Oklahoma Purchasing Department Accused Of Overspending

Thursday, July 21st 2011, 11:48 am
By: News On 6

By Amy Lester, Oklahoma Impact Team

OKLAHOMA CITY -- State employees, retired state workers and business owners are coming forward.  They all have complaints about the Department of Central Services. DCS is in charge of negotiating state contracts and handles issues involving purchasing by state agencies.

"I can't understand anybody not wanting to save money," said Richard Ladd, retired DOC Agri-Services Farm Manager.

Ladd's department saves the state money by providing vegetables, milk, meat and eggs to the inmates. Another program was also started when he worked there, called spot buys. He says employees coordinated with food brokers to buy items nearing expiration, at cheaper prices. The program saved nearly $3 million. At the end of last year, the Department of Central Services shut it down.

Breakdown of the savings month by month

"It's ultimately hurting the taxpayers, the state is already in a financial crisis," said Ladd.

The director of DCS, John Richard says they stopped spot buys to save money. If DOC buys contaminated food, the state could face a lawsuit from an inmate. If they purchase food through the state's vendor, Sysco, then Sysco's liable, instead of the state. No lawsuits have happened because of the spot buy program.

"It only has to happen once and cost us $5 million and wipe out any savings that may have occurred," said John Richard, Director of DCS.

Last session, the legislature passed a bill allowing spot buys to continue. But, Governor Fallin vetoed it.

Read Governor's spokesperson's statement

A different complaint about DCS comes from a local business owner. Larry Price co-owns McClain Chitwood Office Products. He is frustrated with DCS' office supply portal that launched a few years ago. DCS encourages all agencies to buy office supplies there, whether the item's on a mandatory contract or not.

Staples runs the portal. If an item is offered through a mandatory state use contract, which is with a company that employs disabled Oklahomans, Staples sends the order out to them. If it's not, then Staples gets the business. Because of the one stop shop, Price says he's losing thousands of dollars a month in sales.

"We lose, you know, $18,000-20,000 a month in sales that we were doing business with the state, we lost that business," said Price. "We know that we have competitive pricing in a lot of areas, we just want to be able to feel like they can use us or any other small business."

The director of DCS says agencies can still buy non-mandatory items elsewhere. According to him, Staples is a preferred vendor that has low prices and the one stop shop saves time.

"It's not a matter of fairness. I have a statutory obligation to get the very best deal I can get for the state and to manage a system that allows that to happen," said John Richard, Director of DCS.

But, some state employees say they're not getting the best deal. Back in May, we showed you dozens of items employees bought off mandatory contracts for as much as 800% higher than the price offered on the open market. The director of OSBI and DOC employees came forward voicing concern.

Watch our first investigation into DCS

"We end up having to spend more money in many instances than we really have to, so that concerns us greatly," said Stan Florence, OSBI Director.

"I find it incredibly frustrating to know that my tax dollars are being wasted," said Amanda Ewing, Executive Director, Oklahoma Corrections Professionals.

We gave the lists of items OSBI and DOC employees said were overpriced, to DCS. The director tells us that some items the agencies compared were not the exact same as the item offered on the contract. But, in 3/4ths of the cases, DCS says it needs more specific information from the agencies, to compare items. The director assures us that the price comparisons will be used when renegotiating contracts.

State Representatives Billy, Murphey and Hickman will hold an interim study this fall to take a closer look at DCS. We'll be there.