Republicans kill Democratic bill banning ‘organizational conflicts of interest’ in state contracts; OK an alternative

Senate Republicans have rejected a Democratic bill to ban state contractors from having an “organizational conflict of interest” – such as the comptroller deemed the case in a state building management contract – and instead adopted a measure governmental entities to develop a policy on the matter.

Senate Democratic Caucus Chairman Lowe Finney of Jackson sponsored the bill inspired by Jones Lang LaSalle’s contract for management of state buildings (SB1447). A comptroller’s review found an organizational conflict in that the contract called for JLL to recommend actions on state buildings, then profit when the state followed the recommendations – for example, closing a state building and renting alternative space with JLL getting a commission for negotiating the rental agreement.

Republican members of the Senate State and Local Government Committee, including Chairman Ken Yager, R-Harriman, contended Finney’s measure was unnecessary.

“There just some fundamental problems with the bill,” said Yager. “L et the agencies we have created make these policies… rather than one-size-fits-all approach.”
Yager’s alternative bill, SB767 as amended, instead calls on the state’s Central Procurement Office, the State Building Commission and the state Department of Transportation to “establish policies and procedures to define and identify organizational conflicts of interest.”

Finney said that does not go far enough and it would be much better to have a clear prohibition as part of state law to “put some teeth in it make it count.” He said that his bill includes a penalty provision, namely termination of the contract by the state comptroller.

Comptroller Justin Wilson, whose audit raised the issue, said he preferred Yager’s approach because state contracting is a “a very rapidly changing situation” and policies could deal with issues as they arrise.

Yager’s bill was approved 7-0. Only the two Democrats on the committee voted for Finney’s bill, while four Republicans voted no and two abstained. Five yes voted are needed in the committee for a bill to be approved.