Decision Briefing by dM4cKjZw

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									Department of Administrative Services
               and the
    State Purchasing Processes

     American Recovery and Reinvestment Act:
        Accountability and Transparency


       Tim Gibney, Assistant Commissioner



                 March 31, 2009
http://doas.ga.gov/Pages/Home.aspx

                                                             2
             Georgia Department of Administrative Services
     Organizational Structure
                                                   Asst. Commissioner
                                                    State Purchasing


              Director, Strategic Sourcing          Director, Customer                    Director, Knowledge Center
                                                        Advocacy                                Kelly Loll-Jones
                    Terry Doumkos
                                                     Gina Tiedemann


   Good and                                    Special                   Strategic                Process           Procurement
                          IT
    Supplies                                   Projects                   Support               Improvement         Applications
                     Brian Wirpsa                                     Katherine Briody                             Kristine Splieth
Clarence Ingram                              Debra Blount                                        Donna File

                                                                            Cust./Vendor          Professional       Statewide
                               Infrastructure                               Satisfaction          Development      Cards Manager
                               Darryl Mitchell                              Hugh Farley           Mirna Barker       Paul Kurtz



 Conduct category management, strategic                                    Provide support activities to category
  sourcing and supplier development for                                         teams and special projects
  categories managed by State Purchasing                                       Support procurement applications
 Provide guidance to category teams that                                      Manage procurement training
  reside within agencies                                                       Assist agencies in improving process
 Manage procurement of goods/services                                         Manage communications to enhance
  that have no established category teams                                       agency/vendor relations         3
                                              Georgia Department of Administrative Services
The Procurement Transformation will be delivered
while operating within the context of open
and fair competition
   Open Competition             Fairness Considerations                            Transformation Initiative
                                                                                   A.T. Kearney’s House of Procurement

                                                                                                         Supply
                                                                                                       Management
                                                                                                        Strategy


                                                                                                 Organizational Alignment


                                                                                         Sourcing &     Supplie r      Ope rating
                                                                                          Category     Relationship     Process
                                                                                         Management    Management     Management

                                                                                     Performance Management   Knowledge and Information
                                                                                                                    Management

                                                                                               Human Resources Management



Drivers of Competition          Factors for Consideration                          Effective and Balanced
 Broad participation            Leverage for minority                            Approach to Drive Results
 Clear and effective             vendor and small business                         Competition and fairness
  processes that provide open    Establish business                                 used to drive the strategic
  transparency into the           practices to achieve                               sourcing approach to
  procurement processes and       fairness and equity                                achieve savings and
  criteria                                                                           preserve policy priorities
 Effective documentation of                                                        Develop internal capabilities
  results and approach                                                               to further sustain
                                                                                     procurement excellence


                                                                                                                            4
                                   Georgia Department of Administrative Services
Professional Development




                                                              The Training page allows you to
                                                                  obtain information on:
                                                                  • Course Descriptions
                                                                   • Course Schedules
                                                                • Registration Information
                                                                                       5
              Georgia Department of Administrative Services
Georgia Purchasing Curricula & Certifications




                                                                     6
                     Georgia Department of Administrative Services
Professional Development

 1                                          Employees who need basic understanding of State procurement tools,
         Basic Procurement                                      procedures, and policies
             Certificate

     2       S                            Employees who need more advanced understanding of State procurement
                         RFP
                                           tools, procedures, and policies as they relate to RFPs and Negotiations
                       Certificate
                                          More specifically, employees responsible for writing and managing the RFP
                                              process as well as being the facilitator or responsible for finalizing
         4       S
                      Negotiations                    negotiations or for leading the negotiation process
                       Certificate


     5       S          Contract          Employees who need more advanced understanding of State procurement
                      Management           tools, procedures, and policies as they relate to Contract Management
                       Certificate        More specifically, employees responsible for writing and administering the
                                                                          contracts




         S
                                          Employees whose responsibilities include managing the P-Card Program at
                     P-Card Certificate
                                                                        their facilities


                                                                                                                7
                                                Georgia Department of Administrative Services
The procurement process can be
summarized with seven major stages
 Overview of Procurement stages


        Need                                 Solicitation            Solicitation              Evaluation                             Contract
                       Pre-Solicitation                                                                         Award Process
    Identification                           Preparation              process                   Process                               process



