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Testimony on Implementation of Fiscal Year 2014 Budget Enhancement and Procurement Reform Initiative - October 22, 2013

Tuesday, October 22, 2013

Good afternoon, Chairman Mendelson and members of the Committee of the Whole, I am James D. Staton, Jr., Chief Procurement Officer and Director of the Office of Contracting and Procurement. Today, I am pleased to provide testimony on our progress in the implementation of the fiscal year 2014 budget enhancement and the procurement reform initiative. I am joined today by members of my senior staff. Since our last meeting in July, we have made progress on our budget implementation priorities. To date, we have accomplished the following:

Training and Certification

We are on target to have tiers two and three of the procurement certification program implemented in the first quarter of fiscal year 2014.  The course materials for tiers two and three will be completed and ready for pilot in December.  Three courses for tier two -- Statement of Work Review and Technical Writing; Cost and Price Analyses; and Critical and Analytical Thinking – are in development by an external vendor with whom DCHR has a long-standing relationship.  We anticipate the course materials to be delivered by the end of November and ready to pilot beginning in December.   Based on feedback from the pilot participants, we will make necessary adjustments and we anticipate final course structure and materials to be completed by December.

The MOU between OCP and UDC for the issuance of certificates by University of the District of Columbia for course completion was delayed, due to organizational changes at the university.  However, the Memorandum of Understanding has been updated for FY 2014 and is being circulated for review and approval by all parties.  We expect to have the executed MOU in place by end of next month. 

Recruitment Strategy and Plan

We have laid the groundwork for the implementation of our recruitment plan that was broadly outlined during previous testimony, and is being jointly developed with the Department of Human Resources (DCHR).  Key aspects of the recruitment plan include establishing a priority hiring list, revising and reformatting the ranking factors, expanding our use of social networks, and piloting a scenario-based interview process. 
We have established a working partnership with the Division of Continuing Education at the University of the District of Columbia Community College (UDCCC) in the creation of the procurement certification program required by the Procurement Practices Reform Act.  UDC Continuing Education has agreed to:

1. Certify our program;
2. Issue certificates of course completion; and,
3. Grant Continuing Education Units with the certificates.
In addition, the department of Continuing Education at the University of the District of Columbia is working with Interim President Dr. Lyons, and the Board of Trustees to determine if and how our procurement certification program can be delivered through the UDC program, and become part of an academic credit bearing program.  This would allow OCP and UDC to attract interested District residents to the growing field of procurement.  

Procurement Reform

Progress on the procurement reform initiative has been achieved since the last time we met. Our consultants completed a preliminary assessment of procurement operations, which includes the results from an employee insight survey, two legislative and regulatory crosswalks, and the submission of a draft personnel assessment tool for OCP management and staff. The latter was forwarded for comment in mid-September and is currently under review.

Customer Insight Survey

As part of the customer insight process, the consultants interviewed Deputy Mayors and their staffs from each cluster to gauge their experiences working with OCP. The Office of the Attorney General and the Contract Appeals Board were also interviewed for input on current practices. In addition to stakeholder surveys, the consultant conducted a focus group session with OCP procurement staff and managers to understand existing processes and constraints. This “fact-finding” process provided insight on client expectations of OCP and described the misunderstanding agencies have about their roles and responsibilities in the procurement process, and the function of OCP in the various phases of procurement management. OCP staff acknowledged that agencies need much more “advanced” guidance on the procurement management process.

The consultants conducted a survey of personnel with procurement responsibility in forty-one agencies under OCP’s procurement authority. Four critical areas were identified to achieve a more effective partnership with agency counterparts:

  • Communications should be enhanced overall, more structured, with constant exchanges, and new mechanisms developed and implemented at management and staff levels that are used consistently;
  • Training programs should be created and implemented that are ongoing and in-depth, and that include the full lifecycle of procurement, teambuilding, customer service and time/project-management components. This will be key to all reform efforts;
  • Rules, processes, procedures, and approvals should be streamlined in order to bridge the gaps between quality and timeliness in the overall procurements process;
  • Workforce adjustments and organizational re-alignments could strengthen OCP’s and the District’s ability to improve overall standards of performance across its procurement activities.

