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Florida's contracting process intertwined with politics

TALLAHASSEE — In Florida's high-stakes world of government contracting, Connected Nation learned how to play the game.

The nonprofit Kentucky-based company was formed to expand the reach of broadband to underserved areas throughout the country. In 2009, the company submitted the high bid and won a $3.9 million contract to map broadband in Florida using federal stimulus funds.

But after two years and a new administration, state officials decided last fall that they could reduce the cost of the program and improve service if they let Connected Nation's contract expire in December and opened the process to other bidders.

It wasn't so easy. Bids were sought and negotiations started, but with Department of Management Services officials unhappy with Connected Nation's performance, the company did what has become commonplace in Tallahassee: It cranked its powerful lobbying team into gear and turned to the Legislature.

The result: The Legislature passed and the governor signed a bill to move management of the broadband mapping contract from DMS to the new Department of Economic Opportunity, effective July 1. Connected Nation slashed its price in half and emerged as one of the top three bidders. Contract negotiations are on hold until the agency transfer takes place.

Rep. Alan Williams, a Democrat from Tallahassee and a vocal opponent to the contract transfer, says the Connected Nation example underscores what many in Tallahassee have come to expect: Getting state work depends as much on who you know as how much you charge.

"Is this a favor to Connected Nation and a lobbyist or is this really good government?'' he asked. "Is this really being accountable and efficient to the state of Florida the way the governor wants to be?"

Every year, nearly $51 billion, or about 57 percent of the state budget, is spent on contracts and agreements for goods and services, according to Chief Financial Officer Jeff Atwater. He sought legislation in the 2012 session that would have shifted oversight of the contracting process to his office, forcing a political distance between the bulk of state contracts, which are under the governor's purview.

The bill died and instead Gov. Rick Scott anointed David Wilkins, secretary of the Department of Children and Families, his new contract-reviewer-in-chief. Wilkins, a 29-year executive at the giant management and technology services company Accenture, knows how private companies can outmaneuver the state because he's been there. He managed million-dollar contracts between his company, other states, the federal government and other nations.

"Florida is no worse than other states,'' Wilkins said. "It's different because it may have more volume than most."

He says he sees room for improvement all over the place and wants to streamline and consolidate deal-making to give the state more leverage and negotiate better deals. He also wants to find a way to weaken the power of vendors.

"We can't compete with the vendors' skills,'' Wilkins said, noting that some companies are able to hold onto a contract for up to 10 and 20 years and "agencies can be intimidated."

"Just because you bought something one way in the past doesn't mean you have to buy it that way again,'' Wilkins said. "That's where the administration has to step up and stand behind these guys.''

He wants to see agencies ask "a set of standard questions'' when they contract for service.

He also wants to establish a "cadre of gunslingers that would, in essence, focus on the biggest contracts both in design and how you buy them." This group of negotiators ideally would be independent from the agency to remove any bias.

But Wilkins concedes "you probably won't ever take politics out."

"It's those big mega-contracts you have to look at," he said, "and those are the ones that come with big lobbyists.''

While the state has strict rules for single-source contracts, requiring them to undergo an aggressive review process if they are valued at over $195,000, the Legislature has exempted itself from such scrutiny.

When Scott's outgoing chief of staff, Steve MacNamara, was chief of staff in the Senate, for example, he violated no rules when he steered two technology-related contracts to friends and former business associates.

A $5.5 million contract to convert the Senate's budgeting process to a searchable online format was given to a woman who two months earlier became business partners with Jim Eaton, MacNamara long-time friend.

Another $360,000 contract went to a technology expert, Abe Uccello, whom MacNamara had known when he served on the board of Uccello's family business.

One man who spent 12 years trying to reform the state's contracting system is now convinced change is impossible.

"You can't do it,'' says Sen. JD Alexander, R-Lake Wales, the Senate's outgoing budget chief. "I gave it my best shot and I am convinced it won't ever happen."

The political clout of the Legislature, combined with the power of longtime bureaucrats, are the causes, he says. Every time a company loses a contract, they hire someone to come back to the Legislature to change the rules to let them back in.

"This governor is working harder at it then any governor but it's fundamentally difficult,'' he said. "A governor can't know about all this stuff. Each of the secretaries is nearly autonomous and, if they don't choose to cooperate, next to nothing happens."

Sen. Don Gaetz, R-Niceville, who sponsored the bill to give contracting oversight to Atwater's office said the bill died "because of turf battles."

"There is a tug of war not over who should do things better but who ought to do them,'' he said. He agrees with both Wilkins and Atwater that change is needed and hopes that together they can work to implement reforms.

"My criticism has been the lack of consistency and a kind of shoulder-shrugging approach to whether we were getting results,'' he said. "I agree with JD that the way we have been doing business is just not satisfactory."

But Gaetz also concedes that removing politics is unlikely.

Connected Nation's potent lobbying team included Lanny Wiles, the husband of the governor's campaign manager; Al Cardenas, the former chairman of the Republican Party of Florida and head of the Conservative Political Action Committee; and Slater Bayliss, a former aide to former Gov. Jeb Bush.

"It's a worthy goal to take influence peddling out of contract making,'' Gaetz said. "But it's as old as the republic."

Mary Ellen Klas can be reached at meklas@MiamiHerald.com and on Twitter @MaryEllenKlas.

Florida's contracting process intertwined with politics 05/19/12 [Last modified: Saturday, May 19, 2012 5:31am]

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