Undoing some lousy “reforms”
Tuesday, Feb 2, 2016 - Posted by Rich Miller
* There is no question that the state’s procurement reforms were a complete overreaction to Rod Blagojevich’s reign of error. Here’s just one problem that was outlined in a 2012 Crain’s article…
The biggest concern, particularly for the construction industry, is that reforms meant to curb influence-peddling effectively have turned into gag orders for state employees, who ultimately could lose their jobs if they don’t properly report discussions with contractors, even if it’s just to clarify policy or processes. Contractors, in turn, fear they will be barred from bidding if they bring a good idea to the state.
“I think there’s broad agreement there were unintended consequences, primarily a chilling of useful communication that in the long run would undermine the state’s best interests,” says Illinois Sen. Don Harmon, D-Oak Park, co-chair of the Senate Procurement Committee.
Transportation projects often are too complicated and fast-moving to be completely spelled out in a document. Illinois Transportation Secretary Ann Schneider recently issued a memo clarifying rules for vendors to hold discussions with state employees.
The construction industry “appreciates the guidelines, but it’s still a huge problem,” says Jennifer Krug McNaughton, vice president of Lemont-based K-5 Construction Corp. and chairman of the Illinois Road and Transportation Builders Association. “You need to clear it up legislatively.”
It’s a giant mess. Thanks, reformers!
Let this be a lesson: Just because something is called “reform” doesn’t mean the idea is any good or will actually work.
* Gov. Bruce Rauner claims that it takes 9-12 months to complete an RFP process in Illinois. Crazy. And it’s even crazier when you find out the process took only 2-3 months before that “reform” was enacted into law.
So, he outlined a list of changes he wants made today…
Requests for Qualification (RFQ)
• Allows state agencies to create a pre-qualified pool of vendors in different categories of supplies and services, speeding up the process by which the State can receive price quotes and proposals.
Cooperative Purchasing
• Allows the State to “piggyback” on the procurements of other states, governmental entities, and purchasing consortiums in order to leverage this large buying power, while at the same time speeding up the procurement process.
Procurement Exemptions
• Allows an exemption from the procurement code for personal services contracts, public-private
agreements governed by other State statutes, domestic and international trade shows and
exhibitions, tollway improvements when moving railroads and utilities.
• Allows construction agencies to enter into emergency procurements for greater than 90-days in
order to streamline the process of repairing state buildings and structures.
Higher Education Exemptions
• Exempts many procurements that higher education institutions enter into from the
procurement code to increase speed and give purchasing flexibility back to universities.
Energy Conservation Program
• Permits the State to use the Energy Performance Contracting model authorized by statute to enact capital upgrades designed to reduce operating costs and improve the functionality of existing state-owned buildings in lieu of adequate capital funds.
Buy Illinois
• Creates a preference for buying supplies and services from Illinois businesses.
Vendor Support
• Allows vendors to fix issues with their registrations with the State and creates a cure period for
these mistakes.
• Adds more clarity and guidance to vendors on what constitutes acceptable communication and
the prohibited bidder process.
• Streamlines the annual certification requirements for multi-year contracts, reducing
bureaucratic paperwork.
• Streamlines the disclosure process for vendors when resolving various issues.
• Streamlines the specifications procedures for procurements by allowing the agency making the procurement the lead on these issues.
• Makes the Illinois Procurement Bulletin more navigable for vendors by requiring bulletins be produced by each agency requiring the procurement.
• Removes the confusing procurement communications reporting requirements for vendors. Streamline the Procurement Reporting Structure
Proposed Structure Supports more Streamlined, Consistent and Efficient Procurement
Revised CPO Structure
• The bill modifies the current Chief Procurement Officer (CPO) structure. Under the current
system, there are four CPOs (General Services, Transportation, Capital Development, Higher Education). The proposed language would place procurement authority in one CPO (CMS Director for General Supplies and Services) with statutory delegations of procurement authority to four Designated Procurement Officers (DPO) (Transportation, Tollway, Capital Development, and Higher Education).
• Returns the Procurement Policy Board to an advisory body and focuses their mission on creating policies and rules consistent with the Procurement Code.
• Streamlines the rulemaking process to eliminate confusion for vendors and businesses by working within one set of rules.
