Final
Colorado Association of Commerce and Industry
STATE PROCUREMENT PROCESS
Votes:
Action Taken:
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10:33 AM -- Colorado Association of Commerce and Industry Presentation
Committee reconvened. Senator Groff invited Heidi Heltzel, Colorado Association of Commerce and Industry (CACI), to discuss state procurement from the business perspective.
Ms. Heltzel testified that CACI members were queried on their impression of the state procurement process and she received an overwhelming response to her e-mail. CACI identified five areas that need to be addressed: accountability; consistency; oversight; clarity; and transparency. She stated that the process is shrouded in mystery and too complex to navigate for many companies to consider, too many variables across state agencies. Once a company is a verified vendor it should be easier to be considered for contracts across agencies but that is not always the case. Vendors allocate their staff/resources on time availability which often times conflict with state time availability.
She discussed the "direct contract" concept wherein state agencies could purchase services directly from a company without the benefit of a bid award, but questioned whether this amount to a noncompetitive process. The business community is opposed to any restraint/prohibitions on state outsourcing or off-shoring. It does encourage streamlining the state contracting process. Vendors see the state's contract process benefitting the state in a lopsided manner — state contract requirements are often times too cumbersome to meet.
Representative Marshall requested that Ms. Heltzel identify the types of companies/businesses CACI includes in its membership, and to put their recommendations into a memo format for the committee to consider relative to any proposed legislation. Ms. Heltzel said that the companies which belong to CACI are varied and provide a wide range of goods and services. She will provide a memo for the committee on CACI's recommendations.
Senator Groff raise the issue of accountability and asked if it would create an undue burden on the business community, when bidding on a state contract, to ask them to identify their subcontractors. She did not perceive a problem — there should be balanced accountability on both ends.
Mr. Felice asked how off-shoring benefits the people of Colorado. Ms. Heltzel responded by using an example of contracting with a firm in New Jersey with all U.S. employees vs. a Colorado firm with one component of its operations supported offshore — isn't it better to employ a greater number of Colorado workers even though a component is supported offshore. Mr. Felice responded that all work can be met at comparable costs within the state vs. outsourcing to another state or contracting for any services offshore. Ms. Heltzel responded that it is a global economy and Colorado cannot be made an island.
Representative Garcia asked how off-shoring hurts the people of Colorado. Ms. Heltzel has seen no evidence of the state or its people hurt by off-shoring. She noted that Canadian companies have invested considerable money into Colorado and hired Colorado workers. Because companies are multinational, operations won't want to be located in Colorado if they are required to use only Colorado workers. Investment goes both ways.
Senator Hanna asked how many companies come to Colorado to establish operations and actually want to conduct business with the state. Sen. Hanna's perception is that those numbers are negligible.
Mr. Felice stated that he is a technologist and a globalist, and he acknowledged that there are no clear cut answers to the global economy. When considering both China and New Jersey, how do we determine that reciprocity is equal? How much human cry might there be if Colorado awarded a service contract to a company in New Jersey and proceeded to hire a handful of workers from Colorado to work on that contract — would the taxpayers of New Jersey sit still for that? Would the government of China sit still for hiring Colorado workers to fulfill contract work in its country? Can a U.S. or Colorado firm export both its work and its workers in a reciprocal manner? Mr. Felice noted that where the company is located makes little or no difference, what is key is where the jobs are. Mr. Felice stated that varying degrees of standards can be written into statute or contracts, i.e., "preference shall be given to Colorado workers" or "preference shall be given to companies that use Colorado raw materials".
Mr. Houlihan posed several questions on competition. Additionally, he wondered what was meant by transparency. What does the business community mean when it states it wants transparency in the state contracting process? Ms. Heltzel noted that a degree of communication is desired. Mr. Houlihan talked of the need to prominently post when a contract has been approved and awarded. How do people find out when and to whom awards are made, is this information posted on the state's website?
Senator Owen noted that it is not about jobs it's about attracting capital. If we attract the capital, the jobs will come. He does not advocate restrictions, rather he emphasized the need to bring capital into Colorado either through changing Colorado's tax laws, regulatory scheme, state procurement procedures, and not by putting restrictions on companies. Additionally, the U.S. is losing jobs to China and India because those countries are turning out engineers and the brain power that help countries in today's service economy.
Senator Takis asked how we can ensure that the work is being done as requested when being done offshore, where is our ability to leverage accountability. Ms. Heltzel noted that contracts include specific language on what is to be provided and when.
Mr. Felice posed questions about the state of K-12 education and higher education in Colorado from the perspective of Colorado businesses. Ms. Heltzel noted that most are concerned about the reduced funding for higher education and the lack of science/technical education. Mr. Felice asked whether CACI does anything to facilitate increased education in the sciences. Ms. Heltzel stated that CACI is supporting referenda C and D because they will provide increased funding for higher education. Beyond that, CACI does not involve itself with the development of curricula or areas of study in higher education.