Kansas lawmakers voiced frustration this week that they were unaware the state’s revenue agency had entered into no-bid contracts worth millions, including one to outsource dozens of employees. But the agency’s chief said Friday they had been properly informed.
“We’ve reported to the legislative committees on every phase of this where we were supposed to, that we followed the law the way we were supposed to follow it, that it’s all public record what's been done," said Revenue Secretary Sam Williams.
One contract with CGI Technologies worth $53 million requires the company to provide professional services to operate, maintain, enhance and support the Department of Revenue's tax systems. The arrangement is leading to 56 employee layoffs.
KDOR says employees will have the opportunity to apply for jobs at CGI or that the agency will help try to find them jobs elsewhere in state government. CGI is likely to hire upwards of 20 people from the current staff, a spokesman for Gov. Jeff Colyer has said.
Some lawmakers said the deal raised red flags and that the Legislature hadn’t been informed.
Rep. Joy Koesten, R-Leawood, said she has sat on the House Government, Technology and Security Committee for the past two years and had never heard testimony about the contracts.
“So much for transparency & good governance,” Koesten tweeted Friday.
Williams met with reporters on Friday to explain the contracts, after Colyer directed questions to the revenue secretary.
“If I were them, I would be making comments like that too. I’m not surprised by the comments,” Williams said of legislative reaction in general, in particular suggestions that the agency waited until the end of the legislative session to unveil the layoffs.
Williams emphasized that the agency had followed its timeline, however.
Sarah LaFrenz, president of the Kansas Organization of State Employees, said there is a difference between posting a public notice online and talking openly about what is going to happen under the contract.
"That’s the transparency when people are going to lose their jobs — that’s what people are looking for,” LaFrenz said.
Williams said he had met with employees in the fall and had explained what would happen at that time. He described the meeting then as lively.
This week, the agency began meeting with employees to outline the timeline of when the transition will happen, he indicated.
LaFrenz said to her knowledge employees last fall likely understood that the agency would be contracting but did not know that they would lose their jobs.
Williams defended the process used to enter into the contract, called prior authorization, saying it required notice of the proposed contracts to be posted online for a week and that any company that wished to compete could object.
He said in one case, a company did object but that the agency quickly determined it wouldn’t be able to perform the work.
Williams said he is fine speaking about contracts with the agency and the agency’s actions. But he bristled at any suggestion that there should be more disclosure during the negotiation process.
“If this is the definition of new transparency, sitting down and having conversations like this, I’m totally comfortable. I don’t have anything against that,” Williams said. “Now, if that you means you want to be at the table when I’m negotiating, I’m not going to have you at the table when I’m negotiating.”
Another contract requires the company to help improve the state’s debt collection. It includes upgrades to existing technology as well as the launch of a self-service portal that would let people create payment plans and pay back taxes. The cost of the contract over 10 years is $59 million, according to a state form. The state projects a return on investment of 10 to 1 on delinquent tax collections.
The contracts had been in the works for months. KDOR signed the debt collection contract in 2017 and the professional services contract in February 2018.
The agency had previously disclosed little about the contracts. The documents largely prohibit CGI from acknowledging that Kansas is a customer, based on copies seen by The Eagle.
Williams said he wasn’t aware of that language in the contracts.