HD4 - ADP Contracting at the State Corporation Commission


Executive Summary:
In March 1984, Speaker A. L. Philpott requested a review of ADP contracting practices at the State Corporation Commission (SCC). The commission authorized the project during April 1984 as a follow-up to our 1980 report on the "Management and Use of Consultants by State Agencies" and focused it on two key concerns: (a) Has the SCC complied with state statutes, policies and procedures in contracting ADP services? and (b) Have SCC personnel and the Commission's ADP contractors complied with the "Ethics in Public Contracting" provisions of the Public Procurement Act?

The staff reviewed "relevant statutes, policies and procedures; analyzed the SCC's contract files and project expenditures since 1976; interviewed key personnel from the SCC and the Department of Management Analysis and Systems Development (MASD). Three consultants were interviewed. The major findings of the study are:

1. The current practices used by the SCC in consultant procurement are not consistent with provisions of law contained in the Virginia Public Procurement Act, and have great potential for abuse.

2. The SCC does not usually award ADP contracts on a competitive basis and there has not been an effort to establish a competitive environment following the enactment of the Virginia Public Procurement Act.

3. Consistent with our 1980 findings, the ADP contract administration procedures at the SCC are sound and effectively carried out. However, policies and procedures governing the procurement of ADP services are outdated and need to be revised taking into account the requirements of the Public Procurement Act.

4. JLARC staff found no evidence to suggest there have been any violations of the code of ethics contained in the Public Procurement Act; but some of the contractual relationships between the SCC and its contractors are unusual for a public agency, are contrary to prudent management practice, and are vulnerable to allegations of favoritism.

5. Despite administrative and statutory deficiencies, the ADP systems procured by the SCC are in place, and each system examined appears to be operating well. Because the systems were developed in a non-competitive environment, it is not possible to determine if they were developed and installed at the most economic price.