Auditor General Audit
• Requires an audit of procurement every two years, while also allowing the Auditor General to perform surprise audits on the agencies to ensure laws and statutes are being followed.
The problem with undoing reforms, even lousy reforms, is that everybody is gonna think you’ve got a hinky angle. For instance, the governor has been blasting universities for their big-spending ways, but now he wants to let them out of procurement procedures? What up with that?
Well, actually, the universities tried like heck without success to keep themselves out of the procurement process reforms. Many of the problems they predicted turned out to be true.
* I would’ve preferred a bipartisan process on this. The governor’s press conference to unveil his reforms today featured two three GOP legislators, Dan Brady, Pam Althoff and Chapin Rose.
Hopefully, they can work with the other side of the aisle on this because Rauner isn’t wrong. The Democratic majority didn’t allow Gov. Quinn to change the process when he tried a few years back, but maybe something can be done now because something most definitely should be done.
The full legislation is here. Hopefully, our more knowledgeable commenters can sift through the deets and let us know what they think.
- Anon221 - Tuesday, Feb 2, 16 @ 1:34 pm:
Rich- Chapin Rose was there as well- most of the time directly behind the Governor (no snark, that’s where he was standing after his statements).
- Anonymous - Tuesday, Feb 2, 16 @ 1:37 pm:
No doubt there are some good things here, but there are questionable items too. Instead of having an independent procurement officer responsible for making sure politics isn’t brought into the process, the head of CMS would once again be in charge of procurement. Also, the proposal undoes many of the transparency requirements and pretty much eliminates the Procurement Policy Board, the watchdog group that combs over procurements.
- Captain Illini - Tuesday, Feb 2, 16 @ 1:42 pm:
In this particular instance, the Governor can’t go far enough to undo what I believe was Senate Bill 51…and take a hard look at all the consolidation into CMS which took place under the Blagosphere, let alone the absconding of property from agencies to CMS - cars, buildings then renting them back, ugh.
I agree that this is a bipartisan area of agreement, though around the edges there may be disagreement. In the end it’s getting rid of reams of paperwork and undoing a pointless set of procedures in hopes of lessening any criminal activity like bid rigging or collusion, which regardless of a law needs to be investigated where there is suspicion of fraud.
Give him this win - together.
- Not Rich - Tuesday, Feb 2, 16 @ 1:43 pm:
It will be interesting to see how this plays out in the legislature..remember the Blago trial played out his close ties to a couple of road contractors, and helped spur SB 51 which created this ethical boondoggle
- wordslinger - Tuesday, Feb 2, 16 @ 1:44 pm:
–Let this be a lesson: Just because something is called “reform” doesn’t mean the idea is any good or will actually work.–
What about “structural reforms?”
Can they be accepted as chock-fulla-goodness, and repeatedly endlessly as justification for anything, without any coherent rationale?
- K-Bear - Tuesday, Feb 2, 16 @ 1:46 pm:
The GA was right in blocking Quinn, because it was full of bad ideas developed by his Chief Info Officer. However, this needs to be done. It was and is a complete Blago overreact.
- Excessively Rabid - Tuesday, Feb 2, 16 @ 1:47 pm:
==Just because something is called “reform” doesn’t mean the idea is any good or will actually work. ==
See: “Reform,” pension.
While we’re at it, how about getting rid of the ridiculous online ethics “training?”
- Annonin' - Tuesday, Feb 2, 16 @ 1:48 pm:
The reforms are not as bad as the loopholes being asked by The SuperStars. The reforms only impact the lazy and slippery…..The SuperStars need to go back to work on their “early release” scheme at DOC…opps forgot now the GOPies call it reform
- Rich Miller fan - Tuesday, Feb 2, 16 @ 1:49 pm:
“Allows an exemption from the procurement code for personal services contracts” sounds like an open door to jobs for cronies. Oh, Rauner took care of that earlier this year with no-bid contracts to buddies.
- Jocko - Tuesday, Feb 2, 16 @ 1:50 pm:
Since he’s out there pushing procurement reforms and thinking about a CPS takeover…am I to assume that Bruce’s constitutionally required budget is prepared and ready for submission?
