State Senator John Polk is one of the good guys helping to improve our state.
As a young boy, he saw the potential in his parents’ retirement project of preparing hickory smoked meats. Today, you can see the modern Polk Meats facility on the south side of Highway 49 in Magee. They distribute all over the country.
Sen. Polk is just what you want in a state senator. Having retired after building up a successful business, he decided he was bored “of picking up pine cones” and chose a second career in public service. He is now using his business experience to lead the charge on procurement reform.
Mississippi has a statewide GDP of something like $80 billion. A fourth of that is government – a whopping $20 billion a year. Billions of dollars in government contracts are awarded each year.
Procurement reform is an attempt to make sure these billions in contracts are handled above board, so that the public is protected from sweetheart deals and cronyism. Mississippi has a long way to go. Our procurement laws are some of the laxest in the nation. John Polk, as chairman of the State Senate Committee on Accountability, Efficiency, Transparency, is trying to change that.
Polk’s ally is another retired businessman, Jerry Turner, who is chairman of the Committee on Accountability, Efficiency, Transparency in the Mississippi House of Representatives.
Working together, Polk and Turner made some real progress in the last legislative session, passing a law mandating reverse auctions to be used for commodity purchases throughout the state.
Polk learned about reverse auctions while bidding for meat contracts outside Mississippi. He was impressed by their efficiency and fairness.
Monitored by third-party software vendors, reverse auctions allow all parties to continue bidding for government contracts until a certain time, at which point the lowest outstanding bidder wins. It is the modern-day equivalent of competitive sealed bids in writing.
Not everybody is happy about reverse auctions. I received an email from Hastings Puckett, president of Jackson’s Puckett Machinery, who believes the process adds unnecessary fees and leaves money on the table. Puckett believes a one-shot sealed bid process will get the absolute lowest price because nobody knows what their competitors are bidding. Research on reverse auctions versus one-time sealed bids is mixed.
To me, the issue is not that one bidding process is better than the next, but that bidding is done in the first place. More and more, contractors are using exemptions to avoid bidding at all. Polk and Turner’s reforms are getting us back to a legitimate process rather than back room deals. That’s a good thing.
Another big reform is Polk and Turner’s new laws on RFPs (Request for Proposals). Over the last couple of decades, bidding has been replaced with an RFP process that allows too much discretion. The new reforms create rules and regulations on the RFP process to ensure fairness.
Starting next year, state agencies will have to follow these new RFP rules. Hopefully, cities and counties will eventually be required to follow these procedures as well. A newly-centralized statewide independent Procurement Review Board will referee.
Other reforms are needed: Current bidding laws need to be consolidated in one section of the code. We need to end exemptions for the Institutions of Higher Learning, the Department of Transportation and many other powerful agencies. “Lowest and best” needs to be replaced with “lowest responsive bidder” used by the most progressive states in our country. And so on.
Polk believes Mississippi could save hundreds of millions of dollars a year with procurement reform. It’s tough slogging going against the status quo. “It’s like eating an elephant. You have to do it one bite at a time.”
“When I started on this road as chairman, a person I respect a lot told me they suspected there were two to three hundred million a year being wasted in government contracts. I thought the person was exaggerating terribly, but the longer I have delved into this the last few years, I am becoming completely convinced that this individual is absolutely correct and may be undershooting a little bit. That money could be used in areas where we desperately need funds.”
“One contract that bothered me was the delivery of spirits and wine. There was a difference of $23 million between the high bidder and the low bidder and it was a $70 million contract.”
Polk has encountered “substantial” opposition to his reform attempts. He was not surprised.
“When you are talking about a $100 million contract and people are used to getting those contracts one simple procurement way and they have built relationships, when you start messing with those contracts and moving their cheese, they don’t like it.”
“If you look at all the exemptions we had to put in the new law, you can see that it is a politically hard job to get anything passed. We were lucky to get what we got through the Legislature right now. You would not have believed the calls I got from professions, associations, from contractors, from DOT, from ITS. I didn’t want to exempt anyone but the fact is if you don’t exempt certain groups, it’s not gonna pass through the Legislature.”
All you have to do is look at some countries in Africa to see the huge negative effect of government corruption on prosperity. If Mississippi wants to get off the bottom, we can start with clean government and that means procurement reform.