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MANAGEMENT UPDATE.

CONTRACT OVERSIGHT ISSUES IN LOUISIANA

State and local agencies depend on contractors to help them deliver a wide range of government services. But we’ve been surprised to see that many states have limited oversight of the way contractors deliver (or don’t) on their promises.  That’s an important issue, as evidenced by a November 15, 2023 audit of state contracting in Louisiana, which found that agency evaluations and assessments of contract performance were lacking.


The Office of State Procurement, which oversees most contracting in Louisiana, told auditors that agency evaluations of vendor performance “are usually vague, and only indicate whether vendor performance is satisfactory or unsatisfactory, and are not typically used in decision making.”



One problem uncovered by the audit is that state law requires agencies to evaluate vendors at the close of a contract. But that’s like trying to put a dog on a leash after it’s already run into the street. As the audit states, best practices strongly recommend assessments that occur while a contract is in progress and problems can be fixed in a timely way. 


Beyond the issue of timing, the audit found that the evaluation process lacks many details including some that are required by state law, including complications encountered during the contract, a list of deliverables and whether they were completed in a satisfactory manner, and an assessment of the usefulness of contract deliverables.


Tom Ketterer, director of the Office of State Procurement, agreed with the majority of the audit’s findings, noting that his office had developed a new evaluation form in February 2020 to better align with statutory requirements, but it had not mandated its use. He intends to start educating agencies and enforcing use of the new form now.


Putting more focus on contract performance – both during the contract and after it ends – makes a lot of sense given the large amounts of money that go into state contracting. In Louisiana, between 2016 and 2022, the Office of Procurement was responsible for the review and approval of 440,783 contracts that totaled $44.6 billion, with another $3.3 billion spent by agencies that have delegated purchase authority. A better than vague report on how contracts functioned would be helpful not only to other state agencies that are contemplating a contract, but for local governments and other states that may potentially be using the same vendors.


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