Audit 14297

Criteria: The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. CNMI Department of Finance Procurement regulations § 70-30.3-225, sole source procurement indicates: for any sole-source procurement pursuant to subsection (a)(1), a written justification for sole-source procurement shall be prepared by the official with expenditure authority and submitted to the Director. This written justification shall contain the specific unique capabilities required; the specific unique capabilities of the contractor; the efforts made to obtain competition; and the specific considerations given to alternative sources and specific reasons why alternative sources were not selected. Condition: For 3 or 100% of the 3 contractors selected for testing, MINA did not properly document their compliance with the sole source procurement regulation. There was no written justification regarding the specific unique capabilities required from the contractors, also the efforts made to obtain competition, and the specific considerations given to alternative sources. Cause: MINA did search for contractors in the CNMI and made their determination that there were no alternative sources, but they did not document these procedures. Effect: The possibility exists that the Organization may not have obtained the best combination of service and cost. Recommendation: MINA should establish, monitor and follow the existing procurement regulations, or develop its own procurement regulations that will be in accordance with local laws and regulations. MINA should ensure that required written documentation evidencing compliance is prepared and maintained. Views of Responsible Officials: MINA has agreed with the finding. See the details at the corrective action plan.

Criteria: The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. CNMI Department of Finance Procurement regulations § 70-30.3-225, sole source procurement indicates: for any sole-source procurement pursuant to subsection (a)(1), a written justification for sole-source procurement shall be prepared by the official with expenditure authority and submitted to the Director. This written justification shall contain the specific unique capabilities required; the specific unique capabilities of the contractor; the efforts made to obtain competition; and the specific considerations given to alternative sources and specific reasons why alternative sources were not selected. Condition: For 3 or 100% of the 3 contractors selected for testing, MINA did not properly document their compliance with the sole source procurement regulation. There was no written justification regarding the specific unique capabilities required from the contractors, also the efforts made to obtain competition, and the specific considerations given to alternative sources. Cause: MINA did search for contractors in the CNMI and made their determination that there were no alternative sources, but they did not document these procedures. Effect: The possibility exists that the Organization may not have obtained the best combination of service and cost. Recommendation: MINA should establish, monitor and follow the existing procurement regulations, or develop its own procurement regulations that will be in accordance with local laws and regulations. MINA should ensure that required written documentation evidencing compliance is prepared and maintained. Views of Responsible Officials: MINA has agreed with the finding. See the details at the corrective action plan.