Advertisement
  1. Florida Politics

Cashing in on state of Florida contracts is growth industry

David Wilkins reviewed the state’s contracting process.
Published Feb. 10, 2013

TALLAHASSEE — Even by Tallahassee standards, the scene was notable: lobbyist Brian Ballard dining with a nursing home executive, Gov. Rick Scott and a top aide at a pricey restaurant just blocks from the Capitol.

That Ballard's clout could command a private dinner with the governor for a client speaks to the influential lobbyist's fundraising finesse. Equally important is Ballard's talent for helping his clients land lucrative state contracts: $938 million this year alone, according to a Times/Herald analysis of contracts in the $70 billion state budget.

"Is that all?'' joked Ballard, who said he had never added it up. "A big part of my business is protecting contracts, and outsourcing. Outsourcing saves (the state) money."

Ballard is not alone. The lobbying offices that line the moss-covered streets of Tallahassee have grown exponentially larger in the past two decades as governors and legislators have steered a greater share of the state's budget to outside vendors.

No one is keeping track of the total, but Chief Financial Officer Jeff Atwater last year estimated the total contract spending for Florida's 2011-12 budget cycle at $50.4 billion — 72 percent of the budget. The bulk of it, nearly $42 billion, was for health care contracts and service sector grants.

"We probably privatize, or outsource, more than some of the northeastern states — and we have a lot more volume,'' said David Wilkins, a retired business executive who was tapped by the governor to review the state's byzantine contracting process. He also is secretary of the Department of Children and Families.

Vendors — from giant computer firms and health care HMOs, to purveyors of office supplies, parking spaces and even prison services — each compete for a piece of one of the biggest spending pies in the Southeast: the state of Florida. The infusion of state cash into private and nonprofit industries has spawned a cottage industry of lobbyists who help vendors manage the labyrinth of rules and build relationships with executive agency officers and staff so they can steer contracts to their clients.

There are now more people registered to lobby the governor, the Cabinet and their agencies — 4,925 — than there are registered to lobby the 160-member Legislature — 3,235.

Dozens of former legislators and their staff populate that industry, as well as former utility regulators, agency secretaries, division heads and other employees.

The most high-profile newcomer to the executive branch lobbying corps is Dean Cannon, the former speaker of the House from Orlando. Even before he retired from office in November, he had set up a lobbying shop just a block from the Capitol and started signing up clients to lobby the executive branch.

Cannon's swift lawmaker-to-lobbyist turnaround has spawned a backlash from former colleagues. Senators are proposing that lawmakers leaving office wait two years before they can lobby the executive branch — similar to a law that applies to former lawmakers who lobby the Legislature.

"One minute you can be overseeing a budget and the next you're lobbying a state agency,'' said Sen. Jack Latvala, R-Clearwater, who is shepherding the Senate ethics bill. "That's a revolving door and that's wrong."

With the state using more and more outside vendors, transforming the state government as a broker of contracts, less attention is being given to managing those contracts.

As a result, say critics, all too often contractors and their lobbyists outwit and outman the state at the negotiating table.

"For a government employee going and buying something new is hard,'' Wilkins said. They have to create a process and sort through the vendors' options "so when they award a contract they are usually very happy to keep that vendor in place.''

The state not only needs better performance standards in its contracting system, he said, it needs more competition — and that means more than just the veneer of competition.

"Competition is the secret to all this stuff, and you've got to get people interested so the vendor has to believe it's not wired,'' he said. "If a vendor is going to spend $1 million on a procurement, if it's wired, then they've really made a bad business decision."

But wiring contracts to benefit vendors is the job of the legions of lobbyists. Using last-minute amendments to the budget, lobbyists write narrowly crafted budget language into the "special categories" section in the back of the annual appropriations bill or tweak language in other bills.

Here are some recent examples:

• Former Senate President Mike Haridopolos used his influence to get lawmakers to insert millions into the budget at the final stage of the budget process to pay for a state law enforcement radios system the agencies didn't ask for, a juvenile justice contract that agency didn't seek, and the extension of a contract to expand broadband service in rural areas.

• A lobbyist close to former House Speaker Cannon persuaded lawmakers to insert language allowing billboards on state lands, using language disguised as "public information systems," into a must-pass bill to fund water management districts.

• The former Senate chief of staff, Steve MacNamara, signed a no-bid $5.5 million contract with a company to develop and lease a budget transparency website for lawmakers that was paid for but never used.

Former Senate President Jeff Atwater, now the state's chief financial officer, as well as Scott, have both launched initiatives aimed at making the state's contracting corps more professional. Atwater recalled how he watched in dismay when, as Senate president, items appeared in the final budget that were intended to benefit individual companies without a public hearing.

"It was an eye-opener,'' Atwater recalled in an interview with the Times/Herald. "I'd say, did the agency want this? No? Then who did want this? They'd throw out the name of a lobbyist and so I'd cross it off."

Longtime Senate budget chairman and former Sen. JD Alexander said the blame also lies in the state's largest agencies, each of which has its own procurement system, bid process and overhead.

Every time a company loses a contract, it hires someone to come back to the Legislature to write the company back in, he said. "It works, so who wouldn't keep trying?" said Alexander.

