With one party dominating DuPage County politics for more than two decades, there is an inherent risk that the local procurement process favors companies and individuals who have political connections and those who contribute to the campaigns of state and local politicians. Procurement is the process by which a government entity buys, purchases, rents, leases, or otherwise acquires any supplies, services, equipment or construction.1 In June 1992, the DuPage County Board rescinded its 1983 procurement ordinance to enable the County to contract for certain purchases without the use of competitive bidding.2 At the end of 1998, the DuPage County Auditor began an internal audit of the County’s procurement process, and found that the County’s procedures did not comply with state statutes, did not address significant issues within procurement, and did not include appropriate internal controls.3 As a result of the Auditor’s findings, the DuPage County Board passed a procurement ordinance that became effective on July 1, 1999. The Purchasing Ordinance adopted addressed some, but not all, of the concerns of the Auditor’s Office.
The Citizen Advocacy Center ("Center") is a non-profit, non-partisan community legal organization dedicated to building democracy at the local level through increasing the citizenry’s capacities, resources, and institutions for self-governance. In pursuit of building citizen capacity and resources to effectively participate and monitor local government decision making with taxpayer dollars, the Center performed a comprehensive study of procurement policy and practice in DuPage County as compared to the American Bar Association’s Model Code to determine what questionable practices exist, and to make recommendations for systemic reform to address accessibility, transparency, and accountability barriers. Most importantly, the Center has placed in the public domain several databases detailing DuPage County vendors and the DuPage County public officials to whom those vendors have donated, and also posted a web-based searchable database of campaign contribution data for seventy–one state and county public officials from DuPage County, including many candidates not listed on the State Board of Elections website.
II. DuPage County Procurement
Several Illinois statutes and DuPage County ordinances guide the DuPage County procurement process both directly and indirectly.4 The pertinent local ordinance that directly effects procurement is the 1999 DuPage County Purchasing Ordinance, which attempts to obtain two sometimes-conflicting goals of maximizing both the efficiency and the transparency to ensure political integrity in the County’s procurement process. The Purchasing Ordinance states that "[t]he underlying purpose and policies of this ordinance are to manage the procurement process in accordance with the law; spend taxpayer’s money wisely and fairly; protect against fraud and favoritism; and to best meet the needs of DuPage County Departments through continuous improvement of purchasing systems and procedures."5 Continuity and efficiency is to be obtained through the use of the DuPage County Purchasing Division and the creation of a DuPage County Purchasing Manager.
The Purchasing Manager is responsible for authorizing County purchase orders, change orders, and agreements to contracts and is required to develop a program for specification standardization and to evaluate vendor performance.6 The Purchasing Division serves as the procurement agency for the County and has the authority to set standard contractual terms and conditions, create standard invitation-to-bid and proposal documents, and recommend preferred vendors, except for vendors in transportation goods and services.7 The Purchasing Department is required to draft specifications for goods and services that promote economy, encourage competition, and foster competition. The Ordinance also seeks to prevent the "steering" of a contract to a specific vendor by establishing specifications with which only that vendor can comply,8 and mandates that the purchasing department use a vendor’s goods or services to match the contract’s terms.
The 1999 Ordinance established six basic methods for procuring goods and services, including (1) the procurement of goods or non-professional services expected to cost up to $1,000; (2) the procurement of goods or non-professional services between $1,001 and $4,999; (3) the procurement of goods or non-professional services between $5,000 and $9,999.99; (4) competitive sealed bids for goods or non-professional services greater than $10,000; (5) requests for proposal (RFPs); and (6) procurement of professional services. The Ordinance also permits deviation from normal procurement operations in several circumstances, including emergency procurement, procurement in cooperation with another government entity, sole-source procurement, declaring the lowest bidder/offeror "non-responsible," the establishment of a satisfactory relationship with an architectural, engineering, or land surveying firm, and picking a bid/proposal the Parent Committee or County Board prefers.
Recognizing the tenuous balance to be maintained between promoting both efficiency and transparency, notable procedural deficiencies exist in the procurement process used by DuPage County. For example, County Board and Purchasing Department officials have abundant discretion in purchasing that is not standardized and does not require reporting to the public. Unfettered and unchecked discretion on the part of any County official leads to unaccountability to the citizens of DuPage County regarding the spending of taxpayer money.
