Audit Report of the Mayor’s Office of Contract Services’ Monitoring of Vendor Performance Evaluations

Executive Summary

The Mayor’s Office of Contract Services (MOCS) facilitates and oversees citywide procurement activities. The Director of MOCS is the City Chief Procurement Officer (CCPO) and, as such, is responsible for coordinating and overseeing the procurement activity of Mayoral agency staff, including the procurement activity of the City’s four social service agencies—the Administration for Children’s Services (ACS), the Department for the Aging (DFTA), the Department of Homeless Services (DHS), and the Human Resources Administration (HRA).^[1] Section 1-01(e) of the City’s Procurement Policy Board (PPB) Rules defines procurement activity as:

Buying, purchasing, renting, leasing, or otherwise acquiring any goods, services, or construction which includes all phases of contract administration, including …evaluation of performance…

Accordingly, Sections 4-01(b) and (c) of the PPB Rules state, respectively, that “the CCPO shall establish procedures to ensure systematic evaluation of vendor performance” and “establish a centralized computerized database for storage and retrieval of the evaluation.”

In 2017, MOCS launched the Procurement and Sourcing Solutions Portal (PASSPort), an online portal, to facilitate the City’s procurement process and allow agencies to document and monitor vendor performance evaluations (PEs) in one centralized system. City agencies use PASSPort to: (1) assign, complete, review, and send PEs to vendors; and (2) assist in making contract decisions to extend, renew, terminate or allow existing contracts to lapse, and award additional contracts.

During Fiscal Year 2018, the City’s four social service agencies were responsible for evaluating vendors’ performance for 1,980 contracts that were registered with the Comptroller’s Office, with a combined maximum value of $14.7 billion.

Audit Findings

MOCS generally failed to adequately coordinate and oversee the vendor PE process. Based on our review of the 1,980 contracts that were due to be evaluated during Fiscal Year 2018, the City’s four social service agencies did not complete PEs for 526 contracts (26.6 percent), and did not complete PEs timely for 1,384 contracts (69.9 percent). The four City social service agencies completed PEs timely for only 70 contracts (3.5 percent).

MOCS failed to adequately coordinate and oversee the vendor PE process because MOCS did not ensure that PEs were created in PASSPort, improperly approved PE exemptions for contracts, did not adequately oversee City social service agencies, and did not establish adequate written procedures for PEs.

Audit Recommendations

Based on our findings, we made the following five recommendations to MOCS:

MOCS should ensure that PASSPort creates PEs for all contracts except for procurements of goods by competitive sealed bid other than sealed bids awarded based on best value and procurements below the small purchase limits;

• MOCS should ensure that PEs are completed and finalized within 90 days of the contract anniversary start date;
• MOCS should only grant exemptions for contracts that meet the PPB Rules’ PE exemption criteria and contracts for which services or goods were not provided during the evaluation period;
• MOCS should ensure that each Agency Chief Contracting Officer (ACCO) monitors PE completion status on an ongoing basis; and
• MOCS should develop formal written policies and procedures, communicate them, and train City agencies on their responsibilities for completing PEs including, but not limited to, monitoring and follow-up activities.

Agency Response

In its response, MOCS generally disagreed with the report’s findings stating, “Unfortunately, the report misconstrues facts and ignores basic information provided during the course of the audit.” Consequently, MOCS disagreed with four of the report’s five recommendations regarding PE creation, timeframe for completion, its granting of exemptions, and the need for policies and procedures. MOCS agreed with the remaining recommendation regarding agency monitoring of PE completion status, stating, “MOCS will continue to work in partnership with agencies to evaluate vendor performance.”

[1] The Comprehensive Annual Financial Report (CAFR) of the Comptroller for the Fiscal Year Ended June 30, 2020 classifies City agencies based on their functions/programs which includes, among other things, social services. The CAFR identifies the City’s four social service agencies as including ACS, DFTA, DHS, and HRA.