Ohio's government contracting agency lacks rules for ensuring equal and fair competitive bidding by outside IT vendors, the state watchdog said in a report issued Monday.
Inspector General Randall Meyer found the Department of Administrative Services' contract process for information technology threatens the "fair, open, and honest market place" for businesses.
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He recommended the agency do more to ensure competitive bidding and provide more complete documentation when such bidding isn't possible.
Department spokesman Tom Hoyt said many of Meyer's recommendations have already been implemented. It has placed responsibility for procurement with purchasing specialists outside Administrative Services' IT department and is issuing regular program reports to the Legislature, he said.
"We worked with the Inspector General as he prepared this report, and we will review it carefully to see if there is more we can do to improve our operations," Hoyt said.
The watchdog report follows an investigation by The Columbus Dispatch that found department officials sometimes thwarted policy and analysts' warnings to questionably award millions of dollars of no-bid contracts, often at excessive prices and to firms where former department executives worked. The review looked back to 2011.
The department has held a waiver of competitive selection on such contracts from the state Controlling Board for 45 years. It had argued that the arrangement allowed flexibility that saved Ohio taxpayers millions of dollars.
In June, the state Controlling Board granted the department permission to use an alternative way of selecting some vendors, exempting it and other state agencies from competitive selection in certain cases — but with new protections.
The new protocol calls for obtaining at least three price quotes from among 500-plus pre-qualified suppliers. The contract still could be awarded through the unbid process if two or fewer bids are received or only one company can provide the product or service.
State Rep. Jack Cera, a Bellaire Democrat and Controlling Board member, asked Meyer for additional investigation. Earlier this month, Meyer found an Administrative Services technology administrator wrongly solicited a $37,000 sponsorship fee from a company that has received millions of dollars in state contracts.
Cera said Monday that simply recommending improvements is not enough.
"Today's report confirms what many have known for quite some time: Powerful public officials at the highest levels of state government have misused the system and taxpayer dollars to benefit political insiders and friends," he said in a statement. "This is just the latest report of wrongdoing in what is quickly becoming a pattern of corrupt activity."
Cera was among backers of a budget amendment that would have created new oversight protections on unbid contracts. It cleared both the House and Senate, but was vetoed by Republican Gov. John Kasich.
This story has been corrected to reflect the report found a lack of adequate rules, not rules violations.