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Testimony of George Schutter on Fiscal Year 2019 Performance Oversight Hearing

Thursday, February 13, 2020
Before the Committee on Facilities and Procurement, the Honorable Robert White, Chairman

Good morning Chairman White and members of the Committee on Facilities and Procurement. I am George Schutter, Chief Procurement Officer of the District of Columbia and Director of the Office of Contracting and Procurement. On behalf of Mayor Bowser, I would like to thank you for the opportunity to provide testimony on the performance of the Office of Contracting and Procurement for FY19 and FY20 to date.

The mission of OCP 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 actions are conducted fairly and impartially. Toward that end, in FY19 OCP managed $5.7 billion in goods and services on behalf of 79 District agencies. OCP’s core programs include the DC Supply Schedule, Purchase Card program, and the Surplus Property Disposition and Reutilization program. OCP’s learning and certificate programs support ongoing development of staff proficiency and procurement service quality.

Today OCP has built a network of professionals and a system to provide District client agencies with procurement and contracting tools to best support District residents. In 1997, the District of Columbia began the process of centralizing its procurement into a single agency—OCP—with the goals of improving the quality, efficiency, and transparency of the District’s contracting function. I am happy to say that under Mayor Bowser’s leadership, and through the hard work of a cadre of dedicated procurement professionals, those goals are being achieved.

 

THE FIRST PRINCIPLE: QUALITY

OCP delivers quality contracts and value to client agencies through a professional business advisory culture and client engagement atmosphere. We do this in a number of ways, beginning with recruiting and retaining competent professionals. During FY18, OCP launched its workforce development initiative called T.A.L.E.N.T. (Train, Attract, Lead, Engage, Navigate, and Thrive). Through this initiative, OCP has developed a network of contracting professionals to manage the dynamic and growing requirements of the District and ensured wraparound support services through our legal, human resources, performance management, and communications teams. In FY19, OCP implemented a merit-based pay policy to demonstrate its commitment to maintaining a high-performance organization. Managers and employees are expected to establish performance goals, conduct and participate in mid-year reviews, and participate in one-on-one coaching as necessary.

OCP provides continuous education through its Procurement Training Institute (PTI), which offered 18 different training courses in FY19 and FY20 to date. The PTI offers guest lectures with subject matter experts on specific areas of interest, such as “the Dos and Don’ts of Post-Award Debriefings,” facilitated by our colleagues at the Office of the Attorney General, and a Lunch & Learn series offering in-person opportunities to discuss new procurement policies and regulations. For the third year in a row, OCP hosted its annual Procurement Symposium in November for approximately 200 procurement professionals throughout the District, including those supporting agencies with independent procurement authority. The symposium consists of a day-long learning and networking experience, complete with breakout sessions and keynote speakers with extensive procurement expertise.

These efforts have helped to elevate OCP’s profile, as we are seen nationally as a model contracting office and recognized for public procurement best practices. Because of the District’s commitment to quality procurement, I was elected to serve as the president of National Association of State Procurement Officials (NASPO), a member-service organization made up of CPOs of the 50 states and the District of Columbia. NASPO’s network facilitates interaction among CPOs and other procurement peers across the country, allowing for collaboration and information sharing, including the exchange of best practices and lessons learned.

 

THE SECOND PRINCIPLE: EFFICIENCY

OCP continues to create efficiencies in the District’s contracting function. OCP contracting staff is imbedded within 23 client agency locations to allow for synergies with program staff, while maintaining the public trust of warranted contracting officers under my supervision. Through strategic acquisition planning, partnership in the development of acquisition milestones, and coordinated execution, OCP’s contracting staff are actively providing client advisory support services to ensure that we are helping agencies meet their missions.

OCP has also significantly reduced the number of contracts requiring retroactive Council approval. In 2015, OCP submitted 19 contracts with a cumulative value of $1.2 billion to Council for retroactive approval. In FY19, OCP did not submit any contract, modification, or change order to Council for retroactive approval. As we continue to work more efficiently, we are mindful of our execution of contracts, working diligently to ensure that we meet the District’s timelines, provide excellent service to our client agencies, and ultimately ensure that District residents receive the services they need and deserve.

OCP’s Surplus Property Division also creates efficiencies and cost-savings in the way that the District acquires, utilizes, reutilizes, and disposes of property. In FY19, the District acquired 4,388 items from the federal government; transferred 3,109 items to District agencies and non-governmental organizations; and generated approximately $35,000 in revenue from scrap metal recovery, and an additional $3.4 million in revenue from the GovDeals online auction platform.

 

THE THIRD PRINCIPLE: TRANSPARENCY

OCP continues to improve the level of transparency in the procurement process. I am pleased to provide an update on the Contracts and Procurement Transparency Portal, which went live in February 2019. The portal, designed and developed in coordination with the Office of the Chief Technology Officer and the Office of the Chief Financial Officer, improves the functionality of, and offers an an easy-to-navigate public clearinghouse for all information related to the District’s contracting and procurement actions. The public may now visit one website to access contracting opportunities; open, pending, and closed solicitations; information on past and active contracts; information on past and active purchase orders; payments to prime contractors; contracting opportunities of independent agencies; and the District’s procurement laws and regulations. Since its launch, the portal has been accessed 18,422 times.

OCP also successfully launched the Contractor Performance Evaluation System in April 2019. The evaluation system allows contract administrators and contracting officers to assess the performance of contractors for all contracts valued at over $100,000. The system also allows contractors to provide comments on their evaluations, fostering increased transparency and engagement. Since April, we have evaluated 466 contractors, 285 users have accessed the system, and 758 evaluations have been completed.