 Key Steps

• Identify           •Identify            •Develop Sourcing • Post eRFX        •Select Vendors •Issue intent to                    •Create contract
  Internally/ext      sourcing team        strategy           advertisement or                  award                               administration
                                                                                                •Conduct
  ernally need       •Decide on             • Generate             bid notice on GPR             administrative •Handle vendor      plan
  for purchase                                technical          • Conduct Q&A
                      required                                                                   review          protests          •Sustain results
                                              evaluation
• Decide on           analysis                                     session
                                              criteria                                          •Evaluate       •Operationalize      •Track
  Ownership of         •Develop                                  • Conduct offeror
                                            • Include                                            technical       new                  contract
  category              category                                   conference
                                              standard                                           proposal        agreement            performance
                        profile               language for       • Select                       •Analyze cost     •Issue notice      •Track vendor
                       •Generate              RFx                  Implementation                proposal          of award           performance
                        Vendor              • Incorporate          path                          (TCO             •Document
                        Portfolio             standard                                           calculation)
                                                                     •Develop                                      and store
                                              contract terms
                     •Identify most                                   Evaluation/               •Conduct           contract/purc
                                              and conditions
                      appropriate             based on                negotiation                Negotiation       hase details
                      purchasing              category                plan
                      method                                     • Receive bids                                                         8
                                                           Georgia Department of Administrative Services
7-Stage Methodology

• Provides the necessary process and techniques to improve
  procurement operations

• Provides a consistent method to process information and
  defines a structure for each step of the process and
  standardizes the way all events are conducted

• Facilitates the adoption of communication technology that lead
  to increase in efficiencies, effectiveness, and accountability



                                                                        9
                        Georgia Department of Administrative Services
Need Identification
    Need                            Solicitation        Solicitation              Evaluation                   Contract
                 Pre-Solicitation                                                              Award Process
Identification                      Preparation          process                   Process                     process




  The identification of the need involves the broad identification of what is
   required
  As part of this process, the agency will identify stakeholders, may carry out
   some stakeholder analysis or surveys, and undertake spend and demand
   analysis
  Following this activity APOs/UPOs will have some preliminary views on the
   required services and solutions
  Partnership with the State Purchasing Division may enhance the APOs/UPOs’
   comprehensive knowledge of the market, as it is necessary to perform an
   appropriate level of market research to develop a good business case and to
   make a good decision on the specific procurement methodology to follow

                                                                                                                 10
                                              Georgia Department of Administrative Services
Planning Your Procurement

• “The critical importance of the Recovery
  Act…require heightened management attention
  on acquisition planning.” (Peter Orszag Letter,
  2/18/09)




                                                                   11
                   Georgia Department of Administrative Services
   Lead Measure 5:
   Reduce Average Cycle Time For
   RFXs (# of days) by 10%
                                                                                                   2008
                                                                                                 RFX Goals
                                                                                                   161



                                                                                                   106




                                                       RFQ Goal           RFP Goal


        Drivers and what we’re doing to address them:
• Early engagement and customer relationship              • Introducing standard templates
  management                                              • Include metrics for SWC’s in 4th Quarter
• Increasing training                                                                              12
                                    Georgia Department of Administrative Services
Pre-Solicitation


     Need                            Solicitation        Solicitation              Evaluation                   Contract
                  Pre-Solicitation                                                              Award Process
 Identification                      Preparation          process                   Process                     process



 Key              •Identify
                   sourcing team
Step              •Decide on
                   required
   s               analysis
                  •Develop
                   category
                   profile
                  •Generate
                   Vendor
                   Portfolio
                  •Identify most
                   appropriate
                   purchasing
                   method                                                                                         13
                                               Georgia Department of Administrative Services
Pre-Solicitation
• Research is conducted to help write the requirements/
  specifications and identify the sources that provide the goods
  or services required

• A cross functional team is assemble in order to conduct the
  research, write the requirements, and help identify what is
  needed

• If necessary, an evaluation team is assembled together in
  order to perform the evaluation of the proposals

• The best method of solicitation is identified


                                                                         14
                         Georgia Department of Administrative Services
Pre-Solicitation

• Helps identify, examine, select and implement sourcing
  alternatives for a specific Sourcing Group (SG).

