In a 2007 committee hearing, legislators received an important report containing cost-saving recommendations. One notable recommendation suggested that “tremendous ongoing savings” would be realized if higher education entities, including the University of Oklahoma, would collaborate with each other and state agencies in purchasing activities.
We have only realized a small fraction of these potential savings.
Legislators are keenly aware of the challenge of enticing higher education entities to centralize their purchasing activities like the rest of state government. Higher education is thought of as the “fourth branch” of government precisely because it has the lobbying power to keep itself free of the reforms which apply to many of the executive branch agencies of state government.
The Legislature’s recent purchasing system reforms have allowed state agencies to realize millions in savings each year; however, higher education has only participated in a limited number of the new cost-saving contracts.
Requiring higher education participation in purchasing reform isn’t easy, given their massive lobbying power. The only way to realize the savings has been to make the savings so obvious that higher education could not resist the temptation to willingly join with the other state agencies in the reform. And to their credit, this has happened in at least one high profile case.
That said, aside from the need for cost savings, a recently concluded legal case demonstrates the clear need for the checks and balances of the state’s centralized purchasing to apply to higher education as well.
The legal action was filed after the University of Oklahoma awarded a contract for renovating the University of Oklahoma’s Memorial Stadium. A district court ruled that OU did not award the contract to the low bidder and did not demonstrate enough cause to justify their action of giving the award to a higher bidder.
This finding risked delaying the renovations completion until recently, when the university reached an agreement with the aggrieved bidder and dispensed with the case. I am not aware of the terms of this agreement yet, but I am hopeful they will be made public.
In a recent testimony before a House committee, and upon being questioned about this particular case, the state’s Purchasing Director indicated he was unaware of any effort by the university to utilize the state’s central purchasing expertise in this matter.
I believe it is inappropriate for any state agency, including OU, to proceed with a project of this scale without the checks and balances afforded by the state’s central purchasing. Had OU utilized central purchasing, they would have benefited from the state’s Central Purchasing entity, a neutral third party ensuring an appropriate and legal bid award.
Additionally, the checks and balances of Central Purchasing could have provided credibility to any claim by the university that the low bidder was not a responsible bidder. There are times when this is the case, but the court clearly felt this was not one of them. Had Central Purchasing approved the award to the high bidder, according to clearly-defined responsible bidder criteria, the project might have moved forward without risk of delay or the understandable skepticism of the university’s motivations in awarding a high bid.
This case makes it clear that a new generation of courageous higher education officials must come forward, do the right thing, and give up their sole control in favor of an ethical system of checks and balances which both realizes savings and encourages public trust.