Loading...
05/31/2006 Audit AUDIT REPORT OF MONROE COUNTY PROCUREMENT POLICIES May 31, 2006 eOUNt.. . " .. "......... C'o ~ ...~.,. CU/0(;.. ~ j l~.."..,,"" ~: '\ ~ at U. , . , :' : . . . ... .. .: y ~'. ,- ., ,," ~ "'. ",,,, ""0 ......... ..It t" I COUN'f'( . Prepared by: Internal Audit Department Clerk of the Circuit Court Danny L. Kolhage, Clerk Monroe County. Florida AUDIT REPORT OF MONROE COUNTY PROCUREMENT POLICIES TABLE OF CONTENTS ~ I. OBJECTIVES AND SCOPE 1 II. METHODOLOGY 1-2 III. BACKGROUND INFORMATION 3-5 IV. AUDIT CONCLUSIONS 5-7 V. AUDIT FINDINGS A. Piggy-Backing Procurement 1. Purchase of Contender Pumper for Ocean Reef Department of Public Safety 8 2. Purchase of Saber Pumper for Big Pine Fire Station 9 3. Purchase of Saber Pumper for Conch Key Fire Station 10 4. Purchase of Sterling Ambulance for Big Coppitt Fire Rescue Station 9 11-12 5. Purchase of Sterling Ambulance for Big Pine Rescue Station 13 12-13 6. Purchase of Ford XLT F-450 Type I Ambulance for Ocean Reef Department of Public Safety 13-14 7. Purchase of security work for the Emergency Operations Center from Quality Communications, Inc. 15 8. Purchase of skate board equipment and installation services for the Key Largo Commuuity Park from Playmore Recreational Products and Services 16-17 B. Sole Source Procurement 9. Purchase of Thermal Imaging Cameras and accessories from Ten-8 Fire Equipment, Inc. 18 10. Purchase of Moming Pride protective ensembles from Fischer Scientific 18-19 11. Purchase of Lion Apparel protective ensembles from Municipal Equipment Company, LLC 19 12. Purchase of two chillers for the Gato Building from Carrier Commercial Services 20 13. Purchase of chiller system for the Harvey Government Center from McQuay International 20-21 C. State Conttact Procurement 14. Purchase ofFord F-550 for the Public Works Department 15. Purchase of Sterling Conventional Clam Truck and Mo Trim Mower/Tractor for the Solid Waste Department 16. Consulting Agreement with Langton Associates 22-23 24-25 26-27 D. Emergency Procurement 17. Purchase of automatic ttansfer switch from Florida Keys Electric, Inc. 28 E. Other Procurements 18. Conttact with Advanced Data Processing, Inc. 19. Conttact with Advanced Data Solutions, Inc. for web posting services 20. Conttact with Advanced Data Solutions, Inc. for scanning and indexing Building permit files 21. Two professional services agreements with Advanced Data Solutions, Inc. 29 29 30 30-31 VI. SUBSEQUENT EVENT 32 VII. EXHIBITS - Under Separate Cover A. Monroe County Code Article XXII Section 2-541 B. Monroe County Purchasing Policy C. Agenda Item for Pierce Custom Contender Pumper for Ocean Reef Department of Public Safety D. Memorandum from County Attorney E. Lake County Bid F. Invoice and Purchase Order for Pierce Contender Pumper for Ocean Reef Department of Public Safety G. Agenda Item for Saber Pumper for Big Pine Fire Station H. Invoice and Purchase Order for Saber Pumper for Big Pine Fire Station I. Agenda Item for Saber Pumper for Conch Key Fire Station J. Invoice and Purchase Order for Saber Pumper for Conch Key Fire Station K. Agenda Item for Sterling Type I Ambulance for Big Coppitt Fire Rescue Station 9 L. Florida Sheriffs Association Bid for Fire/Rescue Vehicles and Other Fleet Equipment M. Florida Fire Chiefs' Association, Florida Sheriffs Association and Florida Association of Counties Bid 04-05-0824 Specifications and Monroe County Fire Rescue Order for 2005 Sterling Type I Ambulance N. Agenda Item for 2007 Sterling Type I Ambulance for Big Pine Fire Rescue Station 13 O. Florida Fire Chiefs' Association, Florida Sheriffs Association and Florida Association of Counties Bid 05-06-0823 Specifications and Monroe County Fire Rescue Order for 2007 Sterling Type I Ambulance P. Agenda Item for 2006 Ford XLT F-450 Type I Ambulance for Ocean Reef Department of Public Safety Q. Florida Fire Chiefs' Association, Florida Sheriffs Association and Florida Association of Counties Bid 05-06-0823 Specifications and Monroe County Fire Rescue Order for 2006 Ford XL T F-450 R. Agenda Item for Key West International Airport to Quality Communications, Inc. for security work S. Quality Communications, Inc. Documents T. Agenda Item for Playmore Recreational Products and Services for Key Largo Community Park and Invoice and Purchase Order to Playmore Recreational Products and Services U. Agenda Item for Thermal Imaging Cameras and accessories from Ten-8 Fire Equipment, Inc. V. MSA documents and Thermal Image Vendor research W. Agenda Item for Morning Pride protective ensembles from Fisher Scientific X. Memorandums regarding Morning Pride PPE Y. Monroe County Fire Rescue 2005 Protective Clothing Recommendation Z. Agenda Item for Lion Apparel protective ensembles from Municipal Equipment Company, LLC AA. Agenda Item for two new chillers for the Gato Building from Carrier Commercial Services BB. Agenda Item for a new chiller system for the Harvey Government Center from McQuay International CC. Agenda Item for 2005 Ford F-550 for Monroe County Facilities Maintenance/ Corrections Department DD. Florida Sheriffs Association, Florida Association of Counties and Florida Fire Chiefs' Association Bid 04-12-0824 Specifications and Invoice and Request to Purchase from Monroe County EE. Agenda Item for Sterling Conventional Clam Truck and a Mo Trim Mower/Tractor FF. Agenda Item for Clarification of Consulting Agreement with Langton Associates, Inc. GG. Quote from Florida Keys Electric, Inc. and Agenda Item for Florida Keys Elecrric, Inc. for replacement of the automatic transfer switch at the Key West Courthouse. HH. Agenda Item for Advanced Data Processing, Inc. for rescue ambulance billing and related professional services. II. Agenda Items for Advanced Data Solutions, Inc. for web posting services. JJ. Spreadsheet on Payments to Advanced Data Solutions, Inc. KK. Professional Services Agreements with Advanced Data Solutions, Inc. VII. COUNTY ADMINISTRATOR'S RESPONSE AUDIT REPORT OF MONROE COUNTY PROCUREMENT POLICIES I. OBJECTIVES AND SCOPE At the request of the Monroe County Clerk of the Circuit Court, the Internal Audit Department has completed an audit of the Monroe County Board of County Commissioners Procurement Policy, specifically the waiving of these policies and procedures using various exclusions. The audit objectives were to determine compliance with state and local laws, ordinances, and contracts, that policies and procedures properly document the system, whether internal controls have been established and are being followed, and whether the results accomplish the goal of securing economy in expenditure of county funds. II. METHODOLOGY A. The following personnel were interviewed during the audit to obtain information about the Procurement Policy. 