A lack of funding again is plaguing state government’s “Clean Contracting” system, this time hindering an oversight board’s ability to determine when state agencies can hire private-sector workers.

Faced with an ongoing disagreement between the Department of Transportation and the union representing about 1,000 state engineers, planners and safety inspectors, the State Contracting Standards Board may be forced to turn to the General Assembly when the next regular session begins in January – both for funding and for guidance.

“We have some huge issues we are trying to deal with, and we’re trying to do it without any staff,” board Chairman Gale Mattison, a retired executive financial officer from the state Office of Policy and Management, said this week. “It’s not a good situation.”

The board was supposed to be the linchpin of a new system developed by Gov. M. Jodi Rell and the General Assembly to counter the contracting scandals that drove former-Gov. John G. Rowland from office amid an impeachment inquiry in July 2004. Rowland served 10 months in federal prison after admitting he accepted about $100,000 in gifts from state contractors and from his staff.

After three years of battling, including three vetoes, Rell – a Republican – and the Democrat-controlled legislature compromised on the so-called “Clean Contracting” statute in October 2007.

Among the many provisions of that law was a new 14-member standards board, to be appointed by the governor and legislative leaders by January 2010, as well as a staff consisting of an executive director and a chief procurement officer.

Another key component of the statute involved a series of rules governing when state agencies can hire the private sector. Before privatizing most services currently performed by state employees, agencies must develop a cost-benefit analysis that demonstrates at least a 10 percent cost savings, and no loss in quality of service.

The law also makes that presumption that a “core governmental function should not be privatized,” and any department’s cost-benefit analysis arguing that private contracting is necessary must demonstrate that the agency in question lacks staffing to do the job properly.

The standards board was granted a $665,000 budget in the 2008-09 fiscal year, during which it was supposed to prepare for full-scale operations in 2009-10. But both Rell and legislative leaders were slow in appointing board members, and most of those dollars went unspent.

Similarly, most of this fiscal year’s $775,000 allocation for the board was canceled to help close overall budget deficits. And the $950,100 budget originally planned for the board for the fiscal year that begins July 1 was replaced last month with a token $10,001 – large enough only to handle board meeting costs and to keep the agency’s budget line item open.

So the board charged with weighing the cost-benefit analyses required by the law lacks the staff to evaluate them, or even to resolve disputes over when they are necessary.

“Right now I can’t see where the finish line is,” Mattison said. “I’m sure we’re going to get conflicting opinions from attorneys, depending on their stake in the game.”

That type of situation developed earlier this year when the former Connecticut State Employees Association, now Local 2001 of the CSEA/Service Employees International Union, called upon the Transportation Department to conduct a cost-benefit analysis before hiring private bridge inspectors.

DOT spokesman Kevin Nursick declined comment, but referred to a March 17 letter the department’s attorney, Alice M. Sexton, wrote to the union. Sexton responded that an analysis wasn’t necessary because the DOT has used private-sector highway and rail bridge inspectors “for many years.”

The union’s executive director, Robert Rinker, appealed to the standards board to determine whether or not bridge inspections are a “core governmental function” and whether the department could hire outside contractors to perform the work, regardless of past practice. “These analyses are a crucial part of the system and it’s basically being disregarded,” union spokesman Matt O’Connor said Tuesday.

Mattison said the board has asked Attorney General Richard Blumenthal’s office for assistance, but said the ultimate solution might lie with the legislature and next governor. Rell is not seeking re-election and her term expires in early January.

Rep. Christopher L. Caruso, D-Bridgeport, who was co-chairman of the legislature’s Government Administration and Elections Committee during the years when the “Clean Contracting” legislation was developed, said the governor and lawmakers should have given the system the funding it needs.

“It’s a case of spending money to save more money,” Caruso said, adding that the Rowland administration awarded hundreds of millions of dollars worth of inflated contracts without competitive bidding – several of which went to businesses that later provided gifts to the ex-governor. “It’s not as important to some people as it should be.”

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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