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Processes
July 05, 2018
18-01-023
Audit of PCS Procurement Processes July 05, 2018
Mission
Team Members
TABLE OF CONTENTS
Background ................................................................................................... 5
Audit Results
Procurement processes do not ensure compliance with all state requirements. ... 7
Controls to ensure the integrity of the procurement process are lacking. .......... 19
Policies and procedures are incomplete and are not updated to reflect current
processes and statutory requirements. ........................................................ 27
Data within the System of Contract Operation and Reporting (SCOR) is not
accurate or complete. ................................................................................ 31
EXECUTIVE SUMMARY
This report presents the results of the Audit of PCS Procurement Processes. The
objectives were to:
Determine:
o Whether current processes comply with state requirements.
o Whether processes are sufficient to protect the integrity of Health and
Human Services procurements.
o Whether processes are consistently followed by agency staff.
o Whether processes are efficient and effective.
Identify best practices from other state agencies.
The scope included contracts procured from Fiscal Year 2016 through the end of
fieldwork. The scope also included controls related to the procurement process and
relevant information systems.
The Procurement and Contracting Services (PCS) Operating Procedures for Request
for Proposals does not have procedures in place to ensure procurements related to
consulting services are published in the Texas Register. Any consulting procurement
that is $15,000 or more is required to be published in the Texas Register as
required by Texas Government Code §2254.029. Testing identified one
procurement that was consulting related that was not posted to the Texas Register.
The Draft Request for Application (RFA) Process Overview document does not
include procedures to ensure RFAs are sent to the Comptroller’s Contract Advisory
Team – Review and Delegation (CATRAD) when the procurement is $5 million or
more. None of the 12 applicable RFAs were provided to CATRAD as required.
For procurements $1 million and more, the procedures do not address the
completion of nepotism forms. Nine (60%) of 15 applicable RFAs did not have the
required nepotism forms on file.
The General Appropriations Act, Article IX, Section 7.04 requires contracts over $50
thousand to be reported to the Legislative Budget Board (LBB) within 30 days of
contract execution or modification. Eighteen (14%) of 125 contracts tested were
not in compliance with the LBB reporting requirements.
None of the applicable procurements tested had all the documentation needed to
ensure the procurement process was followed as intended. Documents not
maintained in the file include signed Non-Disclosure forms and signed nepotism
forms. Additionally, documentation of CATRAD review, DIR exemption or approval
and signature of Statement of Work if no exemption was granted was not always
maintained.
Prior to April 6, 2018, procurement staff indicated they had not been provided
policies and procedures for the RFP procurement process. Additionally, the draft
RFA procedures have not been finalized or distributed to staff and need to be
updated.
Some staff stated they were not aware nepotism forms needed to be completed for
RFAs. Additionally, some staff understood HUB requirements were not applicable to
RFAs, while other staff completed a HUB determination for RFAs.
It was determined that procurement staff were not always involved in the needs
determination, procurement planning and document development phases of the
procurement process. Some divisions within the agency complete a requisition and
their next communication with procurement staff was to provide them with a final
RFP or RFA for posting. Procurement staffs’ lack of involvement in the initial
procurement phases increases the risk that required steps of the procurement
process are not completed. For example, if procurement staff are unaware of all the
individuals who are involved in developing the solicitation they cannot ensure all
Non-Disclosure forms are signed as required.
Policies and procedures are incomplete and are not updated to reflect
current processes and statutory requirements.
RFP procedures are not complete. A review of the policies and procedures
determined that although there are procedures related to evaluation preparation,
there are no procedures related to the receipt and opening of responses.
Additionally, the RFA procedures are in draft form, considered to be outdated, and
have not been provided to the procurement staff. Our review also identified the use
of “Rolling” RFPs as a procurement method. However, procurement staff indicated
they did not know what a rolling RFP was and policies or procedures related to
those types of procurements were unavailable.
The HHSC Contract Management guide has also not been updated to reflect Senate
Bill 533 which lowered the threshold for procurements to be sent to CATRAD from
$10 million to $5 million.
Data within the System of Contract Operation and Reporting (SCOR) is not
accurate or complete.
The field within SCOR for “Procurement Type” is not accurate and cannot be relied
upon. A review of the data within SCOR identified 189 blanks within the
“Procurement Type” field, which indicates the data within SCOR is not complete.
Further, 6 (12%) of 50 contracts initially selected for testing were not procured
through an RFP as labeled. The lack of accuracy and completion within this field
prevented the identification of a complete population of contracts that originated
from an RFP or RFA procurement type.
Additionally, not all contracts from the Department of State Health Services (DSHS)
have been entered in SCOR. Without accurate and complete data, the accuracy of
both internal and external reporting on procurements is at risk.
Several best practices related to procurement were identified (refer to the Audit
Results and Appendix C).
The results of this audit indicated additional audit work is needed in specific areas.
As a result, Internal Audit will propose future audits in the following areas:
BACKGROUND
Procurement and Contracting Services (PCS) is the centralized office for Health and
Human Services (HHS) that handles procurement and contracting services for the
HHS System, which includes the Health and Human Services Commission and the
Department of State Health Services (DSHS). PCS also handles procurement for the
Department of Family and Protective Services (DFPS). PCS partners with HHS and
DFPS staff to plan procurements, develop solicitation documents, evaluate
proposals, conduct negotiations, award contracts, execute contracts, and manage
and monitor contracts.
Within PCS, the Complex Team is responsible for processing procurements where a
Request for Proposal (RFP) or Request for Application (RFA) is needed. An RFP is a
solicitation requesting submittal of a proposal in response to the required scope of
services and includes some form of a cost proposal. The RFP process allows for
negotiations between a proposer and the issuing agency. An RFA is a solicitation
notice in which HHS announces that grant funding is available and allows
organizations to present applications on how the funding could be disbursed.
RFPs and RFAs follow a similar procurement process in PCS. The procurement
process consists of the following ten phases:
An RFA differs from the above process in the HUB compliance phase of the
procurement. The Comptroller of Public Accounts (Comptroller) does not consider
grants to be goods and services as defined by Texas Government Code, Chapter
2161, Subchapter F. Therefore, a determination of subcontracting opportunities
would not need to be made. However, the Comptroller does recommend that an
agency ensures it is in compliance with any HUB type Federal requirements outlined
within the grant.
AUDIT RESULTS
This audit was initiated at the request of the Executive Commissioner on March 19,
2018. The audit focused on the procurement process from needs determination
through contract award. One hundred procurements were tested, 75 were Request
for Proposals (RFPs) and 25 were Request for Applications (RFAs). These
procurements were in various stages of the procurement process ranging from
determination of need to contract award.
Fifty (50%) of the 100 procurements reviewed resulted in 601 contracts awarded.