III. DuPage County Code and the American Bar Association Model Code
The American Bar Association’s Model Procurement Code9 (the "Model Code") is designed for use at the state rather than the county level; however, specific concepts embedded in the Model Code would considerably improve regulations and shed significant light on the DuPage County procurement process. The following are the most notable points of concern. First, while both the Model Procurement Code and the DuPage County Ordinance assert that they are structured to promote transparency and continuous improvement of procurement practices, the DuPage County Ordinance neglects to create a formal mechanism for evaluating the County’s procurement practices as provided for in the Model Code.10
Second, the Model Code requires the Purchasing Department to maintain a list of all contracts awarded under the sole source and emergency procurement selection methods and annually submit the list to the governing body.11 Annual submission of a similar list from the Purchasing Department to the County Board is absent from the DuPage County Ordinance. This provision would act as a deterrent to the potential for manipulating the less rigorous selection procedures inherent in sole source and emergency procurement to benefit a politically connected vendor.
Third, provisions in the Model Code seek to prevent favoritism from infecting the format of procurement contracts by prohibiting the use of "cost plus percentage contracts."12 Cost plus percentage contracts provide for an automatic increase in a contractor’s fee with increases in a particular cost element. Profits increase in proportion to dollars spent, and thereby provide the contractor with an incentive to be inefficient. An additional problem is that the contractor’s final costs might actually be less than the percentage increase required by the contract, giving the contractor extra profit at taxpayer expense. The DuPage County Ordinance fails to expressly prohibit DuPage County from entering into "cost plus percentage" contracts.
Fourth, the Model Code includes a waiver of sovereign immunity for civil actions between a government entity and a prospective or actual contractor to determine whether the solicitation or award of a contract complied with the applicable statutes and regulations.13 A waiver of sovereign immunity prevents procurement decision makers from reviewing their own decisions in the resolution of disputes, and thereby increases accountability mechanisms. The DuPage County Purchasing Ordinance lacks a similar provision.
Finally, the most glaring difference between the Model Code and the County Ordinance is the commitment to transparency in the selection of professional service providers. The DuPage County Ordinance permits a highly discretionary selection process for professional service providers while the Model Code suggests formal selection procedures based on the type of service required.14 A comparable formal process for professional service providers would protect against awarding a professional services contract to the shrewdest political donor rather than the most skilled provider.
IV. Procurement and Home Rule
Home rule places at the local level the power to tax and regulate with broad discretion any function pertaining to government and local affairs. DuPage County is evaluating home rule status, which would open the door to self-regulation of issues related to public health, safety, morals, and welfare. 15 Home rule status would significantly increase revenue-generating options for the County because it gives the home rule entity the power to tax above and beyond what is allowed by statute in areas such as amusements, liquor, cigarettes, gasoline, use taxes, and sales taxes whereas a non-home rule county can only tax to a certain degree as dictated by statute. Cook County is the only home rule county in the State of Illinois.
Procurement at the state and county level is dramatically affected by home rule status as detailed in American Healthcare Providers v. County of Cook.16 In American Healthcare Providers, the First District held that because State procurement laws do not specifically declare that the competitive bidding requirements be controlled exclusively by the State (as opposed to being the domain of home rule entities), Cook County was not obligated to follow competitive bidding requirements. Furthermore, in General Electric v. County of Cook, the court held that the County Board is permitted to disregard its own procurement ordinance regarding competitive bidding if it specifically votes to do so.17 Should DuPage County receive home rule status, the Board would be allowed to not only forgo the state procurement statutes, but also to effectively void its own purchasing ordinance by vote.
V. Recommendations for Systemic Reform
In order to ensure that existing issues of accessibility, transparency, and accountability are addressed, the Center recommends the following reforms:
• Eliminate vague language in the ordinance which use terms with different meanings interchange-ably, such as County, County Board, Chairman and Purchasing Department, and eliminate the use of passive verbs that muddle the chain of responsibility for implementing the Ordinance’s provisions;
• Provide on-line access of the Purchasing Ordinance and County Board meeting minutes so that the public and contractors may access the code easily and determine contracted vendors and contract amounts;
• Provide a mechanism for citizen protest to increase accountability and provide mandatory documentation for denial of a vendors’ appeal to remedy the existing vague protesting mechanism for vendors which is currently stacked against the potentially injured vendor;
• Implement steering safeguards placing greater emphasis on specification standardization and a requirement of public notice for deviation from those standards. Steering safeguards would protect against the intentional drafting of a Request For Proposal and invitations for bids around one firm. The Ordinance should include a mechanism for the review of specifications employed by the purchasing department to ensure that they promote competition;
• Implement professional service selection safeguards to remedy the current discretionary and vague provisions, in addition to including more formal provisions to protect against political favoritism that allow services that should be selected via competitive bidding to escape that process;
• Add additional sole source and emergency reporting requirements for the Purchasing Manager and Board Chairman to protect against political favoritism;
• Provide a formal review system for architectural, engineering, and land surveying firm performance, and publicly disclose review results. Disclosure will help to ensure transparency and that competitive pressure is not completely eliminated in an attempt reap the benefits of maintaining a continuous relationship with one firm;
• Specifically prohibit "stringing" through the change order process;
• Prohibit "cost plus percentage" contracts to ensure county funds are spent efficiently; and
• Amend wording of Purchasing Ordinance to ensure procurement procedures are followed regardless of home rule status.