1. The Purchasing Director 2. The Assistant County Attorney 3. The Division Director of Fire Rescue 4. The Fire Rescue Staff 5. The Public Works Staff 6. The Social Services Staff 7. The Emergency Management Staff 8. The Engineering Staff 9. Clerk's Finance Department lO.Other County Purchasing Staff B. Internal Audit Department examined the following documents: 1. Florida Statutes related to procurement 2. Florida Administrative Code 3. Monroe County Purchasing Policies 4. Monroe County Administrative Instruction 5. Purchasing Policies from other counties 6. Monroe County Code 7. Various Contracts I C. The Internal Audit Department reviewed a random sample of purchase orders/requisitions to assure that each has received appropriate supervisory or Board of County Commission (BOCC) approval. We also verified that quotes, request for proposals, bids, sole source, and emergency justifications were on file where applicable. For purchases made by means of contracts, we verified that the awards were subject to competition. D. The Internal Audit Department examined purchase orders for evidence of splirring orders to circumvent the bidding process. E. The Internal Audit Department reviewed Monroe County Board of County Commissioners Agendas from July 15, 2003 through January 18, 2006, for items that did not follow the normal bid procedures. 2 / III.BACKGROUND INFORMATION Monroe County has a Procurement Policy Office, conSISting of the Board of County Commissioners, which decides all matters of policy. The County Administrator is the Chief Procurement Officer. The Monroe County Purchasing Policy adopted by the Board in March 1998 changed Purchasing from a Departtnent under the Office of Management and Budget (OMB) to a Section within OMB. The Monroe County Purchasing Policy was revised in May 2003. Procurement is the process organizations use to obtain the supplies and materials needed to support operational activities. It is a universal high-risk function and cuts across departtnents, programs, and agencies. Procurement is obtaining the tight product, at the tight time, from the tight source, and at the tight price. There are a host of processes in the function in which fraud, waste, and abuse might occur. The effectiveness of a procurement program depends partly on the organization's ability to centralize authority and responsibility. TYPES OF PROCUREMENT According to the Monroe County Purchasing Policy Chapter 7 A, Sole Source procurements are the ones in which the needed commodity or service is only available from one source. Sole Source procurements may be exempted from fortnal competition by written justification from the requesting departtnent for the following conditions: a. The public emergency for the requirements will not pertnit a delay resulting from competitive solicitation. b. All single source purchases are subject to approval by either the BOCC, County Administrator or Director of OMB/Purchasing at the authorized level of authority. The OMB/Purchasing Section must in all cases evaluate the request for such commodity, service or source. See Exhibit B . Monroe County Purchasing Policy Chapter 7 A, Sole Source. According to the Monroe County Purchasing Policy Chapter 7D, Piggy-backing procurement utilizes another governrnental entity or not for profit association's competitively awarded bid to take advantage of pricing received. In order to utilize the "piggy-back" provision the following conditions must be met: a. The Purchasing Director must verify specification and award infortnation and receive pertnission from both the entity and vendor to piggy-back. b. Before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services sought are available at a lower price than the price(s) of the existing contract. If the goods or service are available from another vendor at a lower price than the price of the existing contract, then the contract must be awarded to that vendor. 3 c. Piggy-backing only applies when the item(s) or service(s) being purchased are exacdy the same as the original award. See Exhibit B - Monroe County Purchasing Policy Chapter 7D, Piggy-backing. According to the Monroe County Purchasing Policy Chapter 7B, State contract procurement is when a county deparrment identifies an existing state contract that would meet its needs. The Deparrment should thoroughly review the terms and conditions of the state contract because the County cannot alter those terms and conditions and the County Deparrment utilizing the contract will be required to administer the contract on those terms. Purchases of over $25,000 from vendors holding current "State", "SNAPS" and "GSA" contracts are exempted from the competitive bidding process. Before any purchase is made through an existing contract the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services sought are available at a lower price other than the price of the existing contract, if so then the contract for the goods or service must be awarded to that vendor. The purchase of the goods or services sought may be made through the existing contract if none of the other vendors contacted by the Purchasing Director offered the goods or services at a price lower than the price of the existing contract. See Exhibit B - Monroe County Purchasing Policy Chapter 7B, State Contracts, GSA Contracts or SNAPS. According to the Monroe County Code 2-541(k), Emergency procurement is when the Board of County Commissioners dispenses with the bidding provisions and contracts direcdy for services, goods or public works in the case of an "emergency." "Emergency" means one or more of the following conditions: a. An immediate danger to the public health or safety; or b. Danger or loss of public or private property that requires immediate government action; or c. Interruption in the delivery of an essential governmental service; or d. Substantial risk that a funding source of a contract will be diminished or lost because the time required to competitively award bids after the funds become available exceeds the time within which the funding source must be spent; or e. Narutal or manrnade disaster; or f. State or local emergency declaration. See Exhibit A - Monroe County Code 2-541(k). 