- UP FOR BIDS: Arkansas's on-line services, some of which generate fees.
State government is preparing to ask for bids on the contract to provide on-line state services, such as tax payments, corporate filings, and criminal-background checks. Fees are charged for some of these services. The same private company has held the contract since the on-line services program began in 1997. Some people, potential competitors and others, would like to know how profitable the contract is, but the company won't say, and the information is not subject to the state Freedom of Information Act.
The contract has usually been extended by the Board of Directors of the Information Network of Arkansas without seeking bids. It's been six years since the Board last asked for bids, according to Peggy Gram, the Board chairman, who is an employee of the secretary of state's office.
The INA is an unusual public-private hybrid created by Act 1139 of 1995. Rather than appropriate tax dollars to set up a state web site and provide services, the legislature authorized a contract with a private company that would do the job at no cost to the state, but would be allowed to charge users “convenience fees” for some services. The Board, composed of representatives of various government agencies and professional associations, chose the Arkansas Information Consortium, which now has offices in downtown Little Rock. AIC is a subsidiary of NIC, which is headquartered in Olathe, Kan. NIC has similar contracts with 21 other state governments and numerous local governments.
This “self-funded” arrangement is beneficial to the state, Gram said. But nobody outside NIC knows how much money it makes from the user fees charged in Arkansas. The attorney general's office has advised that requiring NIC to reveal its profit margin would give competitors an unfair advantage not allowed by the Freedom of Information law, Gram said.
The bill that became Act 1139 of 1995 was sponsored by Reps. Jim von Gremp of Bentonville, Joe K. Hudson of Mountain Home and Douglas Kidd of Benton. All are gone from the legislature. Von Gremp and Hudson were Republicans, Kidd a Democrat. The bill passed the House 91-0 and the Senate 35-0. Among those voting for the bill was Sen. Mike Beebe of Searcy. Governor Beebe's picture now appears on the state government home page, Arkansas.gov.
INA remains a somewhat mysterious creature in state government. In April 2007, Legislative Auditor Roger A. Norman wrote a letter to Richard Weiss, director of the Department of Finance and Administration, posing two pages of questions about INA. The first item was:
“What type of organization is INA? Is INA a program within the government of the state of Arkansas, a for-profit corporation, a not-for-profit corporation, a not-for-profit organization, or some other kind of organization?” The director of DFA or his designee is a member of the INA Board. In 2007, Weiss's designee was Paul S. Louthian. He replied to Norman's letter. In response to the first question, Louthian said that INA was “a public instrumentality.” (Quotation marks his.) He said that INA “sets policy, provides performance-oversight, and approves fees charged for various services associated with the Arkansas.gov portal.”
Louthian's answers satisfied Norman that there was nothing in INA's operations that was in Norman's jurisdiction. Private audits have been done of INA's dealings with AIC, but they're not open to public inspection.
Janet Girard is the network manager for INA, but she doesn't work for INA. (INA has no employees, nor office either. It's just a board.) She works for AIC, the private group that contracts with INA, and she is the AIC representative on the INA Board. She oversees an AIC staff of nearly 30. She points out although AIC is a subsidiary of an out-of-state corporation, all the AIC employees, including herself, are Arkansas residents and taxpayers. “We're an Arkansas-based corporation,” she said. “Last year, we paid more than $150,000 in corporate taxes and $2 million in wages.”
She said that AIC will again bid on the INA contract.
Gram said a request for proposals is being drafted by the state Purchasing Office.