Oregon state government has been stunningly inefficient when buying computers and other technology.
In fact, agencies’ buying habits are so bad that the state unnecessarily spent an extra $400 million to $1.5 billion during the 2015-17 budget period, according to a recent report from the state Audits Division.
The problem is ironic: antiquated systems of purchasing goods and services for information technology. Some of the purchasing systems date to the 1990s.
As a result, whereas one agency might pay $176.40 for a 24-inch Dell monitor, another paid $241.15. The state bought 1,300 such monitors during the study period, according to the audit report, and could have saved more than $16,500 if it bought at the lowest price.
In another example, agencies paid 131 different prices for the same Ricoh surge protector, ranging from $65.90 to $173.98. Prices also fluctuated widely for some software licenses and service contracts.
The state’s woes in managing IT projects have been well-known, and the audit report says more improvements also are needed there.
National studies have shown that the majority of IT projects run into significant issues, whether in the public or private sector. The technology itself is not to blame. The problems arise from human faults: arrogance in decision-making, internal rivalries, unrealistic expectations of what technology can do, equally unrealistic timelines, changing desires, mismanagement, lack of oversight and inadequate attention to testing.
All those showed up in the infamous Cover Oregon debacle.
As for buying IT products and services, the audit report criticizes technology as well as procedures. We are well into the 21st century, but unlike most corporations, the state lacks an overall purchasing system for products, whether computers or those little adhesive notes known as “stickies.”
The lack of a viable eProcurement system is indefensible and illustrates how public officials’ claims of cost-efficiency do not always match reality. Technology purchases represent a fraction of the state’s multi-billion-dollar budget. But if the lessons learned from this audit were applied to all state purchasing, the estimated savings could average from 5 percent to 20 percent.
The state is making progress, having launched OregonBuys as a pilot program for eProcurement in 2017. Ten state agencies participate so far. It won’t be fully implemented until mid-2021. Secretary of State Dennis Richardson, whose Audits Division performed the IT purchasing audit, and Republican legislators are outraged about the long timeline. Gov. Kate Brown and Democratic lawmakers should be, too.
Brown proposed some expansion of OregonBuys, but the state should move much faster. Investments in eProcurement will save money and potentially time.
There are all sorts of reasons to oppose centralized purchasing. It limits choice and reduces personal decision-making. Some jobs might become unnecessary. The technology of such a system is fallible. But so is the current decentralized approach. The audit report said, “purchase-level data is only available for approximately 12.5 percent of procurement expenditures.”
The report also noted, “Without the ability to analyze detailed purchase data for all procurements, Oregon is unable to identify opportunities for potentially millions of dollars in cost savings.” In contrast, states such as Georgia have achieved significant savings by tracking and analyzing such purchase contracts.
If the governor and Legislature truly are serious about saving money without harming services, as they should be, the audit report is a good place to start.