Your recent article addressing the corrupt mess that are our procurement laws was a breath of fresh air to read as there are far too few voices pointing out the abuse of taxpayers that is being facilitated by legislators and other State leaders. However, the primary focus of your article, eliminating term contracts from the reverse auction process, is only the half of it!
Some of the article's content simply nailed the current state of procurement in Mississippi especially; "den of thieves", "home cooking", and "Mississippi's procurement laws are a corrupt mess". All true and to all too great of an extent.
My company is the authorized distributor for multiple manufacturers of heavy construction equipment. We sell and service all 82 Mississippi counties and have done so for over 30 years. Yet, since the infamous 2017 HB1106 requiring reverse auctions for purchases over $50,000 went into effect in 2018, our business with state agencies and counties declined immediately and significantly. The significance has been not to just our bottom-line but also to our employees. Our sales force have invested years of their time building relationships with these entities and their paycheck has taken a hit.
The decline in our governmental business is attributed not to the implementation of reverse auctions but to the deliberate and clandestine actions taken by the Department of Finance and Administration (DFA) to provide a means for counties to completely avoid the statutory required reverse auction process. It took a couple of years for a handful of dodgy legislators to surreptitiously kill the reverse auction requirement on behalf of favored private interests. However, what DFA did makes these guys look like Ned and the Primer.
By Thanksgiving of 2017 which was only a few months after HB 1106 was passed by the legislature but two months before the law went into effect, DFA implemented a previously unapproved means whereby counties could avoid reverse auctions altogether for heavy equipment purchases over $50,000. Avoid reverse auctions altogether! Before the provisions of HB 1106 even went into effect, DFA had knee-capped the statutory requirement as well as the taxpayer savings that would have be realized through the well-intentioned bill advocated by John Polk and Jerry Turner. No public notice. No bidding. Just call the salesman of your favored supplier and he'll deliver the equipment.
The magic came about by Director Ross Campbell of DFA's Office of Purchasing Travel and Fleet Purchases approving a select number of Cooperative Contracts. Describing a Cooperative Contract is beyond the scope of this email but suffice it to say that counties are paying substantially more for heavy equipment by utilizing the Cooperative Contract. Also know that by statue (31-7-13(m)) cooperative contracts had long been specifically excepted from other bid requirements. The objection is that DFA had not prior to 2018 allowed heavy equipment purchases via cooperative contracts and when approved for use beginning in 2018, there use were limited to a select number of vendors.
As you noted at the end of your article, 'nobody seems to care". Certainly not DFA and certainly not the county boards of supervisors. Not all but far too many county boards of supervisors primary concern is to buy exactly what they want from who they want. Sometimes it is buying from who regardless of what product or what price they sell.
Since the provision of this anti-competitive move by DFA and Ross Campbell, my company hasn't sold a single excavator or wheel loader to any county or state agency. I have requested that the manufacturer's which we represent be added to the list. I've asked nicely. I'm told no additional vendors. It costs DFA exactly nothing to add a manufacturer's cooperative contract to the approved list. This begs the question, why not? And, what input did Campbell's office received from heavy equipment manufacturers and/or their local dealers after passage of HB 1106? Why did representative of the specific Cooperative that Campbell's office favored (Sourcewell) not advocate for all the vendors with a contract who were represented by a Mississippi dealer? One of the manufacturers that I represent fired the Sourcewell representative when it came to light that he had secured Campbell's approval of some contracts but not theirs.
Steve Wilson and you have touched on one of the primary linchpins in our procurement process; the standard of "lowest and best". There is one other that you did not mention; neutral specifications written by a third party. Turner and Polk's well-intentioned bill was a good start but did not go far enough. Until the "lowest responsive bidder" standard replaces "lowest and best" and neutral specifications are written by an objective third party, it really doesn't matter if the suppliers bid is received electronically via reverse auction or via a sealed envelope.
There is much more to the procurement process than said here. I leave it here; in the several decades I've been in the heavy equipment business, Mississippi's procurement practices are as regressive now if not worse than during Operation Pretense.
Reverse auctions are appropriate in some instances, even most, but not always. They depend on multiple suppliers' participation. You mentioned in your article that there are a plethora of companies that host reverse auctions. True. Some charge a percentage of the awarded amount, others charge nothing. As is usually the case, you get what you pay for. The ones that charge will generally (not all) devise specifications and round up multiple suppliers to participate. The county gets what it pays for. It will come as no surprise to you that nearly every county that has engaged in a reverse auction does so with a no-cost-to-the-county platform provider. The county often gets hosed by using the no cost platforms.
Counties want the use of a big red Easy button. The shortest and least painful way to get what they want, the better. This attitude is what has made Ross Campbell's provision of cooperative contracts so wildly successful. I have no way of knowing but anecdotal observation is that Cat (Puckett) and Deere (Stribling) have sold more equipment to municipal customers utilizing the Cat and Deere cooperative contracts than they ever did prior to the Turner/Polk bill becoming law. An unfortunate and unintended consequence. The fault lies with DFA/Ross Campbell for facilitating a work-around and with Turner/Polk for not writing a better bill.
If you have any suggestion for how to cheerlead for better public procurement practices in Mississippi, I'm all ears. If you have any questions, I'm glad to help.
MARK HENRY is with Mid South Machinery, (cell) 601-955-0876, (office) 601-948-6740.
