Tar Heel Tattler - June 2006

N.C. office supplies are cheaper by the doesn't
By Frank Maley

Chances are, when you need paper clips, you have two concerns: price and speed. Lots of vendors carry them, so you want the one that will get them to you cheapest and quickest.

That’s not necessarily what the state got when it signed a contract in November with Office Depot to provide basic office supplies for the next three years, with options for three more. The state agreed to pay $18.2 million a year, about $37,000 more than it would have paid Corporate Express Office Products, part of Dutch giant Buhrmann. Instead of next-day delivery, Corporate Express says, the state settled for second-day delivery.

How? The contract award was based on a point system developed by the state and Accenture Ltd., a New York-based management and technology consultant that, during the past three years, has done $30 million of work for Delray Beach, Fla.-based Office Depot. The work wasn’t related to the state contract but wasn’t disclosed until administrative hearings this year. Hampton Dellinger, a lawyer for Corporate Express, wants the state to give the contract to his client.

An administrative judge agrees the decision should be reversed. In a transcript, Judge Beecher Gray says he saw no wrongful collusion but found an appearance of impropriety. He says the state’s scoring system doesn’t work as it should.

Too much weight was given, for example, to having stores where employees could dash for supplies. But there wasn’t enough evidence that employees wanted that option nor that it was better than the next-day delivery offered by Corporate Express, Gray says. The state loosened a requirement for next-day delivery after Office Depot said it couldn’t meet it, Dellinger says.

The state says it has always considered factors other than price, but that didn’t sway Gray. The state, he says, should take the low bid unless there’s evidence that a higher bidder is the best option. “In this case, it’s just not here.”

Secretary of Administration Britt Cobb will review Gray’s decision. Cobb’s decision can be appealed to Superior Court. Sen. David Hoyle, a Gastonia Democrat and vice chairman of the Senate Commerce Committee, says the state’s reliance on a consultant with an apparent conflict of interest “doesn’t pass the smell test.”