Politics & Government

Kansas is spending $428 million on 7,300 no-bid contracts

The amount Kansas is spending on no-bid contracts has been increasing over the past several years, according to a report from legislative researchers.
The amount Kansas is spending on no-bid contracts has been increasing over the past several years, according to a report from legislative researchers. The Wichita Eagle

Kansas agencies now have more than 7,300 no-bid contracts worth $428 million — numbers that have more than doubled over the past five years.

The figures show that Kansas government has skipped the state’s competitive bidding process far more often than previously known.

An Eagle analysis of state records in May found that agencies had sought to skip competitive bidding at least 1,000 times over eight years. But a report from legislative researchers provided Wednesday shows Kansas has far more no-bid contracts.

Critics of no-bid contracts say that more competitive bidding would drive down costs and save taxpayer money. Proponents of no-bid contracts say that sometimes only a single company is capable of performing the work.

Researchers found the total number of no-bid contracts has grown by more than 4,500 since 2013. The total value of the state’s no-bid contracts has also risen sharply over that same time, from $160 million in 2013 — the low point over the past 10 years — to $428 million now.

Rep. Troy Waymaster, the Republican chairman of the House Appropriations Committee, noted an increase of about 3,000 contracts between 2015 and 2018.

“That’s what is compelling,” Waymaster said.

For the Department of Administration, which assists other agencies in contracting, “competitive procurements are the standard rule and non-competitive bid contracts are the exception to that rule,” Secretary of Administration Sarah Shipman said.

It’s unclear how many contracts — both competitive and no-bid — the state has in total.

Shipman said she is confident that a large amount of the increase in no-bid contracts since 2009, when the state had just 1,587 such contracts, stems from accounting changes made because of a new financial management system adopted in 2010 and 2011.

The number of no-bid contracts issued is trending down each year, Shipman said. In fiscal year 2016, Kansas awarded 4,700 no-bid contracts, 4,000 in 2017 and 3,700 in 2018, she said.

According to legislative researchers, the overall number of no-bid contracts dropped last year for the first time in five years.

“We have been trying to drive the number of non-competitive purchases down over the last few years,” Shipman said.

The state’s no-bid contracts began drawing scrutiny in May after the Department of Revenue said it planned to outsource dozens of information technology jobs. The changes are part of a no-bid contract with CGI Technologies worth upwards of $82 million over 10 years, the largest no-bid contract over the past seven years.

During a legislative committee hearing on Wednesday, Shipman and Revenue Secretary Sam Williams defended decisions to award no-bid contracts and described the steps they must take before skipping competitive bidding.

Agencies must get permission, or prior authorization, for a no-bid process. For prior authorizations worth more than $100,000, a notice must be posted online that gives other companies a chance to protest the decision and potentially bid.

“The prices were challenged and re-challenged,” Williams said. He called the negotiations with CGI extensive.

About 56 jobs at the revenue department are affected by the agency’s contract with CGI. Williams said about 20 of those people had taken jobs with CGI. A few others have retired.

Ultimately the remaining jobs will disappear, but Williams told the committee there is no date for ending anyone’s employment and that the agency is working to find workers other jobs in state government.

KDOR’s contract with CGI and the related personnel moves became public the day after lawmakers wrapped up the regular session this year.

“If that had been a week or two earlier, which it should have been, then we would have had the opportunity to ask the appropriate questions,” Rep. Kathy Wolfe Moore, D-Kansas City, said.

Williams acknowledged he should have told lawmakers sooner.

“Yes, ma’am. I agree with you,”Williams said.

Waymaster said lawmakers need to do a better job in questioning agencies about their no-bid contracts.

“Why did you enter this contract …how much is this contract costing the state?” Waymaster said.