Summary

State agencies did not always appropriately apply the single source and emergency exceptions to competitive procurement. We believe that the exceptions noted reflect a need for clarification of the guidance provided by laws and rules, as well as more effective oversight by responsible parties.

Application of Single Source Exception by State Agencies

• Documentation of agency decisions to utilize the single source exception was not always provided.

• Some documentation of agency decisions to utilize the single source exception did not appear to support that the vendor was the single source for the desired commodities or services.

Guidance and Oversight -- Single Source Procurement

• Current guidance as provided in the laws and rules with respect to single source purchases of $150,000 or less needs clarification regarding two important issues governing effective control over such purchases:

• The nature and extent of required documentation of agency determinations that particular commodities or contractual services are available only from a single source; and

• Required review and approval of such purchases.

• There is a need for improvement in DMS State Purchasing procedures for review of agency decisions to utilize this exception in instances where the purchase exceeds $150,000.

Application of Emergency Exception by State Agencies

• Agencies did not always demonstrate the impracticability of procurement through at least some form of competition as required by applicable laws and rules.

• Agencies did not always clearly document the existence of an emergency situation.

Guidance and Oversight -- Emergency Procurement

• DMS State Purchasing should take a more proactive role in the review of agency emergency determinations to add objective credibility.

The Departments Managements' written responses to the audit findings and recommendations in audit report No. 02-049 can be viewed as a part of the complete report filed on this Auditor General web site.