• Encompasses the whole process for evaluating, selecting and
  aligning with supplier(s) to achieve operational improvements
  and support overall strategic objectives.

• Focuses on total costs and not just the purchase price

• Assists an organization by gaining a good understanding of its
  requirements, knowing how it must map to the existing supply
  market, and then develop a plan for both short and long-term
  objectives.
                                                                        15
                        Georgia Department of Administrative Services
The procurement process can be
summarized with seven major stages
Overview of Procurement stages


     Need                              Solicitation          Solicitation              Evaluation                   Contract
                  Pre-Solicitation                                                                  Award Process
 Identification                        Preparation            process                   Process                     process




 Key
                                     •Develop
Step                                  Sourcing
                                      strategy
   s                                 •Generate
                                      technical
                                      evaluation
                                      criteria
                                     •Include standard
                                      language for RFx
                                     •Incorporate
                                      standard contract
                                      terms and
                                      conditions based
                                      on category
                                                                                                                      16
                                                   Georgia Department of Administrative Services
Solicitation Preparation

• Identify the method of solicitation
• Finalize the requirements
• Write the RFx
• Create an evaluation methodology for the RFx – Assign points
  to each Proposal Factor and each question/requirement within
  each proposal factor
• Create the cost methodology
• Have the cross functional team review and edit the RFx to
  ensure that it addresses the requirements




                                                                       17
                       Georgia Department of Administrative Services
Vendor Registration

• Importance of contacting prospective bidders to
   register on the Georgia Procurement Registry
http://doas.ga.gov/TGM/Pages/TGMSuppliers.aspx

Registration
Determine whether your company is a Sourcing Bidder or a Supplier Sourcing Bidder - If your company
     provides goods or services but has never had a purchase order, received a remittance, or been awarded
     a contract by the State of Georgia, you need to register as a sourcing bidder. Your company may fit into
     this category even if it was active in our current Vendor Registration System. Supplier - If your company
     has had a purchase order, received a remittance, or has been awarded a contract by the State of Georgia,
     you need to register as a supplier. A company in this category will have a PeopleSoft vendor number in
     our Financials system. After reading the definitions, if you are unsure whether you are a bidder or
     supplier, try registering as a supplier first. If you are a supplier, your company information will pop up
     when after you've added all the required fields and click in the Vendor ID box. If no record is found,
     register as a bidder.
Read and Print the Quick Reference Guides Register as a Sourcing Bidder Register as a Supplier
Register in Team Georgia Marketplace New Hours: Team Georgia Marketplace is available 24 hours a day, 7
     days a week, except between 7:00 PM and 7:30 PM daily when the system is down for routine
     maintenance. If you are registering, you must complete the process prior to 7:00 PM or you will lose it.
                                                                                                             18
                                          Georgia Department of Administrative Services
The procurement process can be
summarized with seven major stages
Overview of Procurement stages


     Need                            Solicitation        Solicitation              Evaluation                   Contract
                  Pre-Solicitation                                                              Award Process
 Identification                      Preparation          process                   Process                     process




 Key
                                                     • Post eRFx
Step                                                   advertisement or
                                                       bid notice on GPR
   s                                                 • Conduct Q&A
                                                       session
                                                     • Conduct offeror
                                                       conference
                                                     • Select
                                                       Implementation
                                                       path
                                                     • Develop
                                                       negotiation plan
                                                     • Receive bids

                                                                                                                  19
                                               Georgia Department of Administrative Services
Solicitation Process
During this Stage, the procurement staff is responsible for the
following:

• Post the solicitation – This begins the Solicitation Process
  stage
• Conduct offerors’ conferences, if appropriate
• Respond to any offerors’ questions in writing. Questions
  could be received directly from the offeror or documented as
  part of the offerors’ conference. Post these answers for all
  offerors to see
• Define a negotiation methodology
• Receive the bids or proposals from the suppliers/offerors –
  This marks the end of the Solicitation Process stage
                                                                         20
                         Georgia Department of Administrative Services
Sourcing teams have several options to
complete a competitive bidding process
         Competitive Bid Process Options                                                            Applicability

