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Audit: Web-based procurement could’ve saved state $1 billion

December 19, 2018

SALEM, Ore. (AP) — An audit released Wednesday found that if the state of Oregon had used a web-based procurement app in the last biennium, it could have saved more than $1 billion.

Adoption of a statewide eProcurement system, if quickly implemented statewide, could close Oregon’s 2019-21 budget gap of $623 million without raising taxes, Oregon Secretary of State Dennis Richardson said in announcing his department’s audit.

The audit gives momentum to create an online system to track the $8 billion spent on goods and services by Oregon’s state agencies during each biennium, and to spot waste.

It is one topic in which Democrats, who control the governorship and both branches of the Legislature, and Republicans appear in harmony.

Gov. Kate Brown has said she wants a “modern, innovative state purchasing system.” In September, she called for one unified technology system to track and manage agency purchases.

Richardson, the top elected Republican official in Oregon, said he will partner with Brown “in any way I can to move this forward.”

The review of the Department of Administrative Services — which oversees procurements for goods and services for state agencies — and another office found that Oregon has the potential for saving between $400 million and $1.6 billion by using modern technology and ditching what it called outdated procurement systems and practices.

The Republican leader in the Oregon House of Representatives, Rep. Carl Wilson, called the audit’s findings “shocking and instructive.”

“This level of mismanagement, indeed the utter lack of management should raise the ire of all Oregon taxpayers,” said Wilson, of Grants Pass. He noted that agencies close to each other in Salem are paying wildly different prices for the same equipment.

State Senate Republican Leader Herman Baertschiger, Jr. said the audit shows systemic procurement problems across state agencies.

“This is another huge example of how in Oregon, revenue is not the problem, spending is the problem,” said Baertschiger, of Grants Pass. “Let’s take a good hard look at government spending and clean up practices at the state.”

Wilson said that in coming days, House Republicans will put forth legislation seeking the immediate implementation of a statewide procurement system.

At Brown’s direction, the Department of Administrative Services will seek permission from the Legislature to launch implementation of OregonBuys in February, her office said.

The auditors recommended acquiring a modern procurement system, like one called OregonBuys.

It could involve Oregon working with a California technology company that was involved in a bitter court battle with the state over a failed attempt to have a health exchange website, called Cover Oregon. Oregon said Oracle Corp. defrauded the state by charging $240 million for a health insurance website that didn’t work.

According to a settlement between Oregon and Oracle, all software acquisition projects over a certain dollar amount must determine if the company can provide a solution, the Oregon Department of Forestry said in an October 2016 newsletter. That provision is required by a 2016 settlement between Oregon and Oracle that ended a bitter legal dispute, according to the department, which has been developing OregonBuys project documentation.

Mike Carew, chief of staff for the House Republican Caucus, said that regardless of vendor or service provider, Oregon needs to do better than “throwing away” as much as $1.6 billion a biennium.

“Other states and large entities manage to have more efficient systems,” he said.

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