Finding Text
CONDITION: The City of McKeesport contracted with a third-party vendor (A&H Equipment for the purchase of a street sweeper. The contract with the third-party vendor, which was procured through a cooperative purchasing group (COSTARS), exceeded the threshold for competitive procurement. The City was unable to provide documentation to verify that the third-party procurement contract was competitively procured, such as a bid evaluation and public solicitation. In addition, the City did not conduct a cost or price analysis for this procurement, which was in excess of the Simplified Acquisition Threshold of $250,000.
CRITERIA: Section 2 CFR 200.318(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a non-federal entity whereby the cost exceeds the Simplified Acquisition Threshold. The cost of the street sweeper exceeded the simplified acquisition threshold of $250,000. As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the City must maintain sufficient records to detail the history of procurement. These records will 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. In addition, Section 2 CFR 200.324(a) of the Uniform Guidance requires the performance of a cost or price analysis in connection with every procurement in excess of the Simplified Acquisition Threshold.
CAUSE: City personnel directly responsible for the oversight and execution of these procurements were not fully familiar with the procurement requirements as prescribed by Sections 2 CFR 200.318(i) and 2 CFR 200.324(a) of the Uniform Guidance.
EFFECT: The City of McKeesport did not comply with the requirements of Sections 2 CFR 200.318(i) and 2 CFR 200.324(a) of the Uniform Guidance with regard to maintaining sufficient records to detail the history of procurement for the construction project and conducting a cost or price analysis for a procurement in excess of the Simplified Acquisition Threshold.
QUESTIONED COST: $268,975 RECOMMENDATION: I am recommending that City management implement, review and update annually as necessary, City federal financial policies and procedures, similar to those developed for use in the City’s Community Development Program to ensure In instances where the procurement cost incurred for goods and/or services exceeds the Uniform Guidance Simplified Acquisition, including such instances whereby the City is using a contract vehicle from a cooperative purchase network, that the City is in compliance with all applicable sections of the Uniform Guidance, in specific, Section 2 CFR 200.318(i) of the Uniform Guidance. In addition, I recommend that the City conduct a cost or price analysis for all procurement in excess of the Simplified Acquisition Threshold of $250,000 before receiving bids or proposals in accordance with Section 2 CFR 200.324(a) of the Uniform Guidance.
VIEWS OF RESPONSIBLE OFFICIALS: The City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.