Dunleavy quietly abandons failed 4-year effort to consolidate statewide procurement
On Feb. 13, 2019, with lots of fanfare, Gov. Mike Dunleavy signed an executive order to consolidate the procurement functions of state government in a single office.
“The purpose of this order is to streamline and increase accountability of non-construction procurement activities within the executive branch of state government by realigning non-construction procurement staff to create solid line reporting to the DOA Commissioner or Commissioner Designee in DOA and clear managerial reporting within their respective agencies,” Dunleavy said in his order.
He said that about 100 non-construction procurement staff in various state agencies were to be transferred to the Department of Administration. He created the new Office of Procurement and Property Management and a task force led by Kelly Tshibaka to reinvent the process of purchasing goods and services for state agencies.
It would save money, lead to staff reductions, streamline ordering, make state government more efficient, end redundant purchases, and make it easier to enforce procurement policies, he said in Administrative Order No. 304.
On July 17, 2023, with no fanfare, Dunleavy signed an administrative order saying never mind.
The new order revoked Administrative Order No. 304, declaring an end to statewide procurement consolidation. Procurement staff were transferred back to individual state agencies, Dunleavy said in Administrative Order No. 348.
There has been no news coverage of the failed procurement consolidation effort.
There should be a serious postmortem for at least three main reasons. First, the wasted time and millions invested in this exercise should be documented and understood.
We still don’t know what was achieved, if anything, by the so-called “Alaska Administrative Productivity and Excellence Project,” which included a study that was to cost up to $5 million. The excellence project was aimed at consolidating numerous state services, not just procurement.
Here is the executive summary of the information technology plan that was supposed to have been completed in 2020.
Here is the executive summary of the Alvarez & Marsal procurement plan, describing a consolidation effort that was supposed to have been completed more than two years ago.
Second, the excellence project contractor claimed that the decentralized approach to procurement—which Dunleavy signed off two-and-a-half months ago—results in “inefficiencies and operational issues.” The new administrative order from Dunleavy does not explain his reversal.
The excellence contractor estimated in 2020 that procurement consolidation would allow the state to eliminate from 15 to 25 jobs.
Third, the next time Tshibaka runs for public office, the public needs to know that she had claimed procurement consolidation as one of her main achievements, but it was really a monumental flop.
The state still has an excellence project website that says procurement consolidation is happening, though it has been abandoned.
“Procurement consolidation has many benefits including commodity and contractual cost savings, standardized and streamlined processes that improve efficiencies, and greater consistency and control in the exercise of procurement,” the excellent website says.
In June 2022, the state cancelled a procurement consolidation portion of a request for proposals that also dealt with consolidating information technology services.
When Tshibaka quit her state job as commissioner in 2021 to run against Sen. Lisa Murkowski, she wrote Dunleavy the following about alleged future savings from procurement consolidation that haven’t happened:
Before quitting in 2021, Tshibaka took part in a legislative hearing at which her office alleged that 44 procurement positions had been transferred to the administration department by January 2021. She testified to the Legislature on March 8, 2021 that procurement consolidation had been completed.
By February 2022, however, the department said only 3 procurement positions had been transferred into the Office of Procurement and Property Management. Consolidation was not completed.
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