Senate panel Advances Karcher-Scutari Contract Reform Bill

TRENTON – The Senate State Government Committee today approved a bill sponsored by Senators Ellen Karcher and Nicholas Scutari to reform State contracting procedures by ensuring accountability, improving ethics and saving taxpayers millions of dollars annually.

“It’s bad news for taxpayers when State contracts are awarded based on campaign contributions,” said Senator Karcher, D-Monmouth and Mercer. “The bill reflects the lessons learned from the bungled E-ZPass and Parsons motor vehicles inspections contracts of the Whitman Administration.”

Senator Scutari said the bill, S-2194, includes recommendations from the last year’s E-ZPass contract probe by the State Commission of Investigation called The Making of a Procurement Disaster. The committee vote to release the bill was unanimous.

“Basically, the bill addresses what the SCI found to be widespread mismanagement and manipulation of the contracting process by senior officials of the New Jersey Turnpike Authority and the Department of Transportation during the Whitman Administration,” said Senator Scutari, D-Union, Middlesex and Somerset.

As a no-bid professional services contract, the E-ZPass award to MFS Technologies of Omaha, Neb., in March of 1998 cost taxpayers hundreds of millions of wasted dollars in consultant spending, poor performance and flawed revenue projections – all with virtually no accountability, according to the SCI probe.

“It’s incredible to think that no system was in place to say, ‘Prove it,’ when the E-ZPass hucksters said fines from toll cheats would help provide an electronic tolls system at no cost to the public,” said Senator Karcher. In fact, the projected revenues from toll cheats came in under $20 million when the official projection was $311 million, the SCI found.

“Under our bill, vendor evaluators will have to be proficient in the area of the contract, written records will have to be kept of all conversations by State contacts with would-be vendors and tight restrictions will be imposed on State agencies awarding no-bid contracts,” Senator Scutari said.

“People have to trust the integrity of a system that spends more than $28 billion a year of their money,” Senator Karcher said. “Anything less is simply intolerable.”

Other key aspects of the Karcher-Scutari bill would:

– Permit a State agency to put notices of intent about an upcoming contract on the Internet to solicit information from potential bidders.

– Ban members of contract evaluation committees from having any family ties, personal interest or financial links to any potential vendors.

– Direct the Director of the Division of Purchase and Property to set regulations for contract oversight and for monitoring contract performance.

– Authorize the Purchase and Property Director to enter into bulk purchase agreements with other states or agencies for supplies deemed necessary for domestic preparedness and homeland security.

– Require all State employees who communicate with potential or actual bidders on contracts to keep written records of those contacts for at least three years.

– Establish a clear line of authority for a State Contract Manager to oversee and monitor complaints and to settle disputes about vendor performance in all major State contracts.

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