RD493 - Special Joint General Laws Subcommittee Studying the Virginia Public Procurement Act - Final Report


Executive Summary:
In 2013, House Bill 2079 (Delegate S. Chris Jones) was enacted by the General Assembly. By its terms, HB 2079 did not become effective until July 1, 2014 to enable the House Committee on General Laws and the Senate Committee on General Laws and Technology to conduct a comprehensive study of the Virginia Public Procurement Act (VPPA) (§ 2.2-4300 et seq.) of the Code of Virginia during the 2013 interim, identify weaknesses and other problems in the VPPA, and recommend improvements where such weaknesses or problems exist. HB 2079 also required the Chairmen of the House Committee on General Laws and the Senate Committee on General Laws and Technology to convene a work group in 2013 to examine the provisions of the VPPA. It was decided by the Chairmen that workgroups would be selected in 2014 to allow the Special Joint General Laws Subcommittee Studying the VPPA (Special Joint Subcommittee) to solicit comment from interested parties on problems in the VPPA during the 2013 interim. (*1)

Year one of this study (2013) was a comprehensive fact-finding mission by the Special Joint Subcommittee, including an educational component on the for the benefit of the membership as it undertook this study. The four meetings conducted during the 2013 interim were dedicated to receiving public comment from persons involved in public procurement, including representatives of state and local government and the vendor community, and other interested persons. The fourth and final meeting identified issues to be addressed by the work groups appointed by the Special Joint Subcommittee in 2014.

No recommendations for legislation were expected, and none were made, for the 2014 Session by the Special Joint Subcommittee. At the conclusion of this first year of study, the Special Joint Subcommittee identified the points of consensus about problems and issues in the VPPA that needed to be addressed. The Special Joint Subcommittee also expressed concern, based on comments made by both governmental entities and vendors, of the lack of a "Virginia playbook" for public procurement, which adversely affects vendors and government alike. Confusion exists for vendors because of multiple and disparate rules resulting in a less user-friendly environment for conducting the Commonwealth's procurement business. Methods of procurement have become disjointed and difficult to observe. It was reported that because public procurement has become fragmented, increased costs and complexity of contracts for both agencies and vendors has resulted. Further, duplication of contracts results in less aggregated spending, leading to higher prices and increased contract award and administration costs. The Special Joint Subcommittee directed staff to ensure that this issue was brought to the attention of 2014 work groups, with an instruction that a Virginia public procurement playbook be established by unifying powers, terms and conditions, and implementing the tenants of the VPPA across the satellites (*2). The Special Joint Subcommittee also directed that a website be created for interested parties to follow this study. Available on the website (*3) are agendas, meeting summaries, copies of all presentations made to the Special Joint Subcommittee, issue matrixes, and directions on how to participate in the work of the Special Joint Subcommittee.

Year two (2014) of this study focused on the issues identified during year one, including unifying powers, terms and conditions, and implementing the tenants of the VPPA across the satellites. The principal objective of the work groups was to develop consensus on as many issues as possible and make recommendations for their resolution to the Special Joint Subcommittee in the fall of 2014. Any issues on which consensus could not be reached were referred to the Special Joint Subcommittee for disposition. The topic areas for the two work groups selected by the Special Joint Subcommittee were as follows: Work Group No. 1-- Construction, including Design Professional Services and Work Group No. 2-- IT Procurement, Goods and Nonprofessional Services, and Other Professional Services. Both work groups began their work in May 2014 and each held a total of five meetings, eventually achieving consensus on legislation to recommend to the Special Joint Subcommittee for consideration by the 2015 Session of the General Assembly. For a detailed account of the work group activities, including meeting summaries and other work group study materials, please see the Special Joint Subcommittee's website noted above. Additionally, work group membership, scope of work documents and meeting summaries are appended to this report as Appendices B, C, and D for Work Group No. 1 and Appendices E, F, and G for Work Group No. 2, respectively.