The audit tested each procurement for 64 attributes1. It is important to note not all
attributes were applicable to each procurement. This is due to the various phases
the procurement was in, whether there was only one or no respondents to the
procurement, as well as the type of procurement. For a complete listing of all
attributes tested see Appendix B. The audit results presented below are based on
applicable attributes.
As part of the audit, best practices were researched, identified, and noted
throughout the audit results. A full listing of best practices identified are located in
Appendix C. Best practices are often considered to be proven practices or processes
that have been successfully used by multiple organizations. For the purposes of this
audit, the primary source for best practices was the State and Local Government
Procurement: A Practical Guide. Second ed., The National Association of State
Procurement Officials, 2015.
The Procurement and Contracting Services (PCS) Operating Procedures for Request
for Proposals does not have procedures in place to ensure procurements related to
consulting services are published in the Texas Register as required by Texas
Government Code §2254.029. Any consulting procurement that is $15,000 or more
is required to be published in the Texas Register. One RFP for $1 million was
determined to be consulting based and therefore should have been, but was not
posted to the Texas Register.
1Attribute sampling is a statistical process typically used in audit procedures to analyze the
characteristics of a given population. Attribute sampling is often used to test whether internal controls are
being followed.
The Draft Request for Application (RFA) Process Overview document does not
include procedures to ensure RFAs are sent to the Comptroller’s Contract Advisory
Team – Review and Delegation (CATRAD) when the procurement is $5 million or
more. Twelve (100%) of 12 applicable RFAs were not provided to CATRAD as
required.
For procurements $1 million and more, the procedures do not address the
completion of nepotism forms. Nine (60%) of 15 applicable RFAs did not have the
required nepotism forms on file.
Procedures are also not in place to ensure HUB subcontracting opportunities are
identified if required by the funding grant.
Staff stated they had been directed by PCS Executive Management that RFAs do not
need to be sent to CATRAD for review as they were grants. However, discussion
with the Comptroller and review of Texas Government Code §2155.140 indicates
that only federally funded grants do not need to be reviewed by CATRAD. If state
funds are included in the grant and awards are to be made to private entities the
solicitation should be provided to CATRAD for review if it meets the $5 million
threshold.
The General Appropriations Act, Article IX, Section 7.04 requires contracts over $50
thousand to be reported to the Legislative Budget Board (LBB) within 30 days of
contract execution or modification. Eighteen (14%) of 125 contracts tested were
not in compliance with the LBB reporting requirements.
The General Appropriations Act, Article IX, Section 7.12 also requires contracts for
more than $10 million have an attestation letter, solicitation documents, and
contract documents reported to the LBB along with the contract award. Eleven
contracts were determined to meet the $10 million threshold. All eleven had the
attestation letter reported to the LBB. However, the solicitation or contract
documents were not reported for any of the eleven contracts.
Recommendation 1
PCS, in coordination with HHS Legal, should identify all applicable state
requirements for RFPs and RFAs and update their policies and procedures to ensure
requirements are being met.
Management Response
Action Plan
The PCS 160 – HHS Solicitation Checklist – RFPs, RFAs, RFQs and RFOs was
updated, in coordination with attorneys from HHS System Contracting and staff
from the Department of Information Resources (DIR) and the Office of the
Comptroller of Public Accounts (CPA), to include all requirements to be completed
for large procurements. In addition, Compliance and Quality Control (CQC) has
created a Legal Entity Required Screening Guide that includes instructions and web
addresses to use to complete the required vendor checks, outlined on the PCS 160
– HHS Solicitation Checklist – RFPs, RFAs, RFQs and RFOs, and has provided both
of the documents to the procurement staff and uploaded both of the documents to
the PCS SharePoint Forms Folder.
Responsible Manager
May 2018 - The PCS 160 – HHS Solicitation Checklist – RFPs, RFAs, RFQs and RFOs
was updated and uploaded to the PCS SharePoint Forms Folder in May of 2018. The
Legal Entity Required Screening Guide was provided to staff by email on May 22,
2018 and uploaded to the PCS SharePoint Forms Folder.
Recommendation 2
PCS should ensure staff are trained on all applicable state requirements.
Management Response
Action Plan
All PCS certified purchasers and contract specialists have received the statutorily
mandated procurement training that covers all applicable state requirements
necessary for purchasing. However, PCS Management is taking additional steps to
ensure that all applicable state requirements are being completed.
The PCS 160 – HHS Solicitation Checklist – RFPs, RFAs, RFQs and RFOs was
updated, in coordination with attorneys from HHS System Contracting and staff
from DIR and the CPA, to include all requirements to be completed for large
procurements. In addition, Compliance and Quality Control (CQC) has created a
Legal Entity Required Screening Guide that includes instructions and web addresses
to use to complete the required vendor checks, outlined on the PCS 160 – HHS
Solicitation Checklist – RFPs, RFAs, RFQs and RFOs, and has uploaded it to the PCS
SharePoint Forms Folder.
CQC staff are currently drafting operating procedures that outline the processes
necessary for large procurements to comply with state law and the State of Texas
Procurement and Contract Management Guide. Following completion of these
operating procedures, CQC staff will review, revise and draft, where necessary,
operating procedures that outline the process used for IT related purchases,
including RFOs, and smaller purchases or purchases using the Invitation for Bid
(IFB) procurement method as well as the associated checklist(s).
As operating procedures are completed, CQC staff will coordinate with PCS
Management to retrain staff on the applicable state requirements required for each
type of solicitation.
Responsible Manager
July 2018 - PCS Management will continue to ensure that purchasers receive the
statutorily mandated procurement training that covers all applicable state
requirements necessary for purchasing. In addition, as operating procedures are
completed CQC staff will coordinate with PCS Management to retrain staff on the
applicable state requirements required for each type of solicitation, starting with the
RFP, RFA, and RFQ requirements.
Recommendation 3
PCS should implement a review process to ensure all requirements are being met.
Management Response
Action Plan
The PCS 160 – HHS Solicitation Checklist – RFPs, RFAs, RFQs and RFOs was
updated, in coordination with attorneys from HHS System Contracting and staff
from DIR and the CPA, to include all requirements to be completed for large
procurements. In addition, Compliance and Quality Control (CQC) has created a
Legal Entity Required Screening Guide that includes instructions and web addresses
to use to complete the required vendor checks, outlined on the PCS 160 – HHS
Solicitation Checklist – RFPs, RFAs, RFQs and RFOs, and has uploaded it to the PCS
SharePoint Forms Folder.
In addition, the PCS Manager is required to review the solicitation document and
sign the PCS 138 – Electronic State Business Daily (ESBD) Solicitation Approval,
prior to posting.
CQC staff are currently drafting operating procedures that outline the processes
necessary for large procurements to comply with state law and the State of Texas
Procurement and Contract Management Guide. Following completion of these
operating procedures, CQC staff will review, revise and draft, where necessary,
operating procedures that outline the process used for IT related purchases,
including RFOs, and smaller purchases or purchases using the Invitation for Bid
(IFB) procurement method as well as the associated checklist(s).
In addition, CQC staff are currently reviewing the terms and conditions included in
the large solicitations as well as the shorter terms and conditions attached to every
purchase order to determine if they comply with state law and the State of Texas
Procurement and Contract Management Guide, and will send recommended
changes to the HHS System Contracting Division to review and finalize, and will
continue to review for updated provisions while reviewing solicitations.
Finally, CQC will be sample auditing at different stages of the procurement process
to ensure that staff is complying with policies and procedures, including properly
documenting the procurement file.
Responsible Manager
Fully Implemented
None of the applicable procurements tested had all the documentation needed to
ensure the procurement process was followed as intended. See Appendix B for a
detailed listing of attributes and testing results. Examples of documentation that
was not maintained included:
Best practices state it is critical that the written record of each key step in the
procurement be sufficient to demonstrate the award decision. The amount of
documentation will depend on the type of evaluation conducted and the complexity
of the item being purchased. The procurement officer needs to look at the
documentation in the file from the view of competing bidders or offerors, the public,
the press, and auditors; and then ask whether it tells a reasonable story about the
process and particularly about the basis for award.2
Recommendation 4
PCS should develop a process and implement controls to ensure all necessary
documentation is maintained in the procurement file to support the procurement
award.
2State and Local Government Procurement: A Practical Guide. Second ed., The National Association of
State Procurement Officials, 2015 (pages 148 – 149)
Management Response
Action Plan
The PCS 160 – HHS Solicitation Checklist – RFPs, RFAs, RFQs and RFOs was
updated to include all requirements to be completed for large procurements and
included in the procurement file. At the end of the procurement, the purchaser, as
well as the purchaser’s manager, is required to sign and certify that all actions have
been completed and included in the procurement file. In addition, the Compliance
and Quality Control (CQC) Team will conduct reviews on a sample basis at different
stages of the procurement process to ensure that staff is complying with policies
and procedures, including properly documenting the procurement file.
PCS Management has determined that the procurement file for large procurements
should be kept in an electronic file uploaded to the designated network folder
located under Procurement Resources, and will include a statement in all new
operating procedures that all documents associated with a procurement be stored
in such folder.
Responsible Manager
August 2018 - PCS Management is currently reviewing how procurement files are
created and maintained for smaller procurements and will make any adjustments, if
necessary.
The policies and procedures for RFPs provided had an effective date of October
2016. However, prior to April 6, 2018, procurement staff indicated they had not
been provided policies and procedures for the RFP procurement process.
Additionally, the draft RFA procedures have not been finalized or distributed to staff
and need to be updated. Discussions with staff indicated they followed the process
they learned during their informal on-the-job training. However, staff reported they
were discouraged from asking questions of management.
As noted previously, 9 (60%) of 15 RFAs tested did not have signed nepotism
forms when they were applicable. Some staff stated they were not aware nepotism
forms needed to be completed for RFAs. Additionally, some staff understood HUB
requirements were not applicable to RFAs while other staff completed a HUB
determination for RFAs. Per guidance from the Comptroller, state HUB requirements
are not applicable to grants. However, they do recommend the procurement is
compliant with any federal HUB type requirements as dictated by the grant.
Additionally, it was determined that procurement staff were not always involved in
the needs determination, procurement planning and document development phases
of the procurement process. Some divisions within the agency complete a
requisition and their next communication with procurement staff was to provide
them with a final RFP or RFA for posting. Discussions with procurement staff also
identified that they believe some divisions to be exempt from the established
procurement process.
The State of Texas Contract Management Guide states an agency that develops a
contract for the purchase of goods or services that has a value exceeding $5 million
is required to have its contract management office or procurement director verify in
writing that the solicitation and purchasing methods and contractor selection
process comply with state law and agency policy. Therefore, if PCS is not involved
in all aspects of the procurement process, the procurement director would be
unable to verify that the procurement met state requirements and agency policy.
Recommendation 5
PCS should evaluate their procurement process and ensure procedures are included
that require the procurement staff to be a part of the planning process from the
beginning of every procurement.
Management Response
Action Plan
Compliance and Quality Control (CQC) staff are currently drafting operating
procedures that outline the processes necessary for all large procurements to
comply with state law and the State of Texas Procurement and Contract
Management Guide. The following statement has been included in each operating
procedure:
“PCS Purchasers and Managers are responsible for facilitating the procurement
process for [solicitation specific RFP, RFQ, RFA, RFO, Consultant]. In order to certify
the procurement and award process, PCS Purchasers should function as the primary
contact for each step of the process, from identification of the need(s) to contract
award.”
Former PCS Management has allowed certain HHS programs/agencies to bypass the
PCS processes and provide solicitations “ready to post,” which has resulted in many
required steps not being completed, many that are required by state law; therefore,
PCS purchasers and management cannot certify that purchasing methods and
contractor selection process complied with state law and agency policy.
3 State and Local Government Procurement: A Practical Guide. Second ed., The National Association of
State Procurement Officials, 2015 (page 57)
4 State and Local Government Procurement: A Practical Guide. Second ed., The National Association of
New PCS Management will communicate, with the assistance of HHS Executive
Management, that all procurements must follow the HHS PCS Procurement
Manual/HHSC Contract Management Handbook and operating procedures, and
purchasers will be instructed to follow all adopted procedures and report any HHS
agency/program to PCS Management that does not follow the adopted processes.
Responsible Manager
December 2018 - This directive will be included in all operating procedures and
manuals as they are reviewed and revised over the next six (6) months.
Recommendation 6
HHSC Executive Management should identify the divisions within the agency that
have established their own procurement functions and determine if the agency
would be better served by bringing those functions and associated Full-Time
Equivalents (FTEs) into PCS.
Management Response
Action Plan
Responsible Manager
December 2018 - Executive Management will review these functions and make a
determination.
Procurement staff within the complex team are Certified Texas Procurement
Managers (CTPM) or Certified Texas Contract Developers (CTCD). The Comptroller
requires purchasers to obtain the CTPM to work on procurements over $100,000
and RFPs. The Comptroller recently changed the CTPM to the CTCD as of January 1,
2018. The CTCD has a 24 hour continuing education requirement for procurement
professionals every three years. One of the 24 hours must be ethics related to
maintain certification.
