Report 2009-114 Recommendation 5 Responses

Report 2009-114: Department of General Services: It No Longer Strategically Sources Contracts and Has Not Assessed Their Impact on Small Businesses and Disabled Veteran Business Enterprises (Release Date: July 2010)

Recommendation #5 To: General Services, Department of

To ensure that small business and DVBE subcontractors comply with the commercially useful function requirements, General Services should develop guidance for state agencies on how to ensure that subcontractors perform commercially useful functions if it believes state agencies making the purchases through statewide contracts should be responsible for this task. In addition, General Services should monitor, on a sample basis, whether state agencies are ensuring compliance with these requirements. General Services could leverage its efforts by working with other state agencies to ensure that subcontractors claiming to have provided the goods and services to the purchasing agency did, in fact, perform the work for which they are invoicing the state agencies.

Agency Response*

At the time of our previous update in November 2011, the DGS had fully implemented this recommendation except the Procurement Division (PD) had not entered into a statewide contract that required a user department to verify compliance with commercially useful function (CUF) service requirements on individual transactions. In September 2012, the PD added language to all applicable contracts that requires ordering departments to confirm CUF when value-added services are performed by small business (SB) and DVBE subcontractors. As examples of this new practice, see Enclosures III, Article 36A, and IV, Article 34, for language that was recently added to two statewide contracts related to the responsibility of ordering departments to confirm the performance of CUF services by SB/DVBE subcontractors.

  • Response Type†: Annual Follow Up
  • Completion Date: September 2012
  • Response Date: September 2012

California State Auditor's Assessment of Status: Fully Implemented

All Recommendations in 2009-114

†Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year or subsequent to one year.

*Agency responses received after June 2013 are posted verbatim.

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