District of Columbia:

Procurement System Needs Major Reform

GAO-07-159: Published: Jan 19, 2007. Publicly Released: Feb 15, 2007.

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To improve acquisition outcomes, in 1997 the District established the Office of Contracting and Procurement under the direction of a newly created chief procurement officer (CPO). Since then, the District's inspector general and auditor have identified improper contracting practices. This report examines whether the District's procurement system is based on procurement law and management and oversight practices that incorporate generally accepted key principles to protect against fraud, waste, and abuse. GAO's work is based on a review of generally accepted key principles identified by federal, state, and local procurement laws, regulations, and guidance. GAO also reviewed District audit reports and discussed issues with current and former District officials as well as select state and local officials.

The District's procurement law generally does not apply to all District entities nor does it provide authority to the CPO to effectively carry out and oversee the full scope of procurement responsibilities across all agencies. A lack of uniformity in its procurement law and the CPO's limited authority not only undermines transparency, accountability, and competition but also increases the risk of preferential treatment for certain vendors and ultimately drives up costs. The current law exempts certain entities and procurements from following the law's competition and other requirements, and according to current and former District procurement officials, there is a push to expand independent procurement authority--a move that would reverse action taken by the District a decade ago. Other provisions of current law further erode competition. Notably, the law provides broad authority for sole source contracting and establishes high-dollar thresholds for small purchases, which are generally not subject to full and open competition. Also, in implementing the law, sufficient management oversight is lacking to ensure employees do not make unauthorized commitments. The District has been challenged to effectively manage and oversee its procurement function, due in large part to the low-level position of the procurement office in the governmental structure, the rapid turnover of CPOs, and multiple players having authority to award contracts and affect contract decisions. At the same time, the District does not have the basic tools that contracting and agency staff and financial managers need to effectively manage and oversee procurements--including a procurement manual, a professional development program, and an integrated procurement data system. In summary, the District's procurement system does not incorporate a number of generally accepted key principles and practices for protecting taxpayer resources from fraud, waste, and abuse. Specifically, the District lacks a comprehensive procurement law that applies to all District entities over which the CPO has sole procurement authority and promotes competition; an organizational alignment that empowers its procurement leadership; an adequately trained acquisition and contracting workforce; and the technology and tools to help managers and staff make well-informed acquisition decisions. To better ensure every dollar of its more than $1.8 billion procurement investment is well spent, it is critical that the District have a procurement system grounded in a law that promotes transparency, accountability, and competition, and helps to ensure effective management and oversight and sustained leadership. High-level attention and commitment from multiple stakeholders--including Congress--are needed if the District's procurement law is to provide the right structure and authority and if procurement reforms are to succeed.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: In addition, to further discourage the use of unauthorized commitments to vendors, the Chief Financial Officer (CFO) of the District of Columbia should work with the CPO and other stakeholders to, upon revision of the ratification directive, track and evaluate the use of direct voucher payments and ratifications to improve management attention and oversight of agencies' unauthorized commitments with vendors.

