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A state agency director defended the controversial loosening of the state`s purchasing act Thursday, telling a Senate panel it was a cost-effective way to cope with job cuts forced by a stingy budget.

But members of the panel on State Government Organization and Administration said they expect lawmakers to consider revoking the changes in the law when the General Assembly reconvenes for its November veto session.

During a vote late in the spring session on a 168-page bill covering several subjects, lawmakers approved changes to the purchasing act that raised the ceiling at which competitive bids must be sought to $25,000 from $5,000.

The bill also decentralized purchasing by the state`s office-management agency, the Department of Central Management Services, allowing individual agencies to make more of their own purchases up to the $25,000 limit.

Many lawmakers have admitted that they did not know the changes were in the bill when it was dropped on their desks shortly before the vote.

In two days of hearings in Chicago and Springfield, the revisions have been attacked by present and potential state vendors and governmental purchasing officers.

They contend that the law may end up costing the state more money and create the potential for abuse.

”Who did this and why was it done?” asked Jimmy North, who served as the state`s purchasing agent from 1973 to 1980.

”To gut the most cost-effective division of CMS does not make sense. . . . Some people can steal an awful lot of money with the ability to buy.”

But department director Steve Schnorf told panel members that he probably would have proposed the changes next spring if he had realized that they would have proven so cost-effective. Schnorf said the decision to change the law was approved by Gov. Jim Edgar`s budget office to cope with layoffs at the agency.