 (e)RFQ, Award                                              • Sourcing of standard commodity with clear understanding of
                                                               specifications
                                                             • Procurement is relatively small with limited potential for savings

 (e)RFQC, eAuction, Award                                   • Appropriate for sourcing groups with the following criteria
                                                                  –   compelling spend
                                                                  –   competitive marketplace
                                                                  –   credible switching threat
                                                                  –   clear category definition
                                                                  –   clear product specification
                                                             • Invitation to auction requires pre-screening of suppliers through
                                                               RFQC to gather qualitative data

 (e)RFP, Award                                              • Sourcing of complex categories and/or compelling spend
 (e)RFP, Negotiations/Multiple Revision to                  • Used to gather qualitative, technical and cost information from
  Cost and Technical, Award (1) (2)                            suppliers
 (e)RFP, Negotiations/Multiple Revision to                  • Negotiations with multiple offerors can be conducted during the
  Cost Only, Award (1) (2)                                     RFP process to increase savings opportunities


Note: (1) Authorized to disclose information derived from (but not contained in) the proposals to competing offerors such as overall rankings and
                                                                                                                                           21
          overall scores for the purpose of soliciting ongoing revisions to cost proposals via an auction process or meetings
                                                              Georgia be restricted
      (2) Depending on existing code, the use of negotiations may Department of Administrative Services
The procurement process can be
summarized with seven major stages
Overview of Procurement stages


     Need                            Solicitation        Solicitation              Evaluation                      Contract
                  Pre-Solicitation                                                                 Award Process
 Identification                      Preparation          process                   Process                        process




 Key
                                                                             •Select Vendors
Step                                                                         •Conduct
   s                                                                         administrative
                                                                             review
                                                                             •Evaluate technical
                                                                             proposal
                                                                             •Analyze cost
                                                                             proposal (TCO
                                                                             calculation)
                                                                             •Conduct
                                                                             Negotiation



                                                                                                                     22
                                               Georgia Department of Administrative Services
Solicitation Evaluation
During this Stage, the procurement staff is responsible for the
following:
• Conduct the Administrative review to ensure all necessary
  documentation was submitted and all offerors passed the
  requirements
• Evaluate the proposals based on the evaluation methodology,
  if appropriate
• Evaluate the cost proposal
• Combine the cost and proposal evaluations to arrive to the
  combined evaluation in order to select the best supplier
• Conduct negotiations based on the negotiation methodology
• Evaluate new submittals from the offerors involved in the
  negotiation process
                                                                         23
                         Georgia Department of Administrative Services
Suppliers are ranked and a competitive range is used to
determine a final list of suppliers for award or further
negotiations                                            Predetermined
                                                                                    Vendor Criteria
                                                                       Cost/       Criteria            Weight
                                                                       Technical
                     RFP                                               Cost        Price               30%
                    Response
                                                              +        Technical   Capabilities

                                                                                   Terms
                                                                                                       15%

                                                                                                       20%

                                                                                   Value added         20%

                                                                                   Supplier Status     10%

                                                                                   Quality             5%


                                            Analysis




                                                                                    This Is The Most
                                                                                      Challenging Step
                                                Ranking
                                           #1 Supplier
                                           #2 Supplier
                                            #3 Supplier                                                 24
                               Georgia Department of Administrative Services
In Summary, how to embed the sourcing process?


 1                       2    Select          3   Generate           4       Select              5     Select       6                  7
         Profile                                                                                                        Implement           Benchmark
                             Sourcing             Supplier               Implementation              Competitive
     Sourcing Group                                                                                                     Suppliers          Supply Market
                             Strategy             Portfolio                    Path                  Supplier (s)

• Understand          • Create “go to    • Open supply base • Decide most                   • Evaluate proposal • Operationalize    • Monitor market
  internal spend        market” approach   and identify all   appropriate                     and select          supplier            and supplier
  and external                             viable suppliers   execution strategy              suppliers           agreements          performance
  market                Planning                                         Issue Bid & Select Suppliers                Implement          On-going
                                                                                                                      Suppliers         Category
                                                                                                                                       Management
                                             Roles and Responsibilities –
                                           Strategic Sourcing Initiatives Led
                                                     by Purchasing
                             Purchasing                                                                   Selected Department Stakeholders

• Plan, manage, and complete key milestones                                             • Support Purchasing in profiling spend (i.e., validate spend data
• Share milestones with selected stakeholders and ensure buy-in                           and submit specs/requirements)
• Contact stakeholders to profile spend and fully understand end-                       • Support development of key milestones and support bidding
  user requirements                                                                       process
• Collect supplier spend (i.e., line item detail)                                       • Comply with supplier communication requirements and ensure
                                                                                          engagement of department end-users as needed
• Standardize specs
                                                                                        • Fully support new supplier implementation and compliance
• Lead bidding/negotiation process
                                                                                        • Track department savings and monitor implementation progress
• Plan implementation activities
• Monitor implementation
• Monitor savings tracking and compliance
                                                                                                                                             25
                                                         Georgia Department of Administrative Services
Georgia Procurement Manual
http://pur.doas.ga.gov/SPDportalDocs/GeorgiaProcurementManual.pdf

The State Purchasing Division is currently working on a project that will combine the
Georgia Procurement Manual (GPM) and the Georgia Vendor Manual (GVM). Release
date set for April, 2009

This document contains the state’s sources of policy and guidance for procurement
issues.




                                                                                        26
                                 Georgia Department of Administrative Services
Templates – RFP, RFQ and eQuote

Link to RFP template
Paper/Non-PeopleSoft template
http://statepurchasing.doas.georgia.gov/vgn/images/portal/cit_1210/25/58/136580221SP
D-SP018StateEntityRFPTemplate.doc
Electronic template
http://statepurchasing.doas.georgia.gov/vgn/images/portal/cit_1210/25/59/130530897SP
D-SP020StateEntityeRFPDocument.doc


Link to RFQ template
http://statepurchasing.doas.georgia.gov/vgn/images/portal/cit_1210/25/51/136593068SPD-
     SP022StateEntityeRFQTemplate.doc



Link to eQuote template
http://statepurchasing.doas.georgia.gov/vgn/images/portal/cit_1210/58/32/76605811SP
D-SP005_Request%20For%20Quote.doc

                                                                                         27
                                     Georgia Department of Administrative Services
Language in Our DOAS Agency and
Statewide Contract Templates Regarding
Auditing – Agreement to Cooperate (Vendor)

“Record Retention and Access. The Contractor shall maintain books,
   records and documents in accordance with generally accepted
   accounting principles and procedures and which sufficiently and
   properly document and calculate all charges billed to the State
   throughout the term of the Contract for a period of at least five (5) years
   following the date of final payment or completion of any required audit,
   whichever is later. Records to be maintained include both financial
   records and service records. The Contractor shall permit the Auditor of
   the State of Georgia or any authorized representative of the State, and
   where federal funds are involved, the Comptroller General of the United
   States, or any other authorized representative of the United States
   government, to access and examine, audit, excerpt and transcribe any
   directly pertinent books, documents, papers, electronic or optically
   stored and created records or other records of the Contractor relating to
   orders, invoices or payments or any other documentation or materials
   pertaining to the Contract, wherever such records may be located
   during normal business hours.                                             28
                              Georgia Department of Administrative Services
The Contractor shall not impose a charge for audit or examination of the
   Contractor’s books and records. If an audit discloses incorrect billings
   or improprieties, the State reserves the right to charge the Contractor
   for the cost of the audit and appropriate reimbursement. Evidence of
   criminal conduct will be turned over to the proper authorities.”

CAUTION
As discussed, DOAS contract templates are not mandatory; therefore, not
   all contracts established by SPD on behalf of other state agencies will
   contain the same auditing language. In addition, not all DOAS contracts
   are established utilizing these contract templates as they are only
   required for purchases of $100,000 or more (which generally covers all
   of our multi-year agreements where we would have multiple purchases
   as opposed to a single payment for our less expensive purchases).”
Note
For ARRA funds this language should be used irregardless of the dollar
   amount of the purchase.




                                                                                    29
                                    Georgia Department of Administrative Services
Complying With Federal Law
Regarding Use of ARRA Funds
• Federal law regarding the appropriate use of
  ARRA funds has several implications for the
  state procurement process, including:
   ▪ Building solicitation specifications and requirements so
     that they adhere to ARRA regulations such as the Buy
     American provision,
   ▪ Ensuring the evaluation and award process correctly
     implements the ARRA regulations, and
   ▪ Utilizing effective contract administration tools to ensure
     the goods and services delivered by the awarded vendors
     are in compliance with the contracts.


