We bet that no government function has as many essential conflicts in mission as procurement, which seeks to achieve the best deals possible while also ensuring quality of the products, timeliness of delivery, helping small businesses and minority businesses and more.
An April transparency report from the State Auditor’s office in New Mexico squarely targeted one of these conflicts.
Through a survey of its audited agencies, the auditor’s office looked at purchases and contracts above a $60,000 threshold to see how much was spent in-state and out-of-state in 2015 and 2016. Some areas had a livelier in-state contracting presence than others. For maintenance contracts, only 32 percent went to out-of-state companies. For social services, it was just 4 percent.
But the auditor found that for information technology contracts, 81 percent were going to out-of-state vendors. For some state buyers like the University of New Mexico Hospital, not a cent above the $60,000 threshold went to in-state vendors for IT.
There are many reasons to choose an out-of-state vendor. The most obvious is that the goods or services are not available in state. This is true in New Mexico for some specialized accounting or elections software and large Enterprise Resource Management systems.
But as auditor Tim Keller points out, contracting with New Mexico companies can increase jobs, tax revenues and future opportunities. He believes the state could do a way better job of tracking in-state vs. out of state spending.
One point particularly stood out in the report. In-state vendors may simply not be aware of the state contracting opportunities that exist.Ensuring that in-state vendors know about contract opportunities is key, as is helping to build in-state capacity.
The auditor’s analysis found that 44 percent of procurements in IT were sole source, meaning that they did not go through a competitive bidding process. Only 10 percent of these went to in-state vendors.
Even when contracts were competitively bid through a Request for Proposal (RFP) process, more than half had only one bidder. “While this may reflect errors in reporting, it may also indicate a lack of awareness of RFP opportunities, a lack of willing bidders, or the excessively narrow tailoring of RFPs so that only one company is truly eligible to respond,” the report explains.
