Key Committee Calls for Contract Reform - | Nashville News, Weather & Sports

NewsChannel 5 Investigates: Friends in High Places

Key Committee Calls for Contract Reform

(Story created: 12/12/02)

The fallout from our Friends in High Places investigation has now triggered a call for reform on Capitol Hill.

Today, a key legislative committee recommended more oversight of how state contracts are handled.

And the plan's architect told investigative reporter Phil Williams, our investigation showed lawmakers what was really going on.

"I think it caused us to look closer at what was going on and it gave us an example of what can happen when these things break down," said state Rep. Bobby Wood, R-Harrison.

Wood was talking about our exclusive NewsChannel 5 investigation -- which exposed how some friends of the governor landed millions of dollars in state contracts.

Among them: Workforce Strategists -- a Chattanooga company formed to provide intensive counseling for the unemployed.

In 1999, the Sundquist administration handed the company an exclusive state contract that would eventually be worth almost $2 million.

Administration officials argued it was "the only company in Tennessee" with experience for the job.

That came just six days after the company was incorporated.

In October, agents seized records from that company as part of a federal and state investigation into those alleged insider contracts.

"The greatest concern that we had was the number of contracts that were let 'sole source' or those that weren't competitively bid," Wood told the legislature's Fiscal Review Committee.

So, the committee proposed tough new legislation to try to prevent such sweetheart deals. It provides that:

  • All noncompetitive contracts worth more than $100,000 must be provided to the committee before they can be awarded.
  • Agencies would be required to disclose the names of the people who own the companies receiving those contracts.
  • And they must provide documentation that the companies really do provide a unique service and do have experience.

"That'll make sure that they are looking at a company that can do that job -- not just a company that was put together to get that contract," said Rep. Bob McKee, R-Athens.

Lawmakers say they'll file the new legislation when the General Assembly reconvenes next month.

Sen. Douglas Henry Jr., D-Nashville, told the Fiscal Review Committee, "This is a real step in the right direction."

Lawmakers say, with taxpayers now demanding greater accountability for how their money is spent, they want to make sure that contracts aren't awarded just because someone has a friend in high places.

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