Deloitte deals cause concern

30 October 2009

30 October 2009 | Jake Kanter

The US state of Pennsylvania has been urged to overhaul its "shoddy" procurement processes, following an investigation by the Department of the Auditor General (DAG).

The DAG's special performance audit, Procurement of Deloitte Contracts, found the cost of IT service deals awarded to the consultancy in January 2004 increased 55 per cent to $592 million (£360 million) by December 2007, as a result of changed orders, "emergency contracts" and lack of competitive tendering.

Over the course of almost four years, Pennsylvania state also gave Deloitte $2.25 million (£1.4 million) in economic development grants and tax credits to create and retain jobs. The report said this was a potential breach of the law, given the value of contracts Deloitte had won.

Auditor general Jack Wagner also uncovered "shoddy monitoring and record-keeping" and claimed the Department of General Services (DGS), which oversees the state's purchasing, blocked him from viewing public documents. He said the problems indicated "potential flaws" in Pennsylvania's contracting processes.

The report called on governor Edward Rendell to centralise procurement and consider introducing legislation to tighten up bidding procedures.

A DGS spokesman said it had already implemented Wagner's recommendations, most notably a centralised procurement function, nearly four years ago. A Deloitte spokesman added it had competed for and serviced state contracts according to rules and procedures.


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