4 BASIS OF SELECTION The Internal Audit Department reviewed BOCC agenda items where the normal bid procedures were waived. There were forty-seven (47) selections made of purchases for which the purchase policy was waived during the period tested Ouly 15, 2003 - January 18,2006). Of those selected for testing twenry-one (21) were found to be in violation of the Monroe County Purchasing Policy, while twenty-six (26) conformed to the policy. There were also some selections made judgmentalIy. IV. AUDIT CONCLUSIONS A. Piggy-Backing Procurement - The following County departments did not utilize the piggy- backing procurement procedures for purchases in accordance with the Monroe County Purchasing Policy: 1. The Fire Rescue Department purchased a Contender Pumper for $268,020 for the Ocean Reef Department of Public Safety. 2. The Fire Rescue Department purchased a Saber Pumper for $344,169 for the Big Pine fire station. 3. The Fire Rescue Department purchased a Saber Pumper for $344,169 for the Conch Key fire station. 4. The Fire Rescue Department purchased a 2005 Sterling Type I Ambulance for $150,450 for the Big Coppitt Fire Rescue Station 9. 5. The Fire Rescue Department purchased a 2007 Sterling Type I Ambulance for $159,326 for the Big Pine Fire Rescue Station 13. 6. The Fire Rescue Department purchased a 2006 Ford XLT F-450 Type I Ambulance for $113,530 for the Ocean Reef Department of Public Safety. 7. The Emergency Management Department purchased security work for $82,370 for the Emergency Operations Center. 8. The Engineeting Department purchased skate board park equipment and installation services for Key Largo Community Park at a purchase price of $215,934. 5 B. Sole Source Procurement - The following County departments did not utilize the sole source procurement procedures for purchases in accordance with the Monroe County Purchasing Policy: 9. The Fire Rescue Department purchased 5 MSA Evolution 5200 Thermal Imaging Cameras and accessories from Ten-8 Fire Equipment, Inc. for $43,988. 10. The Fire Rescue Department purchased 47 Morning Pride protective ensembles from Fisher Scientific at a purchase price of $58,420. 11. The Fire Rescue Department purchased 44 Lion Apparel protective ensembles from Municipal Equipment Company, LLC at a purchase price of$59,312. 12. The Public Works Department purchased two new chillers for the Gato Building from Carrier Commercial Services at a purchase price of$151,088. 13. The Public Works Department purchased a new chiller system for the Harvey Government Center from Mcquay International at a purchase price of $98,304. C. State Contract Procurement - The following County departments did not utilize the state contract procurement procedures for purchases in accordance with the Monroe County Purchasing Policy: 14. The Public Works Department purchased a 2005 Ford F-550 from the Florida Sheriffs Association and Florida Association of Counties at a purchase price of $39,262. 15. The Solid Waste Management Department purchased a Clam Truck and a Mo Trim Mower/Tractor for a total price of $130,212. 16. The County Administration Department received approval to use Langton Associates, Inc., for assistance with obtaining governmental grants at a cost of $69,000. D. Emergency Procurement - The following County department did not utilize the emergency procurement procedures for a purchase in accordance with the Monroe County Purchasing Policy: 17. The Public Works Department issued a purchase order to Florida Keys Electric, Inc., for the replacement of the automatic transfer switch at the Key West Courthouse at a purchase price of $52,366. 6 E. Other Procurements - The following County departments did not utilize the appropriate procurement procedures for purchases in accordance with the Monroe County Purchasing Policy: 18. The Fire Rescue Department requested the BOCC enter into a contract with Advanced Data Processing, Inc., for approximately $24,000 a year. 19. The County Administration Department requested the BOCC enter into a contract for web posting services with Advanced Data Solutions, Inc., for an amount not to exceed $24,500 a year. 20. The Building Department had Advanced Data Solutions, Inc., scanning and indexing building permit files for a cost of$199,073. 21. The BOCC entered into two professional setvlces contract with Advanced Data Solutions, Inc. 7 V. AUDIT FINDINGS A. PIGGY-BACKING PROCUREMENT - FIRE RESCUE DEPARTMENT 1. In May 2004, the Fire Rescue Department purchased a custom Contender Pumper for Ocean Reef Department of Public Safety through piggy-backing bid 99-150 of Lake County, Florida at a purchase price of $268,020 in violation of the Monroe County Purchasing Policy. Findi~: The Fire Rescue Department did not follow piggy-backing procedures required by the Monroe County Purchasing Policy dated May 2003. The board agenda submitted by the Fire Rescue Department states, "Approval to purchase one Pierce Custom Contender Pumper for Ocean Reef Department of Public Safety through piggy-backing bid 99-150 of Lake County, Florida at a purchase price of $258,660, plus a contingency amount of $10,000 to cover any changes during construction/manufacturing process, and approval to issue a purchase order to Pierce Manufacturing, Inc." See Exhibit C - Agenda Item for Board Approval. According to the County Attorney, the piggy-backing procedures require that exacdy, without any variance, the same goods or services are provided under the same terms and conditions as the original bid. See Exhibit D - Memorandum from County Attorney. The original Lake County bid was for a vehicle base model with Pierce Responder Body and 4900 International chassis at a total purchase price of $143,754 per truck. See Exhibit E - Lake County Bid. The Monroe County Fire Rescue Department purchased a Contender Pumper mounted on a Contender chassis for $268,020. See Exhibit F - Invoice and Purchase Order. According to Monroe County Purchasing Policy Chapter 7D, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing contract. If the goods or services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods or services must be awarded to the vendor with the lower price. The Contender Pumper was purchased by Board approval utilizing the piggy- backing exception. However, no documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. Since the estimated cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. See Exhibit B - Monroe County Purchasing Policy Chapter 3. 8 PIGGY-BACKING PROCUREMENT - FIRE RESCUE DEPARTMENT 2. In October 2004, the Fire Rescue Department purchased a custom Saber Pumper for Big Pine Fire Station through piggy-backing bid 99-150 of Lake County, Florida at a purchase price of $344,169 in violation of Monroe County Purchasing Policy. Finding: The Fire Rescue Department did not follow piggy-backing procedures authorized under the Monroe County Purchasing Policy dated May 2003. The board agenda item submitted by the Fire Rescue Department states, "Approval to purchase one Pierce Custom Saber Pumper for Big Pine fire station, through piggy-backing bid 99-150 of Lake County, Florida at a purchase price of $328,261, plus a 5% contingency amount of $16,413 to cover any changes during construction/manufacturing process, and approval to issue a purchase order to Pierce Manufacturing, Inc." See Exhibit G - Agenda Item for Board Approval. According to the County Attorney, the piggy-backing procedures require that exacdy, without any variance, the same goods or services are provided under the same terms and conditions as the original bid. The original Lake County bid was for a vehicle base model with Pierce Responder Body and 4900 International chassis at a total purchase price of $143,754 per truck. See Exhibit E - Lake County Bid. The Monroe County Fire Rescue Department purchased a Saber Pumper mounted on a Saber chassis for $344,169. See Exhibit H - Invoice and Purchase Order. According to Monroe County Purchasing Policy Chapter 7D, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing contract. If the goods or services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods or services must be awarded to the vendor with the lower price. The Saber Pumper was purchased by Board approval utilizing the piggy- backing exception. However, no documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. Since the estimated cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest confirming bid by a responsible bidder. 9 PIGGY-BACKING PROCUREMENT - FIRE RESCUE DEPARTMENT 3. In December 2004, the Fire Rescue Department purchased a custom Saber Pumper for Conch Key Fire Sration through piggy-backing bid 99-150 of Lake County, Florida at a purchase price of $344,169 in violation of Monroe County Purchasing Policy. FindiQg: The Fire Rescue Department did not follow piggy-backing procedures authorized under the Monroe County Purchasing Policy dated May 2003. The board agenda submitted by the Fire Rescue Department srates, "Approval to purchase one Pierce Custom Saber Pumper for Conch Key fire sration, through piggy-backing bid 99-150 of Lake County, Florida at a purchase price of $328,261, plus a 5% contingency amount of $16,413 to cover any changes during construction/manufacturing process, and approval to issue a purchase order to Pierce Manufacturing, Inc." See Exhibit I - Agenda Item for Board Approval. According to the County Attorney, the piggy-backing procedures require that exacdy, without any variance, the same goods or services are provided under the same terms and conditions as the original bid. The original Lake County bid was for a vehicle base model with Pierce Responder Body and 4900 International chassis at a toral purchase price of $143,754 per truck. See Exhibit E - Lake County Bid. The Monroe County Fire Rescue Department purchased a Saber Pumper mounted on a Saber chassis for $344,169. See Exhibit J -Invoice and Purchase Order. According to Monroe County Purchasing Policy Chapter 7D, before any purchase is made through an existing contract, the Purchasing Director must first conract other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing contract. If the goods or services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods or services must be awarded to the vendor with the lower price. The Saber Pumper was purchased by Board approval utilizing the piggy- backing exception. However, no documenration was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. Since the estimated cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest confirming bid by a responsible bidder. 10 PIGGY-BACKING PROCUREMENT - FIRE RESCUE DEPARMENT 4. In February 2005, the Fire Rescue Department purchased a 2005 Sterling Type I Ambulance for Big Coppitt Fire Rescue Station 9 through piggy-backing the Florida Sheriffs Association and Florida Association of Counties vehicle/equipment bid conttact 04-05-0824 at a purchase price of $150,450 in violation of Monroe County Purchasing Policy. Finding: The Fire Rescue Department did not follow piggy-backing procedures authorized under the Monroe County Purchasing Policy dated May 2003. The board agenda submitted by the Fire Rescue Department states, "Approval to issue a purchase order to American LaFrance MedicMaster in the amount of $150,450 for the purchase of one 2005 Sterling Type I Ambulance by piggy-backing the Florida Sheriffs Association and Florida Association of Counties vehicle/equipment bid conttact 04- 05-0824 Specification #02." See Exhibit K - Agenda Item for Board Approval. According to the County Attorney, the piggy-backing procedures require that exactly, without any variance, the same goods or services are provided under the same terms and conditions as the original bid. The Florida Sheriffs Association conducts statewide competitive bids for fire and rescue vehicles. See Exhibit L - Florida Sheriffs Association Bid. The vehicles come equipped as base units only. Any additional options that are required to the base unit need to be ordered through the manufacturer. For this ambulance the Fire Rescue Department ordered $55,892 in upgrades and system and component options. See Exhibit M - Bid 04-05-0824 Specifications and Monroe County Fire Rescue Order for 2005 Sterling Type I Ambulance. Monroe County Purchasing Policy Chapter 7D, states if the goods or services are available from another vendor at a lower price than the price of the existing conttact, then the conttact for the goods or services must be awarded to that vendor. The Sterling Type I ambulance had 2 manufacturers that had bid conttacts. The Fire Rescue Department took the higher bid price for a base unit of $97,800 from American LaFrance MedicMaster. Wheeled Coach Industries, Inc. had a bid price for a base unit of $87,990. See Exhibit M - Bid 04-05-0824 Specifications and Monroe County Fire Rescue Order for 2005 Sterling Type I Ambulance. However, the agenda item summary stated "The low bid of $150,450 is derived by taking the price of $97,800, adding necessary options of $55,893 and a conttact fee of $757 and subtracting the Florida Sheriffs Association Discount of $4,000." See Exhibit K - Agenda Item for Board Approval. This is a violation of the County's purchasing policy. According to Monroe County Purchasing Policy Chapter 7D, before any purchase is made through an existing conttact, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing conttact. If the goods or services are available from another vendor at a lower price than the price of the existing conttact, then the conttact for the goods or services must be awarded to the vendor with the lower price. The 2005 Sterling Type I Ambulance was purchased by Board approval utilizing the piggy-backing exception. However, no documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. 11 PIGGY-BACKING PROCUREMENT - FIRE RESCUE DEPARMENT Since the estimated cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. S. In December 2005, the Fire Rescue Department purchased a 2007 Sterling Type I Ambulance for Big Pine Fire Rescue Station 13 through piggy-backing the Florida Sheriffs Association and Florida Association of Counties vehicle/equipment bid contract 05-06-0823 at a purchase price of $159,326 in violation of Monroe County Purchasing Policy. Finding: The Fire Rescue Department did not follow piggy-backing procedures authorized under the Monroe County Purchasing Policy dated May 2003. The board agenda submitted by the Fire Rescue Department states, "Approval to issue a purchase order to American LaFrance MedicMaster in the amount of $159,326 for the purchase of one 2007 Sterling Type I Ambulance by piggy-backing the Florida Sheriffs Association and Florida Association of Counties vehicle/ equipment bid contract 05- 06-0823 Specification #02." See Exhibit N - Agenda Item for Board Approval. According to the County Attorney, the piggy-backing procedures require that exactly, without any variance, the same goods or services are provided under the same terms and conditions as the original bid. The Florida Sheriffs Association conducts statewide competitive bids for fire and rescue vehicles. See Exhibit L - Florida Sheriffs Association Bid. The vehicles come equipped as base units only. Any additional options that are required to the base unit need to be ordered through the manufacturer. For this ambulance the Fire Rescue Department ordered $52,163 in upgrades and system and component options. See Exhibit 0 - Bid 05-06-0823 Specification and Monroe County Fire Rescue Order for 2007 Sterling Type I Ambulance. Monroe County Purchasing Policy Chapter 7D, states if the goods or services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods or services must be awarded to that vendor. The Sterling Type I ambulance had 3 manufacturers that had bid contracts. The Fire Rescue Department took a higher bid price for a base unit of $108,370 from American LaFrance MedicMaster. Wheeled Coach Industries, Inc. had a bid price for a base unit of $97,264. See Exhibit 0 - Bid 05-06-0823 Specification and Monroe County Fire Rescue Order for 2007 Sterling Type I Ambulance. However, the agenda item summary stated "The low bid of $159,326 is derived by taking the price of $108,370, adding necessary options of $52,163 and a contract fee of $793 and subtracting the Florida Sheriff's Association Discount of $2,000." See Exhibit N - Agenda Item for Board Approval. This is a violation of the County's purchasing policy. 12 PIGGY-BACKING PROCUREMENT - FIRE RESCUE DEPARMENT According to Monroe County Purchasing Policy Chapter 7D, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing contract. If the goods or services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods or services must be awarded to the vendor with the lower price. The 2007 Sterling Type I Ambulance was purchased by Board approval utilizing the piggy-backing exception. However, no documentation was provided to the auditor to support that there was any atrempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. Since the estimated cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. 6. In January 2006, the Fire Rescue Department purchased a 2006 Ford XLT F-450 Type I Ambulance for Ocean Reef Department of Public Safety through piggy-backing the Florida Sheriffs Association and Florida Association of Counties vehicle/equipment bid contract 05-06-0823 at a purchase price of $113,530 in violation of Monroe County Purchasing Policy. Findi~ The Fire Rescue Department did not follow piggy-backing procedures authorized under the Monroe County Purchasing Policy dated May 2003. The board agenda item submitted by the Fire Rescue Department states, "Approval to waive purchasing policy requiring bid process and issue a purchase order to Wheeled Coach Industries, Inc., in the amount of $113,530 for the purchase of one 2006 Ford XLT F-450 Type I Ambulance by piggy-backing the Florida Sheriffs Association and Florida Association of Counties vehicle/equipment bid contract 05-06-0823 Specification #01." See Exhibit P - Agenda Item for Board Approval. According to the County Attorney, the piggy- backing procedures require that exactly, without any variance, the same goods or services are provided under the same terms and conditions as the original bid. The Florida Sheriffs Association conducts statewide competitive bids for fire and rescue vehicles. See Exhibit L - Florida Sheriffs Association Bid. The vehicles come equipped as base units only. Any additional options that are required to the base unit need to be ordered through the manufacturer. For this ambulance the Fire Rescue Department ordered $38,044 in upgrades and system and component options. See Exhibit Q _ Bid 05-06-0823 Specifications and Monroe County Fire Rescue Order for 2006 Ford XLT F-450. 