- Big Muddy - Tuesday, Feb 2, 16 @ 1:51 pm:
Who will be the Auditor General in two years when this takes effect?
/s
- Lincoln Lad - Tuesday, Feb 2, 16 @ 1:55 pm:
Considering SB51 was MJM’s decision and desire, what chance does this really have? Pretty sure EVERY member of the GA knows that the reforms under 51 have always been highly problematic and ineffective, will anyone stand up to support this reform? Or will MJM just shut it down?
- Earnest - Tuesday, Feb 2, 16 @ 2:01 pm:
In the context of a functional state budget, this is a great proposal to work on changing a costly and inefficient process. In the context of a planned strategy to destroy the weak then work with the strongest, it seems a distraction.
- RNUG - Tuesday, Feb 2, 16 @ 2:03 pm:
I agree undoing the reforms is needed. They went too far. A lot of what I considered normal interaction with vendors was forbidden uner the reforms, making it really hard to get anything done in a easy and timely manner.
Most of these changes sound reasonable but the personal services exemption is just asking for trouble.
- blue dog dem - Tuesday, Feb 2, 16 @ 2:15 pm:
I have many questions. As an illinois manufacturer the “Buy Illinois” preference intrigues me. I need to see details. Since the vast majority of our businessis with out of state govt agencies, I would hate to see retalitory practices in neighboring states. Although I believe in shopping at home, unintended consequences could surface.
- jdcolombo - Tuesday, Feb 2, 16 @ 2:15 pm:
All I can add is that I know from personal experience that the procurement process is a nightmare for the U of I. Taking the Universities out of the procurement laws as they exist would save many tens of millions of dollars. Rauner is right on this one; do this in a bipartisan agreement, then look for other regulatory simplification that would improve the business climate. These are doable things.
- NixonHead - Tuesday, Feb 2, 16 @ 2:21 pm:
Surprised that the free-market-minded Gov Rauner would support the “Buy Illinois” idea. Sounds like something Quinn would have done.
- Moe Berg - Tuesday, Feb 2, 16 @ 2:27 pm:
Dems can help make these changes and then get blasted in the fall by the various Rauner PACs and Super PACs for going soft on ethics.
- TD - Tuesday, Feb 2, 16 @ 2:28 pm:
The Procurement Code does need reform but let’s be clear. Part of the slowdown/problems are because some of the previous CPOs and their shops took an adversarial stance towards purchasing agencies and questioned the need for purchases. Procurement communications reporting is terrible, needs to go. Streamlining of rules sounds to me like Gov wanting to cut the GA and JCAR out of rulemaking. Do we really want more consolidation to CMS, though? Also, prohibited bidder section of the Code was revised since 2011 to limit the restriction but the wording is too vague. A lot of the slowdown also comes from the financial disclosure requirements and forms that vendors must fill out. They are often confused and need assistance and the CPOs don’t typically have enough staff to assist. Also, get rid of PCMs - pointless. I think a big problem with SB51 is that it wasn’t clear if the CPOs were regulators limited to an ethics oversight role or if they should be more actively involved. That should be clarified.
- what the what - Tuesday, Feb 2, 16 @ 2:35 pm:
==- Lincoln Lad - Tuesday, Feb 2, 16 @ 1:55 pm:
Considering SB51 was MJM’s decision and desire, what chance does this really have? Pretty sure EVERY member of the GA knows that the reforms under 51 have always been highly problematic and ineffective, will anyone stand up to support this reform? Or will MJM just shut it down? ==
The procurement reforms in SB51 were the product of Quinn’s reform commission, not Madigan.
- Handle Bar Mustache - Tuesday, Feb 2, 16 @ 2:39 pm:
This is a lot of change, with sweeping new purchasing power back to the exec branch and universities. The majority of ILGA members distrust the executive. Hard to imagine how this will fly without a radical shift in the trust dynamic.
- AC - Tuesday, Feb 2, 16 @ 2:42 pm:
The Rauner team is getting better at hiding union busting inside their legislation, I knew they could DOIT! /s
Aside from that, it’s a much needed improvement, as the current process makes it more difficult for agencies to get the information they need to make purchases.
