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Testimony of Nancy Hapeman on Agency Performance in FY14 and FY15, to date

Thursday, March 12, 2015

Good afternoon, Chairman Mendelson and members of the Committee of the Whole. I am Nancy Hapeman, Interim Director and Chief Procurement Officer of the Office of Contracting and Procurement. Today, I will provide testimony regarding the agency’s performance in fiscal years 2014 and 2015, to date.

The mission of the Office of Contracting and Procurement (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. Each year we process approximately 8,000 purchase orders, totaling approximately $1.2 billion.

Procurement

The highlight of fiscal year 2014 was the transition to the Delegated Procurement Authority (DPA) operating structure in the spring of 2014.  The DPA structure ensures that procurement service delivery is responsive to agency needs, with the elimination of inter-agency bottlenecks between customer agencies and OCP.  It also safeguards quality control since procurement services and staff performance are monitored by OCP, under the authority of the District’s Chief Procurement Officer.

The DPA operating structure gives contracting staff firsthand knowledge about the programs they support while engaging the program staff throughout the procurement lifecycle. Over the eight-month performance period since OCP implemented the initial phase of DPA, assigned staff have been integrated into agency operations.  Ultimately, though, contracting staff assigned to the DPA agencies remain on OCP’s budget and under the authority of the Chief Procurement Officer.

Even within the DPA operating structure, OCP’s central office retains procurement responsibility for simplified acquisitions, special procurement initiatives, the DC Supply Schedule, District-wide acquisition of universal goods and services, and purchasing for agencies that do not maintain a contracting staff.  Other OCP-central core functions include training and certification of procurement staff, monitoring performance of contracting officers and specialists assigned to DPA agencies, and internal quality assurance and review.

Over a six-week period beginning in May 2014, 60 procurement staffers were deployed to 22 agencies under Phase 1 of DPA. Prior to the deployment, agency heads and affected staff were briefed about the respective roles and responsibilities of OCP and customer agencies in the DPA operating structure.  OCP leadership continues to coordinate resource management with customer agencies to ensure sufficient capacity for procurement processing and management. As a result of that coordination, adjustments were made over the past months to better address agency needs, with the result that, for DPA Phase 1, OCP currently has 56 procurement specialists assigned to 21 agency worksites.

Implementation of Phase 2 of the DPA operating structure, which allows for the transfer to OCP of customer agency staff whose jobs consist of more than 51 percent procurement-related work, began in February. Forty-five personnel from 12 agencies are being transferred to OCP. The conjoining of all procurement staff under OCP oversight that is accomplished through DPA Phase 2 will achieve consistent application of rules and principles, as well as quality control, when procurement service delivery is performed in all agencies under the authority of OCP. The first group of converted staff was officially transferred on March 8 and the second group will be transferred on March 22. 

Sustainable Purchasing

In fiscal year 2014, OCP was awarded a grant from the Sustainable DC Initiative to develop a sustainable purchasing program for the District. The Sustainable Purchasing team developed sustainable specifications for 14 categories of goods or services that are commonly purchased by the District. We recommend that customer agencies use the environmental specification guidance to develop procurement requirements that are in compliance with environmentally preferable purchasing requirements. The team is working to rollout the program District-wide and train procurement stakeholders on how to use the specifications in future solicitations.

Learning and Development

In April 2014, OCP contracted with The George Washington University (GWU) to develop and pilot the curriculum for the procurement training institute required by the Procurement Practices Reform Act of 2010. The six-week pilot of the tiered certification program, with approximately 20 contracting staff and six trainers, was delivered starting in November 2014. OCP’s Chief Learning Officer and the learning and development specialists continue to work with the team at GWU to identify gaps and opportunities to improve the curriculum before the first official cohort begins this spring. Our plan is to usher at least 35 more contracting staff through the certification program before the end of this fiscal year. OCP’s learning and development specialists have already passed the certification exams for all tiers of the program and are working toward certifications in adult education and delivery of OCP’s Knowledge Institute curriculum by the end of this fiscal year.