As we continue to strive for the utmost transparency, we are well aware of our areas for improvement, in particular, the posting of awarded contracts valued at over $100,000 on OCP’s website. In FY19, 81 percent of OCP’s contracts valued at over $100,000 were posted publicly and in FY20 to date, 55 percent of contracts valued at over $100,000 have been posted. As I have mentioned in previous testimonies, we are operating with limitations in our current data, however I am pleased to note that even under manual controls, we have been able to increase the number of publicly posted contracts from 52 percent in FY18 to now over 80 percent in FY19.

 

STAKEHOLDER RELATIONSHIPS

OCP’s efforts around quality, efficiency, and transparency would be futile without constructive stakeholder relationships. In June 2019, and in response to feedback from internal and external stakeholders, OCP launched the Procurement Center of Excellence to serve as a centralized customer service solution center for users of the Procurement Automated Support System (PASS). The Procurement Center of Excellence is managed by a team of procurement and technology experts and offers the highest level of customer service to vendors and agency partners by providing a single point of contact to assist with all issues related to PASS. Since its launch, the Center has received approximately 10,000 help desk tickets and over 8,000 calls for assistance.

OCP’s Office of the Ombudsman is critical to OCP’s efforts to build and maintain effective stakeholder relationships. OCP’s Ombudsman serves as a resource for contractors, offering mediation services, training, and participation in industry outreach events. OCP’s Ombudsman facilitates OCP’s General Vendor Workshop once a month, which provides those interested in doing business with the District, an opportunity to engage with the Ombudsman directly. In FY19, the Office of the Ombudsman received 66 formal contacts, of which seven were complaints. In FY20 to date, 15 formal contacts have been made to the Office of the Ombudsman.

Moving forward, OCP plans to proactively engage client agencies to glean insights into their experiences when interacting with and obtaining support from OCP’s contracting professionals. Through focus groups, surveys, and interviews, we want to better understand any significant issues that can be solved through contracting and procurement action. We will specifically engage clients around areas involving acquisition planning, contracting staff, use of the procurement health dashboard, and how the contracting function can best support the agency’s overall mission. The information obtained through this process will help us pinpoint additional areas for growth.

 

PROCUREMENT GOALS

Technology

OCP will continue to utilize its relationships and network to meet Mayor Bowser’s vision for the District, specifically in the areas of information technology and transportation procurements. OCP is working with our colleagues at OCTO to develop an IT Procurement Playbook for our client agencies across the District, which is modeled in part after the Digital Services Playbook, and incorporates leading IT procurement practices from other states. This playbook will instill certain principles such as understanding the needs of OCP’s client agencies and vendors, using agile and iterative processes, and communicating early and often with end users. Our IT focus is a major component of our broader strategy to improve OCP’s business advisory services in the rapidly changing world of IT.

OCP is also continuing its efforts to refresh the Procurement Automated Support System (PASS), which is an essential tool for the District’s procurement professionals. As we migrate the system to the cloud, we plan to improve DC Supply Schedule utilization; increase automation of the process efficiencies gained; facilitate a single point of entry for our industry partners and move towards a more “Amazon-like” ordering experience for agencies. The refreshed system will ultimately allow for better management oversight of, and insight into, the District’s contracting function. We are currently in the analysis and validation phase of the system refresh. We have completed a detailed analysis of the standard system requirements in preparation for the configuration phase, which will begin in the third quarter of FY20.

 

Transportation

OCP is committed to supporting Mayor Bowser’s Vision Zero to eliminate fatalities and serious injuries to travelers by increasing the efficiency of transportation procurements. In FY19, OCP, in collaboration with the District Department of Transportation (DDOT) and the Executive Office of the Mayor, began assigning Integrated Project Teams to designated priority transportation projects. OCP has also invested in creating systems, developing contractual documentation templates, and setting processes with our DDOT engineer colleagues to better align procurement with DDOT project delivery. Our goal is to be the number one state transportation procurement office in the nation.

 

Supporting Small Businesses

As I have stated in previous testimonies, one of OCP’s top priorities is to ensure that the District’s Small and Certified Business Enterprises have access and opportunity to participate in the District’s contracting process. I am pleased to state that under Mayor Bowser’s leadership, SBE spending has increased by more than 180 percent, from a goal of $317 million in FY15, to over $890 million spent in FY19. The number of CBEs receiving contracts has increased, as has both the number of purchase orders and the percentage of total spend that goes to CBEs. This increase is largely due to the focus, expertise, and leadership of the District’s procurement professionals and our partners at the Department of Small and Local Business Development (DSLBD). Mayor Bowser has set a goal to spend more than $910 million with SBEs in FY20 and, just as in prior years, we are determined to achieve this goal. In FY18, of 84 District agencies monitored by DSLBD, eight agencies (nine percent) did not meet their SBE expenditure goals. Of those eight agencies, OCP is proactively working with the two agencies under the CPO’s authority during the acquisition planning process to identify areas where SBE recruitment is needed. OCP is open and available to meet with any agency on strategies to meet their goals, whether a client agency or not.

 

CONCLUSION

In closing, I am very pleased with OCP’s progress in improving the quality, efficiency, and transparency of the District’s contracting function in FY19 and FY20, to date. None of the efforts that I have mentioned today would be realized without the hard work and commitment of the staff at OCP. I am grateful to them for working tirelessly to ensure that our client agencies, industry partners, and District residents have access to the services and levels of quality they each deserve. I would also like to thank Mayor Bowser and City Administrator Young for their continued leadership and support as we push to improve contracting in the District of Columbia even further. Thank you, Chairman White and members of the Committee on Facilities and Procurement for the opportunity to testify. This concludes my prepared testimony and I am happy to answer any questions you may have.