Did Commissioner of Administration Kristy Nichols violate state law when she approved an amendment to the Alvarez & Marsal (A&M)?
In May of 2011, House Appropriations Committee Chairman Jim Fannin (R-Jonesboro) sharply criticized the Division of Administration (DOA) for DOA’s approval of a $6.8 million contract amendment for F.A. Richard and Associates (FARA), the firm that initially took over the operations of the Office of Risk Management.
Fannin and other members of the committee were upset that DOA did not seek approval of the contract amendment from the Joint Legislative Committee on the Budget (JLCB).
Things got tense as Fannin tore into Assistant Commissioner of Administration Steven Procopio. “All I’m seeing here is where FARA had a $68.2 million contract that somehow went to $74.9 without anyone’s coming to the … Committee … for approval,” Fannin said.
The JLCB was the committee that approved the original $68.2 million contract the year before. “Isn’t a contract a contract?” Fannin asked.
“It is until it’s amended,” Procopio said in typical administration double-speak. “Then it’s another contract.”
It was at that point that Patti Gonzales, Assistant Risk Director for ORM stepped up to the plate to rescue Procopio before he could do any further damage.
“We are allowed one amendment up to 10 percent (of the original contract amount) without legislative approval,” she said, adding that the Office of Contractual Review approved the amendment.
Suffice it to say committee members weren’t very happy to learn that under state law, the Office of Contractual Review may approve contract amendments of up to 10 percent one time without legislative concurrence.
Fast forward to January 2014.
Nichols announced last week that the $4.2 million contract with A&M had been amended by $800,000 to a nice round $5 million.
That’s the controversial contract under which A&M is charged with finding $500 million in state savings. If the firm’s initial report is any indication, the contract is going to go pretty much the way everything else this administration has done—that is to say, bad.
But wait. An $800,000 amendment to a $4.2 million contract?
Excuse us for questioning the validity of the amendment, but according to our math, that’s a 19 percent amendment. Of course we went to public schools in Louisiana, so Jindal may be able to discredit our figures.
But wouldn’t the approval of a 19 percent amendment without concurrence from the JLCB be in violation of that obscure law?
Well, the Office of Contractual Review is required to give its stamp of approval to the amendment.
But wait. The Office of Contractual Review is part of DOA and as such, takes its marching orders from Nichols who takes her marching orders from Jindal who takes his marching orders from…Timmy/Taylor Teepell? ALEC? Bobby Brady? Pick one.
But it was clearly stated back in 2011 that the law allows a one-time 10 percent amendment to contracts without JLCB concurrence.
To paraphrase Rep. Fannin, isn’t 10 percent 10 percent?
Isn’t the law still the law?
Well, that depends.
Remember that whiteboard sign in one of the DOA offices we alluded to on Jan. 23? That’s the one that says, “Do not ask about the law. Do not research the law.” (If there is a functioning brain cell left in this administration, assuming there ever was one, that message most probably has been erased by now.)
And then there was the consultant a few years back who told DOA officials, according to sources present at the meeting, to not let the law stand in the way of the administration’s objectives.
So, what are a few percentage points among friends?