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Editorial: Fix Nebraska's state contracting problems; the government waste continues to mount
Nebraska Contracting Failures

Editorial: Fix Nebraska's state contracting problems; the government waste continues to mount

The term “government waste” is sometimes used in making jokes. But the waste involved in Nebraska state government’s contracting is no laughing matter.

The contracting failures are significant, and Nebraska leaders have an obligation to fix the problems. Such reform can ensure greater accountability and proper decision-making on contracts that involve many millions of dollars.

The series of troubled, expensive projects over the past three decades points to the need for action. The costs to taxpayers have been significant. Here are some examples:

The NFOCUS computer system, under a multimillion-dollar contract, proved cumbersome and unreliable, requiring major ongoing reprogramming. Medicaid Managed Care, under the ambitious contract with Centene, faced multiple problems. The $84 million Medicaid eligibility and enrollment upgrade ultimately was canceled — after an estimated $60 million was spent, producing no results.

Most recently, Nebraskans have seen the troubling example of the child welfare contract with Kansas-based St. Francis Ministries. St. Francis’ $197 million proposal in 2019 was rightly criticized for being irresponsibly underbid at 60% below its competitor. Yet the Ricketts administration approved it. St. Francis then faced ongoing financial challenges in meeting its obligations here, culminating in the debacle this year by which it was set to run out of money for its services for vulnerable children in Douglas and Sarpy Counties. The state approved an emergency contract, through February 2023, for $147 million.

Yes, state government is by definition a remarkably complicated and challenging operation. Contracting can be complex. But that in no way excuses Nebraska government of its responsibility to vet proposals responsibly. The examples above aren’t minor matters — the state’s decisions wound up wasting enormous sums of public money. It was truly “government waste.”

Nebraska can do far better — if our leaders show the vision to fix the problems.

Kate High, a longtime staff member with the Nebraska Department of Health and Human Services now retired, has devoted great energy to analyzing the flaws in the state’s contracting process. In a recent Midlands Voices essay, she cited three worthwhile reforms Nebraska should embrace:

Adopt all or part of the American Bar Association’s Model Procurement Procedures. The ABA’s recommendations set up worthwhile criteria that promote equitable treatment for bidders.

Allow judicial review. Several of Nebraska’s neighboring states — Iowa, Missouri and Colorado — use this approach, by which losing bidders can appeal for court review of the contracting process. Such outside scrutiny can have great value. It certainly could have helped greatly in regard to the St. Francis bid, for example.

Prohibit “pay-to-play.” Consider this scenario: A ballot measure goes before Nebraskans proposing that a business or nonprofit is forbidden from making campaign donations to state officials if they are considering a bid from those parties. Would it pass? Sure it would. The aroma from such self-serving donations is too distasteful to ignore. Yet, Nebraska has never passed a law to create that sensible prohibition. The time has come to do so.

All three of these proposals have been discussed in Nebraska policy circles before, but lawmakers have failed to take action. So, the examples of improperly vetted contracts continue to mount.

Those mistakes result in government waste, with huge sums of taxpayer dollars needlessly spent. The need for reform is clear. Now the Legislature must act.

Nebraska can do far better — if our leaders show the vision to fix the problems.

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