Red Flags Galore in Awarding Contract to Highest Bidder

Last month Arkansas Governor Asa Hutchinson decided to proceed with a controversial move to award a large state contract to Deloitte Consulting even though their bid was twenty million dollars higher than the competing vendor, Northrup Grumman. This was even in though Northrup had fulfilled the contract for the last twenty years without notable complaint! And Hutchinson pushed the deal through quickly despite failing to obtain approval of a key Senate Committee. The contract was related to Department of Human Services Information Technology services.

The particulars of this story are worth looking into for many reasons, not the least of which is it shows how the legislature in this state has been neutered by the executive under essentially one-party rule (for what to do about it see here). It especially demonstrates that the establishment media in this state calmly passes on the most absurd and brazenly irregular claims of the administration as if they were not in the least bit out of the ordinary with no serious effort to dig into what real professional journalists ought to consider a big story. I will examine some of the claims surrounding this issue and you will see what I mean. Here is a link to the AP story on it, which I will reference, but the information for that article was drawn from one in our sycophant state-wide paper, the Democrat-Gazette.
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Legislative committees are supposed to review changes in large state contracts. The house committee voted overwhelmingly to do the review (opening the door to a change of vendors) but the Senate Committee voted it down. Because they did not vote the way the Governor wanted, they got the opportunity to vote again. But they again voted it down! The Governor then decided to proceed anyway! And here is how he described the action…

“Now that the Legislature has had its opportunity for review of the pending DHS contract with Deloitte for IT services, I will instruct the procurement director to approve the contract in accordance with his legal authority, which is the next and final step in the procurement process,” Hutchinson said.

So his position is that so long as the legislature had their “opportunity for review” it is irrelevant whether or not they actually choose to do a review! They had an opportunity to approve doing what he wanted but since they choose not to take advantage of that “opportunity” he is going to do it without their approval! This is not “checks and balances” at its finest friends.

Then notice this paragraph from the story, which no one would put their name to because it is so absurd that no one with any sense would want to put their name on it. It was just thrown out there in the face of all contrary evidence…..

Advocates of the Deloitte Consulting contract said it would cost $5 million less annually than the current contract with Northrop Grumman. They added that Deloitte was awarded the contract based on its technical expertise.

Deloitte bid $74.3 million for the three year contract while the current vendor bid $54.4 million.  That without-attribution statement about Deloitte being “$5 million less annually” should not even be in the story. It only confuses people as to the truth- the Governor awarded the contract to the high-bidder over the people who have been doing it for twenty years by the specs!

Here is Hutchinson with his Clintonesque triple-speak again…

“The Deloitte contract was considered by the legislative committee multiple times, discussed in depth and received numerous votes,” Hutchinson said.

Yes, it was “considered” and discussed by the committee, but the conclusion of that discussion in the Senate was that Deloitte should not get the contract! It received “numerous votes” but those votes were not favorable to Deloitte. That is like your city council putting a sales tax increase on the ballot in a couple of elections, and when they fail to pass they increase the taxes anyway simply because the proposal was “voted on multiple times”.

Next is the one that really gets me. Again, no names are attached to the statement because that would get too close to accuracy and accountability……

State officials said Deloitte won the bid after scoring higher in a technical evaluation by a committee of state employees. The technical evaluation made up 80 percent of the overall score, while the cost made up 20 percent.

Well I could ask how they arrived at those weighted measurements, but the real problem is that this is not a real bidding process. That’s not how they do it in private industry. In a real bid you lay out the technical specs in advance and people bid based on those specs. If they don’t meet the specs, they are not a part of the bidding process. If they do, you take the lowest bidder. You don’t say “well you meet the specs and you have been doing this for us without complaint for twenty years but now we are going to have what we call a technical evaluation that is way more important that cost.” The one who meets the specs for the lowest cost wins the bid.

This is especially true when the parameters of the technical evaluation are unknown and it is done by who-knows who and they can wind up with jobs in this same firm three years from now. It invites corruption. This is too obviously some fig-leaf to attempt to give legitimacy to a very illegitimate move.

And that brings us to a very important question. Why the urgency to change information technology vendors after being satisfied with the same one for twenty years? One possible reason ties into a question I asked two years ago- Is Arkansas’ ruling class involved in welfare fraud on a massive scale? State Senator Bryan King referred to our special version of Obamacare as a “scam” because there was a strong financial incentive for Arkansas to sign up as many people as possible for the program, eligible or not, and keep them on that program for as long as possible, eligible or not.

They were finally forced to verify eligibility of some program recipients- long after they were legally required to do so- and discovered that tens of thousands of people that FEDGOV was paying Arkansas Insurers to cover were dead, moved out of the state, in prison, or got a job that had other health care. They were not eligible, but the state just kept its mouth shut and so FEDGOV kept sending payments in! I can’t help but wonder if the records in DHS could be examined in a way that would detect a deliberate pattern of evasion. If so, a lot of people, Republicans and Democrats alike, would be very anxious for those records to be scrubbed. What better way to obscure things than to change vendors? The incriminating evidence can be “lost in the transition” before anyone who can put it together gets a chance to look.

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Here is how you can help fight corruption in this state without too much effort…


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