The Office of the State Auditor (Office) offers a hotline program through which we receive complaints with financial or compliance implications related to state or local governments. The Office received a complaint alleging the Utah Inland Port Authority (Authority) improperly procured a contract worth $2 million.
We reviewed certain documents related to the Authority’s 2021 sole source procurement of a communications and logistics management network. We have reviewed applicable statutes and the Authority’s purchasing policy (Policy). The Authority is not subject to the Utah Procurement Code and has established its own Policy. We noted the following weakness in that Policy:
Sole Source Procurement Policy Lacks Transparency and Accountability Requirements Best practices in public sector procurement encourage competition, and require transparency and accountability in every procurement process. Leading public sector policies allow for sole source procurements with a properly documented justification and additional noticed intent to pursue sole source. Without these measures to ensure transparency and accountability, sole source procurements represent a significant risk for abuse.
The required notice allows competitors to inform the Authority that they believe they can provide the goods or services to be acquired.
The Authority’s Policy lacks:
Documentation of a sole source procurement justification (accountability)
Public notification of sole source procurement, including its justification (transparency) The Authority would benefit from adding these requirements to its Policy to ensure competition is encouraged, and procurement processes are reasonably transparent (publicly noticed) and accountable (documented).
We recommend the Utah Inland Port Authority Board Update its procurement policy to require public notice and written justifications for sole source procurements.
Our procedures were limited to matters related to the complaint. Had we performed additional procedures, other matters may have come to our attention that would have been reported to you. We appreciate the courtesy and assistance extended to us by Authority personnel during our review. We look forward to a continuing professional relationship. If you have any questions, please contact me.