THE MISSISSIPPI LEGISLATURE

The Joint Committee on
Performance Evaluation and Expenditure Review

Report # 369

A Review of the Department of Economic and Community Development's Personal Services Contracting

December 9, 1997

Introduction

The Department of Economic and Community Development's responsibilities include work force training; industry recruitment and relocation; tourism development; business finance assistance; and, minority business development. In discharging these duties, the department often uses personal services contractors to provide technical assistance, site location and development, strategic planning, and advertisement and marketing services.

Personal services contracting by state agencies and institutions in Mississippi is not a highly regulated activity. Unlike state service positions under the purview of the State Personnel Board, personal services contracts are subject to few pre-audit requirements. Thus state agencies and institutions have a great deal of flexibility in the utilization, selection, and monitoring of contractors.

Overview

The Department of Economic and Community Development's policies relative to personal services contracting comply with requirements of state law and contain essential components of a competitive procurement process. In examining a sample of twenty-six FY 1997 contracts, PEER found that the department documented compliance with its own personal services procurement standards with the exception of one contract. The department did not consistently utilize all relevant components of the best practices model of contracting, which PEER believes provides a more complete accountability standard, when selecting personal services contractors.

During FY 1997, the Department of Economic and Community Development (DECD) paid The Ramey Agency, the department's advertising contractor, $1,080,996 in management fees, which represents approximately 14% of the department's total allocation for advertising services. This percentage is consistent with the accepted level of compensation which, according to Mississippi advertising professionals and professors of mass communications, is approximately 15%. Although the department's advertising expenditures result from needs-based marketing plans, such plans do not contain measurable objectives to determine whether the advertising contractor's performance has a positive effect on DECD's recruitment of businesses, retirees, or tourists. The department does collect data to develop goals and objectives for its divisions and to determine future advertising placements.

DECD acts as a partner to local and regional agencies by providing financial and technical assistance to increase tourism in Mississippi. Contrary to allegations, PEER found no evidence that the department has required local or regional tourism agencies to utilize the department's advertising contractor or that DECD staff have influenced tourism grant applicants to use certain contractors.

Recommendations

  1. DECD should revise its personal services contracting policies to be more consistent with the best practices of contract procurement. The department's policies should define conditions which would justify exceptions to the competitive selection process and require that such exceptions be documented.
  2. DECD should revise its personal services contracting policies to require department staff to document the monitoring and evaluation of contractors' performance on a regular basis&emdash;e.g., monthly, quarterly, or annually.
  3. Although the department collects measurable data relative to its advertising contractors, DECD should revise its marketing plans with its contractors to include measurable objectives for the proposed advertising.

Download Full Text Report in Acrobat Format - (229 K)

PEER Home Page.

E-Mail

If you have questions about PEER, send e-mail to director@peer.ms.gov.