State Procurement and Contracts Reform
The Problem
Idaho taxpayers pay for all kinds of state procurement and contracts: construction (roads, buildings, repairs), services (IT support, consulting, professional work), and goods (office supplies, equipment, materials). Too much money gets lost along the way. Winning companies or vendors often hand off most of the work or supply chain to layers of subcontractors, middlemen, or additional vendors. Each layer takes a cut for overhead and profit. By the time the real workers, providers, or products arrive, there is barely enough left for fair pay or fair value. This leads to low wages, cheap shortcuts, delays, higher costs, and reduced quality across departments like transportation, health, education, environment, and corrections.For construction contracts, the main company often does little hands-on work, bending rules like Idaho Code §54-1902 that require at least 20 percent self-performance. For services and goods, there is no similar self-performance limit, so layers and markups are even harder to control. No good checks or public view means waste builds up in every type of state purchase. Money does not reach the folks doing the real work or delivering the real value.
What I'll Do Day One as Governor
Sign an order that fixes how we award and run all state procurement and contracts over $50,000 for every agency (construction, services, goods, IT, consulting, supplies). Start with big ones like Public Works and Transportation, then roll to health, education, environment, and more. Right away:
Make every bid or quote list all planned hand-offs, subcontractors, vendors, layers, and markups upfront: who, what part, how much.
For construction, stick hard to the 20 percent self-performance rule from Idaho Code §54-1902(2): Main companies do at least that much work themselves. Limit to no more than two extra layers (main to first hand-off to second max).
For services and goods, require clear disclosure of all layers and markups, and minimize unnecessary hand-offs where practical (e.g., cap markups at 15 percent per layer when allowable under existing procurement law).
Require proof of fair pay for everyone involved (workers, providers, subcontractors), based on Idaho rates or federal standards if needed, with spot-checks posted online on Transparent Idaho.
Test it on a mix of upcoming purchases (like one big highway over $1 million, one IT support contract under $200,000, and a supply deal for fire crews). Share results in 90 days on Transparent Idaho.
This uses powers I already have under the State Procurement Act (Title 67 Chapter 92) and public works laws (Title 54 Chapter 19). No new laws needed first.
How This Is Different From Now
Right now, hand-offs and markups run wild across all procurement with little public tracking or limits. Construction has a 20 percent self-performance rule, but it's not always enforced strictly, and services/goods have no equivalent. Bids chase the cheapest price without checking where money really goes, so 70 to 90 percent often gets passed down through layers. No easy way to see who gets paid what or how much is skimmed. Checks happen too late, if ever. Problems like big cuts, low pay, or fake hand-offs pop up after the fact. This hurts every department from health to wildfires. My way changes that: Set disclosure and limits early for all types of procurement, show fund flows online, and get regular folks watching to stop waste before it drains taxpayer cash or cheats workers and providers.
What I'll Push the Legislature For
Easy laws to make it permanent:
Lock in the 20 percent self-performance rule from §54-1902(2) for construction, plus two-layer limits and full disclosure for all procurement over $100,000 (construction, services, goods).
Require yearly online reports on how well procurement works (like percent done in-house or direct, average pay levels, total markups/cuts taken) on Transparent Idaho, covering every department.
Add more spot-checks during contracts for hand-offs, markups, and pay, paid for by small procurement fees.
Give extra bid preference points to vendors or companies that do more direct work or pay above basics, with fines or bans for rule-breakers.
No big new spending. Just smarter rules that help everyone.
How We'll Check It Works
We will keep it honest with:
Online postings of bids, hand-off lists, markups, payments, and progress for all qualifying procurement on Transparent Idaho.
Random checks during and after contracts.
A citizen team to review big deals and take tips from workers, vendors, or locals in any department.
Simple tools to spot odd stuff in payments, like big jumps in markups or cuts.
Yearly report on savings, value received, and improvements across construction, services, and goods.
Everything open for anyone to look and ask about.
How This Connects to Other Reforms
This reform cuts waste at the source of major spending. It generates 12 to 18 percent savings that fuel the rest of the plan. Those dollars directly support workforce incentives because less outsourcing means more in-house hires and budget reallocations because there are fewer blind cuts. Audits verify enforcement of disclosure and limits, while grant reform applies the same transparency tools to grant-funded contracts. Faster permitting means projects start sooner and reduces contract holding costs. It all works together to stop leaks before they drain the system.
Answers to Common Questions
Why combine construction, services, and goods into one reform?
They all suffer from the same problem: layers and markups draining money before it reaches the real work or product. Construction has a 20 percent self-performance rule (§54-1902), but services and goods do not. This single reform enforces the existing construction rule while applying similar disclosure and waste-cutting tools to everything else.
Why not ban all hand-offs or markups?
Some purchases need experts or suppliers the main vendor does not have in-house (e.g., specialized IT, niche equipment). Two layers (and the 20 percent rule for construction) gives room for necessary work but keeps money close to the real value and cuts unnecessary skim.
Won't tougher rules jack up costs or chase away vendors?
Bids might shift a bit at first, but long-term costs drop 12 to 18 percent by killing extra markups and layers (like in other states). Clear rules draw in honest vendors, and preference points reward direct, fair-pay bids. Pilots prove it before going all-in.
How do we make sure workers and providers really get fair pay?
With required proofs, random pay checks on jobs, online reports, and tip lines. Breaks mean fines and money back. The citizen team (with workers on it) helps verify through tips, voluntary site visits (with permission), or public input, no matter the department.
What if a purchase needs more hand-offs or markups for special stuff?
Job or purchase details can allow extras if truly needed (as rules say now), but we will favor bids with fewer layers and lower markups.
What if agencies or vendors fight back or find tricks?
The order makes them follow or face public call-outs. The citizen team spots issues, and laws add real teeth like fines, bans, or legal steps. Online tracking makes hiding tough.
Does this cost taxpayers more?
Very little. Use the current Transparent Idaho site, agency folks for lists, and volunteer citizen team. Small fees (like 0.5 percent on purchases) cover checks. Savings from less waste cover it easy and flow to more services everywhere.
How does this apply to small purchases or emergencies?
For purchases under $50,000 (or $75,000 for non-construction), Idaho law often skips formal bidding. The order focuses on those over $50,000 to start, with pilots proving the model before expanding. Emergencies get exemptions under existing law, so this will not block quick fixes when needed.
What about statewide open contracts or cooperative purchasing?
Idaho has statewide contracts for goods, services, and IT that agencies must use when available. This reform adds disclosure of any layers or markups in those deals, ensuring transparency even in pre-approved purchases.
Won't this create more paperwork for small businesses or local vendors?
The goal is less waste, not more red tape. Upfront disclosure is simple (list layers/markups in the bid). We will use existing online tools to make it easy. Small and local vendors often do more direct work anyway, so they will benefit from fewer layers and fairer competition, plus bid preference incentives.
What if federal funds are involved in the procurement?
Federal rules (like Davis-Bacon for wages or federal limits on subcontracting) apply first. This reform aligns with them by requiring extra disclosure and fair pay checks, and we will adjust pilots to comply fully.
How does this help rural departments or small vendors?
Fewer layers and markup caps reduce costs for rural projects. Small/local vendors benefit from preference points for direct work and fair competition.
How does this sequence with other reforms?
Pilots run in Year 1 (low cost), savings feed into workforce incentives and budget reallocations in Year 2. No unfunded changes.