It didn’t take long for the powers that be to kill reverse auctions — about two years or so.
They killed this reform in the usual sneaky manner. They buried it deep in an unrelated senate bill on county bank accounts that had nothing to do with reverse auctions. As usual, it happened in a secret conference meeting that was closed to the public.
I say “they” because very few people know who did it. Many of the key people involved were hesitant to talk about it. Those who did confirmed that it was a clandestine move by people and companies who had a lot of money on the line. Reverse auctions had hurt their cozy government contracts. They were determined to kill the reform and they did.
Of course, “they” had to wait until the public scrutiny died down. It took a couple of years. All the legislators and state leaders patted themselves on the back for this tax-saving reform. Then once the applause died down and nobody was looking, the powers that be secretly killed it.
Even the author of the bill that mandated reverse auctions signed the very bill that killed his baby. He didn’t know it was hidden in “Section N,” 45 pages deep in an unrelated bill. That’s how it goes down in our state legislature.
Private interests were being hurt big time by reverse auctions. They hired powerful lobbyists to kill it. The lobbyists are experts in how state government works. They talked to the right people at the right time. They greased the skids. They killed reverse auctions. For a good lobbyist, it was all in a day’s work. No big deal.
One legislator who talked to me went on a tirade about what a den of thieves the state legislature is. He was pretty upset. He went on and on about the corruption. Maybe he was having a bad day, but he didn’t paint a pretty picture of our legislative process.
Most people don’t even know what reverse auctions are. It has to do with how cities, counties and agencies buy stuff. Reverse auctions means the “lowest bidder” gets the business. That’s why they call it a “reverse” auction. So if you are bidding to sell widgets to the county, you must bid the lowest amount to win the auction.
There are tons of reverse auction software companies. They charge a three percent fee. Local governments complain about the fee but the money saved for taxpayers far exceeds the three percent fee. Having an outside company run the reverse auction on an external website creates transparency and accountability. It’s great for saving taxpayers money by getting the lowest price.
But the government officials don’t like it. They can’t hand out sweetheart contracts to their friends and neighbors. They don’t like the scrutiny. They don’t like being held accountable. They would prefer having the power to control the money themselves.
Last year Madison County held 20 or so reverse auctions. They did it on their own custom software, saving the outside fee. But the new law, senate bill 2024, bans counties from using reverse auctions on “term contracts as defined in section N.”
You have to go down 45 pages to find section N. Given all the letters, small numbers, Roman numerals and other inscrutable codes, it was almost impossible to find. Turns out a “term contract” is any contract over a period of 60 days. The new law, signed by the governor, makes it illegal for a county board to use reverse auctions on term contracts.
So what was once required to be done by counties is now illegal. Counties can’t use reverse auctions even if they want to. Now that’s some pretty powerful lobbying by a special interest group.
For two years since reverse auctions became law, these special interest groups had to get their government friends to go before the state procurement review board to get a special exemption. What a hassle! Now they don’t have to be bothered. They can just negotiate their asphalt contract mano-a-mano without worrying about these inconvenient regulations to protect taxpayers.
This is a much easier system. The asphalt guy calls up his political contacts and a sweetheart deal goes down. Easy peasy. Everybody is happy, but the taxpayers, who are the stupid sheep in this gig.
How much money are we talking about? Hard to say. The total state budget is over $20 billion. If twenty percent of that is contracted out to private companies, that’s four billion a year. That’s $4,000 per Mississippi household.
The feds have very strict procurement laws. Bigger states do too with independent review boards. Mississippi has some of the laxest procurement laws in the nation. Instead of “lowest responsive bidder” used by most states we have “lowest and best bid.” What makes a bid the “best?” Could be the one that helps “best” to get a politician re-elected. Or worse, the bid that “best” increases a government official’s pocketbook.
It’s called “home cooking” and we’ve got a ton of it in Mississippi. Maybe that’s the way our small cozy state likes it. It’s not what you know but who you know. After all, everybody has an equal opportunity to finagle politicians and officials.
Mississippi’s procurement statutes don’t even have a generic statement saying all government business should be done in an efficient manner that best protects taxpayers. At least that would give honest companies that lose bids to graft a generic basis to file suit.
We used to have sealed bids. Now we have “RFPs” — Requests for Proposals, a much loosier, goosier process. MDOT, IHL and the Mississippi Department of Information Technology are all exempt from the state procurement laws, creating a tower of Babel.
Mississippi’s procurement laws are a corrupt mess. Two years ago, we made great progress in moving in the right direction. Now that is quietly being undone. We need some state leadership on this issue, but nobody seems to care.