Report 2016-124 Recommendation 10 Responses

Report 2016-124: Department of General Services and California Department of Technology: Neither Entity Has Provided the Oversight Necessary to Ensure That State Agencies Consistently Use the Competitive Bidding Process (Release Date: June 2017)

Recommendation #10 To: General Services, Department of

To ensure that it consistently and appropriately responds when agencies fail to justify their noncompetitive requests, plan sufficiently to avoid the noncompetitive process, or follow their corrective action plans, General Services should create an escalation process within 90 days that outlines the order and severity of enforcement mechanisms it will use. The mechanisms it applies should escalate according to the number or severity of offenses it identifies. For example, General Services could begin by sending a warning letter to high-level agency executives, followed by reducing or revoking an agency's purchasing threshold for specific types of acquisitions—for example, IT services—and finally by reducing or revoking an agency's purchasing threshold for all acquisition types in scenarios of repetitive noncompliance.

1-Year Agency Response

Updates to the State Contracting Manual (SCM) Volumes and the Non-Competitive Bid (NCB) Contract Justification desk procedures are finalized and have been approved. The updates include an escalation process that outlines the order and severity of enforcement mechanisms to be used when agencies fail to justify their non-competitive requests, plan sufficiently to avoid the NCB process, or follow their corrective action plans. On June 7, 2018, DGS notified all agencies of the escalation process through Broadcast Bulletin P-07-18.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

General Services (DGS) continues to be on track with developing an escalation process that outlines the order and severity of enforcement mechanisms to be used when agencies fail to justify their non-competitive requests, plan sufficiently to avoid the non-competitive process (NCB), or follow their corrective action plans. Another component of the new NCB system is identifying, documenting, and tracking the enforcement mechanisms used when an agency fails to respond to DGS. The escalation process includes, among many other things, notification to the director of the state agency, and if necessary, the agency secretary of that state agency. DGS will start piloting the new system in December 2017 and will continue to implement the escalation process.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

DGS is on track with developing an escalation process that outlines the order and severity of enforcement mechanisms to be used when agencies fail to justify their non-competitive requests, plan sufficiently to avoid the non-competitive process, or follow their corrective action plans. The escalation process will include, among other things, notification to the director of the state agency, and if necessary, the agency secretary of that state agency.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2016-124

Agency responses received are posted verbatim.