 |  | |
 |
|  |
 |  | |
| | |
|
| |
| | |
|
|
Hudson County Politics Message Board |
|
Posted by Steven Glazer-Urban Times News on August 22, 2003 at 18:02:04:
Urban Times News
It certainly sounds like a great idea: simple, obvious, and badly needed. NJowestbid.com provides an ebay-style reverse auction service for government procurement of any and all services, soup to nuts. New Jersey law requires all governmental units to solicit competitive bids for all goods and services they purchase costing more than $17,500. The idea is to reduce the cost of government, says co-founder Daren Maloney. Maloney is Chief Financial Officer of West New York, and former purchasing agent of Hudson County.
The company has attracted attention recently because of its rented location in the office occupied by Gerard Lisa. Lisa is the Hoboken accountant who just pleaded guilty to a federal bribery charge after about a year during which it is thought that he cooperated with the ongoing corruption investigation. “We just rented some space there. Now, of course, we wish we had not and we are in the process of moving. Lisa has nothing to do with the company, nor does any other elected or appointed official with the exception of the founding partners,” said Maloney. The founders planned to make money by charging a fee, ranging from 1% to 3% to the winning suppliers after they won contract awards and got paid.
“It’s funny,” says Maloney, “Let’s say you were in an investment program, a 401K, let’s say, and you were putting 10% of your earnings into it. You would monitor it and watch the performance and ask questions if there were something you did not understand. And if the performance were not to your liking, you might do something about it. But now, here, people pay maybe 30% to 40% of their earnings to taxes, and they never question how it is being used, whether well or poorly. This is about reducing the cost of government and that means getting a better bang for your buck.”
About a year ago legislation was passed to allow New Jersey local governments to bid out contracts on the internet. The idea was to drive down the cost of government. By putting the contracts online the entire world can see the opportunity to sell product to governmental units with considerable purchasing power. By registering, any vendor can submit a bid, not just those with an “insider” relationship. www.Njlowestbid.com is the only company in the state with a permit to conduct the auctions. During preparation of the site, details were carefully worked out with officials of the state’s Department of Community Affairs, and with the office of the Attorney General. Naturally, there were concerns about possible bid-rigging and the potential for collusion, but those were addressed in the design of the system.
Maloney says the founders including Robert Byrne, Jersey City’s City Clerk, and Al Poreda, CEO of Desktop Systems, tried to anticipate as many of the possible bugs and build them out of the system. It is built for transparency, meaning that the whole world is theoretically watching all the bids coming in from all competing vendors on all available contracts. Everything is out in the light of day, says Maloney. “We can even track the bid back to the pc address it came from, right to the individual machine.
As former purchasing agent for the County of Hudson, Maloney ought to know. “We have been up and running for a little over a year now. We have not had many transactions, but the ones that we have had have all resulted in significant savings. We had a transaction with Atlantic County where they purchased rock salt and saved $80,000. Another transaction produced savings of roughly $6,000 for fuel in Union County. Altogether there have been five auctions and every one resulted in savings.”
Perhaps more interesting are the transactions that almost happened but did not, two in particular here in Hudson County. One with the County itself, and one with Jersey City. The bids were for rock salt and both would have resulted in worthwhile savings that Maloney estimates in the range of $25 to $50 thousand each. Why didn’t they happen? “Who knows?” says Maloney. “I am glad that it happened because it shows you how the mechanics of awarding government contracts work: one word-politics.
Interestingly, Maloney’s partner Al Poreda is the owner of Desktop Services, Inc. the frustrated bidder for a $3.2 million computer service contract with Hudson County. In that competition Poreda was “outbid” by a competitor who was almost a million dollars higher, but whose bid was preceded by a letter of ringing recommendation from Rep. Robert Menendez, D-13. Menendez dominates patronage throughout Hudson County and its municipalities through his control of the Hudson County Democratic Organization. “That’s what’s wrong with this picture,” says Maloney, “They are not interested in saving money. Not that money, not for that guy. It is all about protecting relationships. There is some incompetence, there is some bureaucracy, but mostly it is politics.”
Poreda is now preparing suit against the Freeholder Board for awarding the contract to the highest bidder, Menendez’ and Robert Janizewski’s pet vendor of IT services, Hindsight, Inc. Poreda feels he should have gotten the contract and says he will take the Freeholders to court and make them explain why they awarded the contract to Hindsight when the award contradicts their own policy for selection.
Meanwhile, there is an up-and-running fully functional website ready to save governmental units money on procurement of needed supplies and services. Curiously though it seems that purchasing agents throughout the state would jump at the chance, yet they are staying away in droves.
“Why is that, do you suppose?” says Poreda. “Many cities in the state are looking to protect certain vendors. This system was built to open the process to the whole world and that doesn’t play well to those with interests to protect. When you look at problems the state is having and consider that this is a way to reduce the cost of government, you would naturally think that people would jump at it.”
|
Hudson County Politics Message Board |
 |
 |
|
UrbanTimes.com |