Best practices state training for procurement staff is critical to maintaining a high
level of professionalism within the procurement process. They also state that the
procurement office needs to devote some of its resources to assure the professional
development and certification of procurement staff.5
Recommendation 7
PCS should establish and implement a formal training plan for procurement staff to
ensure they have the requisite training to maintain certifications and understand
their job functions.
Management Response
Action Plan
PCS currently tracks all purchaser certifications including expirations and sends out
reminders about expirations to provide assistance. Individual purchasers and
5State and Local Government Procurement: A Practical Guide. Second ed., The National Association of
State Procurement Officials, 2015 (page 22)
contract specialists are responsible for tracking their continuing education and
training to maintain their certifications. In addition, PCS Management will require
managers to include certification and training requirements in PCS employee
evaluations.
PCS Management is currently working with the Comptroller of Public Accounts (CPA)
Statewide Procurement Division’s Training and Policy Development Program to see
if the CPA can create agency-specific training, advanced purchaser training and
reinstitute the brown bag lunches at the North Complex as well as requesting
continuing education certification for some of the HHSC trainings, such as the HHS
Ethics for Contracting & Procurement Personnel.
Currently, PCS Business Operations staff provides CAPPS Financial training for PCS
staff, as needed or requested by PCS Management. In addition, PCS Business
Operations staff provides a CAPPS, Tips, Tricks and Reminders class for purchasers
every Wednesday where they can ask questions related to system processing.
Responsible Manager
September 2018
It was also determined that divisions within HHSC would request a specific
individual procurement staff member as the purchaser for their procurements.
Consistently having the same procurement staff member work with the same
divisions increases the risk that the purchaser may not be able to be unbiased in
their dealings with the division, leading to the perception of impropriety.
All of the 53 applicable procurements tested had issues identified within the
completed evaluations. The following issues were identified:
23 (43%) had evaluations where scores for specific criteria in the evaluator’s
sheets migrated to the incorrect criteria in the master sheet.
6 (11%) had evaluations where criteria with values in the evaluators sheets
migrated to the master sheet as a blank cell.
18 (34%) had evaluations where manual entries overrode formulas in the
master sheet, including unacceptable entries.
10 (19%) had evaluations with blank cells in the evaluator’s sheets migrate
as a “0” value in the master sheet.
21 (40%) had evaluations use inconsistent formulas in the master sheet.
It was also determined that divisions within the agency did not always identify the
criteria and weights that would be used to score respondents within the solicitation.
Reviews of the solicitation by CATRAD identified the lack of scoring measures and
weights. CATRAD recommended that respondents should be able to easily
understand upon what they are being evaluated and the weight of each of those
criteria. This allows the respondent to better answer the solicitation. This
recommendation was not accepted by the agency.
Evaluating proposals in this manner increases the risk for inconsistency in the
evaluation process. Additionally, proposals should only be scored based on criteria
known to the respondents.
Best practices state each solicitation set forth the criteria to be considered in the
evaluation of bids or proposals for award, and that no factor shall be considered
that is not included in the solicitation.6
Recommendation 8
PCS should establish a quality assurance review process to ensure second level
reviews are being completed throughout the procurement process.
Management Response
Action Plan
HHS has created a Compliance and Quality Control (CQC) Team to review various
stages of the solicitation process for on-going procurements, manage the evaluation
tool and scoring process, and review, revise and create, where necessary,
processes and procedures to ensure compliance with state law and the State of
Texas Procurement and Contract Management Guide.
CQC approved and implemented PCS OP 753 – Process overview – Compliance and
Quality Control Review of Solicitations and Evaluations effective June 11, 2018 to
address the review of solicitations prior to issuance and the entire evaluation
process. In addition, OP 753 requires purchasers to submit the required checklist
for a solicitation to CQC at the midpoint of a procurement to show that the initial
steps have been completed.
CQC staff are currently drafting operating procedures that outline the processes
necessary for large procurements to comply with state law and the State of Texas
Procurement and Contract Management Guide. Following completion of these
operating procedures, CQC staff will review, revise and draft, where necessary,
6State and Local Government Procurement: A Practical Guide. Second ed., The National Association of
State Procurement Officials, 2015 (page 143)
operating procedures that outline the process used for IT related purchases,
including RFOs, and smaller purchases or purchases using the Invitation for Bid
(IFB) procurement method as well as the associated checklist(s).
Finally, CQC will conduct reviews on a sample basis at different stages of the
procurement process to ensure that staff is complying with policies and procedures,
including properly documenting the procurement file.
Responsible Manager
Fully Implemented
Recommendation 9
PCS should establish a process to ensure the integrity of opening and recording bids
or proposals.
Management Response
Action Plan
Compliance and Quality Control (CQC) staff has reviewed the “bid room” process
and is working with PCS Management to make the necessary adjustments to ensure
that the process is sound, fair and defensible. All operating procedures involving the
bid room process will require that the updated process be followed; in addition, the
operating procedures will outline how bids are to be opened and how to document
such opening.
The purchasers will be provided all operating procedures and will be instructed that
they be followed. All operating procedures and checklists will also be uploaded to
the PCS SharePoint Procedures Folder.
Responsible Manager
July 2018 - Updated PCS OP 210 – Response Handling for Formal and Informal
Solicitations will be completed by July 13, 2018.
Recommendation 10
PCS should establish a process for making assignments to procurement staff that
reduces the risk of the appearance of bias.
Management Response
Action Plan
PCS Management thinks that it would be beneficial for the agency to have
purchasers and contract specialists that are “specialized” in certain areas and
procurement types. This would not preclude staff from being cross-trained to be
able to complete all types of procurements, as PCS Management recognizes that
this is vital, but would increase the level of customer service provided. Most
agencies have procurement staff that are assigned to certain areas or types of
procurements such as federal grants, construction-related procurements, service-
level agreements, information technology purchasers, and other complex
procurements, and such staff become familiarized with their customer program, the
associated legal staff, the relevant areas of state law and associated vendor
requirements, the specific terms and conditions required, federal grant
requirements, funding source issues, and many other requirements that are
program specific.
PCS Management feels that by staffing the division to the proper levels, having
good management in place, creating comprehensive operating procedures and
checklists, and creating second level reviews, there will be no risk of the
appearance of bias in the procurement process regardless of which purchaser is
handling a specific procurement and by specializing some of the procurement staff
to handle certain types of procurements, it will result in decreasing lengthy
timelines for the solicitation process, increasing the quality of the solicitation
documents and improving customer service.
Responsible Manager
Recommendation 11
Management Response
Action Plan
Compliance and Quality Control (CQC) staff are currently drafting operating
procedures that outline the processes necessary for large procurements to comply
with state law and the State of Texas Procurement and Contract Management
Guide. Each operating procedure requires the purchaser to work with the HHS
program/agency on the evaluation criteria and sub-criteria to be included in the
solicitation as well as to engage CQC staff in reviewing the criteria and sub-criteria
and creating the evaluation tool.
Each operating procedure states that scored criteria and sub-criteria be prioritized
and weighted according to their relative importance in delivering best value to the
State; that the number of criteria and sub-criteria should be kept to the essential
minimum and be clearly defined for the vendor community; and that scored criteria
and sub-criteria be designed to assess the extent to which the respondent is able to
meet and exceed the requirements to perform the contract.
HHSC will update the standard language for “oral presentations” or “interviews” in
solicitation documents for certain procurements where the initial scored responses
may not provide enough information to inform contract award. The standard
language will state that a competitive field will be identified and evaluated based on
information presented in the solicitation documents and will define how the oral
presentations or interviews will be scored.
Responsible Manager
Recommendation 12
PCS should establish a requirement that all persons identified to evaluate proposals
score all respondents for their assigned criteria.
Management Response
Action Plan
Compliance and Quality Control (CQC) staff are currently drafting operating
procedures that outline the processes necessary for large procurements to comply
with state law and the State of Texas Procurement and Contract Management
Guide. Each operating procedure states that all persons identified to evaluate
proposals must score all respondents for their assigned criteria.
Responsible Manager
Fully Implemented - Although operating procedures are being drafted and finalized
that include this directive, Deputy Executive Commissioner, Procurement and
Contracting Services, sent an email on June 28, 2018 to PCS purchasers and CQC
staff with the directive that all persons identified to evaluate proposals must score
all respondents for their assigned criteria.
Recommendation 13
To increase transparency, PCS should ensure all solicitations include criteria, sub-
criteria, and weights prior to being posted. In addition, the scoring methodology
should be clearly stated.
Management Response
Action Plan
Compliance and Quality Control (CQC) staff are currently drafting operating
procedures that outline the processes necessary for large procurements to comply
with state law and the State of Texas Procurement and Contract Management
Guide. Each operating procedure includes a statement that all solicitation
documents created after September 1, 2108 must include the evaluator score sheet
and an explanation of the scoring methodology as an exhibit to the solicitation.
HHSC will update the standard language for “oral presentations” or “interviews” in
solicitation documents for certain procurements where the initial scored responses
may not provide enough information to inform contract award. The standard
language will state that a competitive field will be identified and evaluated based on
information presented in the solicitation documents and will define how the oral
presentations or interviews will be scored.
Responsible Manager
As previously noted, discussions with procurement staff indicated they had not been
provided policies and procedures for RFP development prior to April 6, 2018. A
review of the policies and procedures provided determined that the Evaluation
Preparation, Response Receipt, and Opening phase are not complete. Although
there are procedures related to evaluation preparation, there are no procedures
related to response receipt and opening of responses. Best practices state bid and
proposal openings should be recorded in some fashion. 7
Additionally, the RFA procedures are in draft form, considered to be outdated, and
have not been provided to the procurement staff. Review also identified the use of
“Rolling”8 RFPs as a procurement method. However, procurement staff indicated
they did not know what a rolling RFP was and when they asked for policies or
procedures related to those types of procurements they were told there might be
some in draft form.
The HHSC Contract Management guide also has not been updated to reflect Senate
Bill 533 which lowered the threshold for procurements to be sent to CATRAD from
$10 million to $5 million.
Having policies and procedures that are outdated or not provided to staff increases
the risk that staff are not completing the procurement process as intended.
Additionally, there is an increased risk of inconsistency within the procurement
process.
Best practices state the central procurement office should publish and maintain
appropriate manuals for procurement personnel that establish day-to-day
procurement procedures in simple, concise language.9 Best practices also state that
an operations manual establishes and describes the internal procedures for the
procurement office. Those procedures should be a practical guide for a procurement
officer. 10
7 State and Local Government Procurement: A Practical Guide. Second ed., The National Association of
State Procurement Officials, 2015 (page 110)
8 Per PCS management, a rolling RFP is used to allow programs to obtain a pool of contractors for a
specific service without posting the RFP multiple times. Having multiple closing dates allows more
vendors to have the ability to respond and become part of the pool of contractors if awarded.
9 State and Local Government Procurement: A Practical Guide. Second ed., The National Association of
Recommendation 14
Policies and procedures for RFPs and RFAs should be comprehensive, updated,
finalized, approved by PCS management, and distributed to staff for
implementation.
Management Response
Action Plan
PCS Compliance and Quality Control (CQC) staff are currently drafting operating
procedures that outline the process necessary for a Request for Applications (RFAs)
and Request for Proposals (RFPs) to comply with state law and the State of Texas
Procurement and Contract Management Guide. The PCS 160 – HHS Solicitation
Checklist – RFPs, RFAs, RFQs and RFOs was updated to include all requirements to
be completed for large procurements, including RFAs and RFPs, and to be included
in the final procurement file. In addition, PCS CQC has created a Legal Entity
Required Screening Guide that includes instructions and web addresses to use to
complete the required vendor checks, outlined on the PCS 160 – HHS Solicitation
Checklist – RFPs, RFAs, RFQs and RFOs, and has uploaded it to the PCS SharePoint
Forms Folder.
Purchasers will be provided the operating procedures and instructed that they be
followed. All operating procedures will also be uploaded to the PCS SharePoint
Procedures Folder.
Responsible Manager
May 2018 - Partially Completed. The PCS 160 – HHS Solicitation Checklist – RFPs,
RFAs, RFQs and RFOs was updated and uploaded to the PCS SharePoint Forms
Folder in May of 2018. The Legal Entity Required Screening Guide was provided to
staff by email on May 22, 2018 and uploaded to the PCS SharePoint Forms Folder.
Recommendation 15
The HHSC Contract Management Guide and the HHS Procurement Manual should be
updated periodically and consolidated to ensure alignment with procurement
processes and state requirements.
Management Response
Action Plan
The PCS Contract Oversight & Support (COS) has updated the HHS Contract
Management Handbook to include the deficiencies identified in the audit. In
addition, PCS COS plans to review the handbook and make further modifications
during the month of July as they review the handbook yearly to ensure compliance
with any statutory or policy changes Thereafter, Compliance and Quality Control
(CQC) will work with PCS COS to merge the HHS Procurement Manual with the
HHSC Contract Management Handbook to create one comprehensive handbook and
review the final handbook to ensure compliance with state law and the State of
Texas Procurement and Contract Management Guide.
Responsible Manager
August 2018 - PCS COS will review and finalize updates to the HHSC Contract
Management Handbook by August 31, 2108.
December 2018 - Thereafter, PCS COS will work with CQC to merge the guide with
the PCS Procurement Manual and create one comprehensive handbook by
December 31, 2018.