13 PIGGY-BACKING PROCUREMENT - FIRE RESCUE DEPARMENT According to Monroe County Purchasing Policy Chapter 7D, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing contract. If the goods or services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods or services must be awarded to the vendor with the lower price. The 2006 Ford XLT F-450 Type I ambulance was purchased by Board approval utilizing the piggy-backing exception. However, no documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower pnce. Since the estimated cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. Recommendation for 1 through 6: 1. The Fire Rescue Department should strictly follow the Monroe County Purchasing Policies and Procedures. 2. If these were valid purchases using the piggy-back procedures, the contact with other South Florida vendors should be maintained in a written format and attached to the purchase order. This information may be provided by the requesting department to the Purchasing Department for review or the purchasing staff may obtain it. The contract should be awarded to the vendor with the lower price. 14 PIGGY-BACKING PROCUREMENT - EMERGENCY MANAGEMENT DEPARTMENT 7. In June 2005, the Emergency Management Department piggy-backed a previously awarded competitive bid, issued for Key West International Airport to Quality Communications, Inc. for security work for the Emergency Operations Center in violation of Monroe County Purchasing Policy. The price for the security work was $82,370 and is to be paid for by a Homeland Security Grant. Finditlg: The Emergency Management Department piggy-backed a previously awarded bid for security work for additional work in the amount of $82,370. See Exhibit R - Agenda Item for Board Approval. The Emergency Management Department piggy-backed a Key West International Airport competitive bid awarded to Quality Communications, Inc., on December 18, 2002. See Exhibit S - Quality Communications, Inc. documents. According to the County Attorney, a department cannot use the piggy-back procedure on a contract that was generated by Monroe County for Monroe County. See Exhibit D - Memorandum from County Attorney. According to Monroe County Purchasing Policy Chapter 7D for piggy-backing procedures, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing state contract. If the goods or services are available from another vendor at a lower price than the price of the existing state contract, then the contract for the goods or services must be awarded to the vendor with the lower price. No documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower pnce. The Emergency Management Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. Recommendation: 1. The Emergency Management Department should strictly follow the Monroe County Purchasing Policies and Procedures. 2. If this was a valid purchase using the piggy-back procedures, the contact with other South Florida vendors should be maintained in a written format and attached to the purchase order. This information may be provided by the requesting department to the Purchasing Department for review or the purchasing staff may obtain it. The contract should be awarded to the vendor with the lower price. 15 PIGGY-BACKING PROCUREMENT - ENGINEERING DEPARTMENT 8. In July 2005, the Engineering Department piggy-backed a City of Jacksonville bid contract SC- 0549-03 for skate board park equipment and installation services for Key Largo Community Park by Playmore Recreational Products and Services at a purchase price of $215,934 in violation of Monroe County Purchasing Policy. See Exhibit T - Agenda Item for Board Approval, Invoice and Purchase Order. Finding: According to Monroe County Purchasing Policy Chapter 7D, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing contract. If the goods or services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods or services should be awarded to the vendor with the lower price. The skate park equipment and installation services were purchased utilizing the piggy-backing exception. However, no documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. . Recommendation: 1. The contact with other South Florida vendors should be maintained in a written format and attached to the purchase order. This information may be provided by the requesting department to the Purchasing Department for review or the purchasing staff may obtain it. The contract should be awarded to the vendor with the lower price. County Administrator's Response: (A) Piggy-backing irregularities (8 f1ndin~) According to the County Attorney's interpretation of chapter 7-D, piggy-backing procedures require that exactly, without any variance, the same goods and services are provided under the same terms and conditions. Findings 1 thru 7 exhibited incorrect procurement whereby different goods and services were purchased under policy '.0. In addition, under chapter 7-D, the piggy- backing procedures require that purchases over $25,000 should be accompanied by evidence that other vendors have been contacted, to determine if the goods and services sought are available from another vendor at a lower price than that of the existing contract. No evidence was provided to the auditor that suggested other vendors had been contacted in ascertaining a lower price. 16 County Ailrn.inistrator's Response: (continued.) Policy 7 -D.2 indicates that the quotes to be sought ate "at a lower price than the price(s) of the existing contract "implying that the pricing bid to be used is that of the contract upon which the County is piggy-backing and not necessarily the original bid. However, Policy 7 -D.4 states "the item(s) or services being purchased are exacdy the same as the original award. The foregoing contradiction needs to be resolved. Further, it should be clarified in a re-written policy that the County must ascertain that the contract was a result of a competitive bid, but that changes in pricing over a number of years through contract amendments by the piggy-backed agency may be incorporated in the resulting contract. At least one of the piggy-backed contracts was originally awarded in 1999 and amended annually since that time. The change in CPI, as well as other factors, may very well have resulted in changed terms which are still beneficial to the county in seeking the best price. Since quotes must still be sought from other vendors, the danger of exceeding the best price should be a moot issue, as long as the County is vigilant in requiring the policies to be followed. 1-8 The Purchasing Policy and Procedure Manual has been revised numerous times to provide a clear and concise document. The Purchasing Department will continue to remind all departments to review each purchase and ensure compliance with the policy. Additionally, to further implement internal controls the Purchasing Department will review each agenda item prior to BOCC action, and will stricdy enforce those policies as set forth in the Monroe County Purchasing Policies and Procedures, by developing a facesheet/ checklist as part of the review process which will specifically address purchases that do not fall into the normal policy guidelines, i.e. Piggy-backing, Sole Source, and Waivers. The checklist will address the documentation required to be included with the purchase order, contract or agenda item summary. This should provide a clear support trail in a written format as recommended. 17 B. SOLE SOURCE PROCUREMENT - FIRE RESCUE DEPARTMENT 9. In December 2005, the Fire Rescue Department purchased 5 MSA Evolution 5200 Thermal Imaging Cameras and accessories from Ten-8 Fire Equipment, Inc. at a purchase price of $43,988 as a sole source exception in violation of Monroe County Purchasing Policy. Findiqg; The Fire Rescue Department purchased these cameras and accessories for $43,988 citing they wanted to maintain uniformity throughout the fire stations for reasons such as personnel training and familiarity, and obtaining servicing and parts. See Exhibit U - Agenda Item for Board Approval. The Department used the sole source exception to waive the policy and procedures, but this purchase does not meet the definition of sole source according to Monroe County Purchasing Policy Chapter 7 A. This vendor may be the designated supplier of MSA Thermal Imaging Cameras to the municipal fire department market for the State of Florida, but the MSA Thermal Imaging Cameras are not the only thermal imaging cameras on the market. See Exhibit V - MSA documents and Thermal Image Vendor research. Since the cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. Recommendation; 1. The Fire Rescue Department should strictly follow the Monroe County Purchasing Policies and Procedures. 2. Sole source procurements are ones in which the needed commodity or service is only available from one source. There might be a need to recommend that a uniformity clause be added to the Monroe County Board of County Commissioners Purchasing Policy specifically for instances such as this. 10. In April 2004, the Fire Rescue Department purchased 47 Morning Pride protective ensembles from Fisher Scientific at a purchase price of $58,420 as a sole source exception in violation of Monroe County Purchasing Policy. Findiqg; The Fire Rescue Department used the sole source exception to waive purchasing policy and procedures to purchase these ensembles in the amount of $58,420. The board agenda item submitted by the Fire Rescue Department states, "Approval to waive purchasing policy and issue a purchase order to Fisher Scientific, sole source provider for Morning Pride protective ensemble products in the State of Florida." See Exhibit W - Agenda Item for Board approval. However, in Florida there are other distributors of protective ensembles such as Globe, Quaker, and Lions Apparel. The Department cited a 1998 study by the Monroe County Fire Chief's Association as the 18 SOLE SOURCE PROCUREMENT - FIRE RESCUE DEPARTMENT reasoning for purchasing the Morning Pride protective ensembles. See Exhibit X - Memorandums regarding Morning Pride PPE. This purchase does not meet the sole source exception stated in the Monroe County Purchasing Policy Chapter 7 A. Later in 2005, the Apparatus and Equipment Committee conducted a protective clothing recommendation study and recommended the Fire Rescue Department purchase Lions Apparel Protective Clothing Ensemble. See Exhibit Y - Monroe County Fire Rescue Protective Clothing Recommendation 2005. Since the cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. 11. In June 2005, the Fire Rescue Department purchased 44 Lion Apparel protective ensembles from Municipal Equipment Company, LLC at a purchase price of $59,312 as a sole source exception in violation of Monroe County Purchasing Policy. Finding: The Fire Rescue Department used the sole source exception to waive purchasing policy and procedures to purchase these ensembles at a cost of $59,312. The board agenda item submitted by the Fire Rescue Department states, "Approval to waive purchasing policy and issue a purchase order to Municipal Equipment Company, LLC, sole source stocking distributor of Lion Apparel's Janesville Brand of Turnouts in the State of Florida." See Exhibit Z - Agenda item for Board Approval. However, in Florida there are other distributors of protective ensembles such as Globe, Quaker, and Morning Pride. The Department used a 2005 evaluation of protective clothing from the Apparatus and Equipment Committee that recommended the Fire Rescue Department should purchase and distribute Lions Apparel Protective Clothing Ensemble. See Exhibit Y - Monroe County Fire Rescue 2005 Protective Clothing Recommendation. Even though the committee recommended using this equipment the purchase does not meet the sole source exception stated in the Monroe County Purchasing Policy Chapter 7 A. Since the cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. Recommendation for 10 and 11: 1. The Fire Rescue Department should stricdy follow the Monroe County Purchasing Policies and Procedures. 