"We're going to have to do something to make sure we have transparency and best practices," said state Rep. Gary Elkins of the Cooperative Contracts program, which facilitates more than $2 billion in government purchases every year by pre-approving products and services that agencies can then buy without competitive bidding.
The program, which is run by the state Department of Information Resources, has drawn scrutiny because it was used by the state health commission to give a $110 million Medicaid fraud detection system contract to an Austin technology company with questionable experience.
Last month, the Houston Chronicle reported that the program has a small staff and lacks oversight and competition, leading it to approve nearly three-quarters of companies that apply for pre-approval.
Elkins, R-Houston, the chairman of the House Government Transparency & Operations Committee, said in an interview after a contentious Wednesday committee hearing about the program that changes were needed even though lawmakers should usually avoid "micromanaging."
The lawmaker said he is thinking about introducing a bill that would require state agencies to consider three pre-approved vendors before making a purchase. That is already encouraged, but not required.
Todd Kimbriel, the interim director of the Department of Information Resources, told the Chronicle last month that he would support such a change.
"I think that absolutely is the right thing to do," Kimbriel said.
Kimbriel also said he expects the Legislature to impose a cap on the size of purchases that can be made through the program. He said he could support that, depending on where the line is drawn.
The interim director also told the Chronicle that he did not realize how little competition was in the program and would fix it.
At Wednesday's hearing, Kimbriel said the department is working internally to ensure "processes are tightened up" and also working with the state Comptroller's Office on changes.
Lawmakers expressed skepticism, in particular criticizing how the program does not verify reports from vendors about purchases.
"Really there is no process," said state Rep. Scott Turner, R-Frisco.
The state Senate has also shown an interest in reforming the Cooperative Contracts program. At a Senate Finance Committee hearing earlier this month, senators called the program "a mess."
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