The state of the State

Selling the reform of state purchasing

By NORA NEWMAN JURGENS

IMAGINE that you work on an Illinois Department of Transportation road crew in Dixon. Instead of running down to your local parts store to buy a spark plug, you have to put in a requisition through the Department of Central Management Services regional office in Elgin, costing the state a day or so in "down" time, as well as extra dollars.

Then imagine you are a purchasing agent for Northern Illinois University who has learned all the quirks of the system and has worked out a cooperative relationship with the other universities for purchasing supplies. But if reformers have their way, you may lose that flexibility as they work on centralizing the state's procurement system.

These are but two of the bureaucratic dilemmas encountered as the Subcommittee on Purchasing Laws explores ways to rewrite the state's procurement statutes. Established in 1984 by the Legislative Audit Commission, a body used to wending its way through many state mazes, the subcommittee is headed by commission chairman Rep. James Keane (D-28, Chicago). Other members are Sen. Aldo A. DeAngelis (R-40, Olympia Fields), Sen. Vince Demuzio (D-49, Carlinville), Rep. Dwight P. Friedrich (R-109, Centralia) and Rep. Ted E. Leverenz (D-51, Maywood). Auditor General Robert G. Cronson suggested that the General Assembly examine the issue when several of his audits found that the laws governing purchasing are "duplicative, vague, incomplete and fragmented," appearing in more than 100 locations in the Illinois Revised Statutes. A rewrite would affect 20 to 30 percent of state spending, including capital construction, Keane estimates. That adds up to between $2 billion and $3 billion this fiscal year.

As Keane predicted, there has been a lot of "yelling and screaming" during the last year at subcommittee hearings in both Springfield and Chicago. In its attempt to simplify and clarify the rules and regulations, the subcommittee has drafted a model code based on the Model Procurement Code of the American Bar Association, recommendations from the Council of State Governments and testimony from representatives of all three branches of state government and the providers of supplies and services.

The draft code would create a new system for state procurement, clarifying the language and lines of authority and centralizing the system within the Department of Central Management Services (CMS), the state's biggest buyer. However, there are differences of opinion over the design of the system.

The constitutional officers and the universities are not happy about giving up any more of their purchasing authority to CMS. Architects and engineers oppose making price a part of the selection process for their services, saying professional competence should be the only criteria and that the price should be negotiated separately.

The Department of Transportation and the Capital Development Board want to retain control of capital construction, which at $1.3 billion in fiscal year 1986 represents almost half of the purchases affected by the code. And reflecting the continuing battle between Cronson and the Supreme Court, Roy Gulley, recently retired head of the Administrative Office of Illinois Courts, told the subcommittee in January 1985 that "centralized purchasing power vested in one branch of government threatens the independence and autonomy" of the three branches.

An even more controversial aspect of the draft code is its repeal of all statutes giving preferential treatment in the procurement process to specific groups or products. The subcommittee will review the current preferences to determine which to keep, Keane said.

At the January 7 hearing in Springfield, representatives from labor unions pleaded their case for retaining the state's prevailing wage law, saying that the state should not use tax dollars to undercut wage rates. A spokeswoman for nonprofit agencies that employ the handicapped pointed out that preferential treatment saves the state money when handicapped workers become less dependent on state aid. And builders and contractors applauded the dropping of preferences, particularly the requirement that 10 percent of state contracts go to minority- and female-owned businesses. Listening to the discussion on preferences, it became evident that they are tools for social change in the much broader areas of structural unemployment and labor-management relations, and can even touch on the quality of education and race relations.

The minority and female preferences may prove to be the most political issue for the subcommittee. The Illinois Minority Vendors Association wants the preferences expanded and has started to line up support with the legislature's Black Caucus.

In total the draft code would repeal 17 acts dealing with purchasing as well as sections of the Civil Administrative Code, the State Finance Act, the Highway Code, the Code of Corrections and the Toll Highway Authority. To replace these, the code would establish one set of purchasing procedures and rules for all state executive agencies including higher education, as well as the legislative and judicial branches. It also covers items and services currently exempt: professional and artistic services, electronic data processing (EDP) equipment and services, telecommunications, duplicating equipment and leases of real property and concessions.

The code does separate the purchasing function from the rulemaking authority. It creates an independent Illinois Purchasing Rules Commision for the latter and sets up a chief procurement officer (CPO) within CMS as the state buyer. The CPO would be authorized to delegate procurement authority to the other state offices and agencies

The draft also sets up a Technology System Review Board to integrate and coordinate the state's EDP and telecommunications systems. The board would include the comptroller, the attorney general, the secretary of state, the treasurer, the directors of CMS and the Bureau of the Budget, the executive director of the Board of Higher Education and the director of the Administrative Office of the Illinois Courts. Wile it appears this reform of state purchasing is an attempt at further centralization through CMS, Keane and Cronson has believe the reform will simplify and clarify the rules and regulations. Cronson has found that many state departments ignore or circumvent current laws because they are so complex. Keane is most concerned that the subcommittee put together an "understandable" purchasing act. He is in no hurry to see it become law this year and he has considered the strategy of introducing sections of the act as they are ready.

The legislature historically has been reluctant to institute such major changes in the way the state does its business. The Civil Administrative Code, when originally introduced in 1915, represented sweeping changes, and a balky legislature refused to act on it until 1917. That was when the new governor, Frank O. Lowden, wanting to run for president as a great administrator, withheld all legislative patronage privileges until the bill was approved. It was on his desk by March, according to legislative historians.

Gov. James R. Thompson has taken a wait -and-see attitude toward the subcommittee proposal this election year. Reform of purchasing laws "doesn't have a lot of political pizazz," according to Keane, but Thompson might be interested in improving his image as a great administrator. Then again, Lowden din't become president.

4/February 1986/Illinois Issues