Audit Report on the Oversight of the Department of Citywide Administrative Services and the Department of Sanitation over New York City’s Contract with Genuine Parts Company
June 23, 2017 | MD16-122A
The objective of this audit was to determine: (1) whether the Department of Citywide Administrative Services (DCAS) has adequate oversight of the contract agreement between Genuine Parts Company (GPC) and New York City (City); and (2) whether the Department of Sanitation (DSNY) has adequate oversight over and fulfills its responsibilities regarding inventory received from GPC.
On January 9, 2013, the City entered into a five-year requirements contract with GPC, through its subsidiary National Auto Parts Association (NAPA), to operate on-site storerooms, supply parts for light/medium- and heavy-duty vehicles and provide inventory management services for six City agencies, including DSNY. Pursuant to its contract with the City, GPC/NAPA is responsible for managing and stocking all vehicle repair and replacement parts and preventive maintenance supplies, including, but not limited to tires, lubricants, antifreeze, special hydraulic fluids, motor oil, and grease, and for battery recharging services. In May 2013, GPC/NAPA established a storeroom, staffed by a GPC/NAPA manager and counter person, at DSNY’s 5th floor Central Repair Shop in Woodside, Queens to provide parts for light-duty vehicles, such as passenger cars and pickup trucks.
According to its contract, parts provided by GPC/NAPA to the City are primarily to be grouped into three defined categories:
- A-movers, which are parts issued on a weekly basis;
- B-movers, which are issued on a biweekly to quarterly basis; and
- C-movers, which are issued on a quarterly to yearly basis.
Under the contract, GPC/NAPA is required to deliver on demand (within ten minutes) no less than:
- 100 percent of the A-movers requested;
- 90 percent of the B-movers requested; and
- 80 percent of the C-movers requested.
Audit Findings and Conclusion
We found that DCAS does not adequately monitor the timeliness of GPC/NAPA’s delivery of requested items. Further, we found that GPC/NAPA’s delivery times consistently fell short of its contractual performance obligations. In addition we found that DCAS does not ensure that parts are adequately categorized in accordance with the contract. Improper categorization of parts could have a significant impact on their availability.
We also found that DCAS had limited evidence to show that it audited GPC/NAPA invoices received from suppliers to ensure that the City paid no more than the jobber price and the allowed markup for parts. In addition, we found that DCAS granted GPC/NAPA inappropriate access to DSNY’s inventory information in M5, and that parts which DSNY received from GPC/NAPA were not consistently recorded in M5, as required.
Finally, we determined that DSNY generally has adequate oversight over and fulfills its responsibilities related to GPC/NAPA’s performance of the contract.
Based on the audit we make 14 recommendations, including:
- DCAS should require GPC/NAPA to prepare and submit reports based on delivery times in accordance with the criteria established in the contract.
- DCAS should ensure that all parts are appropriately classified by GPC/NAPA and DSNY, and that periodic reclassifications based on usage are performed.
- DCAS should conduct periodic audits of GPC jobber invoices to ensure that parts are being billed at GPC’s dealer price, plus the fixed markup.
- DCAS should limit the access of GPC/NAPA personnel to M5 for only required functions, and should remove GPC/NAPA’s access to view DSNY’s in-house inventory.
- DCAS should thoroughly investigate why parts issued against work orders are not appearing in M5 and work with GPC/NAPA to address this issue.
In its response, DCAS generally agreed with the 10 recommendations directed to DCAS. However, the agency disagreed with a number of the audit’s findings. The areas of disagreement are discussed in the relevant sections of this report. DSNY generally agreed with the findings and the four recommendations directed to DSNY.