Legislative committee: Bids? We don't need no stinkin' bids

In the world of government expenditures, one acronym — RFP — describes a step taken before many purchases.

It refers to a “request for proposals,” a process in which a number of bids are invited in order to ensure fairness and keep costs as low as possible. The type of services a public agency may need runs the gamut. For instance, the state’s purchasing division recently issued RFPs for an X-ray system, emergency vehicle accessories, and wiring, cabling and fiber communications infrastructure.

But, in October, there was no RFP process before a legislative committee awarded a nearly $1.2 million, no-bid contract to a consultant tasked with helping the Clark County School District with the nuts and bolts of its massive reorganization. The Republican-controlled committee only considered one firm — TSC² Group, whose president and CEO is Tom Skancke — and approved the contract the same day with a 5-2 vote.  

That vote came immediately after the committee’s creation of a panel headed by a close associate of Skancke, who recommended TSC² Group be retained.

School trustees and other community members have criticized the contract for several reasons, including the questionable qualifications of the consulting firm, the steep price tag that the school district is being forced to pay, and the lack of an RFP process.

So how was the legislative committee able to approve a no-bid contract?

“There is no legal requirement for the legislature or a legislative committee to go through an RFP process to hire a consultant or to approve a contract,” Senate Minority Leader Michael Roberson, who chairs the legislative committee, wrote in a text message. “I don’t think it’s anything new.”

Rick Combs, director of the Legislative Counsel Bureau (LCB), echoed Roberson’s analysis but offered more details.

Simply put, the legislative branch isn’t subject to the State Purchasing Act, he said.

According to Nevada Revised Statutes (NRS), the act’s “using agencies” include “all officers, departments, institutions, boards, commission and other agencies in the Executive Department of the State Government … The term does not include the Nevada Rural Housing Authority, the Housing Division of the Department of Business and Industry, local governments as defined in NRS 354.474, conservation districts, irrigation districts and the Nevada System of Higher Education.”

Nowhere in that passage does it say anything about the legislative or judicial branches of government, hence the LCB’s interpretation that it doesn’t apply, Combs said. “This is kind of a separation of powers issue for the three branches of government,” he said.

Even so, Combs said the act does allow for “sole source” contracts — in other words, contracts without an RFP process — when it involves contracting the services of an expert witness, a professional engineer, a registered architect, attorney, accountant or any other professional whose services couldn’t be “adapted to a competitive selection” as determined by the administrator. The Nevada Administrative Code outlines those exceptions in Section 333.150.

Combs didn’t know exactly how long the legislative branch has been operating under that interpretation but said it has been quite a while.

As director of the LCB, Combs said he decides when to issue RFPs for many of the legislative branch’s contracts, but if it involves a legislative committee, the lawmakers generally make those determinations.

Combs acknowledged that, in this case, some members of the legislative committee didn’t think approving the no-bid contract was the “right thing to do.” Two Democrats seated on the committee — Assembly members Dina Neal and Olivia Diaz — voted against it.

It wasn’t the first time a legislative body has opted out of an RFP, although Combs said that’s not common practice. He gave the following examples:

  • The 1999 Legislature approved funding to contract for a program that would track K-12 expenditures to the classroom level  and aggregate that information using a financial analysis model called In$ite. The system, which was awarded without an RFP process because no one else was providing the service at the time, is still in use today.
  • An advisory committee tasked with studying the possibility of locating a four-year state college in Henderson contracted with the city of Henderson for consulting services without an RFP process. The arrangement hinged on saving time and using some of Henderson’s existing consultants to prepare information for the advisory committee.
  • During the 2005 legislative session, the Fiscal Analysis Division entered into a no-bid contract with Jeremy Aguero and his firm, Applied Analysis, for consulting services related to property tax caps. The rationale: Aguero already had produced data that the Legislature believed would be helpful during the session.

Lorne Malkiewich, a prior director of the LCB, said he remembers approving a no-bid contract in the mid-1990s when the LCB needed to do some minor remodels to the offices of committee chairs.

“While I don’t recall committees directing this, I think the rationale is the same: there is a need to enter into this contract as soon as possible and there is a known and trusted contractor available to do the work,” Malkiewich wrote in an email.

Just moments before the no-bid contract was awarded, the legislative committee approved the creation of a Community Implementation Council (CIC), a board of directors-like group made up of appointed members from diverse backgrounds who could presumably shepherd the school district through the reorganization effort.

Glenn Christenson, a former Station Casinos CFO appointed to chair the CIC, advocated for the hiring of the TSC² Group. Christenson and Skancke have worked closely together in the past, including at the Las Vegas Global Economic Alliance.

Last week, Christenson and Skancke spoke to The Nevada Independent and defended TSC² Group’s qualifications for the gig. They did not address the contract itself, citing a lawsuit the Clark County School Board of Trustees filed last month, which mentions the contract.

The Nevada State Assembly chamber during Governor Sandoval's State of the State address on Jan. 17, 2017.  Photo by David Calvert.

Disclosure: Station Casinos has donated to The Nevada Independent. You can see a full list of donors here.