The survey results provide a clearer understanding of the areas of our work that are serving our customers well, and highlight opportunities for improvement. The customer feedback validates several initiatives undertaken by OCP to improve operational outcomes even before the survey was complete.

The main theme raised by the survey respondents was the need for increased communication between OCP staff and our customer agencies. I have reviewed the results of the survey with my team and we will continue to implement those changes to our organization that we believe will improve the level of service our customers receive.

As you know, OCP’s FY14 strategy includes conversion from a commodity-based organization to a cluster-based structure that mirrors the current operations of our government. Through this reorganization, OCP senior managers are assigned oversight for designated clusters. This new structure, which became effective October 4, 2013, allows our customers to have a single point-of-contact for all of their procurement needs. We anticipate this shift in structure will be highly beneficial to our customers because it will provide clearer lines of accountability and problem resolution within the procurement organization; and, enable the cultivation of agency-specific knowledge and efficient and effective procurement planning and order fulfillment. 

Legislative and Regulatory Analysis

The consultants completed a comprehensive review of the statute and the regulations that govern the Office of Contracting and Procurement. Over the past year and half, the OCP legal team has revised the key District of Columbia Municipal Regulations (DCMR) provisions that required changes to be fully consistent with the Procurement Practices Reform Act (PPRA). The consultants comparison of PPRA and DCMR determined that all material revisions to the OCP rules have been completed. The PPRA is generally consistent with government procurement laws in the United States and should not be a hindrance to efficient and timely purchasing.
As part of the legislative and regulatory review, the consultant also compared regulations in use by the Department of General Services (DGS), DC Public Libraries (DCPL), and the DC Water and Sewer Authority (DCWASA) to those in use by OCP. In a cross-walk comparison of all key provisions, the findings indicate that OCP practices are essentially consistent with the standards established in these high performing agencies. OCP’s regulations should not be an impediment to the District’s purchasing needs.   

Next Steps

Personnel Assessment

We anticipate the personnel assessment to begin in the next few weeks. The assessment will evaluate the skills and capabilities of personnel, for roles and functions within the current procurement structure.  The personnel assessment is intended to serve as a high level appraisal of the current knowledge (experience level), skills (training), and abilities (position) of representative staff from OCP staff and target agencies. The assigned job position statements and job titles will establish baseline qualifications and performance expectations. These standards will be used in the review of work assignment-type, workload analysis, and performance measurements established by the respective agencies. We anticipate the personnel assessment to be completed by the end of November and the consultant’s recommendations to be received by the middle of December.

Pilot Program

Seven agencies have been selected to pilot an industry-recognized procurement management approach known as the Integrated Product Team Model. The selected agencies are representative of the agencies under the Chief Procurement Officer’s authority and have varying levels of procurement spend, volume, and requirements. Implementing the Integrated Product Team Model will enable District stakeholders to observe in ‘real-time’ the actual processes in use by OCP and explore the interaction between key participants in the procurement process to include OCP staff, program agency staff, OCFO personnel and OAG. Information gathered will enable real-time operational adjustments to realize the desired results for OCP and customer agencies. Through the pilot, agencies will also receive technical assistance in their development and management of actual procurements, which will improve processing efficiency and the quality of bid documents and evaluation of proposals.

The agencies selected are:

  • Department of Corrections
  • Department of Employment Services
  • Department of Health
  • Office of the State Superintendent
  • Department of Transportation
  • Department of Human Services
  • Department of Healthcare Finance

We are still on target to complete the Procurement Reform Initiative by June 2014. By then, we expect to have a reformed approach to the way we handle and manage the procurement process for our agency customers. The combination of the Integrated Project Team approach, the proposed changes to the regulations to insure greater flexibility, and the results of the personnel assessment will allow us to develop a plan for how to improve procurement in the District. 

In conclusion, Chairman Mendelson, we are on track to fully implement the detailed plan we discussed at the last hearing. Our priority for this fiscal year is to bring in employees who meet or exceed the qualifications for the 20 additional staff positions; ensure that we have a standardized training program for our new and existing employees; and implement a plan for attracting new talent and developing our existing employees. I expect that these improvements, paired with the planned outcomes of the procurement reform initiative will result in immediate and sustained improvements at OCP by the end of fiscal year 2014. Thank you and I am happy to answer any questions you may have.