Why don’t state and local governments keep better records on contractor performance?
We’ve puzzled over the answer to this question in Governing, where we observed in a January 2016 Smart Management column that many states and local governments “fail to consider a company’s past performance when contracting with them.”
The fact that contractor performance isn’t reported – even when required – was shockingly displayed in a Minnesota legislative audit of professional/technical contract spending that was released yesterday. The audit looked at contracting in the Pollution Control Agency and the Departments of Corrections, Education, Human Services and Transportation. While many of the audit’s conclusions were positive, it did find a big flaw in department inattention to reporting requirements. In Minnesota, departments and agencies are required by statute to file a report with the Department of Administration on contractor performance when contract awards are greater than $25,000.
Based on contracts tested, the audit found that the Pollution Control Agency failed to submit the required contractor performance reports 100 percent of the time; the Department of Transportation failed 86 percent of the time and education had an 83 percent miss in submitting the required reports. The omission rate for both corrections and human services was 75 percent.
Such high rates of non-compliance suggests not only that departments are lax in following the law, but that the Department of Administration doesn’t much care.
“Our testing indicated that none of the agencies had sufficient internal controls to ensure compliance with the statutory reporting requirements,” the audit says. “However, given the widespread noncompliance, we also question whether the Department of Administration is taking a strong enough leadership role as the state’s central procurement agency.”