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Testimony of James D. Staton on FY2014 Budget Implementation and Procurement Reform - January 22, 2014

Wednesday, January 22, 2014

Good afternoon, Chairman Mendelson and members of the Committee of the Whole. I am James D. Staton, Jr., the District’s Chief Procurement Officer and Director of the Office of Contracting and Procurement. I am here today to provide an update on the implementation of the fiscal year 2014 budget enhancement and the procurement reform initiative. I am joined today by Director Shawn Stokes of the Department of Human Resources, Phyllis Love from the Office of the City Administrator, who has been working closely with my office on procurement reform and members of my senior staff.

Following OCP’s oversight hearing in October, we reexamined our approach to determine how best to accelerate critical aspects of this undertaking, in a manner that would not sacrifice the quality of results or destabilize the organization. While there is still much to accomplish, I am pleased to report that we have made tangible progress, and that OCP will continue to work to realize the shared aspirations for an accountable, responsive, streamlined, and efficient procurement system for all District stakeholders.  

Recruitment and Staffing

In November, we established a partnership with the DC Department of Human Resources (DCHR) to help lead our recruiting and training efforts. To date, we have hired 24 new staff members, including seven supervisory contract specialists and seven contract specialists. Our new team members have a broad range of experience in public and private industry, each with strong knowledge of procurement. This group of staff has received orientation and training encompassing the laws, rules, and practices of District procurement. Recruitment is underway for the last procurement position; and we expect to finalize that hiring by February. With our additional procurement staff, OCP is able to improve workload distribution and complete staffing for our cluster-based procurement structure.  The additional personnel will enable OCP to give greater focus to each agency’s business model as procurements are developed. 

I would like to acknowledge the support of Director Stokes, the DCHR team, and the OCP Resource Management team in expediting the recruitment and hiring process. This was a substantial effort.

We are now jointly working to secure the employment of a Chief Learning Officer. Through an executive search firm, we have identified several strong candidates. Those interviews are in progress. We expect to have the successful candidate identified in February and on board by March.   As you know, the Chief Learning Officer will oversee the development and administration of comprehensive procurement training that addresses the needs of OCP and agency staff responsible for contracting. The Chief Learning Officer will manage the OCP training institute and administer a certification program for the District’s contracting staff under my authority.

Training and Certification Program

OCP has prepared a preliminary framework for the certification program, which is intended to provide a training series for contracting specialists, procurement professionals qualified for advanced responsibility, and senior managers that lead procurement teams to ensure that all purchasing staff under the authority of the Chief Procurement Officer are certified to fully execute procurements in the DC Government, pursuant to Section 206 of the Procurement Practices Reform Act of 2010 (PPRA). In addition to covering Title 27 DC Municipal Regulations, advanced procurement methods, and current processes and procedures, the three-tiered approach is expected to build competency at each stage of staff development.  

  • Tier I - Certified Contracting Specialist (CCS)

Approximately 80% of the requisitions annually received by OCP are for goods and services under $100,000.  Tier I of the program introduces attendees to DC procurement rules, laws and policies.  This tier provides a more standardized, step-by-step approach for processing procurements, and covers the issues and the methods most commonly used for small purchases.  

  • Tier II – Certified Associate Contracting Officers (CACO)

Tier II is designed for the experienced contract specialist and covers all procurement types, laws, rules and policies for purchases over $100,000.  During the Tier II training, staff will build competency in processing advanced procurements, including statement of work evaluation and refinement, cost and price analysis, bid evaluation management, and contract administration.  Successful accomplishment of Tier II skills will be a prerequisite for delegations.

  • Tier III – Certified Senior Contracting Officer (CSCO)

Tier III is designed to train and prepare senior staff to lead major, large, and complex procurements as projects, with oversight for effective management throughout the procurement lifecycle. Tier III training is also designed to enhance the analytical skills of procurement managers.

To move the OCP certification program planning to training design, DCHR has identified a partner who can assist with directing the review and refinement of program goals; examination of national procurement certification standards; and identification of an academic partner to take lead responsibility for certification program design and curriculum development.  