Recommendation 16
PCS should ensure procurement staff are trained on all updated policies and
procedures.
Management Response
Action Plan
Compliance and Quality Control (CQC) staff are currently drafting operating
procedures that outline the processes necessary for large procurements to comply
with state law and the State of Texas Procurement and Contract Management
Guide. The PCS 160 – HHS Solicitation Checklist – RFPs, RFAs, RFQs and RFOs was
updated to include all requirements to be completed for large procurements.
Following completion of these operating procedures, CQC staff will review, revise
and draft, where necessary, operating procedures that outline the process used for
IT related purchases, including RFOs, and smaller purchases or purchases using the
Invitation for Bid (IFB) procurement method as well as the associated checklist(s).
PCS Management will work with the CQC Team to provide training to staff on the
updated policies and procedures.
Responsible Manager
September 2018
Recommendation 17
HHS Executive management should ensure all agency and program staff involved in
the procurement process are trained on updated policies and procedures. This
should include the importance of not operating outside the procurement process
and ensuring solicitations have the information needed to ensure respondents
understand how their bids or proposals are being scored.
Management Response
Action Plan
PCS Management is exploring the idea of mandatory training for all HHS
program/agency staff that are involved in the procurement and contracting process.
In addition, Compliance and Quality Control will work with staff to review the HHS
Procurement Manual and the HHS Contract Management Handbook to ensure each
complies with state law and the State of Texas Procurement and Contract
Management Guide and merge the two to create one comprehensive handbook to
provide HHS agency staff a common frame of reference for the solicitations and
development of agency contracts including, procurement methods, planning,
preparing of solicitations, the solicitation process, evaluation and award of a
contract, contracting authority, type and formation.
Responsible Manager
December 2018
The System of Contract Operation and Reporting (SCOR) is the sole system of
record for the management, reporting and compliance for all HHS contracts. SCOR
is also the system of record for reporting contract requirements as defined by the
Comptroller, LBB, Texas Government Code, and HHS internal policies. SCOR
replaced the HHS Contract Administration and Tracking System (HCATS) on
September 1, 2017 to meet 84th Legislative requirements of Senate Bill 20. Active
contracts with information maintained in HCATS and with an end date after August
31, 2017 were moved to SCOR.
A review of the data within SCOR identified 189 blanks within the “Procurement
Type” field. The “Procurement Type” field is the data field that identifies what type
of procurement from which the contract originated. Having a blank field indicates
the data within SCOR is not complete. The lack of completion within this field
prevented auditors from identifying a complete population of contracts that
originated from an RFP or RFA procurement type.
A population of contracts was identified that were labeled in SCOR as having been
procured through RFPs to select a sample for testing purposes. It was determined
that 6 of 50 (12%) contracts were not procured through an RFP as labeled. The
contracts were either noncompetitive, interagency contracts, inter-local cooperation
contracts, or an Invitation for Bid. As a result, it was determined the field within
SCOR for “Procurement Type” is not accurate and cannot be relied upon.
It was also determined not all contracts from DSHS have been entered into SCOR.
Without accurate and complete data the agency cannot rely on the information
obtained from the system. Additionally, any reports created from SCOR would not
be complete.
Recommendation 18
PCS management should work with DSHS management to ensure all DSHS
contracts are entered into SCOR.
Management Response
Action Plan
PCS Contract Oversight & Support (COS) documents the requirements related to
SCOR in the SCOR User Manual and SCOR Contract Manager Guide.
For contracts executed after September 1, 2017, the HHS Contract Management
Handbook directs staff to upload an executed contract into the SCOR Contract
module, History sub-module, within ten (10) calendar days from execution.
For contracts executed before September 1, 2017, contracts uploaded into HCATS
migrated to SCOR. However, HHS agencies had different business practices and
reliability with regard to uploading contracts into HCATS and some contracts are so
old that they pre-date HCATS altogether. Different business areas currently have
discretion related to staff direction to upload these contracts into the SCOR
Contract module, History sub-module, and, therefore, this will be an ongoing effort
to identify and require all contracts be uploaded into SCOR.
DSHS programs were not previously required to use SCOR. Perhaps because of that
history, some DSHS programs have been slow to upload contract documents into
SCOR or provide copies so that they can be uploaded on their behalf. COS is
engaged in a project with DSHS to upload documentation to the extent that it is
made available. To ensure that all contracts are entered into SCOR, DSHS, as well
as all other HHS agencies/programs will be directed to upload all contract
documents or provide copies to COS for uploading. In addition, PCS Management
will explore the current process of uploading future contracts into SCOR to
determine if there is a more efficient manner in which to accomplish this task.
Responsible Manager
December 2018
Recommendation 19
Management Response
Action Plan
PCS Contract Oversight & Support (COS) conducts a variety of quality assurance
tests on the completeness and accuracy of information within SCOR.
The majority of SCOR fields are populated from CAPPS as a required field.
Presently, COS is addressing blank fields related to contracts executed prior to
September 1, 2017 for which COS sends reminders to contract managers to
populate the fields, Department and Section, as these are required fields in SCOR
that are not populated from CAPPS.
COS has six (6) dedicated staff that conduct a variety of quality assurance reviews
on the completeness and accuracy of information within SCOR. CAPPS-related field
issues are referred to the purchaser for correction and SCOR-related field issues are
referred to the contract manager for correction. In addition, the COS SCOR Team
manages ongoing projects to address corrections or modifications on a large scale
and as requested by a business area such as updating grant-related information,
entering/correcting LBB data elements, and modifying department identifiers when
reorganizations occur.
Responsible Manager
September 2018 - PCS Management will review the current processes and
implement adjustments by September 30, 2018.
CAPPS Financials 9.2 (CAPPS) was implemented to allow HHS to better track
acquisitions and contracts, providing more transparency and efficiency in the way
they are handled. With CAPPS, all procurement requests and approvals are
managed in one system.
The workflows within CAPPS are dependent upon the accuracy of the data entry.
The origin code entered by the initial requestor as well as the initial estimate of the
total dollar amount for the procurement determines the approval workflow.
Therefore, if a requisition does not have the correct origin code or initial estimated
dollar amount for the procurement, CAPPS will not include the appropriate levels of
approval within the requisition.
The current RFP process allows for a $0 or $0.01 initial requisition amount to
initiate the requisition. However, the initial estimated amount of the award needs to
be completed using the expected amount over the life of the contract including
renewals.
Recommendation 20
PCS should require the requestor to enter in the appropriate initial estimated
amount based over the life of the contract including renewals.
Management Response
Action Plan
The total contract value including renewals must be entered into the request
document wizard to obtain the correct approvals and the requisition line can be
entered as $0.00. The purchaser should identify this and notify the program area
that their requisition needs to be cancelled and reentered for the correct approvals.
