The no-bid fiasco: Gov. Laura Kelly left with another Sam Brownback mess to clean up

How a tech firm secured its no-bid contract with Kansas under Brownback

CGI Technologies received a $61 million no-bid contract to upgrade Kansas tax systems after key, never before revealed meetings with state officials in 2016.
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CGI Technologies received a $61 million no-bid contract to upgrade Kansas tax systems after key, never before revealed meetings with state officials in 2016.

You can’t help but feel a little bit sorry for Kansas’ new governor, Laura Kelly.

The list of woes she inherited from the Gov. Sam Brownback years is long and well-documented. The financial challenges are immense, and they continue to grow.

Even Kelly has admitted the problems are worse than imagined.

School funding. Highways. Pensions. Prisons. Foster care. Republican legislative leaders, meantime, are hell-bent on going backwards and returning to the Brownback years with a large tax cut that would boost Kansas Senate President Susan Wagle’s U.S. Senate bid and throw nails underneath Kelly’s tires as she tries to get moving in Topeka. It’s the wrong approach.

And now, tack another headache onto Kelly’s list: What to do about the no-bid contracts totaling $110 million over 10 years that the Brownback administration awarded to CGI Technologies. The work was intended to upgrade the state’s tax return processing.

In October, the company missed a key deadline, and legislators were buzzing about a meltdown. The state is now forced to rely on its old system.

“So, they defaulted on their contract by not having it operating?” state Rep. Troy Waymaster, a Republican who chairs the House budget committee, asked this month during a hearing.

Kelly and her team face another treacherous decision: Do they plunge ahead, give CGI more time and try to make the new system work? Or do they pull the plug and sever the relationship, possibly leading to costly litigation?

The issue brings to light yet another disturbing aspect of the Brownback years: the administration’s reliance on no-bid contracts. A recent review by The Star and The Wichita Eagle found that the number of no-bid contracts had skyrocketed to more than 7,300. That’s double the total from just five years ago. The Kansas Legislature should take a closer look and consider reforms.

Kelly, for good reason, has promised a crackdown. Good Government 101 advises that most no-bid contracts are just asking for trouble. They rarely result in a good deal for taxpayers — and citizens don’t trust them.

As The Star’s and The Eagle’s reporting revealed, CGI appears to have relied on political connections to win its no-bid arrangement. Mark Dugan ran Brownback’s 2014 re-election effort and had worked as chief of staff to Lt. Gov. Jeff Colyer. Yet, there he was, working as a lobbyist on CGI’s behalf and appearing on a list of scheduled attendees for a key face-to-face meeting involving CGI and revenue officials in 2016.

The question of whether a contract with CGI had to be bid out was a thorny issue. But that, too, was decided in CGI’s favor. The man who made the call for the state, former Revenue Secretary Sam Williams, declined comment.

Any government needs flexibility to pursue no-bid contracts under certain circumstances. But the subterfuge the Brownback administration relied on in this case, and surely others, is beyond reproach. CGI promised a way for Kansans to pay back taxes online, a process the state lacked. That surely was seen as a way to boost revenue and bolster Brownback’s desperate assertion that his tax cuts would lead to growth.

All those factors could have fueled the push to sign CGI. Now Kelly is left with another mess. That’s too bad for her, and it’s too bad for Kansas.

Steve Kraske is a member of The Star’s Editorial Board. He’s covered politics in Kansas and Missouri since 1994. He’s the proud product of a writer-editor father and a politically engaged mother.