Wade Linger: Don’t overregulate state purchasing rules
In the wake of the apparent purchase card abuse at Fairmont State University, along with the routers and towers controversy, we are seeing some movement toward reforming state purchasing rules.
State Purchasing Director David Tincher is proposing reforms to the purchasing laws. He is to be commended for stepping up to ensure that our laws are appropriately designed to guarantee that our tax dollars are spent properly. I wholeheartedly agree with his moves toward mandating training for state agency supervisors and purchasing officers.
I hope, however, that in our enthusiasm to eliminate dubious purchases, we do not impose restrictions that actually make the system worse than it is.
If we are not careful, we might create a purchasing system that requires every single purchase of equipment, supplies, and services to go through an expensive bidding process. And while this may sound great at one level, such a rigid system will lead to higher costs for state government.
A very high percentage of equipment, supplies, and services purchased by the government are standard commercial items. A roll of toilet paper, a ream of paper, a laptop computer, and an hour of engineering labor are items that can be bought and sold in bulk.
We are all aware of the savings to be had when buying in bulk. From Sam's Club to purchasing cooperatives, buyers are offered significant discounts by participating in these kinds of arrangements. And I would argue that the taxpayers should also get those discounts where they are available.
People familiar with federal purchasing arrangements know about the General Services Administration Schedule, where vendors guarantee their lowest prices to the federal government for a range of products and services. Purchasing agents can then buy from those schedules with confidence that the prices have already been checked.
West Virginia's education efficiency audit cited cooperative purchasing as one of the most effective ways of cutting costs. Indeed, tens of millions of dollars could be saved. The RESAs have already started implementing that recommendation, and the dollars saved are being re-invested at the local level.
West Virginia had its own version of the GSA Schedule 70 in the past. We had SIP08, IPT10, and ITECH10, among others. Those contracts allowed state agencies to buy technical goods or services from pre-qualified vendors; but without the bureaucratic expense and time delays associated with full-fledged RFQ, proposal, evaluation, and contract technicalities for every individual project.
Instead those pre-qualified vendors bid on each project and the lowest-price bidder won. And yes, this saves money because the process is greatly shortened. The main issue raised with the router purchase was that it was an unusually large purchase and had the same oversight as a small purchase. This concern can be cared for within a secondary bid process — which is considered to be a national best practice — without eliminating the process altogether.
In addition, current rules preclude many agencies from using national contracts like GSA Schedule 70 and Western States Contracting Alliance that are negotiated by entities or consortiums with much greater negotiating power than a small state like West Virginia.
Those prohibitions should be eliminated to permit our state to obtain goods and services at the lowest possible cost. With expected upcoming budget cuts, utilization of such contracts becomes even more important.
Of course we need to be good stewards of the taxpayers' money. And of course we need to ensure that our public servants operate with integrity. But it will be a costly mistake to reform our purchasing laws to result in higher costs, slower procurements, and more bureaucracy.
Cooperative purchasing agreements, including contracts such as the GSA and ITECH are important tools for keeping government running efficiently and economically. It is a big mistake to prohibit using those kinds of procurement vehicles in the name of reform.
I urge state lawmakers not to curtail or ban this practice in West Virginia state government purchasing.
Linger is president of TMC Technologies and a member of the West Virginia Board of Education.