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Bill Seeks to Change Procurement Process; Businesses Want to Understand It

4 min read

Procurement laws are complicated, state Sen. Jimmy Hickey says, and he should know: He has helped rewrite them more than once.

“I mean it’s hard for me, and I’m an author of the bill.”

Hickey, R-Texarkana, has been working with Rep. Kim Hammer, R-Benton, and state Procurement Director Edward Armstrong to revise competitive state bidding. (See Disputed Contracts Place Procurement in Spotlight.)

He wants a clearer, more transparently fair process and more responsiveness to price considerations. “This legislative body is very interested in making the process more businesslike,” said. “The goal is a fair and independent process free from external influence, but without an undue administrative burden.”

Experts who help businesses navigate procurement procedures, like Mary Scott Nabers of Strategic Partnerships Inc. of Austin, Texas, say Hickey’s goal is good, but difficult. “We explain to clients that they must understand the process, and know that they’re selling into a political atmosphere,” said Nabers, a former leader of the Texas Railroad Commission. “Procurement should be above all politics, but you can’t escape the environment.”

This month Hickey and Hammer filed Senate Bill 521, which would require that pricing be weighted at a floor of 30 percent in granting all procurement contracts.

The bill would allow one type of state bid solicitation, the request for qualifications (RFQ) to create a lists of qualified vendors certified by the state to compete for technical work. The state would cull the responses down to a minimum of three vendors, and judge those by competitive bidding.

Hickey’s original bill put the minimum pricing element at 40 percent. “But in amending it we’re at 30 percent, which we think is sufficient to make pricing a real factor. But we have to be careful because if you put too much weight on price alone, that could become a determining factor against somebody who is close but might be more qualified.”

The legislation also touches on the evaluators the state uses to judge potential vendors, calling for hiring expert evaluators in some cases, and perhaps paying them through fees assessed on the competing businesses. “On contracts of $100 million or more, we’re going to say that evaluators should be experts, and that 60 percent of those should be from outside the state agency or government group handling the contracts,” Hickey said. The state procurement office has agreed to have at least five evaluators in future competitions, up from a minimum of three. “Two could be from the state agency, because those folks know what the state needs, but three would actually be from the outside.”

Gov. Asa Hutchinson said last week that he was watching the legislation. “Sen. Hickey has worked with our office of procurement at DF&A, and has accepted some changes. Discussions are ongoing, and I haven’t seen a final draft.”

Hickey said that he and Hammer met several times procurement officials, including Armstrong. “I’ve been impressed with OSP and Mr. Armstrong, and they’re bringing a lot of knowledge that helps us.”

He said he never predicts whether legislation will pass. “To any opposition, I’d say if you’ve got a legitimate reason, tell me what it is, and we’ll work on it. But don’t tell me you just don’t like it because pricing wasn’t there before. That’s not a legitimate reason to me.”

Hickey said his business experience has guided him through his work on procurement. “I was in banking for 25 years, and I understand red tape. I don’t like it, and want to avoid it. We want a fair and independent system, but I’m determined not to have one that takes a lot of extra time in a bogged-down process.”

Nabers, the Texas consultant on procurement, says that government contracting tends to be plodding. “This is a surprising thing to folks trying to do government business for the first time,” she said. “The culture is very slow and analytical, and so risk-averse you wouldn’t believe it.”

Nabers says some businesses trying to break in should consider partnering with a seasoned government contractor. “We also warn clients that contracts are different from what they’re accustomed to. For example, a contract may be for five years, but the business could be paid only so much for each year.”

The field is difficult to break into, Nabers said, but the upside can be huge. “Government contracting is probably the most challenging area to get started in. But if you do well, 50 states are waiting for you to replicate your efforts.”

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