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Pa. treasurer refuses to pay no-bid contract

Peter Jackson, Associated Press

HARRISBURG, Pa. (AP) -- State Treasurer Rob McCord said Wednesday he is refusing to pay nearly $3.5 million to a company that Gov. Tom Corbett's administration hired under a no-bid contract to modernize and manage Pennsylvania's executive-branch websites.

McCord said Wednesday he has rejected invoices from a subsidiary of Kansas-based NIC Inc. dating back to January because he is concerned about the legality and propriety of the contract.

"This is a case of the Corbett administration cutting corners regarding contracting practices, inflating contract values beyond the original approved amounts, and using a no-bid process without adequately justifying the reasons," he said. "Not only is it a bad way to do business, it is outside the law, and we have an obligation to the taxpayers to reject these payments."

Administration officials defended the legality of the contract and called it a good deal for taxpayers.

McCord's comments are "inflammatory," said Nils Frederiksen of the governor's Office of General Counsel, contending that the contract and payments are no different than other deals that the treasurer's office approved.

The five-year, sole-source contract, whose value is very roughly estimated at $10 million year, was awarded to NIC subsidiary Pennsylvania Interactive LLC on Dec. 1.

McCord, who's widely considered likely to seek the 2014 Democratic nomination for governor, said he blocked the payments because the contract lacked proper approval from the state attorney general. He also said the invoices lack important information that is customary for consulting contracts and that his office has lingering questions about why no other bids were solicited.

McCord said his office has a responsibility to ensure taxpayer dollars are spent legally, and that his office's Bureau of Fiscal Review has stopped more than $348 million in improper payments over the last three fiscal years.

Dan Egan in the governor's Office of Administration said a no-bid contract makes sense because NIC has unique expertise gained through its similar work with 28 other states. Egan said the services include providing necessary hardware and software, including a catalog of more than 7,000 computer applications "that we can deploy at no cost under this contract."

"There's no other vendors in the market that can provide the range of services that NIC offers," Egan said.

No corporate spokesman was available at NIC headquarters Wednesday afternoon, the receptionist said.