The North Dakota government violated the law by circumventing procurement rules when it created the state’s “Be Legendary” logo and branding, according to an audit.
In a report state auditor Joshua Gallion said two temporary employment contracts were used by the Department of Commerce to pay contractors to carry out the work, which kept the cash sums involved below thresholds that required a tender.
The report said the contracts, with a combined value of $87,162.50, should have been treated as a single one for services, requiring a tender. Under state rules a solicitation of informal bids or proposals was required for a contract this size using the state’s online procurement system and appropriate bidders list.
“Failure to follow Office of Management and Budget Purchasing Guidelines violates state law,” said the audit.
The report said North Dakota developed the “Legendary” brand in 2001 and used it primarily for tourism purposes until 2018, when it was decided to create a unified brand across the state government. A contract with a value of $9,500, and therefore requiring only one “fair and reasonable” quote, was created to develop the “Be Legendary” logo and other digital mediums including the government website.
“Once the original contract work was underway, the department claims they underestimated the amount of work that was necessary and, due to a quick timeline, they decided to offer temporary employment contracts to the two individuals who had been working under the original contract,” said the auditor.
“Based on the determination that the employment contracts were a continuation of services, and that there was no clearly defined break in services between the original contract and the employment contracts, the department circumvented procurement requirements and should have properly bid the work as one contract for services.”
Separately the audit found the Department of Commerce “did not monitor contract deliverables” related to an “entrepreneurial contract”. “As a result contract payments totalling $123,750 were made to unapproved subcontractors,” said the report. “Further, $23,448 of these payments were not supported by progress reports.”
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