$200 Million of Your Money Wasted
State procurement squanders cash and delays services
(page 2 of 4)
Photo Courtesy: ES&S Election Systems & Software’s electronic
Contract No. 2: Electronic Voting Machines
State Agency: Office of Elections
Summary: In 2007, the Office of Elections issued an RFP for the lease of electronic voting machines and the purchase of election services for elections from 2008 through 2016. In 2008, the office awarded the contract to Texas-based Hart-InterCivic, which bid $43.4 million. The other qualified bidder, Nebraska-based Election Systems & Software, whose bid was only $18.1 million, protested on the grounds that the Office of Elections didn’t adequately justify the $25.3 million discrepancy in price between the two bids. The office denied the protest, and Election Systems & Software appealed to the Office of Administrative Hearings. The hearing officer found that it was, indeed, the duty of the Office of Elections to do a cost/price analysis. In response, the state’s chief election officer conducted a cost/price analysis himself, concluding that the Hart-InterCivic price was justified. Again, Election Systems & Software appealed to OAH, on the grounds that the chief election officer wasn’t qualified to do a cost/price analysis and that his analysis was inadequate and misleading. In issuing a summary judgment, the hearings officer agreed with Election Systems & Software, finding, among other things, that the state’s chief election officer had “acted in bad faith.” The Office of Elections appealed to Circuit Court.
Findings: The Office of Elections seems to have been predisposed to Hart-InterCivic technology, but failed to write a request for proposal reflecting this. Although the selection committee determined that ES&S technology was more than adequate, election officials were intent on selecting Hart-InterCivic, regardless of the 140 percent price difference. The Office of Elections’ failure to address the price doesn’t simply violate the State Procurement Code, it violates the ethical obligations of those entrusted with taxpayers’ money.
Moreover, it reflects the chief elections officer’s complete lack of experience in both procurement and elections. His desultory and unprofessional execution of the cost/price analysis ordered by OAH borders on criminal negligence. For example, he made no accounting for the fact that the Hart-InterCivic bid included the full purchase price of the voting machines, even though the contract was a lease. In addition, the Hart-InterCivic cost justification doesn’t account for more than $11 million, nearly 20 percent of the contract price. Even so, delays caused by the protracted litigation required the state to use Hart-InterCivic services for the 2008 elections before terminating the contract. In this settlement, taxpayers paid about $3 million more than what OAH had determined was already unreasonable.
The former chief elections officer did not return repeated calls by Hawaii Business for comment.
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