James Madison said, "Knowledge will forever govern ignorance. And a people who mean to be their own governors must arm themselves with the power with gives knowledge." In an effort to provide knowledge so citizens may be informed community participants, the Center has analyzed the County’s procurement policies compared to the Model Code and made recommendations for systemic reform to address existing issues of accessibility, transparency and accountability. The Center has also made available to the public, at no cost, a web-based searchable database of campaign contribution data for 71 state and county public officials from DuPage County, including many candidates not listed on the State Board of Elections website, as well as databases detailing DuPage County vendors and the DuPage County public officials to whom those vendors have donated. The URL for the website is www.citizenadvocacycenter.org.
A library of educational brochures on issues of public concern, such as guides to Illinois and Federal Campaign Finance, Identity Theft, the Freedom of Information Act, the Open Meeting Act, Home Rule, and Mandatory Arbitration and Adhesion Contracts, are available at the Center and on our website. For further information regarding the DuPage County Procurement Project, please call (630) 833-4080.
1 DuPage County Code art. 6 §2-300-1-101(2)(1999).
2 Letter and Report from William T. Jacklin, DuPage County Auditor, to Robert J. Schillerstrom, Chairman of DuPage County Board (Jan. 14, 1999); (Aug. 2, 1999).
4 These laws include the Illinois Procurement Code (30 ILCS 500), the Local Government Professional Services Selection Act (50 ILCS 510/1), the Illinois Competitive Bid Requirements Act (55 ILCS 5/5-1022), the Public Officer Prohibited Activities Act (50 ILCS 105), the State Gift Ban Act ( 5 ILCS 425), the Public Officers Prohibited Activities Act (50 ILCS 105), the DuPage County Purchasing Ordinance of 1999 (DuPage County Code art. 6), and the DuPage County Ethics Ordinance (DuPage County Code art. 7).
5 DuPage County Code art. 6 §2-300-1-101 (1999).
6 Id. art. 6 §2-300.2-101.
7 Id. art. 6 §2-300.2-101. Road construction and repair services are procured by the DuPage County Division of Transportation. The Transportation Division adheres to Illinois Department of Transportation (IDOT) standards with respect to contractual terms and conditions, and bid and proposal documents. The Illinois Procurement Code and Illinois Professional Services Selection Act determine IDOT standards. Under these rules, construction services under $30,000 are not required to be selected by competitive bid.
8 Id. art. 6 §2-300.5-101.
9 American Bar Association Model Procurement Code (1979).
10 Id. §§ 2-102, 3-703.
11 Id. § 3-704.
12 Id. §3-501.
13 Id. § 9-401.
14 Id. §§ 2-302, 3-203, 3-207, 5-501.
15 Ill. Const. art. 7 § 6.
16 American Healthcare Providers v. County of Cook, 265 Ill.App.3d 919 (1st Dist. 1994).
17 General Electric v. County of Cook, 2001 WL 417321 (N.D. Ill. 2001). The court held that the County Board could disregard its own rules by a legislative act. The failure to follow an ordinance must be by specific legislative act; however, it cannot be arbitrary.
Terry Pastika is the Executive Director of the Citizen’s Advocacy Center. She received her B.A. from Marquette University in 1992, and her J.D. from Creighton University School of Law in 1997. She is licensed to practice in Illinois, California, and Nebraska. Ms. Pastika regularly facilitates seminars teaching citizens how to enforce public access and transparency laws.
Sarah Kleper is a Community Lawyer for the Citizen’s Advocacy Center. She received her B.A. from Ohio University in 1994 and her J.D. from the University of Cincinnati College of Law in 1997. She is licensed to practice in Illinois and Ohio. Prior to working at the Center, Ms. Klaper was a staff attorney with Southeastern Ohio Legal Services in Portsmouth, Ohio for three years, and later worked in private practice in Naperville, Illinois.
Jill M. Dressner is a Volunteer Community Lawyer at the Citizen’s Advocacy Center. She graduated from California State University, Long Beach, in 1993 and received her J.D. from Crieghton University School of Law in 1997. Ms. Dressner is an associate professor at MacCormack College and was a practitioner in the general litigation department at Jones Day. She has generously donated her legal skills to the Center over the last four years.