Pennsylvania Department of the Auditor General News
Auditor General Jack Wagner Finds Procurement Violations During Investigation of State Workers' Insurance Fund
Wagner said that the procurement of emergency contractors is limited to 90 days, with a possible 90-day extension if such an extension is needed to secure the services of a qualified vendor through the state's competitive request-for-proposal (RFP) process. However, by claiming the "emergency" exemption from competitive bidding, SWIF retained two emergency contractors for extended periods of time - a total of 18 and 19 months, respectively - between
"We are not questioning whether there was an emergency that justified SWIF's initial decision to use emergency contractors, but rather how SWIF went about procuring such services," said Wagner. "The use of emergency contractors for periods considerably beyond the norm may limit opportunities for other qualified firms to obtain state contracts, including disadvantaged or minority- or women-owned business enterprises."
Wagner noted that evidence gathered during the investigation indicated that the Department of General Services (DGS), which oversees procurements by state agencies under the jurisdiction of the governor, agreed that SWIF and L&I had not handled the contracts appropriately.
The investigation also found that SWIF awarded the two no-bid contracts without appropriately documenting the basis for the emergency, the identity of the emergency contractors, the price of the emergency services, the basis for the selection of the contractors, and the reasons for rejecting competitive proposals submitted in response to an RFP, as required.
SWIF administers a workers' compensation insurance program for
The Department of the Auditor General's Office of Special Investigations initiated this investigation following a complaint received from an unsuccessful bidder that alleged numerous procurement violations by SWIF in the awarding of the contracts at issue. "Our findings and recommendations are intended to address systemic issues that exist beyond this particular complaint," explained Wagner.
Investigators found that a total of three RFPs were issued to find a contractor to provide medical billing services. All three RFPs were then canceled and subsequently filled through the use of emergency contracts. Although investigators could not take into account the quality of services provided, they found that SWIF may have spent
"As auditor general, I am responsible for making sure that state agencies handle taxpayer dollars appropriately and effectively," Wagner said. "We will follow-up at the appropriate time to determine whether all of our recommendations have been implemented."
Wagner made seven recommendations to L&I and SWIF, including:
— Limit the use of emergency contractors to 90 days, with a possible 90-day extension if such an extension is needed to secure the services of a qualified vendor through the RFP process;
— Refrain from the extended use of emergency contractors and attempt to contract for services at lower costs through the RFP process;
— Maintain the required documentation for all future rejection of competitive bids and uses of emergency contractors; and
— Provide written notice to each unsuccessful bidder setting forth the reasons for rejection.
Because the investigation required a review of certain procurement policies and procedures under the responsibility of DGS, Wagner also provided several recommendations for that agency to improve its oversight of state procurement issues.
A complete copy of Wagner's report, including a response from L&I and SWIF, is available at www.auditorgen.state.pa.us.
Auditor General
Contact:
SOURCE Pennsylvania Department of the Auditor General
Search Our News Using Google Search
Can't find what you want? Try using Google:
