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Governor cancels plan to hit state vendors with fee to fund computer system

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PROVIDENCE, R.I. (WPRI) – One month before it was set to go into effect, Democratic Gov. Gina Raimondo has nixed a plan to tack a 1% fee onto all state contracts to pay for a new computer system.

In a letter dated April 9, about 730 state vendors were informed a new “e-procurement” computer system is set to come online this summer, designed to be what the Department of Administration called a “one-stop shop” to file and track bids. To fund the IT system, businesses were told the state was going to charge a 1% “administrative fee” beginning on June 1.

One state contractor – who asked to remain anonymous to protect his relationship with state officials – said the cost of the fee would likely just have been passed on to taxpayers, because businesses would increase the cost of a contract to account for it.

The plan was put forward in a budget amendment proposed by the Raimondo administration and passed by the General Assembly last year. But on Wednesday, Raimondo said she was nixing the fee.

“When I learned about it I gave the directive to the Director of Administration not to impose the fee,” Raimondo said. “The economy is doing better, revenue is up, we don’t need to impose a fee on small businesses.”

Two days before the governor revealed her decision, Republican gubernatorial candidate Allan Fung released a statement blasting the fee plan.

“The last thing we should be doing is putting another fee on companies looking to do business here,” Fung said. “The state really has a spending problem, and we shouldn’t be turning around and forcing local companies to bail us out of those bad habits.”

Brenna McCabe, a spokesperson for the Department of Administration, said the fees were expected to generate about $540,000 annually. She said the e-procurement system has a one-time $400,000 “implementation cost” and will cost taxpayers $1.3 million over eight years.

The e-procurement system is slated to roll out in phases, according to McCabe, with the first phase set to launch this summer and the second in 2019. 

Tim White ) is the Target 12 investigative reporter and host of Newsmakers for WPRI 12 and Fox Providence. Follow him on Twitter and on Facebook

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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