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Dave Solomon's Gettin' Down to Business: No-bid contracts are under scrutiny by Executive Council

New Hampshire Union Leader

March 26. 2014 6:42PM

Doing business with the state is big business, so every qualified business deserves a fair shot.

That's why sole-source or no-bid agreements get so much attention from the Executive Council, whose advice and consent is needed on most state contracts.

The preference for a competitive bidding process in virtually every possible instance is a nonpartisan issue on the five-member panel. The two Republicans and three Democrats appear to be of one mind on the proposition that New Hampshire needs to be as aggressive as possible in putting out requests for bids, and less reliant on sole-source or amended contracts with the same vendors.

The state has a competitive bidding statute, but there are loopholes.

Republican Councilor Chris Sununu has at times voted against contracts for no reason other than the lack of a bidding process, as has Democratic Councilor Debora Pignatelli.

"I don't like them (sole-source contracts)," she says. "I'm glad other people are taking up the mantle."

Capital projects like roads, buildings, new computer systems and the like generally go out to bid, and although the losing bidders might not like the outcome, at least they had an opportunity to make their case.

But when it comes to consultants and services, the bidding process can be compromised or ignored, often because it is considered cumbersome and time-consuming in cases where time is of the essence.

Health and Human Services Commissioner Nick Toumpas uses a lot of consultants in his department. Consultants are hired to develop and install computer systems that manage benefit programs like Medicaid, and then other consultants are hired to road-test or "authenticate" the work of the first group of consultants.

One such contract came up on Wednesday, as the council deliberated on a sole-source contract for $1.6 million to a company that would advise the state on Medicaid expansion.

"Why not bid?" Sununu asked.

Toumpas explained that the company in question has helped two other states obtain the necessary waivers, and time is of the essence in getting coverage for 50,000 qualified New Hampshire residents if Medicaid expansion becomes law.

Sununu and newly elected Republican Joe Kenney voted against the contract, which passed 3-2.

"Of the 14 HHS contracts before us, eight are sole-source," Sununu said, although many of the contracts in question were not new, but were extensions of existing contracts that were put out to bid at one time.

Councilors kept hammering away at the same theme.

When the Division of Travel and Tourism decided to develop a version of the state's tourism website for mobile devices, why did it add more than $300,000 to its existing contract with the SilverTech agency instead of putting the job out to bid?

When the Division of Parks and Recreation wanted new banners and sunfish structures at Hampton Beach, why did it directly contact five potential vendors to submit bids, instead of posting the opportunity or broadcasting it more widely?

When the same division wanted to convert from parking meters to parking pay stations at Hampton Beach, why did it contract with a company that must now become the sole source for maintenance of those stations, until they are ripped out and replaced?

"It just seems funny that parking meters need proprietary technology," Sununu said.

The Executive Council, a uniquely New Hampshire institution, has to disrupt the comfortable relationship senior state employees develop with the consultants or service providers whose work meets their high standards. It's often easier to keep doing business with the same folks than to go through a complicated, contentious and potentially litigious "request for proposals" and bidding process.

The state is struggling to find a balance between transparency and efficiency.

"We had a robust discussion at the breakfast about ways to streamline and improve the council process," said Democratic Councilor Colin Van Ostern of Newfields after Wednesday's session. "There is always a balance to be struck between public scrutiny on the one hand, and how much that might slow things down on the other."

Gov. Maggie Hassan says she wants to see every job that can be put out to bid, put out to bid.

"The governor believes strongly in the importance of pursuing contracts through the competitive bidding process outlined in state law in order to protect taxpayer dollars," said her spokesman Marc Goldberg.

"The governor appreciated Wednesday's conversation about these issues, and looks forward to continuing to work with members of the Executive Council to ensure proper oversight of state contracts."

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