In early December, DCHR engaged The George Washington University to advise OCP on how to structure and develop curriculum for the Tier III courses which will focus on project management competencies.  In addition to curriculum development, OCP is seeking The George Washington University’s assistance to validate the current program structure, develop the certification criteria and design the evaluation mechanism for certification. The George Washington University’s experience in creating and administering certification programs specifically in the contracting and procurement arena will prove invaluable as we work to fully implement our training and certification program. Our goal is to have the GW recommendations ready for the Chief Learning Officer’s review and input in March.

OCP is also working with the Community College of the District of Columbia to develop a comprehensive guide for key roles in the procurement lifecycle. This guide will align with the materials and information taught in each tier of the Procurement Training Institute. The first “roles-based” guide, scheduled for completion by the end of February, will address the “how-tos” for contracting officers and specialists.

Procurement Reform

The consultant's work on Tasks 1 and 2 have provided the foundation for OCP reforms. Their examination of the District's procurement portfolio – specifically, the mix of goods, services and purchasing mechanisms, volume, and value – offered critical information on current needs and trends, which has helped OCP consider the type of policy and procedural improvements that will enhance service-delivery. The customer insight survey also provided a useful perspective on the procurement system from agencies that operate under OCP authority. Essentially, baseline conditions of the existing procurement system were defined in Task 1 (Fact-Finding).

Through Task 2 (Legislative and Regulatory Review), the consultants prepared a thorough appraisal of the PPRA and OCP policies and rules to determine consistency between the law and procurement management operating instructions. In addition, the consultants examined this information in the context of national standards and the practices of high performing procurement operations to identify areas that could be streamlined, eliminated, or clarified to achieve processing efficiency in agencies that operate under authority of the District’s Chief Procurement Officer. As a result of that work, we can confirm that the PPRA is aligned with the American Bar Association Model Procurement Code standards. And, while some of the District's provisions provide more descriptive guidance, the consultants determined that generally, the additional details achieve important controls, without impeding processing efficiency. Task 2 has helped OCP validate the appropriateness of the law and rules; and, it provided guidance on necessary clarifications in the DCMR. OCP will now be able to develop detailed operating procedures to standardize procurement processing and management.

The Procurement Responsibilities Review Survey is the underpinning of Task 3 (Personnel Assessment). The consultants have designed this instrument to collect information on the current procurement practices from staff responsible for purchasing. The survey information will be used to identify and clarify any distinctions in the way agencies process and manage procurements. The overall intent is to build on successful practices and rectify current requirements that contribute to processing inconsistencies and delays.  Staff input in the survey will help determine the type of training that is most useful. For instance, staff response on their current role and responsibility, in purchasing, will provide insight on processing components that can be standardized, through training, to achieve uniformity where appropriate and improve inter-agency coordination. Staff will also use the survey to suggest training areas that will help them achieve greater success in procurement processing and management. A comprehensive procurement training strategy, for the District, will address both immediate capacity-building in OCP and agencies, as well as long-term developmental needs that will ensure readiness to managing an increasing diverse procurement portfolio.

The Integrated Procurement Team (IPT) pilot program designed in Task 4 and made operational in Task 5 are using "active" procurements to help agencies plan, process, and manage procurement activities to achieve the timely and efficient purchase of goods and services. IPT ensures that the program and technical specialists, and the contracting, budget, and legal staff work together, throughout the procurement cycle, which helps improve inter-agency coordination and alleviates bottlenecks that can occur when there is insufficient understanding of processing requirements. This strategy insists on transparency between counterpart agencies, which will result in more efficient processing, as well as, a higher quality product for bidders – eliminating the ambiguity and inconsistencies that often lead to protests that impede the purchase of goods and services. Further, the consultant support provided through the pilot program will give agencies the technical assistance to complete complex procurements. Using weekly coordination meetings, IPTs are structured to rigorously track processing performance and expeditiously implement corrective action to achieve successful procurements including delivery schedules.   IPTs also serve as a substantive, ongoing feedback loop for both our training and oversight programs. Lessons from the pilots will culminate in procedures and systems that can be transferred across the District’s procurement operation.

Conclusion

Thank you, Chairman Mendelson, for the opportunity to provide an update on the status of fiscal year 2014 budget implementation at the Office of Contracting and Procurement.

I am happy to answer any questions you may have.