The AGO said recently vendors have been reluctant to participate in the competitive purchasing process due to the lack of transparency when awarding the contract, therefore an amendment is needed to the bidding regulations to give further transparency of the competitive purchasing process to all of the participating vendors.
Currently, competitive purchasing is used to ensure price comparisons are made when the state is entering into a purchase contract — except for real property — in which competitive bidding was not required.
The competitive purchasing process requires price comparisons of at least three vendors, when possible.
This price comparison ensures that the state makes an informed decision when awarding contracts as well as keeps the state from drastically overpaying for its purchases.
Unfortunately for the state, many times it is not possible to attain price quotations from three vendors.
While this problem could be attributed to the small number of vendors on-island, it is more likely due to the lack of participation of the on-island vendors, the AGO stated.
It added that this lack of participation has been attributed to the vendors’ mistrust in the competitive purchasing process.
When approached for a price quotation many vendors may feel as though the state is merely filling a quota by asking and will not seriously consider the vendor when they award the contract.
In order to convince the vendors of the integrity of the process we need more transparency in the contract awarding process.
The AGO has suggested an amendment be made to he bidding regulations, requiring a bid summery report be given to each vendor who submits a quotation.
This will allow the vendor to see why they were not awarded a contract, instead of the current practice where the vendor is left not knowing.
Although some departments have already used a bid summery report when dealing with competitive bidding, it suggested that this practice be implemented when doing both competitive bidding and competitive purchasing.
The AGO said by amending the bidding regulations to require bid summaries be used for competitive purchasing “we would be increasing transparency in the competitive purchasing process, thereby, increasing the vendor’s confidence in the integrity of this process.”
The AGO added, “If vendors believe they will have a fair chance of being awarded a contract they will be more likely to participate in this process. By increasing the number of participating vendors the state will benefit by being able to make a more informed decision when awarding state contracts.”