    Agency Affected: District of Columbia: Office of the Chief Financial Officer

    Status: Closed - Implemented

    Comments: Consistent with this recommendation and according to the CFO's office, its actions to revise the financial policy on unauthorized commitments for goods and services was coordinated with the CPO's office to discourage them. As such and consistent with our related recommendations aimed at the mayor's and CPO's offices, as of June 2009, the CPO's office has taken aggressive actions to significantly reduce the number of ratifications requested by agencies and discourage unauthorized commitments by district government personnel. First, as of March 2008, the CPO cut-off approvals for ratification requests from district agencies. Second, as part of a one-time alternative to ratification to address situations with agencies continuing to identify having received goods or services without a valid written contract, the CPO's office and the Office of the Attorney General agreed to a temporary procedure--under the legal theory known as Quantum Meruit Recovery--between August 2008 and July 2009 under which the attorney general's office would consent to a court order, on behalf of the District, to pay a vendor that has provided goods or services without valid written contract. Under the temporary Quantum Meruit procedure, various stringent controls were put in place that the agencies had to follow to support the CPO's and Attorney General's response to financially settle any court-approved claims of vendors, based on the agency's written certification of reasonable value of the goods or services rendered to the agency. Finally, in March 2009 the CPO's office issued new procurement policy that permanently prohibits the use of ratifications for unauthorized commitments. To clearly discourage city employees, the new policy states that no city employee shall authorize payment for services or supplies received without a valid written contract; no employee shall enter into an oral agreement with a vendor to provide supplies or services to the District without a valid written contract, and any violation of this policy shall be cause for the employee's termination (or any supervisor who directs an employee to violate the policy shall be terminated). The policy also now prohibits paying any vendor who enters into an oral agreement with a city employee for supplies or services without a valid written contract. These actions by the CFO's and CPO's offices are consistent with our recommendation that the district's policy not encourage unauthorized commitments by government personnel.

    Recommendation: To further discourage the use of unauthorized commitments to vendors, the Mayor of the District of Columbia, in coordination with the CFO and other stakeholders, should revise Directive 1800.04 to be consistent with FAR part 1.6 and clearly state, consistent with the policy of FAR section 1.602-3(b), that these ratification procedures are not to be used in a manner that encourage unauthorized commitments by government personnel.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan and a timeframe to the House and Senate oversight committees, and in April 2009 provided GAO and those committees an update on the District's continuing efforts to address GAO's recommendations. As of June 2009, the CPO's office has taken aggressive actions to complete implementation of this recommendation and significantly reduce the number of ratifications requested by agencies. First, as of March 2008, the CPO cut-off approvals for ratification requests from district agencies. Second, as part of a one-time alternative to ratification to address situations with agencies continuing to identify having received goods or services without a valid written contract, the CPO's office and the Office of the Attorney General agreed to a temporary procedure--under the legal theory known as Quantum Meruit Recovery--between August 2008 and July 2009 under which the attorney general's office would consent to a court order, on behalf of the District, to pay a vendor that has provided goods or services without valid written contract. Under the temporary Quantum Meruit procedure, various stringent controls were put in place that the agencies had to follow to support the CPO's and Attorney General's response to financially settle any court-approved claims of vendors, based on the agency's written certification of reasonable value of the goods or services rendered to the agency. To clarify further, the temporary procedure required that a vendor must file a lawsuit in order to trigger the process for claim recovery, and that the district did not initiate the litigation. Finally, in March 2009 the CPO's office eliminated Directive 1800.04 policy, replacing it with new procurement policy that permanently prohibits the use of ratifications for unauthorized commitments. To clearly discourage city employees, the new policy states that no city employee shall authorize payment for services or supplies received without a valid written contract; no employee shall enter into an oral agreement with a vendor to provide supplies or services to the District without a valid written contract, and any violation of this policy shall be cause for the employee's termination (or any supervisor who directs an employee to violate the policy shall be terminated). The policy also now prohibits paying any vendor who enters into an oral agreement with a city employee for supplies or services without a valid written contract. These actions are consistent with our recommendation that the district's policy not encourage unauthorized commitments by government personnel.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should eliminate the procurement-related circumstance that allows direct voucher payments for emergency procurements.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: Between May and September 2007, the District's Chief Financial Officer (CFO) took action in reponse to this and a related recommendation directed to the CFO to develop and implement revised financial policy to eliminate emergency procurement-related circumstances that allow agencies to use direct voucher payments for unauthorized commitments. According to the CFO, to implement this revised policy, his office would further review and make conforming changes in all CFO fund obligation and payment processing policies and procedures; D.C.'s automated financial accounting records system; any D.C. laws and regulations; and notify all city employees, vendors, and others about the revised policy.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should require that specific guidance on the use of the DCSS program be incorporated into the District's regulations.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan with timeframes to the House and Senate oversight committees. Futher, in February 2010, consistent with GAO's recommendation for executive action, the Mayor submitted to the D.C. Council comprehensive reform legislation, entitled the "Procurement Practices Reform Act of 2010." According to the Chief Procurement Officer's (CPO) testimony before the D.C. Council, the reform legislation includes provisions to improve the use of the D.C. Supply Schedule (DCSS) program. The law was passed and took effect in April 2011. Specifically, section 412 is a separate section that establishes the DCSS program. As a result, the program is no longer embedded in the non-competitive section of the procurement law (i.e. as a condition for allowing sole source procurements). According to the CPOs's testimony, the legislation would not change the current DCSS processes for receiving proposals, awarding contracts, or placing orders. Also consistent with GAO's recommendation is action by the Office of Contracting and Procurement incorporating more guidance on the use of the DCSS program on its Web site. Specifically, the Web site includes specific guidance on the use of the program for vendors, including (1) notice for the mandatory presolicitation workshop for vendors interested in participating in the DCSS program; (2) DCSS Terms and Conditions; (3) instructions to vendors for how to apply for the DCSS; and (4) a list of awarded DCSS contracts.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should revise the DCSS program to (a) cap purchase ceilings at an appropriate threshold; (b) eliminate any schedule that contains fewer than three vendors or combine it with another schedule; (c) establish procedures to ensure all eligible vendors are provided an opportunity to be considered for orders; and (d) require the CPO to monitor and report on patterns of contracting with a limited number of the same vendors.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan and a timeframe to the House and Senate oversight committees, and in April 2009 provided GAO and those committees an update on the District's continuing efforts to address GAO's recommendations. As of April 2009, the mayor's update demonstrates that several actions have been taken to revise the DCSS program that promote elimination of barriers to competition identified in our report and respond to each part of this recommendation. For example, the CPO has (a) reviewed current caps for certain DCSS schedules and has now put in place appropriate dollar thresholds for each DCSS solicitation. In response to recommendations(b) and (c), the CPO has eliminated all DCSS schedules with fewer than three vendors and established procedures to ensure that all orders above $50,000 are posted on the city's contracting and procurement Web site to maximize competition by advertising opportunity for eligible vendors to submit offers. In response to recommendation (d) to monitor on patterns of contracting with a limited number of vendors, to test whether or not all eligible vendors are realizing the opportunity to be considered for orders, in 2009 the CPO's Procurement Integrity and Compliance office is analyzing data to report on the level of vendor rotation. Consistent with our recommendation, the CPO's actions to revise the overall DCSS program are aimed at expanding competitive opportunities among all eligible vendors, ensuring that the program is not used as a sole source contract vehicle. The executive actions taken by the mayor's and CPO's offices since 2008 to submit a comprehensive plan that includes a series of revisions to the DCSS program are responsive to maximizing competition and support closing out this recommendation as implemented.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should reconsider appropriateness of high dollar thresholds for small purchases to maximize competition.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan and a timeframe to the House and Senate oversight committees, and in April 2009 provided GAO and those committees an update on the District's continuing efforts to address GAO's recommendations. In response to this recommendation intended to reduce high dollar thresholds that limited competition for small purchases, several major actions were taken in 2009 which should promote more competition in the District's procurement system. First, in January 2009 the CPO's office submitted a legislative proposal to the city council. With the city council's enactment of the legislation in July 2009, this reform permanently amends the District's procurement law to reduce the small purchase limit for the Metropolitan Police Department and the Office of the Chief Technology Officer to $100,000, instead of the $500,000 threshold identified in our report as a barrier to competition. In justifying this legislation and consistent with our recommendation, the CPO testified before the city council in May 2009 that the $500,000 limit is too high, does not reflect best practices, and should be reduced so that high dollar contracts are subject to regular competition. Because of the importance of this issue, in March 2009 the mayor administratively ordered this change to be made, and the council's legislative action in July 2009 to institutionalize it makes the reform permanent. In January 2009 the mayor submitted a second legislative proposal to the city council to amend the District's small purchase procedures that allow use of non-competitive procurements. With the city council's enactment of this legislation also in July 2009, a district contracting officer may make a non-competitive procurement (i.e., obtain only a single quote from one source)for purchases less than or equal to $5,000 (rather than the $10,000 threshold identified in our report as a barrier to competition). The executive actions taken by the mayor and CPO's offices in 2009 to reconsider the appropriateness of high dollar thresholds for small purchases are responsive to maximizing competition and closing out this recommendation as implemented.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should eliminate sections 2-303.05(a)(3) and (a)(3A) of the District Official Code that allow noncompetitive procurements with a vendor who (a) maintains a price agreement or schedule with any federal agency; and (b) agrees to adopt the same pricing schedule as that of another vendor who maintains a price agreement or schedule with any federal agency.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan with timeframes to the House and Senate oversight committees. Further, in February 2010, consistent with GAO's recommendation for executive action, the Mayor submitted to the D.C. Council comprehensive reform legislation, entitled the "Procurement Practices Reform Act of 2010." According to the Chief Procurement Officer's testimony before the D.C. Council, the reform legislation eliminates several provisions of existing law to improve competition. The legislation was passed and took effect in April 2011. Specifically, Section 404 (sole source procurements) of the law provides that a contract may only be award through noncompetitive negotiation when there is only one source for the required good or service and the Chief Procurement Officer must make a determination and finding justifying the sole source procurment, with information on the contract made publicly available after award. According to the CPO and consistent with GAO's recommendation, Section 304 also eliminates sections of the existing code regarding non-competitive procurements for vendors who maintain a price agreement or schedule with any federal agency or agree to adopt the same pricing schedule as that of another vendor who maintains a price agreement or schedule with any federal agency.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should consider reestablishing the CPO as the sole authority for suspension and debarment decisions.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan and a timeframe to the House and Senate oversight committees, and in April 2009 provided GAO and those committees an update on the District's continuing efforts to address GAO's recommendations. As of April 2009, the mayor's update indicated that reestablishing the CPO as the sole authority for suspension and debarment decisions requires amending the District's procurement law. Toward that end, in January 2009, the Office of Contracting and Procurement submitted to the city council proposed legislation to amend the district procurement law by eliminating the Debarment and Suspension Panel and making the CPO the sole debarment and suspension authority. A short-term improvement already in place is that the CPO is now the Chairman of the interagency suspension and debarment panel where he was previously a member. In July 2009, the city council passed this legislation, and thus responsive action is complete.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should provide the CPO sole authority and responsibility as head of the District's Office of Contracting and Procurement to manage and oversee the entire acquisition function for all entities, and if exclusions from the CPO's authority are necessary, they be defined narrowly by types of goods and services procured.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan with timeframes to the House and Senate oversight committees. Further, in February 2010, consistent with GAO's recommendation for executive action, the Mayor submitted to the D.C. Council comprehensive reform legislation, entitled the "Procurement Practices Reform Act of 2010." According to the Chief Procurement Officer's (CPO) testimony before the D.C. Council, the reform legislation draws from model procurement practices in other jurisdictions and would strengthen CPO authority by expanding the procurement code's applicability to district agencies. The legislation was passed and became effective on April 8, 2011. Section 201 of the law provides for the Office of Contracting and Procurement under the administration of the CPO, who has exclusive authority to administer the law's provisions. Section 201 specifies which agencies are not subject to the authority of the CPO, but that are nevertheless to conduct procurements in accordance with the law's provisions. Also, sections 203 and 204 further describe the duties, authorities, and responsibilities of the CPO, including serving as the central procurement and contracting officer for the District and providing overall leadership in the implementation of procurements rules.

    Recommendation: To address needed structural and fundamental revision in the District's procurement law and to strengthen management and oversight practices as well as facilitate congressional oversight, the Mayor of the District of Columbia should submit a comprehensive plan and time frame to Congress detailing proposed changes in line with our recommendations. This comprehensive plan, to be submitted to Congress, should apply, at a minimum, to all District entities funded through the District's appropriated budget and specify that if exclusions from its authority are necessary, they be defined narrowly by types of goods and services procured.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan with timeframes to the House and Senate oversight committees. Further, in February 2010, consistent with GAO's recommendation for executive action, the Mayor submitted to the D.C. Council comprehensive reform legislation, entitled the "Procurement Practices Reform Act of 2010." According to the Mayor's press release, the legislation would improve most of the District's existing laws covering procurement authority and consolidate the Chief Procurement Officer's (CPO) authority. According to the CPO's testimony before the D.C. Council, the legislation draws from model procurement practices in other jurisdictions and would strengthen CPO authority by expanding the procurement code's applicability to district agencies. The law was passed and became effective on April 8, 2011. The law, in section 105, specifies that it applies to all subordinate agencies, instrumentalities, and employees of the District government, independent agencies, boards, and commissions with limited, specified exemptions (for example, the Washington Convention Center and Sports Authority).

    Recommendation: To further discourage the use of unauthorized commitments to vendors, the Mayor of the District of Columbia, in coordination with the CFO and other stakeholders, should refer unauthorized commitments that are not ratified for further resolution under government claim procedures, to include in appropriate cases, possible referrals for Anti-Deficiency Act violations.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: Since 2008, the CPO's office has taken aggressive actions to complete implementation of this recommendation aimed at actively reducing and ultimately eliminating the number of ratifications requested by agencies and holding parties accountable. Specifically, as of March 2008, the CPO's office cut off approval for ratifications; abolished the ratification committee; and communicated to agency leadership the importance of avoiding unauthorized commitments with vendors and ratifications. Since the March 2008 cut-off, the CPO reports a drop off in requested ratifications to 16 from 116 in the previous year. As of March 2009, the CPO's new procurement policy bans ratifications altogether and employment termination for any employee (or supervisor directing an employee) who violates the policy with unauthorized commitments or payments to vendors without a valid written contract. Further, by 2009, the CPO's educational impact on agencies and vendors from the temporary "Quantum Meruit Recovery" procedure between August 2008 and July 2009 described in the above recommendation has helped them learn that goods and services cannot be purchased without a contract in place. These actions are consistent with GAO's recommendation.

    Recommendation: To further discourage the use of unauthorized commitments to vendors, the Mayor of the District of Columbia, in coordination with the CFO and other stakeholders, should, upon revision of the ratification directive, track and evaluate the use of direct voucher payments and ratifications to improve management attention and oversight of agencies' unauthorized commitments with vendors.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: Since 2008, the CPO's office has taken aggressive actions to complete implementation of this recommendation aimed at actively reducing and ultimately eliminating the number of ratifications requested by agencies and holding parties accountable. As further described above and consistent with this and the related preceding recommendations, the procedures put in place by the CPO's office between March 2008 and March 2009 to first stop approvals for ratifications; then use a temporary alternative to ratification ("Quantum Meruit Recovery"), and last implement new policy prohibiting the use of ratifications for unauthorized commitments and employment termination for employees (or supervisors directing employees) who violate this policy, complete efforts to address this recommendation.

    Recommendation: To strengthen management and oversight practices in the District's procurement system, the Mayor of the District of Columbia should recruit and appoint a CPO with the requisite skills and procurement experience as required in the law.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In June 2007, the Mayor appointed an Acting Chief Procurement Officer for the District and in November 2007, that appointment was confirmed by the District of Columbia City Council. According to the Mayor, and in follow-up discussions with the new CPO, the CPO is a Certified Public Procurement Officer with more than 15 years of relevant procurement experience. Specifically, the CPO has extensive career experience leading procurement systems in other states; has served as an active leader in national associations for government procurement and contract management officials, and has worked as an expert consultant to other procurement agencies throughout the country. His qualifications and expertise in the field of procurement have demonstrated the requisite skills and experience as required in the law. GAO is closing this recommendation.

    Recommendation: In addition, to further discourage the use of unauthorized commitments to vendors, the Chief Financial Officer (CFO) of the District of Columbia should work with the CPO and other stakeholders to refer unauthorized commitments that are not ratified for further resolution under government claim procedures, to include in appropriate cases, possible referrals for Anti-Deficiency Act violations.

    Agency Affected: District of Columbia: Office of the Chief Financial Officer

    Status: Closed - Implemented

    Comments: Consistent with GAO's recommendation, in September 2007, the Office of Chief Financial Officer (CFO) implemented a revised Financial Management and Control Order (No. 07-004) that makes it clear that improper use of fund purpose and budget object categories could also be subject to both District and federal Anti-Deficiency Act laws. According to the CFO in May 2007, in implementing this revised order, his office will implement the new financial management guidance by reviewing and making conforming changes in all CFO fund obligation and payment processing policies and procedures; the District's automated financial accounting records system; any District laws and regulations; and notify all District employees, vendors, and others about the revised order. Consistent with GAO's recommendation and according to the CFO, his office is also coordinating its actions to revise the financial guidance and other procurement reform actions with the CPO and mayor's offices. The CFO's actions appear to be consistent with GAO's recommendation.

    Recommendation: In addition, to further discourage the use of unauthorized commitments to vendors, the Chief Financial Officer (CFO) of the District of Columbia should work with the CPO and other stakeholders to revise Directive 1800.04 to be consistent with FAR part 1.6 and clearly state, consistent with the policy of FAR section 1.602-3(b), that these ratification procedures are not to be used in a manner that encourage unauthorized commitments by government personnel.

    Agency Affected: District of Columbia: Office of the Chief Financial Officer

    Status: Closed - Implemented

    Comments: Consistent with this recommendation and according to the CFO's office, its actions to revise the financial policy on unauthorized commitments for goods and services was coordinated with the CPO's office to discourage them. As such and consistent with our related recommendations aimed at the mayor's and CPO's offices, as of June 2009, the CPO's office has taken aggressive actions to significantly reduce the number of ratifications requested by agencies and discourage unauthorized commitments by district government personnel. First, as of March 2008, the CPO cut-off approvals for ratification requests from district agencies. Second, as part of a one-time alternative to ratification to address situations with agencies continuing to identify having received goods or services without a valid written contract, the CPO's office and the Office of the Attorney General agreed to a temporary procedure--under the legal theory known as Quantum Meruit Recovery--between August 2008 and July 2009 under which the attorney general's office would consent to a court order, on behalf of the District, to pay a vendor that has provided goods or services without valid written contract. Under the temporary Quantum Meruit procedure, various stringent controls were put in place that the agencies had to follow to support the CPO's and Attorney General's response to financially settle any court-approved claims of vendors, based on the agency's written certification of reasonable value of the goods or services rendered to the agency. Finally, in March 2009 the CPO's office issued new procurement policy that permanently prohibits the use of ratifications for unauthorized commitments. To clearly discourage city employees, the new policy states that no city employee shall authorize payment for services or supplies received without a valid written contract; no employee shall enter into an oral agreement with a vendor to provide supplies or services to the District without a valid written contract, and any violation of this policy shall be cause for the employee's termination (or any supervisor who directs an employee to violate the policy shall be terminated). The policy also now prohibits paying any vendor who enters into an oral agreement with a city employee for supplies or services without a valid written contract. These actions by the CFO's and CPO's offices are consistent with our recommendation that the district's policy not encourage unauthorized commitments by government personnel.

    Recommendation: In addition, to further discourage the use of unauthorized commitments to vendors, the Chief Financial Officer (CFO) of the District of Columbia should revise Financial Management and Control Order No. 05-002 to eliminate the use of direct vouchers payments for emergency procurements.

    Agency Affected: District of Columbia: Office of the Chief Financial Officer

    Status: Closed - Implemented

    Comments: In September 2007, the Chief Financial Officer (CFO) replaced Financial Management and Control Order No. 05-002 with a completely new order (No. 07-004). Following GAO's recommendation, the new guidance eliminates the procurement related circumstance that allows direct voucher payments for emergency procurements. The new guidance also provides more detail for certain items and gives examples of payments that are appropriate for use of direct vouchers in addition to defining certain types of payments that are not appropriate. Moreover, in May 2007 the CFO wrote us regarding this recommendation, stated that in implementing the revised order, his office would be reviewing and making conforming changes in all CFO fund obligation and payment processing policies and procedures; the District's automated financial accounting records system; any District laws and regulations; and would notify all District employees, vendors, and others about the revised order. Since we consider the CFO's actions responsive, we are closing this recommendation.

    Recommendation: To help ensure the District makes adequate progress in revising its procurement law and improving procurement management and oversight, the Mayor of the District of Columbia should submit periodic reports to congressional oversight and appropriations committees on such elements by agency as (a) competitive actions by agency; (b) number, value, and type of sole source procurements; (c) numbers of procurement personnel trained and the type of training received; and other indicators as appropriate.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: Consistent with this recommendation and on an annual basis since 2008, the Mayor of the District of Columbia is providing an update to the House and Senate oversight committees on progress being made on remediation items in response to GAO's report. For example, in April 2009, the Mayor wrote congressional committees an update on progress being made since the February 2008 comprehensive plan submitted to those committees for (1) revising the district's procurement law and (2) improving procurement management and oversight. According to the Chief Procurement Officer (CPO) in April 2010, future annual letters from the Mayor to GAO and congressional committees will provide updates on the CPO's office Annual Performance Report. Consistent with GAO's recommendation, this annual report will include key indicators and procurement data to track and publish performance metrics. For example, for the annual performance report, the CPO's office is tracking several key indicators--agencies' use of direct voucher payments; agencies' use of the DCSS program; and certification/training for contracting personnel. Finally, according to the CPO's office, agency-by-agency performance indicators have been developed for the performance report that will provide information on areas identified in GAO's recommendation, such as competitive actions and the number and value of non-competitive actions.

    Recommendation: To strengthen management and oversight practices in the District's procurement system, the Mayor of the District of Columbia should direct OCTO to work with the CPO to expeditiously complete installation of an integrated procurement data system.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: Between December 2009 and October 2010, the Chief Procurement Officer's (CPO) office will have completed a series of actions to work with the Chief Technology Officer's (CTO) office to secure necessary funding and finish installing the District's fully integrated on-line procurement data system (i.e. PASS). With these actions, the CPO has gained much needed capabilities for managing and overseeing the city's multi-billion dollar procurement system. Consistent with GAO's recommendation, the District took or plans to take the following specific actions: (1) contract award in December 2009 to the PASS vendor for installation of the final two modules (i.e. Ariba Contract Compliance and Sourcing modules); (2) completed design of integrated procurement data system in March 2010; (3) activated the PASS module for Contract Compliance in May 2010; (4) completed training in May 2010 for all CPO contracting staff and independent agency buyers on both new modules; (5) uploaded all active (i.e. legacy) contracts in the CPO's office and began entering new contracts into the new contract compliance and sourcing modules in July 2010; (6) activated the PASS Sourcing module in July 2010; and (7) begin entering all new contracts for independent agencies into the new contract compliance module in October 2010.

    Recommendation: To strengthen management and oversight practices in the District's procurement system, the Mayor of the District of Columbia should direct the CPO to establish a plan and schedule for professional development and certification programs for contracting staff and to track personnel trained.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In response to and consistent with this recommendation, the CPO's office completed several actions between 2008 and 2008 directed at improving professional development and certification programs for contracting staff and to track personnel training and certifications. For example, in fiscal year 2008, the CPO's office invested resources in training some procurement staff to become Certified Professional Public Buyers by the Universal Public Purchasing Certification Council. Also, in fiscal year 2009, the CPO's office rolled out a certification program, targeted at agency contracting officers and uncertified staff in the CPO's office, that is more closely tied to District guidelines and procedures. Also, all contract specialists and supervisory contract specialists in the CPO's office are being tracked on their professional contracting certification status (including year of expiration) to ensure training is kept up to date to maintain those certifications. Finally, the CPO's office in fiscal year 2009 is sponsoring a monthly professional development speaker series for contracting staff. In these sessions, District procurement professionals and external experts in public procurement are invited to lead discussions on critical topics in modern contracting and procurement.

    Recommendation: To strengthen management and oversight practices in the District's procurement system, the Mayor of the District of Columbia should direct the CPO to develop a procurement manual concurrent with revision in the procurement law.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: In February 2008, the Mayor of the District of Columbia submitted a comprehensive plan and a timeframe to the House and Senate oversight committees, and in April 2009 provided GAO and those committees an update on the District's continuing efforts to address GAO's recommendations. As of April 2009, in response to and consistent with this recommendation, the CPO's office has completed development of a procurement procedures manual for contracting staff, and has it posted on the District government's intranet Web sites for their use. According to the CPO's office, the revised manual is comprehensive and manual lays out in one place policies, rule, and standardized procedures and practices. With this new manual, contracting and agency personnel have a tool that provides for a clear and consistent understanding of contracting rules and processes. The CPO's office plan to keep this manual up-to-date through continuous revisions as policies change. In addition,in March 2008 the CPO's office updated a 43-page "Practical User's Guide to Procurement," which is posted on its public Web site to serve as a guide for District personnel, from the identification of a minimum need to the closeout of a contract.

    Recommendation: To strengthen management and oversight practices in the District's procurement system, the Mayor of the District of Columbia should direct the CPO to develop a process and tools for frequent and regular interactions with agency heads and program managers to support acquisition planning.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: Consistent with this recommendation, according to the Chief Procurement Officer (CPO), by April 2010 the Office of Contracting and Procurement completed their efforts with the District's budget and planning office to integrate acquisition planning into each agency's annual budget development and approval process. According to the CPO's office, procurement staff are (1) now able to leverage budget information from agencies to identify advance planning requirements for new procurements; (2) reviewing spend data from the automated procurement system (PASS) to support acquisition planning for expiring contracts and identify opportunities to consolidate contracts for like requirements; and (3) monitoring automated expiration reminders and tracking procurement milestones (for upcoming renewals/expiration's) to support advance acquisition planning. In this way, agencies will have to plan their upcoming procurements as part of their annual budget submissions and approvals. This new integrated acquisition and budgeting process requires the CPO office to coordinate with the Office of the Chief Financial Office (CFO), allowing for more accurate, budget-driven decisions for future procurements and curtailing vagueness in planned procurements by not accepting line items for "miscellaneous procurements." Under this new process, agencies are required to submit line items for specific goods and services corresponding to approved budget dollars from the CFO.

    Recommendation: To strengthen management and oversight practices in the District's procurement system, the Mayor of the District of Columbia should elevate the CPO's position and office so that it is either in line with other critical cross-government functions, such as the Office of the Chief Technology Officer (OCTO), or higher and would allow participation in cross-cutting executive management, budgeting, planning, and review processes.

    Agency Affected: District of Columbia: Executive Office of the Mayor

    Status: Closed - Implemented

    Comments: The Mayor's February 2008 procurement reform plan submitted to GAO and Congressional staff highlighted a revised District government organization chart clearly showing that the Office of Contracting and Procurement now reports directly to the City Administrator as opposed to a Deputy Mayor of Operations. According to discussions with the current Chief Procurement Officer (CPO) and reiterated in the Mayor's June 2007 written response to GAO's report, to be effective, the CPO must be an active participant in the management, budgeting, planning, and review processes when such processes occur at the highest levels of District government. The mayor wrote at that time that he had strengthened the CPO's cabinet member status by having him report directly to the mayor and the city administrator in the same way as all other agency directors. According to the CPO, he now believes he is in line with other cross-government functions such as the Office of the Chief Technology Officer, and will help him facilitate improved management and oversight of the entire acquisition process across agencies--the intent of GAO's recommendation. In light of these actions, GAO considers this recommendation closed.

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