Cape Issues: No Bid Contracts, No Good

As discussions intensify across the state and country about ways to curtail public sector costs, there is one topic that is carefully avoided – No-Bid Contracting. “No-bid contract” is a common term used for contracts that are awarded as “sole source” contracts. The term implies that there is only one person or organization that can provide the required services. In New Jersey, the formal name for no-bid contracts is “Non-Fair and Open Contract.”
Various justifications are advanced to using no-bid contracts.
These include:
• Emergency situations
• Only one firm has a product that will meet the projects needs.
• Obtaining expert services.
This latter point extends the concept of no-bid contracts into the practice of acquiring “Professional Services.” As defined in N.J.S.A. 18A-5a (1) Professional Services means services rendered or performed by a person authorized by law to practice a recognized profession and whose practice is regulated by law and the performance of which requires knowledge of an advanced type in a field of learning acquired by a prolonged formal course of specialized instruction and study as distinguished from general academic instruction or apprenticeship and training. In practice, professional services are normally provided in the fields of legal services, healthcare, architecture, engineering, sciences, etc.
No-bid contracts are a permitted exception to the state’s Local Public Contracts Law
( LPCL), N.J.S.A. 40A:11-1. The purpose of the LPCL is to ensure that public contracts are awarded through a fair, open and competitive process. The use of such a process prevents preferential treatment by municipalities and results in the award of a contract for the lowest cost, which is intended to serve the best interest of the public. ( Buzak and Cofoni, 2010).
In their work, The Soprano State: New Jersey’s Culture of Corruption, Ingle and McClure (2008) state “the boss system is fueled by New Jersey’s legal pay-to-play arrangement in which campaign contributors get no-bid contracts and other government work. In most states, that’s called bribery.”
In 1994, Morris County freeholder candidate Chris Christie called for the county to put out to bid all contracts for consultants and professionals, saying that it makes common sense, it’s good government, and gets the best people at the best price (Daily Record, 2/23/94).
In 2002, U.S. Attorney Christie stated “The biggest problem in corruption in New Jersey is no-bid contracts. If you look at all of the cases that we do, they almost always center around no-bid professional contracts.” ( Asbury Park Press, 11/26/02)
A limited review of the resolutions passed in one municipality was conducted to determine the number of public contracts awarded through open bidding versus those awarded without public bidding.
The municipal resolutions were examined over a 27-month period. During that period, 65 contracts were awarded after the receipt of public bids, six contracts were awarded under the state contract process, and 29 contracts were awarded under the Non-Fair and Open Contract process.
Although the use of no-bid contracting is legal, it nevertheless leaves the public in the dark.
As the legal name implies, the process is not fair.
The contracts are developed outside of the normal process of seeking proposals from a number of qualified individuals or firms. Instead of an objective review of qualified applicants, based on the scope of work, bidders’ qualifications, prior experience, and cost; no-bid contracts are awarded through a subjective process that is rarely explained to the public. Thus, the taxpayers are left with questions, such as:
• Was the most qualified hired?
• Are we getting the best value for our money?
• Is there a quid pro quo in the awarding of the contract?
The solution to eliminating no-bid contracts is to tighten this loophole to only emergency situations. It is doubtful that the Legislature would pass such legislation since no-bid contracting is a cornerstone of the political patronage system.
The next best thing is for taxpayers to publicly question officials every time a no-bid contract is awarded.
Suggested questions should include:
• Why was the contract awarded through a no-bid process?
• What criteria were used to select the awardee?
• What unique qualifications do they have?
• Have they been successful in carrying other contracts?
• What guarantees are there that the contract price is fair to the taxpayer?
If you do not get answers that give you comfort, then you always have a voting booth solution in the next election.
References:
Buzak, E. and T. Cofoni. A Guide to Local Public Contracts Law. N.J. State League of Municipalities. 2010. Trenton, N.J.
“Chris Christie and Multi-million Dollar No-Bid Contracts”. Morris County Daily Record. Feb. 23, 1994. Parsippany, N.J.
Editorial Board Meeting. Asbury Park Press. Nov. 26, 2002 Asbury Park, NJ
Ingle, B. and S. McClure. The Soprano State: New Jersey’s Culture of Corruption. St. Martin’s Press. 2008. New York.
Wikipedia. Definition. No Bid Contract.
(ED. NOTE: The author, of Sea Isle City, has more than 40 years experience in public sector collective bargaining. Earlier this year, he wrote a three-part series on public sector bargaining. He has been the president of the New Jersey Association of County College Negotiators.)