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Finding #SA2024-003: Procurement Documentation Assistance Listing Number: 21.027 Assistance Listing Title: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of the Treasury Pass Through Entity: County of San Mateo Federal Award Identification Number: SFLRP0201 Criteria: Procurements must “provided full and open competition” as required by 2 CFR section 200.319 and 48 CFR section 52.244-5 of the Uniform Guidance. In the event the procurement is noncompetitive, it can only be awarded if five specific circumstances apply, such as the item or service only being available from a single source. For purchases that meet the criteria to use the “Simplified Purchase Procedures” method under the Uniform Guidance procurement standards, “price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Condition: We selected two of the thirteen vendors used for the Opportunity Center of the Coastside project during fiscal year 2024 for testing of compliance with the procurement standards of the Uniform Guidance. Both contracts appear to meet the criteria under the Simplified Purchase Procedures method, however we noted the following: • American Energy Society contract in the amount of $200,000 – The City Council authorized the development and release of an a RFQ to identify and retain a qualified entity to launch and operate an incubator to be located at the Opportunity Center of the Coastside for an amount not to exceed $200,000. We understand American Energy Society was the only response and City staff did not return to City Council to approve the sole-source contract. • William Duff Architects contract in the amount of $75,000 – We understand the City did not obtain price quotations from multiple sources and only approached William Duff Architects. The City awarded the contract under a sole-source purchase, however, the information related to the sole source documentation was only included in the staff report to the City Council. The Resolution approving the award of the contract did not include any information related to the award being a sole-source purchase and that it met one of the five criteria under the noncompetitive procurement requirements. Effect: The City is not in compliance with the Simplified Purchase Procedures or the Noncompetitive Procurement requirements of the Uniform Guidance. Cause: We understand the failure to complete the required documentation was due to staff oversight. Recommendation: The City should develop procedures to ensure compliance with the procurement standards under the Uniform Guidance for all contracts funded by federal awards. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.