Audit 43263

2022-003: Procurement/Full and open competition Cluster Name: Research and development Award Name: 2019 Fire Prevention and Safety (FP&S) Assistance Listing Number: 97.044 Award Number: EMW-2019-FP-00770 Agency: Department of Homeland Security Award Year: 2019 Criteria: Underwriters Laboratories Inc. has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Condition: There were two transactions over the $10,000 threshold and both were selected for testing. For one transaction in August 2022 totaling $69,239 out of the two transactions tested totaling $123,408, excluding transactions with subrecipients, management provided us with the Underwriters Laboratories, Inc. Vendor Selection Form noting multiple vendors were identified for the project at hand. However, management received two responses (one being a decline of services), of four vendors identified, and did not provide rationale for why the selected vendor was sufficient (both from a capabilities and cost side) within the Vendor Selection Form section ?Why did you choose the selected vendor?? prior to the purchase being made. Note, as of September 2022 a corrective action plan around procurement/full and open competition was created by management related to finding 2021-002 from FY21. As such, this had not been implemented at the time of vendor selection in August 2022. There were no exceptions noted for the other selection. Cause: At this point in time (August 2022) there was no formal review to ensure all federal documentation requirements related to purchases above the micro-purchase threshold had been included in the procurement files (i.e., Vendor Selection Form). Effect: The lack of a formal process for review of the Vendor Selection Form could result in inadequate bids and competition. Questioned Costs: There are no questioned costs associated with this finding. Recommendation: We recommend Underwriters Laboratories Inc. formalize the documentation and review required for procurements over the micro-purchase threshold, including instances where requests for bids from multiple vendors are not received to ensure the vendor selection process is adequately communicated prior to the purchase being made. Management?s View and Corrective Action Plan: Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit finding.

2022-003: Procurement/Full and open competition Cluster Name: Research and development Award Name: 2019 Fire Prevention and Safety (FP&S) Assistance Listing Number: 97.044 Award Number: EMW-2019-FP-00770 Agency: Department of Homeland Security Award Year: 2019 Criteria: Underwriters Laboratories Inc. has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Condition: There were two transactions over the $10,000 threshold and both were selected for testing. For one transaction in August 2022 totaling $69,239 out of the two transactions tested totaling $123,408, excluding transactions with subrecipients, management provided us with the Underwriters Laboratories, Inc. Vendor Selection Form noting multiple vendors were identified for the project at hand. However, management received two responses (one being a decline of services), of four vendors identified, and did not provide rationale for why the selected vendor was sufficient (both from a capabilities and cost side) within the Vendor Selection Form section ?Why did you choose the selected vendor?? prior to the purchase being made. Note, as of September 2022 a corrective action plan around procurement/full and open competition was created by management related to finding 2021-002 from FY21. As such, this had not been implemented at the time of vendor selection in August 2022. There were no exceptions noted for the other selection. Cause: At this point in time (August 2022) there was no formal review to ensure all federal documentation requirements related to purchases above the micro-purchase threshold had been included in the procurement files (i.e., Vendor Selection Form). Effect: The lack of a formal process for review of the Vendor Selection Form could result in inadequate bids and competition. Questioned Costs: There are no questioned costs associated with this finding. Recommendation: We recommend Underwriters Laboratories Inc. formalize the documentation and review required for procurements over the micro-purchase threshold, including instances where requests for bids from multiple vendors are not received to ensure the vendor selection process is adequately communicated prior to the purchase being made. Management?s View and Corrective Action Plan: Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit finding.