OPENING STATEMENT OF DAVID P. GRAGAN
ON
EMERGENCY CONTRACTS AND STRATEGIES FOR
ELIMINATING OR REDUCING THEIR OCCURRENCE
Tuesday, February 12, 2008
2:30 p.m.
The John A. Wilson Building
1350 Pennsylvania Avenue, NW, Room 120
Washington, DC 20004
Chairperson Schwartz and members of the Committee, I am David P. Gragan, Chief Procurement Officer (CPO) for the District of Columbia. Thank you for this opportunity to appear before you to discuss emergency contracts. Today, I will share with you an overview of my agency’s strategy for reducing the amount of contracts submitted for emergency approval by the Council.
There are many critical issues that I have identified since my arrival at the Office of Contracting and Procurement (OCP). Most require some reinvention or change in current processes or procedures. We are striving mightily to get all these priorities in order and develop, implement and lead the needed changes to remediate a number of what I would classify as practices not commonly used in public procurement. Labeling routine contract actions requiring legislative approval “emergencies” is one such practice.
Since becoming CPO, I have tackled many issues and have implemented many changes within OCP. After speaking to you last week and sitting with my staff to understand the history surrounding the issue of emergency contract approvals, this issue is among the top priorities for change in the agency.
Apparently, it has become routine to submit retroactive contract actions and ratifications to the Council for approval on an emergency basis.
The ten contracts submitted last week for approval were for goods and services ranging from providing nutritional meals for the elderly to health care services for the sick to pharmacy sales for District Medicaid recipients. In each instance, the contract need was routine and predictable. Given that, introducing appropriate lead time into the contract process would allow us to let Council approval take its normal course. That planning issue, incidentally, is owned by both my office and agencies, and resolving the complete coordination of the process has been a high priority for me since arriving here. I will take responsibility for ensuring that proper procurement planning is understood and adhered to by agencies in this government.
Let me share with you how we’re going to ensure that contracts are vetted through the normal legislative approval process and are not classified by my staff, or any other, as emergencies. My goal is to change the culture and redefine our processes and planning efforts.
As you are aware, OCP is currently undergoing a substantial transformation. Many of the immediate reforms I have put in place are starting to pay off such as our campaign to eliminate ratifications, which I will discuss momentarily. In previous years, this Council has often been flooded with requests for emergency approval of retroactive contracts and ratifications. And while we have not totally eliminated the need for this approval, we have reduced the number drastically.
Yet, my vision goes beyond simply reducing that number. I want to get to the point where my office only submits emergency contract actions when it is, in fact, an emergency. My directive to my staff is clear; submitting emergency contracts to the Council for approval should be the exception and not the rule.
One of the core components of our transformation initiative is the development of a strategic process for planning procurements. There are many contracts that we know we will need on an annual basis. Currently, my staff is working with agencies to outline upcoming procurements that are needed for the remainder of the Fiscal Year.
Our planning efforts focuses on improving the annual procurement planning process that agencies are required to complete. When done conscientiously, an annual procurement plan provides a blueprint for procurements that will be requested by the agency. This plan, then, allows both the agency and my office to schedule resource use and appropriate lead times in all major contracts.
Last year, OCP took a bold step to eliminate routine ratifications. In August and again last month, I sent out notices to all stakeholders in the procurement process notifying them of our intent to completely eliminate ratifications. Ratifications, which are actions taken to pay a vendor for services or goods which have been rendered without a proper contract, have been used frequently in previous years. However, the Fenty Administration is committed to eliminating their use as a routine procurement method.
My position is simple: Vendors must have an approved procurement instrument in place prior to providing goods or services. This includes a purchase order, term contract, or funded blanket purchase agreement, just to name a few. Entering into contracts verbally or without appropriate authorization is prohibited. Any vendor who delivers services or goods to the District without a proper contract is doing so entirely at their own risk. The District will not pay for goods or services that were provided without the benefit of a properly executed contract.
All agency heads have been notified that individuals without procurement authority who order supplies or services, who attempt to change the terms of an existing purchase, or who commit the District to pay a vendor for anything received, shall be subject to disciplinary action and may be responsible for payment for goods and services provided. This notice has been released to vendors, the media, placed on our website, and posted throughout government buildings. We are also in the process of developing a Public Service Announcement that will be featured on the District’s Cable Television. We are committed to eliminating unauthorized procurements.
Chairperson Schwartz and members of this Committee, this concludes my prepared testimony. Thank you for your interest in and continued support of the Office of Contracting and Procurement. With your continued support, we will transform the process and become a better, more productive and efficient contracting agency. I am happy to answer your questions.