The Commission to Modernize State Procurement, created by Governor Larry Hogan in February and chaired by Lt. Governor Boyd Rutherford, has released its final Report including more than 200 pages and 57 recommendations for streamlining procurement efforts, expanding small and minority-owned business opportunities, promoting efficiencies through automation and technology upgrades, and removing redundant and unnecessary procurement processes. It is divided into five major sections:
- Enhancing the Procurement Process to Attract More Participation;
- Streamlining Architectural/Engineering Services Procurements;
- Expanding Small and Minority Business Opportunities;
- Developing Quality Procurement Personnel; and
- Updating Procurement Oversight Structure.
While it is not yet clear whether any legislation will come from the Commission’s recommendations, implementation of some recommendations has already begun. For one, the State has started by creating procurement.maryland.gov, which it calls “a singular procurement communications portal providing online access to Maryland procurement information” – checking Recommendation 1.6 off the list.
Recommendations of particular noteworthiness to local governments are highlighted below.
eMaryland Marketplace
Recommendation 1.7 centers around re-launching eMaryland Marketplace, the principal location for posting notices of State procurement opportunities and contract awards. The Department of Information Technology is in the process of re-launching eMaryland Marketplace to “provide a shared service for local governments,” as well as to improve its functionality, streamline processes for vendors, facilitate solicitation development, and improve transparency and accountability. In Recommendation 1.9, the Commission suggested that the State perform a cost-benefit analysis to determine whether to replace eMaryland Marketplace and FMIS, the State’s financial management information system. The Commission also suggested that the State procure a contract management system for use by all State agencies.
Cooperative Purchasing
The Commission addressed cooperative purchasing agreements in Recommendation 1.10. While finding that “when used correctly, … Cooperative Purchasing Agreements are a useful procurement tool,” the Commission recommended that:
Before sponsoring, entering, renewing, or modifying an Intergovernmental Cooperative Purchasing Agreement, the procurement officer must make a written determination that it is in the best interest of the State to do so and, specifically, that it will provide cost benefits to the State.
The Maryland Associaton of Boards of Education (MABE) and other stakeholders testified last June before the Commission in support of allowing the continued use of cooperative purchasing. From their testimony:
In 2015, MABE joined the Baltimore County Board of Education in opposing a local bill to prohibit the purchase of roofing repair services for public schools through an intergovernmental purchasing cooperative. The Maryland Court of Appeals had already ruled in favor of the Baltimore County Board, finding that a local board of education may purchase roofing repair services for public schools through an intergovernmental purchasing cooperative when it acts pursuant to authority granted by Board of Public Works regulations. As the Court of Appeals recognized, regulations adopted by the Board of Public Works clearly allow school systems to utilize “intergovernmental cooperative purchasing” and “piggybacking” to provide cost benefits, administrative efficiencies, and promote governmental cooperation (COMAR 23.03.03.12).
Most recently, in 2016 legislation was introduced, but not enacted, which would have impeded the ability of local school systems to use cooperative purchasing for school facility projects (HB 330/SB 515). MABE’s opposition to this legislation was grounded in the association’s support for the continued use of cooperative purchasing, or piggybacking on other government contracts, for the purchase of materials related to school construction or repair projects.
MABE respectfully requests that this Commission not pursue or adopt any recommendations regarding amendments to school system procurement law to redress the Building Materials Corp. case; or recommendations consistent with the legislation rejected in 2016 which could have impeded school system efforts to achieve the cost savings and efficiencies the General Assembly has consistently encouraged school systems to employ through cooperative purchasing.
In Section V, Updating Procurement Oversight Structure, the Commission recommends that the Governor hire a Chief Procurement Policy Officer, who would replace the Board of Public Works Executive Secretary as Chair of the Procurement Advisory Council (to be renamed the Procurement Improvement Council), and would implement a number of the Commission’s 57 recommendations and “coordinate government entities and local entities to maximize use of intergovernmental purchasing.”
Statewide Versus Regional Procurement
Through Recommendation 1.11, the Commission advised the Board of Public Works to issue an advisory informing about the pros and cons of procuring goods and services on a county or regional basis versus on a Statewide basis:
A Statewide contract typically requires a bigger vendor to meet the capacity demands of the entire State government, while regional contracting – by county or by geographic region … – provides opportunities for smaller vendors. The Advisory should inform State procurement officers as to the advantages and disadvantages of each as well as the appropriateness for different procurement scenarios.
Staff Retention
In Section IV, Developing Quality Procurement Personnel, the Commission addresses the challenges the State has in maintaining a trained and capable procurement workforce. Of note, the Report states,
[T]urnover of procurement staff occurs not only because of experienced staff retirements, but also through attrition due to insufficient compensation and inadequate career tracks within the State system. Compensation provided to most State procurement staff is not competitive with the federal government, private sector, or local governments.
To address workforce retention challenges, the Commission recommended changes to personnel classification series. A number of other suggestions address training and hiring considerations.
Political Contribution Disclosure Reporting
Recommendation 5.9 addresses compliance with political contribution disclosure reporting. From the report:
…[A] person “doing public business”, i.e. a procurement contract worth at least $200,000, must file a statement with the State Board of Elections that names political candidates to which the contractor has made a contribution of at least $500. …
According to the State Board of Elections…, fewer than 700 businesses file the political contribution disclosures, which is a small fraction of those to which the Elections Law likely applies. The Elections Law directs procurement agencies to require contractors to certify filing the statement and to notify the Elections Board when contractors fail to do so. The Commission recommends that procurement staff include notice of the Elections Law political contribution disclosure requirements in solicitation documents and again with award notices.
It deserves noting that the above requirements not only apply to State procurement officers, but county procurement personnel and contracts, as well.
Other recommendations of note include:
- Following the federal government’s example and using a standard template for Requests for Proposals (RFPs);
- Removing the preference set in State law for the competitive sealed bidding procurement method (i.e., lowest price wins) as the default procurement method for all procurement;
- Authorizing 31 additional State agencies to limit solicitations to Maryland small businesses through the Small Business Reserve program;
- Repealing the Small Business Preference program, an optional program available to five State agencies but rarely used; and
- Increasing the general small procurement ceiling to $50,000 and increasing the small construction procurement ceiling to $100,000, bringing it “in line with other state and local government small procurement limits.”