The 2014 membership of the Special Joint Subcommittee consisted of House Committee on General Laws members: Delegate C. Todd Gilbert, Chair, Delegate Dave Albo, Delegate Thomas "Tag" Greason, Delegate Nick Rush, Delegate Richard Anderson and Delegate Betsy Carr; and Senate Committee on General Laws and Technology members Senator Frank Ruff, Jr. Vice-Chair, Senator J. Chapman Petersen, Senator Bryce Reeves and Senator Mamie Locke.

On November 24, 2014, the Special Joint Subcommittee reviewed the legislative drafts recommended by the two work groups, and received additional public comment concerning these drafts. The Special Joint Subcommittee voted to recommend two of the three work group drafts with amendments. (*4)

The Special Joint Subcommittee also continued its consideration of HB 1223 (Yancey) referred to the Special Joint Subcommittee by the 2014 General Assembly. The Special Joint Subcommittee again heard from Delegate Yancey concerning his bill. Delegate Yancey requested that the portion of HB 223 that related to historic black colleges and universities to be included in the SWaM requirements under the VPPA be favorably considered by the Special Joint Subcommittee, while other portions of his bill be stricken. The Special Joint Subcommittee voted 6-0 to recommend HB 1223, as amended, to the 2015 Session of the General Assembly.

There was consensus in both work groups for the need to establish a VPPA oversight body to provide, among other things, an administrative appeal process and increased enforcement. A measure was offered on behalf of the AGC that would establish a nine-member independent review board for construction. The Board would have the authority to reach findings and either compel corrective action or refer the matter to a body that could compel the corrective action. It was asserted, however, that the focus should be on gathering empirical data rather than establishing a review board. Other options discussed included (i) starting small by having either the Office of the Inspector General or DGS provide advisory opinions, (ii) establishing an advisory procurement council to encourage and facilitate compliance with the state's procurement laws, including the powers and duties to: conduct training seminars and educational programs; publish educational materials; review written determinations of public bodies regarding methods of procurement; collect data necessary to evaluate the effectiveness of the VPPA; provide a forum to address concerns regarding public procurement; and monitor changes in state procurement law and make recommendations for changes to the General Assembly. Each work group discussed the possibility of establishing an advisory entity with limited powers, but could not reach an agreement on the composition and size of the board, the powers it would exercise, the scope of its authority, or staffing. Due to this lack of a consensus, the work group did not advance any specific language or recommend any legislation for consideration by the Special Joint Subcommittee.
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(*1) The Special Joint Subcommittee was created accordance with Rules 18 and 19 of the Rules of the House of Delegates and Rule 20(h) of the Rules of the Senate of Virginia.
(*2) "Satellites" was the unofficial name given for the varying procurement authority granted different governmental entities by the General Assembly. Specifically, the procurement satellites include: DGS, VITA, Public Institutions of Higher Education--Level 2 institutions: Radford University, Virginia Military Institute, James Madison University, George Mason University, Old Dominion University, Longwood University, Mary Washington University, Virginia Community College System (for capital construction and IT), Christopher Newport University (for capital construction and IT), and Level 3 institutions: Virginia Tech, University of Virginia, College of William and Mary, and Virginia Commonwealth University, and local public bodies subject to the VPPA, and those local public bodies that have adopted resolutions pursuant to subdivisions 9 through 12 of § 2.2-4343.
(*3) Website address is http://dls.virginia.gov/interim_studies_procurement.html.
(*4) Work Group No. 1 draft relating to job order contracting and cooperative procurement, the Special Joint Subcommittee vote was 6 - 0 to recommend to the 2015 Session of the General Assembly.
Work Group No. 2 drafts relating to: (i) equal footing between competitive sealed bidding and competitive negotiation for goods, services, and insurance, the Special Joint Subcommittee vote was 6 - 0 to recommend to the 2015 Session of the General Assembly, and (ii) newspaper publication of RFPs, the Special Joint Subcommittee vote was 6 - 0 to table.