                                                                        30
                        Georgia Department of Administrative Services
Key Action to Ensure These Goals
Are Met Include:

• Issue a communication alert to state entities
  requesting these entities receiving ARRA funds to
  contact DOAS
• Begin discussions with GSFIC (DOAS’ partner for
  establishing public works contracts) as well as BOR
  and GDOT to address the need to draft compliance
  provisions and or policy regarding ARRA funded
  contracts
• Partner with GSFIC and individual state agencies to
  ensure appropriate evaluation and award of
  contracts utilizing ARRA funds
                                                                    31
                    Georgia Department of Administrative Services
Buy American Provision

• DOAS understands Section 1605 of the ARRA
  imposes a mandate that certain manufactured
  products must be produced in the United States.
• During discussions with state entities establishing
  public works contracts, DOAS will address this
  mandate and its correct application, including the
  definition of US-made products as well as cost-
  based waivers to this requirement.




                                                                     32
                     Georgia Department of Administrative Services
   “In today’s edition of the Federal Register, the General Services
   Administration (GSA) posted six new documents relating to the Federal
   Acquisition Regulations (FAR) within the American Recovery and
   Reinvestment Act (ARRA). While the postings only affect federal
   agencies, the Office of Management and Budget (OMB) has stated in
   previous conversations that the FAR regulations would likely be similar
   to the OMB issued regulations for Title 2 regarding federal assistance to
   states. OMB is anticipating publishing these regulations as early as
   Friday, April 3. The six FAR postings cover the following topics:


Publicizing Contract Actions

Reporting Requirements

Whistleblower Protections

GAO Access to Contractor Employees

Buy American Requirements for Construction Material

GAO/IG Access”
                                                                                       33
                                       Georgia Department of Administrative Services
Ethics Policy
In order to maintain public trust and transparency in
State Purchasing, DOAS has implemented policies
and procedures on standards of conduct for its
employees and contractors. Below you can access
these policies.

http://ies/doas/images/activedit/policies/Policies/301-soc.pdf
Standards of Conduct



http://ies/doas/images/activedit/policies/Policies/ethics-govt.pdf
Code of Ethics for Government Service


                                                                               34
                               Georgia Department of Administrative Services
Ethics Policy

  In order to maintain public trust and promote
  transparency in government, an ethics policy has been
  established by Governor Perdue to ensure the highest
  ethical standards within the State of Georgia

 Link to State Ethics Policy
 http://gov.georgia.gov/gov/exorders/2003/jan/01_13_03_01.pdf

 Office of Inspector General directive
 IG Directive - FINAL VERSION 3-24-09 (3).doc




                                                                          35
                          Georgia Department of Administrative Services
Ethical Standards
Ethics-govt.pdf
Code of Ethics for Government Service


Standards of Conduct Policy.pdf
State Purchasing Standard of Conduct


White House Memo 3-20-2009.pdf
Ensuring Responsible Spending of Recovery Act Funds




                                                                           36
                           Georgia Department of Administrative Services
Accountability & Auditing
Audit Risk Alert 2.doc
                                      American Recovery and Reinvestment Act of 2009 (ARRA)
                                  Audit Risk Alert #2 – Responsible Spending of Recovery Act Funds
                                                            March 24, 2009

On March 20, 2009, President Obama issued a memorandum to heads of Executive Departments and Agencies emphasizing responsible
spending and transparency of Recover Act Funds.
Recovery Act funds are to be used to stimulate the Nation’s economy, and are not intended to fund projects for special interest.

To that end, please be advised of the following:

           1. Limit on Funds – Section 1604 of the Recovery Act states that none of the Recovery Act funds may be sued by
           any State or local government for:
               “any casino, or other gambling establishment, aquarium, zoo, golf course, or swimming pool.”
           Consequences of Noncompliance: In the event of a recipient has not complied with Section 1604, appropriate corrective action
may include, but not be limited to:
                               a) Disallowing or otherwise recovering improperly spent amounts.
                               b) Imposing additional requirements on the recipient.
                               c) Initiating a proceeding for administrative civil penalties.
                               d) Initiating a proceeding for suspension and debarment.

