The competitive contracting job is not over when the initial deal is struck. District officials have a clear duty to ensure that the contractor meets the specifications they have laid out in the RFP and the signed contract. Indeed, the individuals assigned to ensure that the contractor meets the district’s needs and contract provisions should be selected while the RFP is being assembled. This will give the eventual contract monitor the opportunity to develop an institutional memory of the particular contracting process, the personalities involved and the responsibilities of each party in the final contract.
It is important that the contract monitor have no conflict of interest. That is, oversight must be conducted by an individual with nothing to lose or gain personally from measuring and reporting on the performance of the contractor. For example, a district cannot fully rely on information about a contractor’s performance from an observer who has close friends or relatives who either lost or received their jobs because of privatization.
John Rehfuss, author of the Reason Foundation’s “Designing an Effective Bidding and Monitoring System to Minimize Problems in Competitive Contracting,” suggests that rather than using a monitor from the school department that originally provided the service, districts consider using “centralized monitors” who work in the contracting office, “usually the purchasing or procurement office.” He argues that although these monitors may be less familiar with the operational details of the service, they tend to be very familiar with the contract itself. “Being more removed from the program,” Rehfuss observes, “they are more likely to be disinterested, objective monitors and treat contractors more consistently.” Rehfuss argues that good centralized monitors ultimately “can become the basis of an experienced cadre of contracting officers” and reduce the “possibility of collusion between [district] program officers and the contractor.”
Likewise, contact between the monitor and bidders should be minimized during the bidding process to preclude not just impropriety (such as providing one contractor with exclusive insider information), but also the appearance of impropriety. This same restriction should apply to other district officials as well.
Kenneth P. May, author of the study of contracting in New Jersey, also recommends that a checklist be developed from the specifications of the RFP.The contract would then specify that the checklist be used in evaluating the contractor’s performance, and the contract would then detail penalties for repeated poor evaluations.
This approach has merit. A checklist arranged in advance will warn a contractor what level of service must be provided, provide a paper trail in the event that a district needs to penalize a contractor and encourage a monitor to provide a more complete and objective measure of the contractor’s performance than the monitor might otherwise be inclined to give.