Stimulus: Who are the watchdogs?

The following is an excerpt from the written testimony NIGP’s CEO Rick Grimm submitted to the U.S. House Committee on Oversight and Government Reform hearing on “Preventing Stimulus Waste and Fraud: Who Are The Watchdogs?” View the complete testimony online at www.nigp.org.

We believe that there are three inter-related components for preventing waste and fraud as stimulus dollars are distributed to state and local governments through the American Recovery and Reinvestment Act (ARRA):

• Ensure that current state and local government standards of contracting practice for acquiring goods and services continue to be utilized to the greatest extent possible;

• Ensure that state and local governmental entities have the workforce capacity and capability to achieve the goals of ARRA; and

• Ensure that transparency is pervasive throughout each step of the acquisition and contracting process.

Every state and local public entity targeted to receive grants from the federal government should have regulations, statutes, ordinances and/or rules already in place that govern its procurement practices. These regulations should be consistent with the basic guidelines outlined in the Model Procurement Code for State and Local Governments.

At the expense of creating another layer of approvals, the federal government may wish to consider requiring grant recipients to certify that their current public procurement regulations address these standards of practice. The Recovery Accountability and Transparency Board could administer this certification; thereby holding the grant recipient accountable for compliance with their own regulations.

The bottom line is this: we believe that the federal government should be able to rely on the effective procurement models that are already in place within state and local governments. While the specific acquisition and contracting methods may vary based on the total spend of the public entity, demographics, and/or socio-economic factors, the basic principles of public procurement remain the same: transparency, ethical integrity, maximized competition, consistency, and the fair and equitable treatment of suppliers. As diverse as these public institutions are, they all share a universal principle: the very best value for the tax dollar.

Accordingly, we believe that the Recovery Act will be most successful if state and local governments are authorized to utilize their existing procurement rules to the fullest extent possible when acquiring goods and services in conjunction with the Recovery Act. This would enable the state or local public entity to maximize competition — an essential component of transparency — while holding each entity accountable for compliance with its own prescribed rules.

Naturally, there are federal agency mandates that may supersede state and local laws; and these federal requirements should be respected. However, if mandates can be minimized, it will minimize any confusion on which rules to follow when acquiring goods and services in conjunction with ARRA.

It is our understanding that each federal agency involved in the ARRA has its own procurement regulations that require compliance. Many of these regulations are little known in state and local governments. Therefore, we are deeply concerned that, without clarity and knowledge on the rules of engagement, state and local governments will unknowingly fail to comply with federal agency mandates, leading to audit and transparency problems.

To minimize this potential problem, NIGP offers to serve as a conduit of information between the federal government and the state and local procurement organizations through our website, educational webinars, informative sessions during our annual conference and other communications mechanisms. The close coordination of activities between federal, state and local entities provides unity of purpose — and we all have a steadfast desire to ensure that our tax dollars are spent wisely, transparently, and purposefully.

One final thought on the public procurement standards of practice as they relate to the expedient nature of the federal stimulus program. We realize that there is a common mission to spend ARRA dollars as quickly as possible to maximize the impact on our national and global economies. At times, expediency is translated to mean emergency, which, by its very nature, could exclude some or all of the public procurement process and its commitment to transparency. Most assuredly, the timeline for implementing public procurement practices could be shortened as long as the critical steps in the process are not eliminated.

Rick Grimm, CPPO, CPPB, is NIGP‘s Chief Executive Officer. We welcome your comments at [email protected].