O'Malley suggests procurement overhaul

As state officials took action to deal with a botched contract award, Gov. Martin O'Malley said Wednesday that Maryland's procurement process needs an overhaul and perhaps a new watchdog.

The governor's remarks came as the Board of Public Works approved spending $4.3 million to extend a contract to run a child-support enforcement call center while the Department of Human Resources seeks new bids. The extension was necessary after an appeals panel overturned the department's decision to award the work to a rival company.

The appeals panel found numerous flaws in the contract award process, including basic math errors and repeatedly shifting estimates of the volume of calls the call-center operator would be expected to handle.

Questioned by Treasurer Nancy K. Kopp, Human Resources Secretary Ted Dallas acknowledged that the appeals board decision was a setback. "We clearly made some mistakes in the process," he said.

The public works board approved an extension for Active Network Inc., the 10-year incumbent, while the state conducts a new bidding process. The company successfully appealed the department's decision to award the contract to a Calls Plus-Attiva Soft joint venture.

Before the vote, O'Malley suggested that much of the responsibility for overseeing the contract-award process could be taken out of the hands of the Department of Budget and Managment. Such a move would be a significant shift in a process Maryland has used for decades to award billions of dollars in contracts each year to private companies and nonprofits.

The governor said he wants to invite out-of-state experts from a national association of government procurement officers to "kick the tires" of Maryland's procurement process. "We need to pull this apart and put it back together," he said. He also suggested the administration would call in procurement officers from various departments to review their procedures.

With Budget Secretary T. Eloise Foster looking on, O'Malley said the state may have to get her department out of the procurement business entirely. He did not suggest which agency might take over that role.

"The [budget department's] desire to close the annual budget gap sometimes gets in the way of securing a timely and effective process" for awarding new contracts, O'Malley he said.

In recent months, the Board of Public Works has heard a series of disputes over multimillion-dollar contract awards, most of which have been resolved in favor of the agencies recommending the awards. In several of those cases, the budget department's oversight role has been called into question.


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