Finding 1090341 (2024-002)

2024 – 002 – Procurement Grantor: Department of Health and Human Services Passthrough Agency: N/A Program Name: Community Project Funding/Congressionally Directed Spending - Construction Award Name: Congressional Directives Award Year: 2024 Award Number: 6 CE1HS47194-01-10 Assistance Listing Number: 93.493 Criteria 2 CFR 200.318(i) stipulates that non-Federal entities must maintain records sufficient to detail the history of procurement. These records should include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition The Alliance’s Procurement policy states that bidding is required for expenditures greater than $5,000. A minimum of two bids are required for any expenditures between $5,000 and $50,000 and a minimum of three bids are required for any expenditures greater than $50,000. The policy states that any purchase transactions above $25,000 are required to be approved by the head of the department. For two of the five samples selected for testing, the Alliance received the appropriate bids, but did not retain adequate documentation to support the basis for selecting the contractor. The Alliance did not retain documentation that the cost or price analysis was performed. Cause For the two samples, the individual completing the contractor selection process did not have the appropriate understanding that the basis for selecting the contractor was required to be formally documented or that the cost or price analysis was required to be formally documented and maintained. Effect Although the procurement policy was followed regarding the bidding process, no documentation was retained for the rationale regarding the selection of the contractor. Therefore, the Alliance was not in compliance with policy. Questioned Costs None noted. Recommendation The Alliance should implement training and communication to enforce their procurement policy over the bidding process including maintaining documentation of the decision between competing bids. Management’s Views and Corrective Action Plan Please refer to the Alliance’s Management’s Views and Corrective Action Plan included at the end of this report for additional details.