Legislation that would provide more transparency and oversight to state government’s purchasing process now moves to the Michigan Senate after passage in the House.
The Michigan Department of Technology, Management, and Budget (DTMB) is responsible for contracts and purchasing decisions for state government agencies.
DTMB can delegate procurement authority to state agencies that have DTMB-approved procedures within a certain dollar amount, which it can revoke if it finds the agency didn’t follow procurement rules.
State agencies with delegated authority that follow established policy don’t have to competitively solicit contract extensions, and DTMB doesn’t currently have authority to review them.
Filed by Rep. Sarah Lightner, R-Springport, HB 4831 seeks to require state agencies with delegated contract authority to obtain written approval from the DTMB before exercising a contract extension.
Lightner said that during the fiscal year 2019-2020 budget, state agencies with delegated power were extending procurement contracts without DTMB input.
“Without input from DTMB, a state agency could very well extend a procurement contract that is not in the best interest of the state or the hard-working taxpayers of Michigan,” Lightner said in a statement. “We need to make sure there’s proper oversight and transparency in the procurement process to make sure state government is spending responsibly and within its means.”
Caleb Buhs, a spokesperson for DTMB, told The Center Square that the bill codifies rules that DTMB should be involved in all contracting discussions with the state, including exercising an option year within a contract.
One benefit of a centralized procurement service is experts “who spend all day, every day focused on contracts and negotiations,” Buhs said.
“It allows the agencies to focus on their core mission, whatever that might be; health, safety, recreation, while we have the experts who can help them navigate the contract world,” Buhs said.
Agencies with delegated authority would must still follow the standard process for putting a proposal out to bid and executing the contract.
Buhs said there are safeguards for the contract process: it’s essentially already been competitively bid, the terms and conditions have been reviewed, and the State Administrative Board has to review all contracts over $250,000.
“This is about respecting Michigan taxpayers and making sure the department charged with overseeing purchasing decisions of state government has the means to effectively do so,” Lightner said.
HB 4831 passed the Michigan House Tuesday on a vote of 106-1.
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