Prior to CAPPS 9.2, the requisition was entered for $.01 and PCS 146 was required
for approvals on the total contract values including renewals.
PCS Management is currently working with HHSC IT ESC to update the description
in the renewal requisition wizard to make it clear that the total contract value
including any potential renewals should be entered for the requisition. In addition,
PCS can provide requisition entry training that explains which requisition
amendment wizard should be chosen to reflect the contract change and the
requirement for requisition entry in detail. Finally, PCS has created “job aids” which
are located on the PCS extranet page found at PCS Training under CAPPS and SCOR
Resources. General requisition entry training can also be found under the iLearn
portal.
A memo from the Interim Deputy Executive Director of PCS was distributed to
executive management staff in a meeting on June 12, 2018 addressing this issue
and providing information on how to fill out a requisition in CAPPS. The memo was
also emailed to all executive staff and program managers by the Acting Chief
Operating Officer on June 15, 2018. The memo also includes a link to ePro
Requisition training and assistance.
Responsible Manager
Fully Implemented
Recommendation 21
PCS management should work with the CAPPS Financials 9.2 staff to establish and
conduct trainings related to the system workflows, including the approval process,
for requisitions.
Management Response
Action Plan
PCS Management is exploring the idea of mandatory training for all HHS
program/agency staff that are involved in the procurement and contracting process.
Currently, PCS Business Operations staff provides CAPPS Financial training for HHS
program/agency staff, as requested.
Responsible Manager
December 2018
Recommendation 22
PCS management should ensure purchasers do not complete requisitions that have
an initial estimated amount that does not generate appropriate approval workflows.
Management Response
Action Plan
PCS Compliance and Quality Control (CQC) staff are currently drafting operating
procedures that outline the processes necessary for large procurements to comply
with state law and the State of Texas Procurement and Contract Management
Guide. Following completion of these operating procedures, CQC staff will review,
revise and draft, where necessary, operating procedures that outline the process
used for IT related purchases, including RFOs, and smaller purchases or purchases
using the Invitation for Bid (IFB) procurement method as well as the associated
checklist(s). PCS CQC staff will include a statement in all procedures that directs
the purchaser to reject a requisition that has not gone through the proper operation
and amount approvers based on the total contract value plus renewals. Purchasers
will notify the HHS program/agency to accurately complete and resubmit the
requisition or request the requisition be denied and routed back to the requestor.
Responsible Manager
APPENDIX A
Audit Objectives
Determine:
o Whether current processes comply with state requirements.
o Whether processes are sufficient to protect the integrity of Health and
Human Services (HHS) procurements.
o Whether processes are consistently followed by agency staff.
o Whether processes are efficient and effective.
Audit Scope
Contracts procured from Fiscal Year 2016 through the end of fieldwork. The scope
also included controls related to the procurement process and relevant information
systems.
Audit Methodology
Data Reliability
For the purposes of this audit, the Procurement and Contracting Services’ Network
Drive, CAPPS Financials 9.2, and SCOR were used. The Network Drive was used to
access documentation that was reviewed and considered during the audit. A review
of security permissions over the shared drive was determined to be appropriate.
CAPPS Financials eProcurement module was accessed for proper approvals for
requisitions however; it was determined that workflows within the system might not
always require the appropriate approvals for the procurement process (See page
34). Other than workflow approval information, data from CAPPS was not relied
upon. SCOR was used to access the population of contracts within the scope of the
audit however; it was determined that the data within the system was not accurate
or complete (See page 31).
Project Information
We conducted audit work in Austin, Texas from April 2018 to May 2018. The
following individuals provided oversight over the project:
Internal Audit conducted the audit in accordance with standards contained in the
International Standards for the Professional Practice of Internal Auditing contained
in the International Professional Practices Framework issued by the Institute of
Internal Auditors and Generally Accepted Government Auditing Standards issued by
the Comptroller General of the United States.
The results of this audit indicated additional audit work is needed in specific areas.
As a result, Internal Audit will propose future audits in the following areas:
APPENDIX B
Each attribute tested resulted in either ‘Yes’, ‘No’, or ‘Could Not Be Determined’.
Generally, a ‘Yes’ response indicates evidence of compliance with the attribute while
a ‘No’ response indicates that evidence, or lack of evidence, suggested
noncompliance with the attribute11.
The ‘Could Not Be Determined’ designation indicates that either there was not
enough evidence to support either compliance or noncompliance with the attribute
or that the attribute was dependent on another attribute that was designated
noncompliant12. In most instances, the ‘Could Not Be Determined’ designation
would generally fail the attribute test.
In the tables below, attribute numbers with an “*” are either explicitly required by
statute, or the process is employed to comply with statute. A table listing the
statutes can be found on page 48.
Determination of Need
11 The exceptions to the ‘Yes’ and ‘No’ responses are DN2, which was a characteristic attribute rather
than a compliance attribute, and SP1, which was the average number of days the solicitation was posted
to ESBD for the sample.
12 For example, attributes PE3, PE4, and PE5 were contingent on PE2. If PE2 was deemed
Procurement Planning
Document Development
Solicitation Process
HUB Compliance
Procurement Evaluations
13This process began on April 6, 2018; and therefore was not implemented for procurements in the
sample.
Contract Negotiations
Contract Award
Total Total Could
Attribute Applicable Total Total Not Be
Attribute Number Procurements Yes No Determined
RFA 9 6 (67%) 1 (11%) 2 (22%)
Award posted to
CA1* RFP 42 32 (76%) 2 (5%) 8 (19%)
ESBD?
Total 51 38 (75%) 3 (6%) 10 (20%)
RFA 9 2 (22%) 2 (22%) 5 (56%)
Did the PCS
manager review CA2 RFP 41 12 (29%) 5 (12%) 24 (59%)
the completed file?
Total 50 14 (28%) 7 (14%) 29 (58%)
(4) the procedure by which the state agency will award the
contract.
These phases support the final verification that the best value
standard was used if applicable.
(1) approve each state agency contract for which the agency
is required to purchase goods or services using the best value
standard;
(2) ensure that, for each contract, the agency documents the
best value standard used for the contract; and
APPENDIX C
Best Practices
Procurement Policy
Employee Retention
The manager of the procurement office needs to make certain that he or she knows
the potential extent of staff departing by examining employees’ ages and years of
services. Additionally, the manager should identify trends and whether others
within the office can replace those departing including any training that may be
necessary. These talent reviews should occur on a regular basis. Taking these steps
makes for greater employee retention. Other nonmonetary incentives may include
such things as a 4-day work week/9-day work schedule, professional development,
job rotation, telecommuting and virtual offices, on-site fitness center, business
casual dress, participatory decision making, and signature authority. Monetary
incentives are also important, but may not necessarily be the single determinant for
an employee who is trying to determine whether or not to stay in a public job. To
stop the outflow of expertise from retirees, the single most important strategy for
the manager of a procurement office is to have a knowledge-transfer/talent-
management plan in place.
