Emergency state contract change considered

Members of the Government, Military and Veterans Affairs Committee heard testimony Feb. 5 on a measure that would update notification requirements governing emergency sole source contracts.

Under current law, all proposals for sole source contracts in excess of $50,000 must be preapproved by the state Department of Administrative Services except in emergency situations.

When an emergency sole source contract is approved by a state agency director or designee, a copy of the contract and the agency’s written justification for the emergency must be provided to the DAS director within three business days after contract approval.

LB997, sponsored by Omaha Sen. Bob Andersen, would require that the Auditor of Public Accounts also receive a copy within the same time frame.

Andersen said he introduced the measure at the request of State Auditor of Public Accounts Mike Foley to ensure proper oversight of emergency contracts. The process for state government contract procurement in Nebraska was standardized in 2003, he said, but the emergency contract provisions have remained largely unchanged.

“LB997 seeks to provide greater transparency and accountability by including the state auditor in the contract notification process,” Andersen said.

Auditor Foley testified in support of the proposal. Almost all of the thousands of contracts entered into by state agencies each year go through the competitive bidding process, he said, to ensure the prudent expenditure of state dollars. Emergency situations do arise, however, and the law makes an exception in those instances, he said.

The bill would not authorize the state auditor to approve emergency contracts or take on any additional role in the process, Foley said, other than being notified when such contracts are entered into.

For example, he said, irregularities with a recent emergency contract between the governor’s office and a consultant only came to his attention through tips from the public. If he had seen a copy of the contract, he said, the office could have started asking questions sooner.

“I think the fact that they would file this form in my office would give the agency director pause to make sure he’s got it right and there really is an emergency,” Foley said.

DAS director Lee Will also testified in favor of LB997. While DAS does not approve emergency contracts, he said, the department is the repository for those records and has implemented processes to provide more oversight for emergency contracts — including ensuring that all information is filled out accurately and is on file.

“Improving state procurement processes has been a key initiative [for the department] over the last few years,” Will said.

No one testified in opposition to the proposal and the committee took no immediate action on it.