The Government Efficiency Task Force also is studying the state's contracting system and has found plenty of fault with lawmakers. In its report, it noted that because of exceptions written into law, the Department of Management Services is barred from seeking competitive bids for legal services, health services, artistic services, lectures, training and education services, and substance abuse and mental health contracts — services estimated at $8.4 billion a year.

Legislators also carved out exceptions for 32 vendors whose services don't have to go through the state's Web-based vendor database known as MyFlorida­MarketPlace, the report found.

Last spring, Scott assigned Wilkins the task of reviewing the state contracting process. He has found a hodgepodge of procedures in which some agencies adhered to strict performance measures while others relied on little more than an invoice. There were no uniform contract standards, often no penalties, and "vendors could low-ball to get in the door and then file cost overruns."

All of this "screams for reform," said Abigail MacIver, legislative affairs director for Americans for Prosperity of Florida, a group that promotes limited government.

The group believes that Florida's budget system rewards companies by allowing contracts to roll over year after year, with minimal performance measures and competition.

"We don't even know what we're getting with these contracts. I would have to question whether or not the Legislature is even asking these questions," she said.

Senate President Don Gaetz has ordered his budget committee to take a deep dive into the state budget system and "scrub the contracts to make sure taxpayers are well served,'' said Sen. Joe Negron, the Senate appropriations chairman.

But Gaetz, who as the owner of health care companies has had government contracts, is also pragmatic.

"It's a worthy goal to take influence peddling out of contract making,'' Gaetz told the Times/Herald. "But it's as old as the republic. It's not as if we can pass a law. It is a matter of working against a natural friend when human beings operate a government."

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

ALSO IN THIS SECTION

  1. Former Broward County Sheriff Scott Israel appears before the Senate Rules Committee concerning his dismissal by Gov. Ron DeSantis, Monday, Oct. 21, 2019, in Tallahassee, Fla. (AP Photo/Steve Cannon) STEVE CANNON  |  AP
    After an emotional four hours of debate, the same Senate that 20 months ago rejected calls for an assault weapons ban after the Parkland shooting, voted 25-15 largely along party lines to remove Scott...
  2. From left to right: Terrie Rizzo, chair of the Florida Democratic Party; Tampa Bay Times Political Editor Steve Contorno; and State Sen. Joe Gruters of Sarasota, chair of the Republican Party of Florida. Times Files
    Republican Party of Florida chairman Joe Gruters and Florida Democratic Party chairwoman Terrie Rizzo will join Times Political Editor Steve Contorno for a Nov. 6 event.
  3. Lev Parnas, center, leaves federal court following his arraignment, Wednesday, Oct. 23, 2019 in New York. Parnas and Igor Fruman are charged with conspiracy to make illegal contributions to political committees supporting President Donald Trump and other Republicans. Prosecutors say the pair wanted to use the donations to lobby U.S. politicians to oust the country's ambassador to Ukraine. (AP Photo/Mark Lennihan) MARK LENNIHAN  |  AP
    Appearing with their attorneys, Lev Parnas and Igor Fruman said they will fight allegations in a grand jury indictment that they used a shell company to secretly steer hundreds of thousands of dollars...
  4. -
    A report presented to the Senate panel showed a variety of causes of deaths, including inmate-on-inmate assaults and suicides.
  5. Sen. Rand Paul, R-Ky., attends an executive session of the Senate Health, Education, Labor and Pensions Committee on Capitol Hill in Washington on Sept. 24, 2019. (AP Photo/Susan Walsh) SUSAN WALSH  |  AP
    The senator drew backlash for the claim on ABC’s “The View.”
  6. Herman Lindsey, a former death row inmate who was exonerated, holds a letter that he and other wrongfully convicted men delivered Tuesday to the office of Gov. Ron DeSantis, asking him to stop the execution of James Dailey. Witness to Innocence
    Former death row inmates delivered a letter to the governor’s office Tuesday asking him to stay the execution of James Dailey over questions of innocence. DeSantis won’t budge.
  7. Former sheriff of Broward County Scott Israel, right, and his attorney Benedict Kuehne wait their turn to speak to the Senate Rules Committee concerning his dismissal by Gov. Ron DeSantis on Monday in Tallahassee. (AP Photo/Steve Cannon) STEVE CANNON  |  AP
    The vote is expected to be seen as a political victory for the governor and validation for the families of the victims of the Marjory Stoneman Douglas High School shooting.
  8. Rep. Erin Grall, R-Vero Beach, speaks on the floor of the Florida House. Grall is sponsoring a bill for the second time that would require parental consent for minors to obtain an abortion.
    The legislation would enact a consent requirement for minors.
  9. Florida Governor Ron DeSantis. "OCTAVIO JONES   |   TIMES"  |  Times
    He could use his position on the Board of Clemency to allow nonviolent felons to serve on juries and run for office.
  10. Rep. Bruce Antone, D-Orlando, says the Legislative Black Caucus will prioritize both public education and school choice during the 2020 Florida session. The caucus held a news conference on Oct. 22, 2019. The Florida Channel
    The caucus announced its 2020 goals for justice, housing and other key issues, as well, with members saying they will stick together to pursue them.
Advertisement
Advertisement
Advertisement