framework PEER identifies are corrected and vendors’ complaints persist, a compliance review may be in order.

Background

Best Practices for Public Contracting

The best practices for public contracting may be summarized as follows: vendors should have access to the contracting process; the selection of vendors for contracts should be clearly defined; and, the contracting process should be transparent.

In developing best practices for public contracting, PEER consulted the American Bar Association’s 2000 Model Procurement Code for State and Local Governments (also referred to within this report as the Model Procurement Code), as well as other applicable sources. Best practices for public contracting promote fair and open competition among vendors.

From a review of the literature, PEER identified three key principles of an effective public contracting process:

• vendor access--Vendors should have easy access to information about the contracting process and an opportunity to compete for contracts. An accessible contracting process includes vendor outreach, public issuance of requests for competitive proposals, and provision of adequate public notice for competition.
• vendor selection--The process of selecting a successful vendor for a contract should be clearly defined. The evaluation criteria that serve as the basis for awarding the contract should be laid out in the request for proposals, invitation for bids, request for qualifications, or solicitation of quotes, depending on the item(s) to be purchased and the estimated value of the contract.
• a transparent process--The process should be transparent in disclosing to the public that it was conducted in a fair and open manner and that the goods or services procured fulfilled the needs, were secured at the best prices, and were of acceptable quality. A transparent public contracting process includes publicizing of bid awards, debriefing of vendors, and disclosure of current contract information on a website.

While the vendors’ perspective of contracting is important, the ultimate goal of agencies’ contracting for goods, services, and construction is to provide for the needs of the state in a timely and cost effective manner.

Primary Agencies Responsible for Regulating Public Contracting

The Department of Finance and Administration, the Department of Information Technology Services, and the Personal Service Contract Review Board interface frequently with other state agencies and with vendors in the contracting process.

The MISSISSIPPI CODE governs state agencies’ processes for contracting for goods, services, and construction. The CODE delegates responsibility to the following state agencies to create rules and regulations regarding contracting within their jurisdiction.

• The Department of Finance and Administration (DFA)--Within this department, the Public Procurement Review Board; the Office of Purchasing, Travel, and Fleet Management; and the Bureau of Building, Grounds and Real Property Management have responsibilities regarding contracting. The department is also responsible for developing and operating the Transparency Mississippi website, upon which are posted copies of contracts entered into by agencies since January 22, 2010.
• The Department of Information Technology Services (ITS)--This department oversees the contracting process for computer hardware, software, and technology services.
• The Personal Service Contract Review Board (PSCRB)--This board sets forth rules and regulations that agencies should follow in contracting for personal services.

MISS. CODE ANN. Sections 27-104-7 (2) (a), 25-53-5 (d), and 25-9-120 (3) (a) authorize these agencies to promulgate rules and regulations regarding contracting for goods and services. State agencies must operate within the bounds of these rules and regulations and are responsible for maintaining appropriate records to document their compliance with such.

Assessment of the State’s Contracting Framework Regarding Vendor Access, Vendor Selection, and Transparency

Framework Assessment: Vendor Access

Vendors have no single point of access to information regarding opportunities to sell goods or services to state agencies. Because three separate state regulatory agencies have responsibilities related to contracting, vendors must deal with potentially three different environments in learning about opportunities. State law and the regulatory agencies’ rules and regulations specify how vendors must enter the contracting process (e. g., submitting bids or proposals).

Vendor access is limited to some extent by thresholds and exemptions in statutes or regulations. Exemptions (i. e., items exempted from statutory or regulatory procurement requirements) and thresholds (i. e., dollar value limits that determine the level of vendor access and competition required) can result in both efficiency benefits to the state and in a competing outcome of limiting contracting opportunities for vendors.

Framework Assessment: Vendor Selection

ITS regulations require that vendors be selected based on quantitative and qualitative scoring criteria. PSCRB regulations require agencies to select vendors based on requirements set out in the document soliciting bids or proposals. DFA, ITS, and the PSCRB have mechanisms in place to help ensure that vendor selection is based on well-defined criteria.

Framework Assessment: Disclosure and Transparency

DFA, ITS, and PSCRB regulations require that written notification of a bid award be sent to the successful bidder but do not specifically require proactive presentation of this information to the public. Only ITS requires a form of debriefing--the Post Procurement Review--at the vendor’s request. All three agencies’ regulations require maintaining some information on their websites regarding awarded contracts, but none of the three have all current contracts posted on their websites with easy access.

Recommendation

The Legislature should amend MISS. CODE ANN. Section 25-53-151 (1972) to require the Electronic Government Oversight Committee2 to develop a procurement portal that will enable potential vendors of goods and services to have access to relevant and necessary information regarding the sale of the following to state agencies:

• commodities, as defined by CODE Section 31-7-1;
• contract personnel, as defined by CODE Section 25-9-107 and 25-9-120; and,
• computer equipment and services, as defined by CODE Section 25-53-3.

Specifically, the portal should provide potential vendors with:

• a searchable database of business opportunities with the state, including a breakdown by product/service and by organization seeking the product/service;
• listings of the effective dates of each contract;
• Frequently Asked Questions regarding doing business with the respective agencies and a breakdown of these questions regarding the selection process for the respective agencies;
• a searchable database of contract types, contract number, commodity, supplier, organization, or keywords;
• a forum for questions and answers relating to the procurement process in general and/or specific to a single contract; and,
• links to individual agency websites and contacts to enable potential vendors to obtain more specific information if necessary.

The portal should be maintained as part of the Transparency Mississippi website managed by the Department of Finance and Administration as provided for by CODE Section 27-104-151 through 27-104-165. It should be mandatory that the Department of Information Technology Services maintain a link from the state website to the portal.

Further, the Legislature should create a new CODE section to be codified with the other provisions or Transparency Mississippi that will require the Department of Finance and Administration to maintain and update this portal with guidance and assistance from the Department of Information Technology Services and the State Personnel Board.

1   For purposes of this report, the term contracting means the procurement of commodities (including equipment, vehicles, and construction), computer equipment and services, and personal and professional services as defined by MISS. CODE ANN. Sections 31-7-1, 25-53-3, and 25-9-120.

2   Created in 2001, the Electronic Government Oversight Committee was established to:

• prioritize and make recommendations for all electronic government services, in order to cut across state and local governmental organizational structures;
• address policy issues such as privacy, security, transaction fees and accessibility;
• review ongoing fiscal and operational management and support of portal;
• provide a mechanism for gathering input from citizens, businesses and government entities;
• encourage self-service models for citizens through state websites and other electronic services; and,
• promote economic development and efficient delivery of government services by encouraging governmental and private sector entities to conduct their business and transactions using electronic media.

Thus, this committee has a mandate to help government develop electronic government systems that meet the broad needs of state and local government and the broad range of citizen interests reflected in Mississippi’s diverse population. The committee consists of:

• the Executive Director of the Department of Information Technology Services, or his designee;
• the State Auditor, or his designee;
• the State Treasurer, or his designee;
• the Secretary of State, or his designee;
• the Executive Director of the Department of Finance and Administration, or his designee;
• the Commissioner of Public Safety, or his designee; and,
• the Commissioner of Revenue, or his designee.

See MISS. CODE ANN. Section 25-53-151 (1972).

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