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No-Bid Contracts Worrisome to Some State Lawmakers

Fiscal Review Committee members say any job that isn’t competitively bid demands vigilant, explicit scrutiny by legislators

State lawmakers from both parties are expressing concern that taxpayer interests aren’t adequately safeguarded when public contracts are inked with private firms without first submitting jobs to competitive bidding.

Lebanon Republican state Rep. Mark Pody, who was backed up by Rep. Brenda Gilmore, D-Nashville, said this week during a Joint Fiscal Review Committee hearing that the state ought open up more of its contracts to market competition.

“I don’t think (noncompetitive bidding) is in the taxpayer’s best interest. They needed to go through the competitive system and have it competitively bid,” Pody said.

At a minimum, any single-source contract ought to raise a “red flag” and should be earnestly probed by the Fiscal Review Committee, the Lebanon lawmaker added.

Gilmore agreed. “We may be saving money but we need to know why,” she said.

Committee Chairman Bill Ketron, a Murfreesboro Republican who chairs the state Senate’s majority-party caucus, joined the call for more information on noncompetitive contracts.

Pody brought the issue to the forefront Monday afternoon during the joint committee’s monthly meeting, when it was considering a contract extension with Xerox to provide services for the International Fuel Tax Agreement. IFTA is described on the state’s website for trucking commerce as “a tax collection agreement by and among the 48 contiguous States and Canadian provinces bordering the United States to simplify the reporting and collecting motor fuel use taxes used by motor carriers operating in more than one jurisdiction.”

Phillip Mize, the state Department of Revenue’s chief financial officer, explained that Xerox offers one of six commercial products that help commercial fleets and states track fuel taxes owed to other jurisdictions.

Mize defended the contract by saying Xerox is the “most mature product” and controls 45 percent of the market. He also said the state negotiated a 5 percent discount, totaling $420,000, over the previous contract.

After the meeting, Pody said the contract may well provide a savings for the state, but without it being competitively bid, there is no way to know for certain. He said it is worrying there are five other providers available on the market, but the contract was not offered the same bid process as other state-awarded contracts.

“I think that anything that is competitively bid, even if it ends up here, would be a lot more transparent,” Pody said before voting against moving the contract out of committee. The contract with Xerox passed 15-1, with Pody casting the sole dissenting vote.

The committee approved another proprietary contract Monday, but it was explained that no other company provides the service.

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