Reforming Maryland Procurement Laws


When the state wants to make a major purchase -- such as Medevac helicopters, or a vehicle-emissions testing system, or a fiber-optic distance learning network -- there are two core issues: First, did the state get the best product at the best price; and second, was the process fair and untainted by improper influence?

"Special access" is at the core of Maryland's procurement woes. Whether it is the perception of special access or the actual dispensing of it doesn't really matter: As long as it could exist, it might as well exist. Some of the criticism surrounding state procurement procedures is valid, some not; but there is a loophole which permits lobbyists to influence improperly the award of state contracts.

Under the current lobbying registration and reporting law, a person who receives $500 or more in compensation becomes a "legislative lobbyist" and must register with the State Ethics Commission and file reports of income and expenses. Such is not the case, however, for those who lobby the executive branch. These lobbyists are exempt from the obligation to register even if they receive million-dollar fees, unless the lobbyist spends $100 or more on meals, beverages, gifts, etc. in connection with the executive branch.

It makes no sense to exempt someone who receives a huge fee to lobby a state agency for a contract. Other states, like Texas, have closed this loophole.

The loophole could be closed by a simple legislative change. The current definition of lobbyist (contained in Article 40A, Section 1-201(t) of the Maryland Code) should be amended to provide that any person who receives more than $500, or spends more than $100, to influence legislative or executive action is a lobbyist, and thus is subject to the law's reporting requirements.

Another alarming loophole also should be slammed shut. The state ethics law prevents a public officer from disclosing confidential information to a lobbyist that would benefit his client, but nothing prevents this lobbyist from making a direct pitch to an agency head or official. A simple solution would be to require disclosure of such "ex parte" communications or, perhaps, prohibit such communications during a specific period of time.

For example, when an agency is preparing specifications on a contract proposal and certainly after there has been a request for proposals, there should be a flat prohibition against seeking to influence the decision maker outside the formal procedures established by law. That is the rule in matters pending before a court; the same rule should apply here.

The General Assembly should also consider abolishing or at least severely limiting an agency's authority to enter into "sole source" contracts. Too often, a need for speed becomes the basis for a "sole source." These two concepts should be kept distinct. There are times of genuine emergency when a contract must be entered into at once. The procurement law permits this. The existence of an emergency or the need for an expedited procurement should not, however, be used to justify a "sole source" and thereby to circumvent the bidding process.

The General Assembly should also review its practice of continually enlarging the list of agencies exempt from the procurement law. With virtually each legislative session, a new agency is added to the exempt list (Section 11-203 of the State Finance Article of the Maryland Code). This practice should stop. A fair and open process is not inconsistent with the efficient completion of government projects.

The state is a dominant player in the marketplace. It is a major purchaser of goods and services. And yet, is unlike a private entity in many important respects. The state must be fair in the exercise of its market power and it must appear to be fair. Political influence real or imagined has no place in this process. It is time to assure that distorting influences do not result in a process which is either unfair or appears to be unfair.

J. Joseph Curran Jr. is attorney general of Maryland.

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