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(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

GSD and DFA have not provided the analysis for this bill.

State Highway and Transportation Department (SHTD)

LFC files

SUMMARY

Synopsis of Bill

This bill would require SHTD to procure all goods and services through the State Purchasing Agent of the General Services Department (GSD). It would also require all SHTD contracts to be reviewed by the Department of Finance and Administration (DFA).

Significant Issues

The additional scrutiny on SHTD contracts and purchasing required by this bill would ensure the department is operating under the same standards as other state agencies. All "innovative" or procurement or contracts initiated by the department would be subject to further review and approval by outside agencies. The bill would eliminate a portion of the independent operating status the department currently has and would require additional scrutiny and accountability for contracts and purchasing.

The high volume of goods and services procured by the department would place a large, additional burden on the existing GSD staff. Processing all procurement and bid documents through the State Purchasing Agent could cause additional delays for the department in procuring goods and services and awarding construction contracts.

Presently the department is exempt from contract review by DFA. Additionally the department processes its own vouchers, issues its own warrants and generally operates independent of DFA. All contracts are prepared and reviewed internally by SHTD staff unless they exceed $200.0, which requires review and approval by the Attorney General. Requiring DFA to review the high volume of department contracts would create a large, additional burden on existing DFA contract review staff and would slow contract processing time.

FISCAL IMPLICATIONS

The additional oversight cost is estimated to be approximately $200.0 in recurring cost to the General Fund for additional staff and overhead cost at the DFA and GSD.

ADMINISTRATIVE IMPLICATIONS

The additional layer of review and processing would impact SHTD operations by increasing processing time for contract and procurement activities. The physical transportation of documents between agencies would also create additional processing backlogs.

The technical nature of highway specifications, bid documents and contracts would require DFA and GSD procurement and contract review staff to develop expertise in highway engineering and construction.

Undue delays in the processing of SHTD procurement and contracts could jeopardize federal funds, project schedules, critical time frames in construction projects and efficient operation of the SHTD.

MFV/njw