State Audit Reveals Billions in no-bid Contracts
State Auditor Elaine Howle highlighted several projects in a new report released last week that urges California’s government to be more cautious when awarding high-value contracts without seeking competitive bids first. According to the report, the state spent $44 billion on noncompetitive contracts worth about $1 million or more between 2011 and 2016. State rules do allow departments to award contracts without bidding in emergencies and under other special circumstances, but the report clearly shows that several contracts were awarded inappropriately without bids. The report states,
The sheer magnitude of the value of the state’s noncompetitive contracts during this period emphasizes the importance of ensuring that the state provides adequate oversight of agencies’ contracting practices.
The Department of General Services and the Department of Technology are the state departments in charge of monitoring spending and they definitely showed signs of weak oversight. The audit shows that the departments missed opportunities to challenge requests for noncompetitive contracts, failed to ensure that contract databases have accurate information, and rarely disciplined other government agencies for misusing noncompetitive contracts. For example, that the California High-Speed Rail Authority extended a $3 million contract 17 days before its existing contract was scheduled to expire, but the High-Speed Rail didn’t describe why the vendor it chose had unique services that merited a noncompetitive contract. Another example comes from the Department of Motor Vehicles, which extended a $75.5 million contract without getting bids on top of another $62.8 million contract for work on the state’s driver’s license production system. Hopefully, the government can fix these issues and ensure that state departments get competitive bids for contracts rather than just awarding them to vendors that may not be the most cost effective.