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O'Malley hints at procurement process changes

Confronted with a botched contract award by one of his departments, Gov. Martin O'Malley suggested Wednesday that Maryland's procurement process is desperately in need of an overhaul.

Among other things, O'Malley hinted that a large measure of the responsibility for overseeing the contract-award process could be taken out of the hands of the Department of Budget and Taxation. Such a move would be a significant shift in a process Maryland has long used to award billions of dollars in contracts each year to private companies and nonprofits.

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The governor's remarks came at a regular meeting of the Board of Public Works, which oversees the awarding of large state contracts. He commented after the board took up a proposal to extend a contract with an incumbent vendor to run a child support enforcement call center after the state Board of Contract Appeals invalidated the Department of Human Resources' decision to award the contract to a rival company. The appeals board found numerous "fatal flaws" in the contract award process, including basic arithmetic 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 the appeals board decision was a "setback."

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"We clearly made some mistakes in the process," he said.

Dallas' boss, O'Malley,  said he wants the state to invite in 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.

The governor also suggested the administration would do a "hot wash" during which it would call in procurement officers from the various departments to review their procedures without stopping the process in its tracks.

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

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In an interview afterward, the governor explained that the budget department's role in overseeing state spending  "bleeds over" into its contract award responsibilities.

"The DBM desire to close the annual budget gap sometimes gets in the way of securing a timely and effective process for a service or community contract that has a multi-year direction," he said.

In recent months, the Board of Public Works has heard a series of appeals of contract awards that have stirred controversy. In several of those cases the budget department's oversight role has been called into question.

O'Malley said he's concerned that while Maryland's contract award process in recent decades has largely steered clear of the corruption scandals  that plagued in during the 1970s, it may have become too rigid and inflexible to deliver the best value for Maryland taxpayers. He said some people in state government seem to pride themselves on "the fact vendors hate our procurement process."

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