Testimony of James D. Staton, Jr., Chief Procurement Officer
“Public Oversight Hearing on District Contracting and Procurement”
Committee on Government Operations, Muriel Bowser, Chair
Council of the District of Columbia
Wednesday, January 25, 2012
11:00 am
John A. Wilson Building
1350 Pennsylvania Avenue, NW
Room 412
Washington, DC 20004

Introduction

Good morning Madam Chair and members of the Committee on Government Operations. I am James D. Staton, Jr., Chief Procurement Officer for the District of Columbia and the Agency Director for the Office of Contracting and Procurement, known as OCP. Today, I will present testimony on the status of the District’s contracting and procurement practices along with initiatives we have implemented to improve the contracting process. I am pleased to be joined by my senior staff members: Nancy Hapeman, General Counsel for OCP; Sanya Cade, Chief of Staff; and Courtney Lattimore, OCP’s Contracting Officer. Additional members of my senior staff are in attendance to assist as we respond to your questions.

Overview of OCP and the Procurement Process

OCP’s mission is to partner with vendors and District agencies to purchase quality goods and services in a timely manner and at a reasonable cost while ensuring that all purchasing activities are conducted fairly and impartially. We process solicitations that yield contract awards and over 10,000 purchase orders, totaling more than 1.2 billion dollars each fiscal year. We serve 60 agencies and programs and oversee the procurement activities for 16 agencies with delegated contracting authority. OCP procures goods, services, transportation and specialty equipment, as well as information technology. We also administer procurement-related programs such as the Purchase Card program and the District of Columbia Supply Schedule. Additionally, OCP manages the Procurement Automated Support System, known as PASS; and we provide contract administration and support services to include legal, customer service, vendor relations, procurement training, and compliance oversight. OCP also manages the District’s Surplus Property Division. All of these programs, in addition to our administrative functions, are executed with a central staff of 84 FTEs and 17 Agency Contracting Officers with support staff.

The central procurement staff is responsible for the accurate execution of procurement through the contract award process. Our contract award process follows the Procurement Practices Reform Act of 2010, the PPRA, and allows for procurement by means of competitive sealed bids or competitive sealed proposals. The basis of award varies depending on the procurement method selected. If competitive sealed bidding is selected, the award is determined by lowest price. If the competitive sealed proposal is selected, the award is determined by other factors in addition to price, such as technical experience, past performance or a combination of both. These methods allow for Certified Business Enterprises participation and preferences.

Transformation to the New OCP

During my confirmation testimony in May of 2011, I shared my vision that OCP will become a model for efficient and timely service to District agencies. Since that time, I have worked closely with the OCP staff to assess and realign the central procurement organization; improve its processes and procedures; provide increased training for contracting staff, program personnel, and vendors; and have a user-friendly procurement system to support our agencies and stakeholders. Due to reductions in the Fiscal Year 2012 operating budget, we had to re-align our resources in to provide optimal performance without interruption to procurement operations. In re-aligning our organization, we were able to meet our budget challenges and yield enhancements in technology, customer service, audit and compliance, and transparency.

OCP Technology

OCP, together with Office of the Chief Technology Officer’s, known as OCTO, PASS support team, has been working aggressively on enhancements to make PASS more user friendly and to allow OCP to manage and monitor the entire procurement process online. With the system changes now in place, OCP can electronically process procurement from initiation to award more efficiently. Key enhancements have been made to link existing modules so that they communicate seamlessly with one another. These modules are:

• Buyer for requisitioning;
• eSourcing for solicitations, vendor response, evaluations, and awards.
• Contracting which serves as a depository for all contract documents; and
• eValuation for vendor performance;

We’re in the process of implementing and developing two new tools: OCP Project Initiation Form, known as OPIF, which will be used for project initiation and acquisition planning and the Ariba Category Management tool, known as ACM, which will allow milestone tracking and bottle-neck identification of procurements. The OPIF will be rolled out to agencies in stages starting in February and ACM was introduced last week to all contract specialists and contracting officers.

Customer Service Focus

To improve accessibility, we have created the OCP Customer Contact Center as a single point of contact for agency customers and vendors. The Center will respond to all service related calls now handled by the procurement staff. The shift of this service function will allow procurement staff to focus solely on completing procurements in a timely and efficient manner. The Center is scheduled to be fully operational in March. In preparation for the official launch, the Center staff is currently handling many of the service calls from agencies, conducting bi-weekly training sessions for our vendor community on how to do business with the District and providing assistance with vendor registration. Vendor training sessions are offered the first and third Thursday of each month at 1:00 PM at OCP’s central office.

Training and Education

OCP is continuing its focus on building and maintaining a well-educated and trained staff. In Fiscal Year 2011, we delivered approximately 19 procurement and PASS related courses to employees from OCP and other agencies. There is an ongoing effort to support the professional development of procurement staff. We encourage staff to maintain membership in and obtain professional certification from the National Institute of Governmental Purchasing. OCP staff members currently hold leadership positions in the local chapter of NIGP. As the Chief Procurement Officer, I represent the District as a member of the National Association of State Procurement Officials and also serve as vice chair of the organization’s northeast region.

While national certification provides a general understanding of procurement, my assessment has identified a need for specialized certification in the District’s procurement process. In compliance with the PPRA, we will establish and administer a procurement training institute to facilitate a system of training, continuing education, and a rigorous certification program for District contracting personnel. Staff who successfully complete the curriculum and demonstrate an understanding of the material will be deemed by the institute as certified procurement specialists or officers for the District of Columbia Government. The institute is scheduled to start delivering courses in March 2012.

As an extension of the institute, OCP is discussing a potential partnership with the University of the District of Columbia Community College to expand our DC focused curriculum to include more traditional industry courses. This will allow students to receive a certificate or associate’s degree in procurement from UDC Community College. We hope this program will pilot in September 2012.

Audit and Compliance

In our ongoing assessment of the procurement process, we identified opportunities for improvement in our audit and compliance efforts. OCP’s Office of Procurement Integrity and Compliance, known as OPIC, has expanded its audit program to include procurements in excess of 100 thousand dollars. In the past, our audit program focused almost exclusively on procurements in the small competitive threshold. However, based on OPIC’s assessment, almost 80 percent of the District’s expenditures are in the large competitive threshold. We have realized that it only makes sense for us to focus our oversight and compliance efforts on this class of procurements, since they represent the greatest risk exposure to the District. Our goal is to create a sustainable contract administration process focused on proper execution of contracts, vendor performance, and timely payment for receipt of goods and services.

OCP’s revamped contract administration and compliance program is based on frequent interaction with Contracting Officers and Contract Administrators, surprise audits, and ongoing reviews of contract monitoring responsibilities. We have notified agency directors and procurement staff of the changes to the audit program through memos and training courses. In November 2011, OPIC launched a District-wide refresher course on contract administration accessible by all employees both online and in person.

In December, we began an audit of select agencies to determine their level of compliance to the new audit program. By February 27, OPIC will begin issuing formal reports of agency compliance. Our hope is that this new program will strengthen contract administration throughout the District.

OCP Procurement Transparency

OCP continues to promote procurement transparency by maximizing the amount of procurement data available to the public. We now post on our website: all solicitations; notices of all contracts awarded over 100 hundred thousand dollars; and notices of intent to award sole-source contracts. Purchase orders and purchase card transactions are also published online and available through the District’s data catalog, housed on OCTO’s website. (www.data.octo.dc.gov)

Conclusion

Madam Chair and members of this Committee, I appreciate having the opportunity to testify regarding the status of the District’s contracting and procurement process. I would like to conclude by thanking you for your leadership and support. In our previous discussions and meetings, both you and Committee staff have been supportive of change and open to OCP’s implementation of best practices. I also would like to thank OCP’s staff, agency contracting officers, and my colleagues for supporting the paradigm shift to accountability, collaboration, and efficiency at OCP.

Madam Chair, this concludes my prepared testimony. I am happy to answer any questions you might have.