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July 14, 2010

Maragos: Rubber Stamping of Contracts is Over

Comptroller’s office sets new directives to ensure County is getting best price for only necessary services

Nassau County Comptroller George Maragos, making good on a campaign promise to make certain that Nassau County contracts must demonstrate value, announced new contract directives designed to save tax payers money and ensure every dollar spent delivers a dollar of value.

The Comptroller’s contract directives will introduce more competition, ensure that payments are tied to performance, and eliminate cost overruns. The new rules places a limit of 5 years on the length of a contract awarded to the same vendor before they must be competitively rebid, requires payment schedules tied to verifiable deliverables, demand review of the value in renewing a contract, and limits contract overruns of 10% on all contracts.

"After reviewing many contracts we began to notice a pattern of millions of dollars in service contracts being issued to the same vendor year after year,” Comptroller Maragos said. “In some cases contracts were renewed with the same vendor for over a decade without going through a competitive bidding process. I was also alarmed at seeing vendors charging the County significantly more than what was agreed to in the original contract without proper prior approvals and proper documentation. Even worse, the County was paying these claims. These practices and business as usual in Nassau County will end and the new directives will make sure that they do.”

The Comptroller’s office sent letters to the heads of every department that issues contracts on behalf of County taxpayers. Below is the purpose of each directive:

 

  • Directive 2010-1 Requirement Contracts- requires the contracting department to received quotes from 3 vendors who have requirement contracts and who are eligible to perform the task(s) specified under the contract.
  •   Directive 2010-2 Contract Overruns on Capital Projects- the Comptroller’s Office will not approve overruns that cumulatively exceed 10% of the original contract price where the department has not provided justification and obtained prior approval.
  • Directive 2010-3 Health and Human Services Contracts- all contracts must be competitively bid at least every 5 years to ensure that the County and County taxpayers are receiving and paying for the best possible service at the lowest possible cost.

These directives are effective immediately and will be strictly enforced by the Comptroller’s Office. Additionally, the Comptroller’s office has instituted a number of internal contract review policies to ensure that contract payments are clearly tied to performance milestones. Also every contract will be tested for value and necessity.

Comptroller Maragos added, “In the past, contracts were being casually renewed annually with the same vendor; without any documentation showing that efforts were made to locate other vendors, without assessment of past performance of the vendor, and without a statement of the need or value to continue with the contract.  Additionally, on the larger public works contracts it was not unusual for cost overruns to reach as high as 50% of the original contract when the policy was no more than 10%. On some IT contracts the cost overruns could reach 300% or higher and still not have a good working solution.”

            “My office will not sign-off on any contracts that do not follow these directives and do not provide the taxpayer with the best bang for their buck,” Comptroller Maragos concluded.

            Copies of the letters sent to the heads of departments that issue contracts can be obtained by clicking below:

PDF File Contract Directives