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Commentary: Emergency Sole-Source Procurement and Political Pressure

Posted By NAEP, Monday, April 11, 2016

By: Neil Markee
Editor in Chief-Purchasing Link

Ever been on Candid Camera?  Maybe not on the TV show, but camera surveillance in public places and commercial establishments has become a fact of life—a key tool of law enforcement and maybe even commercial marketing. The last time you parked in a public lot and walked into a shopping area, stopping at various shops along the way, you were probably on camera all along the way.  Where you went and what you stopped to look at or bought were probably recorded. Merchants have found the information helps them better understand buying patterns. Law enforcement has found video surveillance a valuable tool used extensively to collect evidence on legal issues ranging from minor traffic infractions and shoplifting to kidnapping and  mass murder.  When there is a need to collect evidence for a crime or even personal injury, the first question asked usually relates to the availability of useable video evidence.  We have come to believe that video is more reliable than eye witnesses. That is probably a fact.   About the only class of evidence considered as more reliable in the minds of the public is genetic.

The images produced by privately owned and official body-, dashboard- and property-protection cameras began to appear on the nightly news some time ago.  We routinely assumed that high-value or sensitive areas were covered and, from time to time, we had seen a horrendous auto accident that, through some unusual happenstance, had been recorded live. Although some individual police officers had worn body cameras and a few police cars were equipped with dashboard cameras earlier, until recently, the numbers were small enough to be seen as unusual. That was then. Currently, large areas of cities are covered and individuals (you or me and everyone else) can be tracked as they pass from the area covered by one camera to another over substantial distances.  All that began to accelerate after the events of August 9, 2014 in Ferguson, Missouri.  Conflicting eyewitness accounts focused attention on whatever little photographic evidence was available.  Forensics eventually played a key role but, by their nature, could not provide the immediate answers demanded in the street and press. Cameras surveillance was seen as one solution. OK, you ask, but what has all this got to do with purchasing in support of higher education or hospital administration, etc.? Nothing much, I guess, until it comes time to respond to a sensitive capability involving privacy in a high-pressure environment where a sole-source procurement might be indicated.      

Police action and street disturbances reported live nightly on national television focused attention on accountability and transparency.  And the advisability of equipping individual police officers with body cameras to capture the events close up seemed obvious. Municipalities rushed to respond by seeking to acquire these devices in quantity immediately.  Rapid acquisition and implementation became both a priority and a challenge. The sudden demand for body cameras, combined with the political pressure to act swiftly, created a seller’s market nationwide. Suddenly, demand for body cameras spiked, as police departments across the country took steps to equip their forces with these bits of technology now—in recognition of their value and, no doubt, because decision makers wanted to be seen as responding positively  to criticism from all sides.  A lengthy article in the March 8, 2016 issue of the Wall Street Journal, titled “Cities Face Dilemma over Police Cameras” (by Dan Frosch and Zusha Elison) described what could be seen as the chaotic acquisition-process that ensued.  The scale of demand potentially was huge. For example, New York City alone was reported to have 34,454 sworn officers.

Departments knew what they wanted to buy and had a favored vendor in mind. Technically, or maybe actually, there were four or five potential suppliers. However, police loyalty to Taser, the manufacturer of stun guns that they had used successfully, made this a sole-source acquisition in their minds. They declined to “take a chance” on another supplier in this highly charged situation.  In fact, they were taking a stance that is not unknown within the scientific/medical research world on campus. Generally, sole-source procurement procedures aren’t designed to be quick or to facilitate emergency purchases. That has been a source of frustration on campus.   And that frustration, at another level perhaps, may have been the key factor for the end-users involved here. They wanted to make a substantial, emergency, sole-source purchase—avoiding the need to comply with the usual, protective, sole-source procedures that purchasing professionals have developed over the years. In so doing, they gave up the goal of obtaining what is needed at the lowest cost possible, despite the lack of credible competition inherent in a sole-source purchase. Their message to purchasing was clear: Just cut the purchase order.  And, at least initially, the political leadership of harried municipalities probably saw this as an acceptable trade-off for a quicker response. 

Just how pervasive was the preference for the favored supplier? According to the article, “Of the 50 largest local U.S. police departments, 24 have chosen a body camera supplier with 22 picking Taser according to the Wall Street Journal count.” Speaking of the process in general, the article said, “Opponents of the contract arrangements say officials may have cut corners by signing no-bid deals, by not testing options thoroughly, or by becoming too cozy with vendors. Many purchasing professionals would agree, but the departments saw this as an emergency procurement and wanted to turn to their proven supplier for help.  Sounds familiar!   

