ISSUE AREA 1: Two out of Nine RFP Contracts Reviewed Were Found to be In Error

In this issue, the Legislative Auditor's Office examined the Request for Quote (RFQ) and the Request for Proposal (RFP) processes to determine if these processes are timely, competitive, and providing cost savings to the state. The Legislative Auditor found that in general both procedures are timely, competitive, and cost-effective. However, the Legislative Auditor reviewed nine RFP's and found two that violated proper procedure. These violations created the possibility of the wrong vendor being awarded a contract. Finding two RFP's evaluated incorrectly out of nine is unacceptably high, simply because there should be no risk at all of any RFP being awarded incorrectly. This assertion is based on three factors, one is that Purchasing is required to review the evaluation committee's final evaluation document according to its procedure, second, the calculations involve basic arithmetic, and third, the number of RFP's to review is small.

ISSUE AREA 2: Purchasing Division Should Improve the Collection of Certain Management Information

Certain management information is not collected by the Purchasing Division that is useful to improve the procurement process, and identify areas that may need improvement. This information includes Quality Assistance (QA) reviews, vendor performance complaints, and vendor protests. The Executive Director of Purchasing indicated that QA reviews are not conducted on a formal level because Purchasing does not have an appropriate number of staff. Having QA reviews performed on a regular basis could possibly indicate whether or not agencies are conforming to proper purchasing procedures.

The Executive Director does not monitor vendor performance complaints, but he indicated that written vendor performance reports occur in less than 1% of all transactions. However, there are many more verbal complaints by state agencies to Purchasing Buyers or to the Executive Director. There is a benefit in requiring agencies to submit vendor performance forms on good or bad performance on contracts with a value greater than a certain amount. If vendors know ahead of time that their performance will come under a certain amount of scrutiny, then these vendors would be more apt to deliver their goods and/or services in a timely and efficient manner.

There are basically three different levels of protests that a vendor can pursue: 1st, 2nd, and court level. Of all the contracts that are awarded each year, the Executive Director estimates that approximately less than 1% result in any type of protest. Currently, Purchasing does not keep records of the number of protests that reach the 1st, 2nd, or court level. Keeping a complete and accurate record of all protests can be a good management tool used to gauge the performance of the procurement system. For instance, if records of protests were kept, then Purchasing could monitor whether or not there was an increase in the number of protests from year to year.