Recommended Practices:
The central procurement office and the Chief Procurement Officer should
define its internal purposes, goals, and objectives to be service, leadership,
and management oriented; and those purposes, goals, and objectives should
address the full spectrum of procurement activities, including: planning,
procurement, quality assurance, contract administration, dispute resolution,
property management and disposal, supplier relations, procurement
consulting and training, and procurement data and technology management.
The central procurement office and the Chief Procurement Officer should
establish measurements for assessing the performance of the procurement
process, such as processing times, supplier performance data, and client
survey responses.
The central procurement office should publish and maintain appropriate
manuals for procurement personnel that set forth jurisdiction-wide
procurement goals and objectives and establishing day-to-day procurement
procedures in simple, concise language.
The Chief Procurement Officer should delegate, but closely monitor,
procurement functions that can logically, effectively, and efficiently be
performed by others. The delegation should be in writing, and the scope of
the delegation should be commensurate with the expertise and resources of
the agency, department, or person to whom the delegation is to be made.
The central procurement office should establish mechanisms, such as focus
or advisory groups and cross-functional procurement teams, to encourage
Procurement Staff
Best practices state training for procurement staff is critical to maintaining a high
level of professionalism within the procurement process. They also state that the
procurement office needs to devote some of its resources to assure the professional
development and certification of procurement staff.
Leadership
Best practices state that the key ingredient to an effective public procurement
system is leadership through the Chief Procurement Officer. Leadership also
requires that the person serving as the Chief Procurement Officer, and those who
work under that officer, adopt an attitude of professionalism, openness,
cooperation, and creativity.
Clearly identifying in the solicitation the need to be filled with a view toward
qualifying the broadest range of commodities, services, construction, and
vendors.
Restricting sole-source procurements to a limited, well-defined, and
published set of criteria, and documenting the need for a sole-source
decision.
Staffing the procurement process with truly independent, well-trained
procurement professionals and making sure that they are free to exercise
their professional judgment without political pressure.
Estimating prices and costs based on thorough market price and cost
research.
Drafting specifications and scopes of work to be performed and other terms
of the procurement to avoid brand- or sole-vendor limitations.
Drafting specifications independent of any prospective vendor or brand name
product.
Recommended Practices:
The procurement office needs to foster a relationship with user agencies that
ensures that those agencies will want to have procurement professionals
involved with them early in the procurement planning process. That requires,
in part, that the procurement office adopt an attitude of keeping an eye on
the big picture and not just the daily business. It also requires that the
procurement officer engage in continual outreach to those agencies and
devise good means for collecting agency needs information and expenditure
data.
The procurement office must plan for its workload in a manner that permits
regular prioritizing and reprioritizing of work; that assigns work based on the
needs of the procurement, as well as the training and experience of the
procurement officer; and that benchmarks performance through
measurements, such as processing times and customer complaints.
The procurement office should have a disaster recovery plan that permits
access to its contract information even if its staff doesn’t have access to the
office.
The procurement office needs to find room in its budget to support staff
access to current market information, such as subscriptions and attendance
at trade shows.
Procurement officers must be encouraged to think strategically about each
procurement and ensure that they have tools for making strategic decisions.
Planning
Recommended Practices:
The central procurement office should develop guidelines for vendor input
into the process of determining agencies’ needs or preparing initial
specifications or scopes of work, so that the agencies and the central
procurement office may obtain the benefits of vendor expertise without
creating unfair bias or a conflict of interest. The use of vendor focus groups
and pre-solicitation conferences should be encouraged.
Specifications and scopes of work should be closely tailored to the
appropriate level of utility and quality to meet the customer agency’s needs,
should emphasize performance rather than design, and should not call for
features or quality not needed for an item’s intended use.
To aid in providing commonality for competitive purposes, a specification
should identify the essential characteristics of the item to be purchased. In
drafting and updating specification voluntary standards and specification
information available from other governmental units should be utilized.
Generally, specifications and scopes of work should provide for commercial
products (off-the shelf items) and not unique or custom-made items.
Standard specifications should be issued in a prescribed format, properly
indexed, and each should carry a designated time for review and updating.
To avoid misinterpretation or favoritism to a particular vendor and increase
competition, the use of a brand name should specify or equivalent instead of
or equal.
Recommended Practices:
Time and date stamp all bids, proposals and quotations upon receipt. This
ensures a proper audit trail in the procurement file. If faxes are permitted.
The facsimile machine should automatically provide a time-date stamp.
Record bid and proposal openings in some fashion.
Where an evaluation committee or outside technical personnel are used to
assist in the evaluation of proposals, require those persons to sign a conflict
of interest/confidentiality statement before receipt of copies or proposals to
ensure the integrity of the competitive process.
Recommended Practices:
Recommended Practices:
Evaluations
Best practices state each solicitation set forth the criteria to be considered in the
evaluation of bids or proposals for award, and that no factor shall be considered
that is not included in the solicitation.
Best practices state it is critical that the written record of each key step in the
procurement be sufficient to demonstrate the award decision. The amount of
documentation will depend on the type of evaluation conducted and the complexity
of the item being purchased. The procurement officer needs to look at the
documentation in the file from the view of competing bidders or offerors, the public,
the press, and auditors; and then ask whether it tells a reasonable story about the
process and particularly about the basis for award.
Cooperative Purchasing
Recommended Practices:
Clearly understand the nature of the various participants to ensure that legal
authority exists and requirements for participation are satisfied - use written
cooperative purchasing agreements.
Use a lead state or agency, but involve other participating states and entities
in the market research, solicitation planning and development, and
evaluation to add expertise and better ensure use of an accepted, compliant
procurement process that promotes best value through full and open
competition.
Quality Assurance
Recommended Practices:
Recommended Practices:
Recommended Practices:
eProcurement
The state procurement manual and vendor’s manual should include the rules,
applicable information, and details on how the state eProcurement system is used
throughout the procurement process.
Recommended Practices:
Professional Development
Recommended Practices:
Executive branch officials and the central procurement office should support
professional certification and encourage professional staff to qualify for
appropriate certification.
Executive branch officials and the central procurement office should
encourage and support procurement staff participation in training programs
and in membership or affiliation in one or more procurement professional
associations.
The central procurement office should maintain a current library of
procurement materials such as those addressing technology, contract law,
management theories, and procurement theory.
The central procurement office should provide continuing management-
administrative experience for professional procurement staff by providing
career paths within the public procurement profession.
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