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CFO Alex Sink Calls on Citizens Property Insurance to Competitively Bid Contracts

8/13/2010

CONTACT: Jerri Franz or Jayme O’Rourke, 850-413-2842
 
 TALLAHASSEE — Florida CFO Alex Sink today sent a letter to Scott Wallace, executive director of Citizens Property Insurance Corporation, calling on Citizens to implement contract reforms to ensure accountable and competitive contracting, and allow all qualified businesses the opportunity to compete for work available from Citizens.  Wallace is scheduled to meet with CFO Sink’s staff about contracting procedures at Citizens next week.
 
“I was disappointed to learn recently that Citizens has elected not to competitively bid 33 of its current contracts, which together are worth close to $50 million,” wrote CFO Sink.  “Citizens has an obligation to be accountable and transparent to the people of Florida in its contracting processes.  A competitive, open solicitation process is the best way to ensure that Floridians’ money is being spent wisely.”
 
 
A copy of the letter follows below:
 
August 13, 2010
 
Mr. Scott Wallace
President/CEO & Executive Director
Citizens Property Insurance Corporation
2101 Maryland Circle
Tallahassee, FL 32303
 
Dear Director Wallace:
 
In anticipation of your meeting with my General Counsel next week, I would like to highlight an area of concern I have regarding competitive bidding of Citizens’ contracts.  I was disappointed to learn recently that Citizens Property Insurance Corporation (Citizens) has elected not to competitively bid 33 of its current contracts, which together are worth close to $50 million.  The South Florida Sun-Sentinel, which reported this information, also noted that Citizens frequently relies on an “emergency” exception to the competitive solicitation process.  I am hopeful that you can discuss the need to change this process and ensure more competitive bidding for Citizens contracts during your upcoming meeting with my staff.
 
Citizens is a quasi-governmental entity with an important public purpose, and therefore it has an obligation to be accountable and transparent to the people of Florida in its contracting processes.  A competitive, open solicitation process is the best way to ensure that Floridians’ money is being spent wisely.
 
While I understand that true emergencies may occasionally require the Board to take immediate action, I am concerned that Citizens may be relying too often on emergency exemptions to the competitive solicitation process.   I am also concerned when Citizens, relying on an “emergency” exemption, awards work to a single vendor for a multi-year contract. 
 
Earlier this year in a letter I sent to Chairman Jim Malone regarding Citizens’ emergency contract with Inspection Depot, I called for the implementation of a new competitive solicitation process to allow all qualified vendors the opportunity to compete for work available from Citizens. While I was encouraged that, at my suggestion, Citizens renegotiated the contract for the interim while requests for competitive bids were solicited, it is disturbing that this type of emergency contracting seems to be more prevalent within the company.

During my time overseeing the Department of Financial Services, we have developed specific contracting reforms designed to ensure accountable and competitive contracting procedures, some agency-wide and others in my own Department.  Training is mandatory for everyone working on Department contracts and to ensure the highest level of transparency all current contracts are posted on our website in searchable form.  All of our contracts over $35,000 are assigned a contract manager accountable for clearly defined deliverables and performance standards.   Contracting outside the normal process, such as in emergency situations, is limited to rare circumstances that require strict justification and are limited in scope and time.
 
I appreciate your willingness to meet with my general counsel and chief counsel for contracting and procurement next week to review your contracting procedure.  I would also like you to review with my general counsel each of the 33 current contracts that Citizens has awarded without competition, and the reasons for doing so.   We have expertise in this area and would like to be of assistance to you in making sure that Citizens’ procurement policies provide the highest level of accountability and transparency to the people of Florida.   Thank you in advance for your attention to this important issue. 
 
Sincerely,
 
 
Alex Sink
 
Cc:   Jim Malone, Chairman of the Board of Governors
         Harold Knowles, Board of Governors