Department of Administrative Services: Without a Comprehensive Compliance Function, DAS Cannot Effectively Monitor High-Risk Contracts or Mitigate Contracting Risks

Why this audit is important

Oregon state agencies use procurement and contracting to acquire critical goods and services.

Public procurement and contracting come with substantial, inherent risks and require effective oversight to be efficient, secure, and equitable.

DAS oversees public procurement and contracting for the state of Oregon and holds primary authority over most state purchasing and contracting decisions.

DAS adopted the OregonBuys eProcurement enterprise system to modernize public procurement in Oregon and more effectively capture state spending.

During fiscal year 2024, OregonBuys housed over 40,000 transactions totaling $2.14 billion.

What we recommend

1. Coordinate with the Legislature and key partnering agencies to create a centralized statewide procurement and contracting compliance program informed by a robust risk analysis. DAS and its partners should consider compliance functions that include:
   1. Reviewing a sample of agency contracts on a routine schedule to promote and confirm timeliness, adherence to contract stipulations, and compliance with the Public Contracting Code.
   2. Reviewing a sample of procurements on a routine schedule to confirm compliance with the Public Contracting Code.
   3. Reviewing agency contract compliance policies, procedures, and practices, and providing direct feedback for improvement based on existing statute, administrative rules, and best practices.
   4. Evaluating common issues identified during compliance reviews for inclusion in DAS training priorities and guidance development as well as delegation decisions that fall under DAS authority.
   Agency response: Agree
   Target completion date: June 30, 2027
   
   
2. Develop more consistent, accessible, and robust service delivery to support state agencies with procurement, contracting, and training needs. This should include:
   1. Establishing service level standards and ensuring all DAS State Procurement Services staff receive sufficient, timely, and regular training on state procurement rules and expectations to enhance program consistency.
   2. Establishing a centralized administrative support mechanism to track, triage, and respond to agency questions and requests regarding services, OregonBuys, training and guidance resources, statewide and agency policies, contract administration, and more as needed.
   3. Delivering timely, accurate, and appropriate informational updates to agencies regarding DAS services and resources, policy updates, OregonBuys, guidance and training, and more as needed.
   4. Collecting feedback from partnering agencies on ways to enhance and target services to better meet agency needs.
   5. Including partnering agencies in ongoing efforts to revise, develop, and update DAS procurement and contract training, guidance documents and templates to stay current with statute and state policy.
   Agency response: Agree
   Target completion date: June 30, 2027
   
   
3. Review the utilization of staff and other resources in the State Procurement Services program and make adjustments based on that review. This may include requesting additional FTE from the Legislature where appropriate to consistently perform its full suite of services, including managing the ongoing operation of OregonBuys. This review should include:
   1. Determining whether DAS State Procurement Services has sufficient administrative support for key functions, such as training development.
   2. Ensuring staff resources are properly aligned with program needs.
   3. Evaluating the need to utilize contracted services to review and analyze workload and service delivery.
   Agency response: Agree
   Target completion date: June 30, 2027
   
   
4. Create a sufficient resource plan for the ongoing development and operation of OregonBuys and use the plan to obtain and direct funds and staffing.
   Agency response: Agree
   Target completion date: June 30, 2027
   
   
5. Coordinate with the Department of Justice, Enterprise Information Services, and members of the Designated Procurement Officers Advisory Council to perform an assessment of OregonBuys which includes:
   1. Reviewing agency policies and practices’ changes to inform DAS’s efforts to standardize procurement processes among agency users.
   2. Creating more agency-specific reporting customizations to help meet state and federal reporting requirements.
   3. Evaluating and equitably managing state resources for quarterly release testing to support more sufficient and balanced agency participation.
   4. Analyzing spend data within OregonBuys as well as spend data residing in external sources to support informed reporting and strategic sourcing effort.
   5. Identifying common external system workarounds and finding ways to minimize and mitigate their use.
   Agency response: Agree
   Target completion date: June 30, 2027
   
   
6. Coordinate with Periscope Holdings and agency partners to clarify DAS and vendor customer service roles and expectations and revise DAS support protocols with state agencies using OregonBuys. These changes should address communication needs and challenges and should include:
   1. Giving agency users prompt, consistent, and well-coordinated support from DAS and Periscope Holdings to address questions and issues about the OregonBuys system or state procurement process.
   2. Providing agency users involved in OregonBuys quarterly release testing with clear and timely communication on testing priorities, requirements, and timeframes.
   Agency response: Agree
   Target completion date: June 30, 2027
   
   
7. Coordinate with the Department of Justice, Enterprise Information Services, and the Designated Procurement Officers Advisory Council to conduct a benefits and feasibility study on adopting an enterprise-wide contract management system. The study must prioritize system security and DAS must report findings to the Legislature.
   1. Based on study results and Legislative direction, determine whether to adopt an enterprise-wide contract management system and identify critical next steps.
   Agency response: Agree
   Target completion date: December 31, 2027
   
   
8. Monitor, assess, and regularly report to the Legislature on progress made to capture and analyze spend data in OregonBuys and efforts to utilize spend data from other sources in this analysis.
   Agency response: Agree
   Target completion date: Upon Request by Legislature