Private company negotiating for management of state “e-government”

jordan.schrader@thenewstribune.comApril 24, 2013 

State government is negotiating a contract to outsource website work to a private company that specializes in “e-government,” but the Legislature could stand in the way.

In a twist, it’s not public-sector unions asking lawmakers to scuttle the deal. It’s business interests – specifically, insurance companies.

Kansas-based NIC Inc. makes its money in other states by charging businesses for information they seek from government. If it takes over Washington’s online financial transactions, the insurance industry expects to have to pay more to access motorists’ driving records.

“I don’t think that’s what we had in mind when we talked about contracting out,” said Vancouver Sen. Don Benton, the top Republican on insurance issues. “The purpose of contracting out is not to earn a profit on the backs of citizens.”

So senators tucked a provision into their transportation spending plan that would prevent an increase in the $13 charge for obtaining driving record abstracts. The transportation budget as a whole passed the Senate 47-0 and is subject to negotiations with the House.

Abstracts summarize a driver’s record of traffic accidents and convictions on traffic charges. The state releases them to brokers who are allowed to provide them to insurers, companies that employ drivers and a few others.

They are a key to the deal with NIC. But officials said other fees could be considered. “The contract and how they get to it and how they get paid is all subject to negotiation,” OFM legal and legislative director Julie Murray said.

“They may have to come up with another idea to pay for it. But I love what they’re doing,” said House Transportation Chairwoman Judy Clibborn, D-Mercer Island, who approves of handing the work that had been done by seven state employees to a to a private company. The state workers are moving to other positions.

NIC would be expected to give businesses more for their money. The company told OFM it can simplify payments and provide the information in different formats.

The transaction fees would allow NIC to do that work and run the state’s Access Washington web portal at no cost to taxpayers, the Office of Financial Management concluded last month when it selected the company in a contracting-out process mandated by lawmakers.

If the transaction fees are put in place, what would be unclear is whether businesses that choose not to use the new options could continue to pay only the current fee. That’s possible but still uncertain pending the negotiation of the contract between the state Department of Enterprise Services and the company, Enterprise Services spokesman Steve Valandra said.

Even those not wanting the new options would still have to go through NIC, Murray said.

The budget would prevent any fee increases on the abstracts, regardless of format.

Insurers said the Legislature doubled fees for abstracts in 2007 to $10 before increasing them again to $13 last year – higher than 41 other states.

“We’re way out of step above where other states are,” said American Insurance Association lobbyist Cliff Webster.

NIC has retained its own lobbyist, Becky Bogard, in Olympia. The company declined to answer specific questions, citing the continuing procurement process, but issued a statement saying Washington businesses and residents “deserve the convenience, efficiency, and security that online government services offer.

“It would be unfortunate if anything limited the funding and full value of eGovernment from being realized,” the company said.

Jordan Schrader: 360-786-1826 @Jordan_Schrader Download the Capital Update app for iPad and iPhone.

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