DC Council Hearing on Fiscal Year 2007 and Fiscal Year 2008 Performance Oversight Hearing on the Office of Contracting and Procurement - Testimonies

Testimony of
David P. Gragan
Chief Procurement Officer

“Fiscal Year 2007 and Fiscal Year 2008 Performance Oversight Hearing on the
Office of Contracting and Procurement”

Committee on Workforce Development
and
Government Operations
The Honorable Carol Schwartz, Chair
Council of the District of Columbia

Friday, February 15, 2008

John A. Wilson Building
1350 Pennsylvania Avenue, NW
Washington, DC 20004

Good morning Chairperson Schwartz and members of the Committee on Workforce Development and Government Operations. I am David P. Gragan, Chief Procurement Officer for the District of Columbia. Thank you for the opportunity to appear before you today to present testimony on the Office of Contracting and Procurement’s (OCP) performance during Fiscal Years 2007 and 2008.

OCP’s mission is to provide quality goods and services for District agencies through a coherent and streamlined procurement process that is responsive to the needs of its customers. To give you an idea of the workload this represents, in FY 2006 OCP processed over 21,000 purchase orders totaling more than $1.2 billion; and in FY 2007 we processed over 17,000 purchase orders totaling over $1.3 billion. At the same time we are executing small and large procurements for agencies, we also provide oversight and guidance to the entire procurement system in the District. But most importantly we are re-engineering our business processes to make them more efficient and effective.

FY 2007 Budget
OCP’s approved budget for FY 2007 was $14,003,875, our staffing number is 152 FTEs. The composition of our budget remained essentially the same as the previous year, in terms of funding sources and expenditure distributions. We ended the fiscal year within our allocated budget.

FY 2008 Budget
In FY 2008 OCP’s approved budget is $13,796,792. Our FTE count and the distribution of expenditures remains virtually the same. We expect to expend our entire budget by the end of the fiscal year.

FY 2007 Score Card Results
In terms of our workload, we are on course for processing a higher volume of procurement activity than last year. OCP has become more efficient, we are starting to work smarter, yet we still have many improvements to make. We have accomplished 60% of the ten goals in our FY 2007 Score Card, including the following:

Cycle time of 8 days for purchases of $100,000 or less – OCP achieved 7.98 days;
75% of RFPs greater than $1 million awarded within 120 days –OCP achieved 93%;
80% of District agencies and not-for-profits receiving excess/surplus property transfers within two business days of their requests –OCP achieved 99%;
100% of eligible contracts over $100,000 containing LSDBE subcontracting plans monitored for compliance – OCP achieved 100%;
15% of awards over $100,000 containing LSDBE subcontracting plans – OCP achieved 82%; and
$45,000 average monthly revenue from proceeds of personal property sales – OCP achieved $48,514.

We have more work to do on the following four (4) goals which we narrowly missed:

95% of property disposal actions completed within five days of receipt –OCP achieved 92%;
70% of invitations for bids less than $1 million awarded within 90 days – OCP achieved 53%;
95% of customer agencies with which OCP established service level agreements – OCP achieved 93%; and
85% of customer agency personnel rating OCP services as satisfactory or better – OCP achieved 83%.

Starting FY 2008, OCP has new goals that will be more effective in indicating actual agency performance.

Agency Goals
My staff and I are committed to improving the procurement process in this city by accomplishing the following:

Delegated procurement authority – Limited contracting authority will be given to qualified agencies. If an agency wants to take advantage of the program, a certain level of investment will be required.(1) Presently, we are reconfiguring OCP’s warranting process, which is the preferred method for delegating contracting authority to my contracting officers.
Improved annual procurement planning – I want this process to be more meaningful, it will not only help me manage my resources; but also help the agencies understand when we should be brought into the process to ensure successful contracts formation.
Increase the number of term contracts – This is a basic tool in any procurement operation. We plan to put in place term contracts for everyday deliverables that will allow each agency to purchase against them on an as needed basis. The ground work would have already been done and all the LSDBE and other customer requirements would be met by the contract. My staff is developing the ordering process for these term contracts at this time.
Elimination of ratifications – As we have discussed on a number of occasions, I have implemented a methodical plan to eliminate the ratification problem that we have in the District government. That plan included multiple notices to agencies and suppliers, and now a final statement that effective March 29th, I will no longer ratify contracts that circumvented the procurement process.
Improving Accountability – This administration, from the mayor and city administrator, to every agency head, and certainly me in my role as director of contracting, is committed to increasing transparency, and to ensuring accountability on the part of employees and vendors involved in the procurement process.

OCP Major Achievements

We have realigned OCP to create functional areas that deserve focused attention such as the management of vendor relations, care of customers, contract administration and compliance with procurement directives.

OCP has successfully launched live on-line bid openings, which allows individuals in the District and coast to coast to literally look into the procurement process of the District of Columbia.

We are partnering with the Office of the Chief Technology Officer to improve the procurement process. For example we are currently investigating web-based technology to support a specific procurement in an effort to streamline and expedite the process.

In FY 2007, OCP held ten (10) business roundtables and workshops. These seminars were attended by 734 participants from the vendor community, all eager to gain insight on how the District buys. I have received nothing but positive feedback by vendors attending these workshops.

For the second time in two years, OCP has been recognized by our peers for being innovative. In September 2007, the Personal Property Division received a national award for Procurement Excellence.
We are also creating a procurement user guide, which is a tool for agency personnel that allows them to order the goods and services they need, and we are publishing our first Vendor Guide. This document will explain to current and prospective buyers how to do business with the District.

Conclusion
We are working more closely than ever before with our colleagues in this administration such as the Department of Small and Local Business Development, the Office of the Chief Technology Officer, and the Department of Employment Services to improve the process and to ensure that there is coherence and mutual support within this government.

We are more sensitive to the way our suppliers view the DC procurement process. In addition, we are enhancing our ability to monitor contracts with the creation of the Office of Procurement Integrity and Compliance (OPIC).
I want to publicly thank the dedicated procurement and support professionals who work within my agency, all of whom must be engaged in this transformation effort. I also want to thank you, Madam Chair, for your unwavering support for procurement improvement in the District; I know that you are as committed to this as I am. It is important for me to convey that DC Government is open for business. And the word “open” is very important here. Chairperson Schwartz, this concludes my prepared testimony. Again, thank you for the opportunity to appear before you today. I am prepared to answer any questions you may have.