- Bogey Golfer - Tuesday, Feb 2, 16 @ 2:56 pm:
It is not uncommon for an IDOT Engineering Agreement to take more than nine months to be processed. You also have minimal opportunities to discuss your firm and its growth or new capabilities with anyone at IDOT. SB51 was a knee-jerk reaction and now is the time for the pendulum to swing to the middle.
- crazybleedingheart - Tuesday, Feb 2, 16 @ 2:59 pm:
Enjoy your “strategic mergers,” state vendors!
- not so simple - Tuesday, Feb 2, 16 @ 2:59 pm:
It is a nightmare for many reasons. However, apart from this legislation, what has this administration done to address the problem? Reverse auctions have been on the books since 2011, but never implemented. Other states have seen significant savings through this procedure and it could expand the pool of bidders. Instead of filling out an RFP response and hoping you win, with a reverse auction, qualified bidders can see the bids of other respondents and change their price accordingly. The transparency is beautiful and when you lose, you know why immediately, rather than wondering who the other bidder greased to get selected. That is the sort of transformational change many have been hoping for, yet now all we have is legislation.
- Ghost - Tuesday, Feb 2, 16 @ 3:05 pm:
i have 2 more!
1. if an item can be purchased from a retailer for less then a bid, then the itme can be purchased frm any retailer.
we overpay frmlots of small items because of the procurment process. like paying 100 for a 25 book etc
2. reverse auctions. this saves a lot of states money. in essence you have the bidders cme in and they keep bidding down from each other until no one wants to go any lower. why keep bidders from dropping prices? let them all know each others bids and consider truing to come in under. Huge savings.
- ToughGuy - Tuesday, Feb 2, 16 @ 3:18 pm:
Consolidates purchasing power back under the Director of CMS and negates most of the authority of the Procurement Policy Board and the Ethics Commission. Really puts the fox back in charge of the hen house.
While the vendor communication requirement was burdensome and somewhat over reaching, its intent was to prohibit some vendors from basically writing the specifications or actually telling the agency “here’s what you really need.”
Procurements have always been subject to review by the Auditor General’s office as part of their auditing requirements. I’m assuming the greater role the Governor is wanting the OAG to play now will increase the staff and/or provide additional funding for outside auditors to come in.
This legislation swings the pendulum way back to where we were pre-Blag.
- Arthur Andersen - Tuesday, Feb 2, 16 @ 3:20 pm:
Placing fiduciary liability on the top purchasing officials is a strong statement, but if they can be overridden by the head of CMS, that position should be held to the same standard. I’m also not convinced that CMS needs a third assistant director solely to oversee procurement.
I’m still digesting the details, but one that is tripping me up is allowing Unis to procure bonds and lawyers without bids when the Code still apparently maintains that requirement for the rest of State government…
- Stuff Happens - Tuesday, Feb 2, 16 @ 3:28 pm:
Here’s my favorite… Need something from a vendor, but it has to go out for bid because of the amount? Is it urgent?
Just ask one of the State’s approved vendors to get it for you and mark it up by 30%. Now it went through an approved vendor so there’s no delay or bidding process.
Of course, it costs the taxpayers 30% more…
- Blue dog dem - Tuesday, Feb 2, 16 @ 3:35 pm:
AA. Amen .
- Paul - Tuesday, Feb 2, 16 @ 3:48 pm:
Legislating via media hasn’t worked for the Gov in the past and I don’t think it will work now. As was pointed out, this was not a bi-partisan press conference which it should have been. Again, another distraction tactic to the real problem - which is the budget. This could be part of the budget implementation bill for the budget.
- Lincoln Lad - Tuesday, Feb 2, 16 @ 4:04 pm:
I don’t believe the reform commission would recognize the procurement law as enacted. It was the Speaker’s team and his former staff working for Quinn that created SB51. The procurement professionals were kept out of it, and were barely consulted. That is fact.
- Skeptic - Tuesday, Feb 2, 16 @ 4:14 pm:
“Surprised that the free-market-minded Gov Rauner would support the “Buy Illinois” idea” As long as it was made with non-Union labor, right? /snark
But seriously, as much as I dislike Rauner, there’s an element of a good idea in there somewhere.
