Moore: Raimondo is Not Wrong to Hire Out-of-State Vendors

Monday, April 11, 2016

Russell J. Moore, GoLocalProv MINDSETTER™

 

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There's no doubt about it. The fact that an out-of-state firm coined "cooler and warmer" helped contribute to the uproar over Slogangate. 

It makes sense at first blush.  Let's face it: the state has an endless supply of marketing and public relations firms. 

To make matters worse, Providence tries to market itself as "The Creative Capital". When the state hires an outside firm to devise a slogan and logo, it weakens the city's slogan.

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Slogangate

That's why it must have irked Rhode Islanders last week when GoLocal reported that during the first nine months of the 2015-2016 fiscal year, out-of-state vendors received contracts for roughly $524 million. That's about 48-percent of the money spent on contracts or payments to vendors.

The state's economy is still lagging. So many believe it would benefit us to keep the money local. 

In this case,  I have to disagree.

Simply put: that's not always the best way to do business.  Don't get me wrong, if two companies bid for the same contract and charge a similar amount of money and are equally qualified, then it should stay local.

But state contracts aren't intended to be a stimulus package. Nor should they be. Instead, they're intended to perform a specific purpose in the most cost-effective manner possible.

Not a Stimulus Package

What happens when an out-of-state company bids millions of dollars less than an in-state company? It would be the height of fiscal irresponsibility to select the in-state company just because they're local.  

The taxpayers deserve to see their money expended in the most economical manner possible. The money saved by going out-of-state could be spent on more services. Or, the savings could lower our taxes.

That was the case when the state decided to award its health care contract to United Health Care. The state saved about $5.5 million when it re-upped the contract with United in 2007 . It also stipulated that local communities could capitalize on the savings by following suit. 

Major Savings

One of the more frustrating moments I have ever encountered covering municipal government was back in 2008 when the Warwick City Council opted to leave roughly $1 million in savings on the table by neglecting to piggy back on the state contract. Naturally, Blue Cross argued that they offered more savings. But a neutral health care consultant affirmed United's assessment.

That RI health care contract accounts for the largest out-of-state expenditure. It amounted to $134 over the first nine months of the current fiscal year. 

None of this is to say that there aren't some questionable out-of-state contracts. The state paid roughly $10 million dollars over the first 9 months of the fiscal year to bond underwriter Wells Fargo Securities. The SEC has charged that company with defrauding investors in the 38 Studios bond offering. Given the severity of those charges it doesn't make sense, on principal alone, for the the state to do business with Well Fargo.

Reasonable Suggestions

And Dr. Ed Mazze, the former Dean of the University of Rhode Island’s Business School, makes some excellent points about how the state could make it easier for smaller, Rhode Island based companies to bid and win state business. The state should make the bidding process more transparent and simpler. Businesses who lose out on the bidding process should be made aware why. And the state purchasing department should do more outreach to local business. 

But the state should never hire a more expensive company or less qualified company just because they're located in Rhode Island. At the end of the day, the government needs make sure that the taxpayer's money gets spent as efficiently as possible. 

That's why I don't fault Raimondo for spending money on out-of-state firms.

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Russell Moore has worked on both sides of the desk in Rhode Island media, both for newspapers and on political campaigns. Send him email at [email protected] Follow him on twitter @russmoore713. 

 

Related Slideshow: Raimondo’s Tourism Problems Are Far From Over

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1)

Complete Mismanagement

The story of how three agencies could be hired before the Chief Marketing Officer — Betsy Wall — was engaged is unimaginable in the world of marketing. The fact that anyone in the Raimondo Administration thinks you need to leave Rhode Island to get superior design work is a demonstration of the disconnect between the Raimondo Administration and the talents in Rhode Island.

Rhode Island has many weaknesses, but a lack of fabulously talented designers is not one of them. 

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2)

Solutions Have the Potential to Create More Problems

In her press conference announcing the firing of Betsy Wall and the assertion that the tagline "warmer-cooler" would be discarded, but the logo would remain was another example of the Governor’s unwillingness to understand the issues being raise. To date,  the process, the product and the quality of the work were all flawed.

There is no member of the Raimondo Administration who has significant experience in developing and launching a national brand. 

In the interim, Raimondo has announced that Seth Goldenberg, CEO of Jamestown-based Epic Decade will play a key role in the reinvention of the existing work completed by Milton Glaser and Havas. Goldenberg is a talented facilitator, but he is not a Chief Marketing Officer. The legislature trusted you with $5 million this year and you are asking for another $5 million in this coming year's budget -- it is time to recruit the most talented RHODE ISLANDERS. Selling Rhode Island to America and the world is not that complicated.

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3)

Raimondo and Rhode Islanders

Rhode Islanders are negative. The press is mean. Talk radio is evil. All may be true and Gina Raimondo was not drafted by the Selective Service Agency to run for Governor. She sought the office.

The best way to engage and build trust with Rhode Islanders is to perform at a high level and produce. Bringing in “experts” from out-of-state who fail to perform is not a way to transform negativism.

Iceland footage, stock photos, false claims — hundreds of errors are not the fault of the negative Rhode Islanders.

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4)

Big Trouble

In the past few months, Raimondo has demonstrated that she has a lack of understanding of Rhode Islanders. First, the unwillingness to lower the flags to half-mast in recognition of Buddy Cianci's death was a significant miscalculation.

Every Rhode Islander knows that Cianci was flawed and a two-time felon, but they also know that he did interesting things and was maybe the states most famous or most infamous. 

Raimondo did not understand that most (not all) Rhode Islanders saw the duality of the flawed, failed and accomplished Cianci.

Similarly, she was tone deaf to the reaction of Rhode Islanders of the logo design by Milton Glaser. Whether is is the most brilliant piece of graphic art or pathetic work overpriced by a New York design shop it does not matter. Rhode Islanders clearly want a logo produced by a Rhode Islander. 

She is still fighting a silly fight.

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5)

Out-of-state Addiction

Rhode Islanders may be inferior, but the quote of Mark Twain may be applicable about the reflective talent of Rhode Islanders versus the smarter and more talented out-of-staters. The Governor's Chief of Staff, Commerce Corp boss and many other top appointees are from outside of Rhode Island. But, maybe not as superior as perceived. Rhode Islanders know that Iceland is not in Rhode Island, which restaurants have closed, and the importance of the burning of the Gaspee. 

Twain said, “When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years.”

 

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