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DGS Recommendations to the Governor’s Task Force on Contracting & Procurement Review. Report Overview. August 12, 2002. Agenda. Opening Remarks Three Reform Themes Recommendations Conclusion. Goal of Recommendations.

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dgs recommendations to the governor s task force on contracting procurement review

DGS Recommendations to the Governor’s Task Force on Contracting & Procurement Review

Report Overview

August 12, 2002

agenda
Agenda
  • Opening Remarks
  • Three Reform Themes
  • Recommendations
  • Conclusion
goal of recommendations
Goal of Recommendations

“The DGS recommendations to the Task Force are designed to strengthen the contracting and procurement processes of the State of California, by improving the quality and openness of the process and by implementing a set of checks and balances to ensure its integrity.”

reform themes
Reform Themes
  • Ensuring High Quality
  • Open Process
  • System of Checks and Balances
definition of terms
Definition of Terms
  • Contracting = Contracting & Procurement throughout report
  • State Agency = All entities engaged in state contracting (e.g., state agencies, departments, offices, commissions, boards, institutions, hospitals, training facilities, data centers, or other state entity)
  • ShortTerm = implement immediately or up to one year
  • LongTerm = implementation takes a year or more
high quality quality assurance
High Quality: Quality Assurance
  • Problem: Lack of consistent oversight for all contract areas
  • Recommendation 1 (short term): Broaden scope of Quality Assurance program to include CMAS, Master Agreement orders & service contracts
  • Recommendation 2 (long term): Establish standards and conduct random audits of all types of contracts under DGS authority
high quality common processes
High Quality: Common Processes
  • Problem: Multiple bodies of law; lack of comprehensive source for policies & procedures; need for process alignment
  • Recommendation 3 (long term): Develop comprehensive & uniform policies, procedures & processes; align contracting & procurement laws
high quality training and certification
High Quality: Training and Certification
  • Problem: Lack of recognition of contracting as a strategic function; lack of understanding that contracting is a profession; no comprehensive training & certification program
  • Recommendation 4 (short term): Immerse contracting personnel in training on rules governing use of contract methods & instruments
  • Recommendation 5 (long term): Provide comprehensive training program for Contracting Officials leading to professional certification
high quality ethics and integrity
High Quality: Ethics and Integrity
  • Problem: No uniform code of ethics for contracting personnel or vendors; unclear reporting and oversight; lack of meaningful sanctions
  • Recommendation 6 (short term): Establish standards of conduct for state contracting personnel and vendors, coupled with sanctions for those violating the standards
high quality contract provisions
High Quality: Contract Provisions
  • Problem: Model contract terms and conditions perceived unduly restrictive
  • Recommendation 7 (short term): Confer with industry representatives and state stakeholders to improve contract provisions to protect the state’s interest and mitigate risks for all parties
high quality continuous improvements
High Quality: Continuous Improvements
  • Problem: Industry and state stakeholders not engaged in efforts for continuous improvement of the contracting process
  • Recommendation 8 (short term): Facilitateindustryand state stakeholderparticipation in continuous improvement of contracting processes through establishment of advisory councils
open process tracking system
Open Process: Tracking System
  • Problem:No single point of data collection and process control for contracts
  • Recommendation 9 (short term):Implement structuredtrackingof contracts throughout the contract lifecycle (Contract Administration Tracking System)
open process comprehensive system
Open Process: Comprehensive System
  • Problem:No rule-based visible system to process contracts
  • Recommendation 10 (long term):Continue implementation of a comprehensive eProcurement system
    • Public access to contracting opportunities; reverse auctions/dynamic pricing
    • Link to online policies, procedures & decision support system and online training
    • Pricing comparisons & historical data
    • Rules-based approval routing for all transactions (or cannot be awarded)
    • Comprehensive data collection & reporting
slide16

System of

Checks and Balances

checks balances further legal review
Checks & Balances:Further Legal Review
  • Problem:Insufficient legal review of IT and high risk contracts
  • Recommendation 11 (short term):Further legal review of high risk transactions; establish a common process for review
high risk criteria
Dollar Thresholds

Goods/IT Goods > $500K

IT Services > $200K

Non-IT Services > $50K

Large Scale System Integration - ALL

History of protests or litigation

Public safety

Acquisition of unique or specially manufactured goods/services

Complex items

Deviates from standard processes/ terms (e.g., advance payments, modification to warranty/indemnity/ liability verbiage)

High Profile

Potential conflicts of interest

Involves hazardous material

Federal Matching Funds

High Risk Criteria
slide19

Checks & Balances:Further Legal Review, continued

  • Recommendation 12 (short term): State agencies will conduct initial review and apply high risk criteria and forward those to DGS for review and approval
  • Recommendation 13 (short term): DGS should develop and deliver the necessary training to state contracting officials on contract law, regulations & review requirements and how to apply high risk criteria
checks balances contract templates
Checks & Balances:Contract Templates
  • Problem: Lack of model contract templates for various contract methods
  • Recommendation 14 (long term): Develop model contract templates with standard terms & conditions (available electronically)
checks balances responsible official
Checks & Balances: Responsible Official
  • Problem: There is no single person responsible for all contracting at each state agency
  • Recommendation 15 (short term): State agencies shall designate a single official responsible for all contracting & procurement within the agency
checks balances signature authority
Checks & Balances:Signature Authority
  • Problem: No designation of specific individual signature authority or clearly defined accountability
  • Recommendation 16 (long term): Signature authority for contracting officials based on position held, experience, training & certification
conclusion1
Conclusion
  • Recommendation 17 (8/20/02): Issue new Management Memo to follow expiration of Executive Order D-55-02
  • Recommendation 18 (short term): Continue provisions of Interim Guidelines, as amended, for up to an additional 90 days to allow time to begin implementing approved reforms