State lawmakers endorsed legislation Wednesday that would require that approved, noncompetitive government bids worth more than $1 million are reported to them.
The new requirement proposed in AB 2157 comes after the state auditor last year found that the state Department of General Services (DGS) and the California Department of Technology (CDT) had failed to adequately oversee billions of dollars in noncompetitive state contracts.
Among the auditor’s recommendations: DGS should submit an annual report to the Legislature that details noncompetitive bids, which are allowed under state law but only under certain circumstances.
“This will result in better oversight of the program and hopefully a better legislative viewpoint into what’s going on over there with the whole contracting process,” the bill author, Assemblyman Jay Obernolte, R-Hesperia, told his colleagues on the Assembly Accountability and Administrative Review Committee.
In most cases, state agencies solicit bids from private entities and individuals, with oversight from DGS and CDT. But exemptions in state law allow the state to award very large contracts without competition in certain circumstances, such as in emergencies or when a certain vendor’s goods or services are the only ones that meet the state’s needs.
The 2017 audit found that state agencies “habitually overuse” noncompetitive contracts and bypass the bid process without any justification or proof of reasonable vendor prices. In doing so, DGS and CDT potentially put the “state at risk of not receiving the best value,” according to the report.
Obernolte’s bill would require DGS to submit annual reports until 2023 to the Legislature, an effort to ensure the state is abiding to its competitive-bid standards. The reports, which would also be made public, would disclose the contracting agency, the value of the contract, and whether the contract is an amendment to an existing contract or a new one.
Assemblyman Tom Lackey, R-Palmdale, a past critic of noncompetitive bids, said the reporting would encourage government to do its best with taxpayer dollars.
“I think it’s human nature, and I think it’s no different in the business world that when people are watching we simply perform at our best,” Lackey said.
DGS posts all contract information online at its searchable California eProcurement Portals. It also recently launched a no-contract bid dashboard on its website, which details information about contracts worth more than $1 million, including listings by each state entity, and a summary of no-bid contracts over time, according to a committee analysis of the bill.
Obernolte’s bill, however, would require DGS to go a step further and detail the mechanisms it employed during the previous year to enforce compliance with noncompetitive procurement laws and policies. No one from the administration spoke against the bill.
Lawmakers approved the measure by a 5-0 vote. It now goes to the Assembly Appropriations Committee. The committee also approved the following bills:
— AB 2198, also by Obernolte, which would require the state to disclose data about special funds on its Financial Information System for California's (FI$Cal) public transparency website. Currently, the public can find information about the general fund and federal fund expenditures.
— AB 2543, by Assemblywoman Susan Talamantes Eggman, D-Stockton, that directs state and agencies and departments to post information on their website whenever there is a change in the cost of schedule of large infrastructure projects.