               2. Transparency of Registered Lobbyist Communications – An executive department or agency official shall not
               consider the view of a registered lobbyist concerning particular projects, applications, or applicants for funding under the
               Recovery Act unless such views are in writing.
               All written communications form a registered lobbyist concerning the commitment, obligation, or expenditure of Recovery
               Act funds for particular projects, applications, or applicants shall be posted publicly by the receiving agency or governmental
               entity on its recovery website within 3 business days after receipt of such communication.
                                                                                                                                 37
                                                      Georgia Department of Administrative Services
Monitoring System
Best Practices_Contract Monitoring.pdf




                                                                            38
                            Georgia Department of Administrative Services
Ethics
IG Directive - FINAL VERSION 3-24-09 (3).doc
                                                      Office of the State Inspector General (OIG)
                                                      Right to Inspect Contract/Grant Directives
                                                               Regarding Stimulus Funds




                       Issue Date:
                       3/24/09 – v1

                       Applicability:
                       This OIG Directive applies to all agencies, departments, commissions, councils, boards,
                       universities, colleges, authorities, associations, and other organizations that fall under the
                       Executive Branch of State Government (hereinafter referred to as “State Organizations.”)

                       Background:
                       The OIG was created on January 13, 2003, by Executive Order of Governor Sonny Perdue.

                       OIG is charged with fostering and promoting accountability and integrity in state government.
                       OIG has the authority to investigate complaints of fraud, waste, abuse and corruption in all
                       executive branch agencies, departments, commissions, authorities and any entity of state
                       government that is headed by an appointee of the Governor. Excluded from our jurisdiction are
                       the General Assembly and any Courts.

                       General Directive:
                       Each State Organization shall require its contracting officer to insert in full in each contract,
                       subcontract, grant and bid solicitation financed with funds obtained by the American Recovery
                       and Reinvestment Act and entered into with outside contractors, subcontractors or consultants
                       the following provision:

                              RIGHT TO INSPECT

                              It is hereby agreed that the Office of the State Inspector General shall have access to all
                              records, information, data, reports, plans, projections, matters, contracts, memoranda,
                              correspondence, and any other materials of [insert State Organization name] and shall be
                              deemed to be an authorized representative and agent of [insert State Organization name]
                              for the purposes of examining and investigating the records of all contractors,




                                                                                                                            39
                                        Georgia Department of Administrative Services
Audit Language for Vendors
(contained in “Best Practices in Government, Components of an Effective
Contract Monitoring System” from the State Auditing Office

Access to Records/Right to Audit Clauses
The right to audit the vendor’s books is a standard contract clause and a fundamental concept of contract administration.
When government services are contracted out, the vendor represents the state in providing the service. Agencies have a
responsibility to verify the information that the vendor reports to them and to ensure that funds are expended properly.
This is especially important when there is a high degree of risk involved due to the type of contract or service, a high
degree of liability exists for the state, or the potential for severe consequences in the event of poor vendor performance.
Because the records are the property of the vendor, the contract must include an agreement that the agency has access
to and can audit those records. The ability of agencies to audit vendor records should also extend to the records of any
subcontractors.

Other States’ Use of Access to Records/Right to Audit:
Access to vendor records and the right of the state to audit the contractor is present either
through existing law or as a standard contract clause in five of the six states surveyed by the
audit team. The clause is used only for some contracts in the remaining state.

Georgia’s Use of Access to Records/Right to Audit:
         • The survey of 25 state agencies found that 23 of the agencies (92%) reported that
         access to vendor records and the ability to audit those records was a contract
         management tool. This was the most frequent practice used, according to the surveyed
         agencies.
         • Contract file reviews found that 17 of 20 contracts (85%) contained clauses related to
         the right of access of vendor records and the ability to audit those vendors. The three
         remaining contracts (15%) either addressed access to confidential information or
         stated that the vendor’s records would become the agency’s property at the end of the
         contract.
         • The Georgia Procurement Manual does not require an access to records/right to audit
         clause but does reference it.
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                                                Georgia Department of Administrative Services
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Georgia Department of Administrative Services

								
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