And so they did. Was it a good call?  Perhaps, in the rush to do something, one city signed a contract to spend $3.5 million to acquire 2000 cameras from the favored supplier during an ongoing mayoral reelection campaign. The incumbent mayor, who approved the contract, lost the election and only later did it become known that his campaign manager had a business relationship with the supplier. Both the outgoing mayor and the supplier denied prior knowledge of the relationship. The new mayor, while supporting the need for cameras, put the transaction on hold.  I assume the campaign manager did not mention the potential conflict to either the mayor or the supplier and according to the article the manager later, “said she didn’t do anything improper.” Not everyone would agree.   In another case mentioned, a municipality requested samples from several suppliers but, according to the unsuccessful suppliers, did not conduct adequate testing. Urgency may have required the change in plans but transparency would have required that the change be acknowledged immediately, and there was no mention of such action. In one city, the former chief of police is under investigation by the state’s Attorney General, apparently for allegedly taking a job as a consultant with the supplier and assisting it in obtaining a $2-million, no-bid contract with the city. The combination of having one widely favored, competent supplier, along with political pressure and, maybe, opportunism, seemed to have caused some of those involved to ignore basic, prudent procurement procedures governing sole-source procurements.

Reportedly, to avoid sole-source bidding requirements, there have been attempts to piggyback onto existing contracts that other governmental entities had previously established with a favored supplier.  In one case, a multi-year, multi-million-dollar deal would be added to an existing arrangement that had previously covered just 30 cameras elsewhere.  Taking advantage of an existing contract is, of course, a well-established procurement procedure and, when conducted properly, it makes sense.  In this case, however, the process seems to have been selected in another attempt to avoid the procedural requirements of sole-source procurement. 

Obviously, acquisition price of the devices isn’t the only consideration.  For decades, purchasing professionals have been considering life-cycle cost of ownership.  The article went on to say that, “Other cities after hurrying into camera initiatives found unexpected costs and some are pulling back.”  I doubt many individuals with a voice in the discussion had accurately calculated the likely lifecycle costs involved. The contract for handling the film can greatly exceed the cost of the cameras themselves.  In one case, the authors mentioned a city had paid $575,000 for the cameras and $1.6 million for processing and storing footage. Additional staff would be required to examine the footage.  The article mentioned a police department employing almost 10,000 sworn officers that estimated 122 new people would be required. If the job required sworn officers or people with a legal background and special training, the total cost could exceed $100,000 for each position, or $12 million annually for this group.  My retired deputy sheriff’s captain brother-in-law reminded me that to keep officers equipped would require an inventory of spare parts and cameras, so the total would probably be substantially greater than one for each officer involved. Ongoing support seems likely to greatly exceed the cost of the cameras that were the focus. These unexpected and unbudgeted lost-in-the-sauce expenses have forced some reconsideration.

It’s easy to conclude that all this is an example of politically dominated procurement at its worst. I don’t think it’s reasonable to conclude that the leaders of every municipal police department simultaneously lost their moral compasses and forgot what they knew about professional ethical procurement.  I don’t believe that the suppliers involved saw this as a unique opportunity to enrich themselves.  They will be dealing with these same departments in other areas down the road long-term. And I don’t believe that all the honest, hard-working people involved in the decision-making were likely to simultaneously lose their way, barring some major event that causes them to suspend their good sense.  But I do think the situation described in the article is an example of what can go wrong when enough political pressure becomes the dominant fact in tough decision-making situations. Rarely have procurement procedural missteps been examined so closely in the national media.  Having found fire where they saw smoke, the media appropriately examined both the events and the outcomes in some detail.  I doubt we have heard the end of this tale.   

 I don’t know how widely read this Wall Street Journal article was among NAEP Members but I think it should be required reading when the topic on the table is what to do— what not to do—when faced with the need to quickly  handle a unusual, substantial, high-priority, and very  sensitive procurement in a highly charged political environment.

Handling sensitive, sole-source procurements is one of the topics discussed around the shrimp bowl, wherever campus purchasing professionals may gather—such as at the upcoming NAEP Annual Meeting in San Antonio [May 22-25, 2016]. I suspect that more than a few of our Members can recall at least one or two incidents when maybe the rules were shaved just a bit more than necessary to fit the situation. And maybe a few might cite instances where they wished they had handled the procurement a little differently. That is why this situation provides such a useful educational opportunity.

If any reader would like to share some thoughts with other NAEP Members on any aspect of this matter, we may be able to make space available in upcoming Purchasing Links.  Just send your copy to me at: NDM11777@aol.com or nmarkee@naepnet.org 

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