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The state of the State
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State contracts and By JENNIFER HALPERIN The habit of those in power rewarding friends with public business is probably as old as any form of government itself. But it's a subject that continually raises ire among people who get tired of the connection. Renewed attention to this phenomenon was sparked about a year ago, when two newspapers documented several cases of what's come to be known as "pinstripe patronage." The term refers to the tradeoff between those who give and those who receive campaign contributions — often via no-bid contracts for state services. Many people who contribute money to public officials' campaigns have been awarded contracts to perform a range of services for the state. It's been estimated that the state paid out as much as $384 million in no-bid contracts in a year. Along the same line, buildings owned by campaign contributors often are rented out for taxpayer-funded state offices. In the wake of the flood of publicity regarding these controversial connections, a panel was convened to come up with proposals to reform the state's current policy on these business decisions. Chaired by Auditor General William G. Holland, the Blue Ribbon Committee on the State Procurement Code submitted its final report and recommendations to the General Assembly in October. These proposals are expected to be addressed in the spring legislative session, since they weren't voted upon (as many had hoped they would be) last fall. But if people were optimistically waiting for the panel to come up with stinging suggestions to end the cycle that turns money paid out as campaign contributions into money taken in via state contracts or rent, they may be disappointed. The main problem with implementing severe reforms in the way the state purchases services, aside from getting such rules through the state legislature, is that they could run smack into the wall of enthusiasm that has sprung up in favor of "reinventing govemment"-type concepts. For instance, if the state were required to put out to bid every single state consulting contract, no matter how small a financial amount was involved, an untold number of employees likely would have to be hired to work full time to enforce the regulation. Among the last things voters want to see these days are: 1) governmental actions delayed or made more expensive by mazes of rules, and 2) multitudes of public employees paid to shuffle through reams of regulations and specifications. In any event, the bipartisan panel appointed to come up with new rules and regs submitted its unanimously approved final report after seven months, 12 meetings and 40 witnesses. Among the panel's 82 recommendations: • Prohibit former state employees involved in any aspect of purchasing from doing similar business with the state agency formerly employing them for a year after leaving their jobs. • Create three more categories of goods to which the state should give preference: Vehicles powered by ethanol produced from corn or biodiesel fuels produced from soybeans; plastics produced from corn by-products, and Illinois-raised agricultural products. There's potential for a little tension here between the desire to sustain Illinois farm-related jobs and the possibility these products would carry higher price tags than their counterparts, but efforts to sustain jobs would seem to be politically defensible. • Secure competitive sealed bids for services, equipment and commodities above $10,000, professional and artistic services (such as legal services) above $25,000, and for construction work over $25,000. Increase these thresholds each July 1 to reflect inflation. • Tighten the process for awarding leases except for those leases that are for 8/January 1994/Illinois Issues less than a year and not subject to renewal, for space less than 10,000 square feet, for space to be rented for less than $100,000 annually, or for specialized space available at only one location. State leases are exempt from competitive bidding requirements now. (But who is to say what a specialized space is? Some fear space could be described so narrowly that only an intended and preknown space would fit the specifications.) One perceivable problem with the panel's recommendations, pointed out by the State Journal-Register of Springfield, is that about 60 percent of the services contracts and 80 percent of the current building leases awarded would remain exempt from bidding requirements. The big-money contracts would be covered, though that still leaves the potential for thousands — even millions — of dollars paid out without being put to bid. This revelation prompted some members of the panel to rethink the recommended thresholds in the procurement report, which they said may be lowered before being put to a vote in the General Assembly. But one can't help wondering why, during seven months and 12 meetings, no one found out just how far the recommendations being decided upon actually would go if passed into law. Even the recommended thresholds — not to mention lower ones — could well be challenged with the argument that more money would be spent adhering to these extra requirements than is worthwhile. This line of thinking has spawned the popular "we'll be spending dollars to save pennies" refrain heard so often these days — especially from folks in the state's Central Management Services department — in response to questions about suggested reforms. And it is a legitimate concern that the state not get bogged down spending large amounts of money by putting even the smallest of contracts and leases out to bid. In some cases, though, it would do state officials well to remember it's not just a matter of saving pennies that's at issue. Late last year, for example, it was reported that in east-central Illinois alone, more than $1.5 million was paid in rent in a year to political campaign contributors who hold state leases. So it's the very appearance of propriety in the public's eye that is at stake as well.
January 1994/Illinois Issues/9 |
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