Finding Text
Finding 2021-002: Material Weakness – Lack of Documentation on Sole Source Contracts and
Verification of Vendors
Federal grantor: Department of Commerce
Condition: The Chamber contract with a vendor on a sole-source basis and did not document justification
for the use of a sole source vendor. In addition, the Chamber did not verify that the vendor was not on
the list of vendors suspended or debarred from federal contracting before contracting with the vendor.
Criteria: Entities are required to follow the procurement standards in 2 CFR sections 200.318 through
200.327, including ensuring that the procurement method used for the contracts are appropriate based on
the dollar amount and conditions specified in 2 CFR section 200.320 and noncompetitive procurements.
Entities also must comply with 2 CFR Part 1326 that prohibits entities that have been debarred, suspended
or voluntarily excluded from participating in Federal procurement.
Cause: The Chamber’s Procurement Policy allows for a sole source vendor but requires staff to document
sole source procurements prior to initial purchase. It appears staff did not follow its policy. The Policy also contains a requirement to verify or receive vendor certification that they are not debarred, suspended,
ineligible or voluntarily excluded from Federal procurements, but this procedure was not followed.
Effect: The Department of Commerce may impose additional conditions on the receipt of a subsequent
tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.C. section
200.339.
Recommendation: We recommend the Chamber review policies with staff to ensure procurement
requirements are followed, and that staff are familiar with federal procurement requirements.
Management’s Response: Management’s response to the finding is discussed in the Corrective Action
Plan.