Audit Report on the Department of Youth and Community Development’s Awarding of Non-Competitive and Limited-Competition Contracts

Executive Summary

The objective of this audit was to determine whether the New York City (City) Department of Youth and Community Development (DYCD) ensures that its decisions to award contracts on a non-competitive or limited-competition basis have been adequately justified, that contractor performance has been properly evaluated, and that contract awards have been properly approved.

DYCD supports City youth and their families by funding a wide range of youth and community development programs, including afterschool, family support, literacy services, youth services, and youth workforce development programs. DYCD contracts with a variety of vendors to provide such programs.

DYCD uses a variety of methods to award the contracts. Some methods are competitive, such as requests for proposals; some are non-competitive, such as contract extensions and renewals; and others involve limited competition, such as negotiated acquisitions. Decisions to use non-competitive or limited-competition methods to award contracts must be properly justified by the agency. In addition, the City’s Procurement Policy Board (PPB) Rules require a pre-solicitation review for most of the procurement methods used. Furthermore, contract awards must be based in part on prior evaluations of the vendors’ performance.

According to information provided by DYCD, of the 546 contracts that the agency awarded in Fiscal Year 2019, 380 (70 percent) were non-competitive or limited-competition contracts.

Audit Findings and Conclusions

DYCD’s awarding of non-competitive and limited-competition contracts needs improvement. DYCD adequately justified its decisions to use non-competitive and limited-competition procurement methods, ensured that its contract award decisions involving these methods were properly approved, and maintained well-organized contract files. However, DYCD’s vendor responsibility determinations often lacked comprehensive overall assessments of the vendors that adequately supported the agency’s decisions to award such contracts to particular vendors. Specifically, in a sample of 25 contract awards, renewals, and extensions, we identified 12 procurement actions in which DYCD did not adequately account for its decisions to contract with vendors that had experienced multiple incidents of client abuse and neglect, workplace violence involving staff, civil litigation, and/or poor performance evaluations on previous DYCD contracts. In addition, DYCD did not consistently maintain evidence demonstrating that the agency had evaluated the performance of its contractors in a timely manner and, in one case, that it had conducted a required pre-solicitation review.

Audit Recommendations

To address the issues raised by this audit, we made the following four recommendations:

• DYCD should consider the totality of adverse information presented for each vendor when determining whether a vendor is responsible and document its considerations in the contract files.
• DYCD should ensure that it consistently obtains and considers all relevant vendor performance evaluations in its responsibility determinations and that it documents its considerations of these evaluations in the contract files.
• DYCD should ensure that it completes vendor performance evaluations in a timely manner.
• DYCD should prepare a pre-solicitation review report before assigning a contract or approving a vendor’s assignment of a contract.

Agency Response

In its response, DYCD agreed with three of the four audit recommendations, but disagreed with the recommendation that it should prepare a pre-solicitation review report before assigning a contract or approving a vendor’s assignment of a contract.