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What we don’t know about state contracts

Several years ago, we started work on a project about state contracts. The idea was to utilize the contract databases that the ten biggest states were putting up on much-heralded transparency websites to analyze trends in state contracts.

This turned out to be a highly complex and frustrating task. We never were able to finish. Contract data was entered inconsistently. Contract information lacked timeliness and was often incomplete. Many data fields were blank.

Our effort to analyze the information from databases of state contracts ended in early 2014. We’re sure there have been improvements since then and we’d love to try again. But a June 2017 audit by the California State Auditor provides a warning that we would run into similar obstacles today. Looking at the Department of General Services and the California Department of Technology, the audit found countless problems.

In a letter to the Governor and legislative leaders, auditor Elaine Howle wrote:  “General services did not ensure the integrity of the data in the database it created to track the State’s contracts. As a result of its lack of oversight, the database contained numerous errors, essentially rendering it ineffective for its intended purpose.”

Yesterday, we talked with Howle about the audit. She knows there’s enormous potential to learn more about the state’s contracting decisions by analyzing state data. “But if the data going in is bad, no matter how you analyze it, it’s going to give you bad information.”

Poor data quality is a constant headache for her office and just about every other state audit and evaluation office, as we chronicled in the Causes, Costs and Consequences of Bad Government Data, our July 2015 cover story in Governing magazine.  The California State Auditor’s office has focused on this issue to such an extent that every two years, it releases a data reliability report, which summarizes the data problems it has found in multiple audits.

In talking with Howle, several issues stood out relating to the contract database audit. The audit found that agencies were often entering data into the system incorrectly and inconsistently. Multiple contracts and contract amendments were missing from the database. Contracts were also identified as competitively bid, when they weren’t. For example, the Department of Motor Vehicles listed a $34 million contract as competitively bid. When auditors looked more closely, only the original $3 million contract was competitively bid. The original contract was subsequently amended “nine times, without competition,” increasing its value to $34 million.

The audit covered database issues that occurred between July 2011 and December 2015. In January 2016, the General Services department began transitioning to an expensive new database, but Howle is troubled that many of the same data quality problems remain.  “We’re very worried about the problems continuing with the new system,” she told us.

Currently, agency personnel still lack training that would help improve the data inputting process. Information is still inconsistent. In addition, the new database, like the old one, lacks comprehensible easy to access information on contract amendments.

The conclusion of the audit and its recommendations centered on the need for far more oversight of data quality by both General Services and the Department of Technology, greater attention to the analysis of the data, and heightened enforcement of rules to prevent unnecessary use of non-competitive contracts.


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