Delegates Morhaim, West Praise Procurement Reform

The State could potentially save nearly a billion dollars over the next five years thanks to procurement reform completed this past session, boast Delegates Dan Morhaim and Chris West in an editorial in The Baltimore Sun. Their op-ed highlights the extraordinary work performed by the Commission to Reform Procurement, chaired by Lt. Governor Boyd Rutherford. The Democrat and Republican, both from Baltimore County, both served on the Commission and tout the group’s hard work.

The Delegates’ editorial explains how the State’s procurement budget is over $16 billion – so increases in efficiencies saving just one percent would result in an additional $160 million in the State’s coffers, without any program cuts or new taxes.

From the editorial:

Historically our Maryland procurement system has been dysfunctional, hard to navigate for businesses wanting to provide services to government, confusing to understand, wasteful and often duplicative and inefficient. There have been a number of reforms enacted over the past few years in the process, but it was time for a major overhaul. …

That’s why we were pleased to serve as the House of Delegates representatives on the bi-partisan Commission to Reform Procurement, chaired by Lt. Gov. Boyd Rutherford. The process included stakeholders from the public and private sectors. There were eight formal meetings, three meetings held around the state solely for citizen input, and numerous sub-committee meetings as well.

The result of this effort was a series of enacted bills that will have a major impact on how Maryland’s government operates. Additionally, these will help Maryland businesses compete for and win more contracts, thereby keeping jobs and revenue in the state.

The most important reform creates what almost every other state has: a chief procurement officer. That job will encompass responsibility for all state procurement, coordinating and clarifying procedures, identifying and adopting efficiencies, applying consistent standards and training for procurement officers, and staying on top of the latest developments in procurement reform. The Department of Legislative Services reported that this approach in Georgia and Arizona “observed financial benefits of approximately 10%.” In Maryland, the annual cost of this office could be about $1 million, but the savings could exceed $900 million over the next five years, assuming these improvements are fully implemented.

Other reforms will eliminate the need for businesses to complete applications for each and every bid when their basic information is already on file. Veteran and minority businesses will be supported. Consortium purchasing has the advantage of volume discounts and will be encouraged, but now Maryland businesses will be able to better compete for these contracts. Flexibility will be added so that large contracts can proceed intact or be broken up into smaller ones if there will be cost savings. The bid process will be simplified. For example, the current system for architects and engineers routinely requires applications over 100 pages long. These application forms will be reduced considerably, likely to 10 pages or less, without sacrificing accountability, thus making it easier for smaller firms to compete.

There is more work to be done on the state’s procurement system, but in 2017 the administration and the General Assembly worked together to take giant steps forward. We anticipate that this effort will reap benefits for decades to come.

Prior Conduit Street coverage on the Commission to Reform Procurement:

MACo Supports Improving State Procurement System

MACo Supports Modernization of Procurement System

Procurement Commission Issues Final Recommendations (…And There’s 57!!)