Are Lobbyists and Former Officials Persuading States to Consider Expensive Software That Doesn’t Live Up to Promises?

An Anonymous Tipster Tells Us Former State Officials May Have Influenced the Outcome of Government Bid Processes for E-procurement Software

Back-office software that allows governments to buy and businesses to sell goods and services through the Internet is a big and growing business. Unlike cybersecurity software, E-procurement software isn’t very sexy. Nevertheless, it’s a multi-billion-dollar business.

But according to an anonymous tip received by Checks and Balances Project, lobbyists and former officials may be persuading state government purchasing officials to buy expensive software through questionable contracts.

According to a survey by Governing, state procurement offices vary widely when it comes to their use of technology, performance measures and how well they manage the things they purchase.

The procurement process is complicated, as this graphic produced by the state of Georgia shows. Sometimes the awarding of these contracts requires state legislative approval.

E-procurement software could simplify government purchasing. But possible undue influence by former state officials raises questions about how the money of unsuspecting taxpayers is being spent.

In Missouri, for example, the Virginia-based E-procurement company, Perfect Commerce (now a Proactis company) employed a former Missouri Division of Purchasing director, Tom Blaine, as a consultant in 2015 while attempting to secure a multi-million dollar contract to provide purchasing software to the state. Missouri ultimately awarded Perfect Commerce the contract in March 2015, despite questions raised in the media about this decision. Since June 2015, Perfect Commerce has had a business registration in Luxembourg, one of the world’s top tax havens.

In Arizona, it was reported that former state Rep. Don Shooter, before resigning for unrelated reasons,  appeared to be steering an $8.7 million state contract to the French procurement software firm, Ivalua. During a Joint Legislative Budget Committee meeting, which Shooter chaired, he “[suggested] it was his maneuvering that allowed the Ivalua contract to move ahead.”

Based on our initial research, another important question in this new investigation is whether these procurement software systems perform as advertised.

We have filed public records requests to find how the software was sold to these and other states and if the performance promises made by these companies are panning out.

We’ll report back on what we learn.

Scott Peterson is executive director of Checks and Balances Project, an investigative watchdog that seeks to hold government officials, lobbyists and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.