PEER releases review of State Government Purchasing processes

Committee recommends changes to state law, State Auditor review.

On Monday, the Mississippi Legislative PEER Committee released its latest report titled State Government Purchasing: A Biennial Review of State Procurement.

As required by state law, PEER reports that it conducted its fourth biennial review of state procurement. This review provided an overview of Mississippi’s procurement environment and emergency procurement process, specifically during the COVID-19 pandemic. In addition, PEER addressed legislators’ concerns regarding the Mississippi Department of Education’s (MDE) emergency declaration regarding the procurement of technology products and professional services, and subsequent requests to suspend the one-year restriction on contract(s) awarded from an emergency declaration.

According to the release, some of the Committee’s major findings include:

• An “emergency” is defined as an unexpected circumstance that creates a threat to health, safety, or the preservation of public property. Procurement rules and regulations prohibit emergency contracts exceeding one year in duration.
• State agencies are not required to obtain prior approval from an oversight authority to make an emergency purchase if the emergency threatens health, safety, or the preservation of property. Proper documentation is required to be filed with the appropriate oversight authority after the purchase is made.
• State law does not require the Department of Finance and Administration (DFA) and the Department of Information Technology Services (ITS) to determine the validity of an emergency declaration.
• There were 314 emergency procurement contracts, totaling approximately $469.6 million from July 1, 2018, to September 16, 2021. Approximately 154 (49%) of the total emergency procurement contracts reviewed by PEER did not have an emergency declaration letter as required by state law.
• While the Mississippi Department of Education’s (MDE) emergency declaration does not appear to threaten health, safety, or property, MDE is within the bounds of the state emergency procurement law.
• The ITS Board is within its authority to temporarily suspend the one-year restriction because it is an ITS rule and not state law, and the Governor’s Proclamation on March 14, 2020, allowing the suspension of rules and regulations.
• MDE had to include one professional services contract in its emergency declaration to meet the ESSER funding deadline due to unforeseen circumstances (e.g., a vendor protest, a procedural error). On December 1, 2021, the Public Procurement Review Board (PPRB) approved MDE’s request to suspend the one-year restriction on emergency contracts.
• An emergency procurement plan, as recommended by best practices, would help the state navigate procurement during an emergency situation, such as the pandemic.

PEER recommended the following actions:

1. The State Auditor should annually conduct a random sample and audit of emergency procurement contracts made without prior approval from DFA or ITS, to determine if emergencies in the sample did threaten health, safety, or property.
2. DFA and ITS should amend their rules and regulations to require procedural errors to be submitted as in the “best interest of the state” emergencies, which require prior approval.
3. DFA, ITS, and Mississippi Emergency Management Agency should build on preexisting inter-agency relationships to prepare an Emergency Procurement Response Plan, focused on ensuring documentation and continued operations.
4. The Legislature should consider amending state law to:
   • limit any IT-related contract awarded in response to an emergency to a term not to exceed one year;
   • include emergency contracts for personal or professional services;
   • prevent any part of the emergency procurement process from being suspended during an emergency; and,
   • require DFA and ITS to evaluate jointly on a biennial basis the procurement process utilized by all state agencies and repeal state law that currently requires PEER to conduct such review.

The full report can be read here.