Quasi-Public Agencies Oppose Bill to Expand State Watchdog’s Oversight


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HARTFORD — Legislation to expand a state contracting watchdog’s authority over quasi-public agencies is putting the group at odds again with agencies who say that increased oversight will take away the flexibility they need.

Established in 2007 as a check on state contracting in the wake of then-Gov. John Rowland’s resignation, the State Contracting Standards Board had been perennially on the budget chopping block until last year when lawmakers finally restored funding for the board to hire five staff to boost their investigations into procurement policies of state agencies.

Larry Fox, chair of the contracting standards board, said he doesn’t want to be in the position of reviewing every request for proposals, but wants to be able to look at the procedures the quasi-publics use, and make sure they’re promoting fair competition in their bidding process.

The quasi-agencies – which are designed to provide government services with the flexibility of a private business – say they already are already under state oversight, including from state auditors, and that putting them under the purview of the board would slow them down when they need leeway to set up new programs or compete with private businesses. 

Erin Choquette, CEO of the CT Paid Leave Authority — a quasi-public tasked with managing the state’s paid family leave program — told lawmakers on the Government Administrations and Elections Committee on Monday that the quasi-publics were created to be able to be nimble in response to problems and opportunities.

She said the paid leave authority needs that flexibility to manage its responsibilities by contracting services to meet the needs of workers in Connecticut, while also balancing budget constraints and legislative mandates. 

The contracting board, she said, has “extraordinary powers” to terminate contracts and restrict agencies from procuring new contracts, which could jeopardize the authority’s mission. 

Choquette said the authority would still be setting up the paid family leave program if these rules were already in place.

“[The contracting board] can’t have a fiduciary duty to 16 other [quasi-public] agencies, and has no responsibility for ensuring the authority is able to fulfill the mission for which the legislature created us,” she said.

Fox said the bill was a way to build more honesty and transparency into the state’s procurements. He said Connecticut doesn’t have a “culture of competitive bidding.”

“We need to have a robust system to protect the public interest,” Fox said. “It’s not going to slow down their ability to be nimble. Nimble was never about doing crappy procurement.”

So far, the board has only been given oversight of the Connecticut Port Authority, a move that exposed tension between the board and the administration of Gov. Ned Lamont, whose budget secretary said during its review of the Port Authority  in 2021 that it didn’t need to exist. 

The port authority has been one of the higher profile quasi-publics since it’s been tasked with redeveloping the New London State Pier for offshore wind — a project that’s price tag stands at $255.5 million and counting as construction is set to wrap up this year. 

And it’s drawn scrutiny for its procurements — especially for paying a legally questionable $523,000 success fee to a contractor in 2018, and for selecting the State Pier project manager Kiewit as a subcontractor for at least $87 million of work on the project. 

A separate bill would make the contracting board’s authority to review the Port Authority permanent, but some lawmakers want to go further and extend the board’s scrutiny to more quasi-public agencies. The bill would also require quasi-public contracts to set measurable results and inform bidders of their rights to appeal a decision.

Chris Davis, government relations manager for the quasi-public Connecticut Lottery Corporation, said the bill would take away flexibility that the organization that manages the state lottery and sports betting needs to compete with private companies like DraftKings and FanDuel.

“The bill calls for us to request a waiver from the [board] for any purchases under $10,000,” Davis said. “As you can imagine, we make a lot of those, and [we] meet once a month. So this would basically make it so we can’t respond quickly to anything going on in the marketplace.”

Fox told CT Examiner that there are provisions in the bill that still need to be ironed out. He said the board doesn’t have the staff to be tasked with granting agencies waivers for competitive bidding, and that it would be a conflict for the board to both grant those waivers and be the watchdog overseeing if those waivers are granted correctly.

But he said the general thrust of the bill — giving the board oversight of how quasi-public agencies conduct their procurement — is important.

“It’s not a punishment,” Fox told lawmakers. “It’s good practice that we take a look at how are they doing procurement, because the state spends so much money in these agencies.”

A similar bill passed the State Senate last year, including sections aimed at safeguarding the board from what have become routine budget cuts throughout its history.

But the bill didn’t come up for a vote in the House after objections from state agencies, including the Department of Children and Family Services, which said it has particular contracting requirements that could be disrupted if someone without the right background wrote new standards for how the department contracts out human services. 

Fox said the board isn’t like other regulatory boards in state government that have to approve actions beforehand — like the State Properties Review Board that has to approve property transactions. 

The contracting board instead reviews contracting procedures so that they’re in place when a department or agency opens a procurement, Fox said. They would need a staff of 100 people to pre-approve every procurement from every agency, he said.

“It’s not our lane to decide if a project is a good idea or a bad idea,” Fox said. “It’s our lane to make sure that if the governing body of an agency wants to go forward with a project, that in fact they use transparent, competitive procurement policies as they implement the project. But we don’t have to pre-approve any project.”

State Sen. Mae Flexer, D-Killingly, co-chair of the Government Administration and Elections Committee and a vocal proponent of the bill last session, said she was frustrated that “behind-the-scenes misinformation” killed the bill despite broad support from lawmakers.

“It’s been very frustrating to see this strong opposition — that is often quiet, unlike the people who’ve come here today — to sunlight,” Flexer said. “It’s one of the most frustrating experiences I’ve had in the time I’ve been privileged to be a legislator.”

Fox said he expects a night and day difference between the work of the board as a group of volunteers with one full-time staff, and now a fully staffed unit with an investigator and procurement officer who will be able to provide training to state departments.

“Basically, we had the ability to respond to things that we read about in the newspaper when the local press covered stuff, or we would have the ability to respond to a complaint that we received from the public,” Fox said. “But when you go back and look at the legislation that was passed by the legislature, years ago, it really intended for this board with a staff to proactively build a very robust, clear, transparent procurement system.”