The District drives up procurement costs and leaves itself open to fraud because it lacks the resources, organization, legal structure and oversight of an effective contracting system, a federal auditor found in a damning new report.
Prepared by the U.S. Government Accountability Office at the request of U.S. Rep. Thomas M. Davis III, R-Va., the audit picks apart D.C. procurement laws and policies, pinpointing weaknesses in the mayor’s office, D.C. Council and the Office of the Chief Financial Officer. Nearly 22 percent of the District’s fiscal year 2005 budget was spent on procurement, the GAO reported — more than 20,000 transactions valued at $1.8 billion.
Davis, ranking member and former chairman of the Government Reform Committee, called the report “scathing.”
“The reform that is needed is substantial and statutory,” he said, promising further federal scrutiny. “The report makes clear that D.C. procurement is fatally flawed, both in its structure and execution, affecting all aspects of government.”
The D.C. contracting and procurement process must be reformed, City Administrator Dan Tangherlini acknowledged Wednesday, and a strategy to that end should be ready within 60 days. Mayor Adrian Fenty has pledged to name a permanent chief procurement officer within six months.
The District’s procurement law is choked with loopholes and exemptions, the report states; its chief procurement officer is too low in the government hierarchy and has insufficient authority; its work force is not adequately trained; and its technology and tools are inadequate.
The GAO also reported that the District government has “lacked the rigor needed to protect against fraud, waste, and abuse.” Existing contracting law limits the supply schedule of local vendors, allows the liberal use of sole-source contracting, and provides for the overuse of direct voucher payments, the report concluded, “increasing the risk of preferential treatment for certain vendors and ultimately driving costs up.”
Last week, the council exempted contracts related to the Metropolitan Police Department’s crime camera program “to shorten the procurement period and implement the proposed security measure.”
During a council hearing Wednesday on his future with the District, CFO Natwar Gandhi said procurement is a “major issue for us as a government,” in that “procurement people do not even comply with the procurement regulations.”
Similar audits, with similar findings, have been conducted over the last decade by the District’s inspector general and the D.C. Council auditor. Most recommended actions, however, “remain under study or are partially implemented at best,” the GAO said.
Former Mayor Anthony Williams was shown a draft of the audit before he left office, but declined to comment, the GAO said.
More information
Agencies permitted to contract independently:
» Board of Education
» Office of the Chief Financial Officer
» Child and Family Services Agency
» Washington Convention Center
» D.C. Council
» D.C. Court System
» D.C. Housing Authority
» D.C. Housing Finance Agency
» D.C. Public Service Commision
» D.C. Retirement Board
» Department of Mental Health
» Pretrial Services Agency
» Public Defender Service
» D.C. Sports and Entertainment Commission
» D.C. Water and Sewer Authority
Source: GAO