In addition to the courses OCP provides for our newly hired contracting staff, OCP continues to offer introductory contracting and procurement courses through DCHR’s Center for Learning and Development. In fiscal year 2014, 1,459 government employees took procurement-related courses taught by OCP’s learning and development team. The current slate of courses being offered in fiscal year 2015 include, among others: Introduction to DC Government Contracting, Management of the Purchase Card, Contract Administration, PASS Buyer and Statement of Work Writing.

Procurement Integrity and Quality Assurance

OCP expanded its procurement integrity and compliance team to include quality assurance on a pre-award basis. The quality assurance team evaluates high value and complex procurements throughout the procurement lifecycle to ensure compliance with procurement standards. The team also supports the procurement staff through critical review of statements of work, cost price analysis, and market research.

Surplus Property

The Surplus Property Program continues to improve revenue and cost savings through the sale and reuse of District surplus property. In fiscal year 2014, the program generated approximately 3.9 million dollars in revenue, while saving the District an additional 4.3 million dollars through cost savings and reutilization. The Surplus Property Program continues to expand as the team establishes new partnerships with additional agencies. This fiscal year Surplus Property established a partnership with the Office of Tax and Revenue to auction seized property.

Additionally, the Surplus Property team increased outreach to the local non-profit community in fiscal year 2014 to raise awareness of both the District and federal surplus programs. Through the federal surplus property program, OCP gained access to over 2,000 laptops, and partnered with OCTO’s Connect.DC Initiative to reimage and distribute the computers to UDC Community College, local elementary schools, and DC-based non-profits serving District residents.

Purchase Card

OCP worked to improve and expand the District’s purchase card program in 2014. We updated our policies and procedures to reflect new limits and requirements since the last update in 2009. As part of the rollout of the revised policies and procedures, the purchase card training was revamped to include detailed expectations for each role in the process. Further, we automated credit limit increase requests that were previously paper based to ensure that an accurate repository of information is maintained.  

These enhancements laid the proper foundation to expand the purchase card program to additional independent agencies. We expanded the number of cardholders at DCPS from one cardholder to 50 cardholders to allow school-level officials to manage their own purchasing. We are exploring the possibility of adding more independent agencies this fiscal year.

External Relations

OCP continued to expand outreach to the vendor community in fiscal year 2014 by attending community events and providing information to help small and local businesses understand how to do business with OCP.  OCP attended events such as Congresswoman Eleanor Holmes Norton’s Small Business Summit, Greater Brookland Business Association’s meeting on procurement and contracting opportunities, and the National Black League’s Annual ProBiz Conference, among others. Our goal for fiscal year 2015 is to increase the number of events we attend and introduce more local organizations to the contracting opportunities available to the District. We are already well on our way to this goal having presented at events sponsored by the Greater Washington Hispanic Chamber of Commerce, The US Women’s Chamber of Commerce, and the Latino Economic Development Center.  These events are in addition to our monthly General Vendor and DC Supply Schedule workshops where vendors come to learn about doing business through OCP.  

OCP is working to create our own slate of outreach events, most notably, DC Buys, a reverse trade fair scheduled for April 10 at the Washington Convention Center. The fair gives vendors the opportunity to market their businesses to contracting staff and program staff from our customer agencies. This spring we will also kick off OCP in the Wards, a monthly outreach event where we will visit all eight wards and educate vendors on doing business with the Office of Contracting and Procurement.

Remainder of Fiscal Year 2015

Our plan for fiscal year 2015 is to continue to build on the momentum from last fiscal year and this fiscal year, to date. We will continue to work with our customer agencies to streamline the procurement process to ensure proper planning and execution of contracts. Further, we will roll out a robust procurement training institute and certify procurement staff.

In closing, I want to thank the OCP staff who have worked so hard on behalf of our customer agencies and the residents of the District. Thank you, Chairman Mendelson, for your continued support. I am happy to answer any questions you may have.