- Been There, Done That - Tuesday, Feb 2, 16 @ 4:16 pm:
I’ve followed procurement since the old State Purchasing Act. The reforms of SB 51 were burdensome. I don’t see an effort with a scalpel here to streamline burdensome aspects of the process. I see an overhaul to make it way too “easy” (relying on audits after the fact doesn’t prevent the problems). I agree with some of TD’s observations as to how the process actually turned out. I’m skeptical how this will turn out in its present form. Some elements of it would be useful. Better would be eliminating procurement preferences. P & A Service contracts have been the source of abuse forever, however. I agree with the sentiment that something labeled as a reform is too often just counterproductive. We’ll see how this effort turns out.
- thoughts matter - Tuesday, Feb 2, 16 @ 5:23 pm:
I’m guessing that some of Gov Rauners’ suggestions are good, others not. My problem is that I don’t trust him to tell me the truth about anything at this point. I’m not sure the legislators do either. He may have damaged his credibility beyond all return.
- Trainwreck - Tuesday, Feb 2, 16 @ 5:51 pm:
I’ve been thinking for a long time that someone from higher up in state government should follow contract and grant paperwork from origination until execution. Ideally in a way that all of the people in the process don’t know it’s being tracked. In my agency, it takes a ridiculous amount of time to even complete a $1000 purchase or contract and our procedure booklet for procurement is 10 years out of date so there are no training materials to help new employees figure out time consuming and convoluted processes. Same with paying vendors.
- sal-says - Tuesday, Feb 2, 16 @ 5:55 pm:
== * Gov. Bruce Rauner claims that it takes 9-12 months to complete an RFP process in Illinois. Crazy. And it’s even crazier when you find out the process took only 2-3 months before that “reform” was enacted into law. ==
Probably true, but as I recall, RFP’s took longer than 2-3 months BB (Before Blago).
== Cooperative Purchasing ==
As long as there’s some folks validating the savings….or not.
== • Allows an exemption from the procurement code for personal services contracts ==
You betcha. Looks like something to drool over in this administration. This opens a big barn door. Surprise?
== • The bill modifies the current Chief Procurement Officer (CPO) structure. Under the current system, there are four CPOs (General Services, Transportation, Capital Development, Higher Education). The proposed language would place procurement authority in one CPO (CMS Director for General Supplies and Services) with statutory delegations of procurement authority to four Designated Procurement Officers (DPO) (Transportation, Tollway, Capital Development, and Higher Education). ==
Yeah. THAT looks to cut bureaucracy!
== …. is that everybody is gonna think you’ve got a hinky angle. ==
Keep in mind; this is raunner we’re talking about.
- Power House Prowler - Tuesday, Feb 2, 16 @ 6:44 pm:
The current procurement process cost tax payers a lot of money.
- Eric Zorn - Tuesday, Feb 2, 16 @ 8:02 pm:
“Just because something is called ‘reform’ doesn’t mean the idea is any good or will actually work.”
Just so. Which I why I’ve declared war on any use of the word in ostensibly neutral contexts, such as news stories or even-handed analysis pieces. One person’s reform is often another person’s legislative wrecking ball.
- DuPage Dave - Tuesday, Feb 2, 16 @ 9:22 pm:
I have 25 years of state experience and I can affirm that RFPs and other solicitations have taken varying amounts of time under different governors. But the 9 to 12 months range cited by Rauner is extreme even today.
So reform the last guy’s reforms if it will help. But sorry I think there’s a lot of hinky in this administration. Making hiring your pals on personal services contracts easier, well, how could that possibly be abused?
- Former State Employee - Tuesday, Feb 2, 16 @ 9:24 pm:
I have been at CMS and believe me you we don’t want a politically appointed Directot, under any Governor, having less scrutiny.
- Anon - Wednesday, Feb 3, 16 @ 12:18 am:
Buy Illinois? Dear God man, when the state hasn’t paid its bills in 7 months, social service agencies closing, and Mr. Rauner not paying Springpatch’s utility bills…. who would want to have the State as an account?
- Say no to big government - Wednesday, Feb 3, 16 @ 1:32 pm:
Part of the reason RFPs take as long as they do is because of the people involved. Too many people involved. We have an attorney assigned to us who is notoriously slow. Our SPO is notoriously slow.