2. If it is determined that there are other conditions under which purchases should be exempted from bidding requirements, the BOCC should consider whether or not it is in the best interest of the public to do so and amend the Motiroe County Purchasing Policies and Procedures accordingly. 19 SOLE SOURCE PROCUREMENT - PUBLIC WORKS DEPARTMENT 12. In November 2005, the Public Works Department purchased two new chillers for the Gato Building from Carrier Commercial Services at a purchase price of $151,088 as a sole source exception in violation of Monroe County Purchasing Policy. Findiqg: The Public Works Department used the sole source exception to waive purchasing policy and procedure to purchase these chillers at a cost of$151,088. The entire HVAC system was purchased and installed by Carrier Commercial Services. The original chillers were not "coastal conditioned" for our environment and were deteriorated to a point that required action. Since this was specialized equipment it was decided to keep with the same type of equipment and vendor. This does not meet the sole source exception stated in the Monroe County Purchasing Policy Chapter 7 A. The Public Works Department stated that if any other vendor modifies the system, substantial changes and costs would be required to accommodate a different system. See Exhibit AA - Agenda Item for Board Approval. Without a quote or opening this up to a competitive bid process, we don't know how much the cost would be to have another vendor install two new chillers. However, if the estimated cost was greater than $25,000.01, the Public Works Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BaCC to the lowest conforming bid by a responsible bidder. 13. In June 2005, the Public Works Department purchased a new chiller system for the Harvey Governrnent Center from Mcquay International at a purchase price of $98,304 as a sole source exception in violation of Monroe County Purchasing Policy. FindiQg: The Public Works Department used the sole source exception to waive purchasing policy and procedures to purchase this chiller system in the amount of $98,304. See Exhibit BB - Agenda Item for Board Approval. Since this was specialized equipment it was decided to keep with the same type of equipment and vendor. This does not meet the sole source exception stated in the Monroe County Purchasing Policy Chapter 7 A. The Public Works Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BaCC to the lowest conforming bid by a responsible bidder. Recommendation for 12 and 13: 1. The Public Works Department should strictly follow the Monroe County Purchasing Policies and Procedures. 20 SOLE SOURCE PROCUREMENT - PUBLIC WORKS DEPARTMENT County Administrator's Response: 03) Sole Source Procurement (5 findings) Chapter 7-A, sole source purchases of commodities and services may be exempted from formal competition if under $25,000 by written justification from the requesting department of the following conditions: 1. The public emergency for the requirements will not permit a delay resulting from competitive solicitation. 2. All Single Source purchases are subject to approval by the BOCC, County Administrator or Director of OMB/Purchasing at the authorized level of authority. The OMB/Purchasing Section must in all cases evaluate the request for such commodity, service or source. Any waiver of competition in a specific instance shall not serve to waive competition of future purchases of a similar or exact nature. 9-13 Findings 9 thru 13 exhibited incorrect sole source procurement whereby the cost of purchasing goods and services through a single source exceeded $25,000, and there were other vendors that could have supplied the needed good or service. The Purchasing department is considering revising chapter 7-A sole source to include a uniformity clause, and is consulting with the County Attorney to consider other changes needed such as wording for procurement of commodities and services from a sole source in excess of $25,000 without formal competition, if applicable, and or if it is in the best interest of the County. The County Attorney has acknowledged that a change to the sole source exceptions, particularly for commodities and services exceeding $25,000 is extremely important. Although written justification was provided in all of the cases cited, and ultimately were approved by the BOCC, County Administrator, or the Director of purchasing; the policy clearly needs revision in this area if we are to reduce the number of times the purchasing policy is waived. 21 C. STATE CONTRACT PROCUREMENT - PUBLIC WORKS DEPARTMENT 14. In March 2005, the Public Works Department purchased a 2005 Ford F-550 from the Florida Sheriffs Association and Florida Association of Counties vehicle/equipment bid contract 04-12- 0824 at a purchase price of $39,262 as a state contract in violation of Monroe County Purchasing Policy. Finding: The Public Works Department purchased the Ford F-550, at a cost of $39,262 under the assumption that this was a state contract. See Exhibit CC - Agenda Item for Board Approval. The Florida Sheriffs Association and Florida Association of Counties bid contract is not a state contract. The Florida Sheriffs Association conducts statewide competitive bids for vehicles. According to the Monroe County Purchasing Policy dated May 2003, even if this was a state contract the County can not alter the terms and conditions of the contract. The vehicles come equipped as base units only. Any additional options that are required to the base unit need to be ordered through the manufacturer. For this truck the Public Works Department ordered $13,862 in upgrades and system and component options. See Exhibit DD - Bid 04-12-0824 Specifications and Invoice and Request to Purchase from Monroe County. According to Monroe County Purchasing Policy Chapter 7B, before any purchase is made through an existing state contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing state contract. If the goods or services are available from another vendor at a lower price than the price of the existing state contract, then the contract for the goods or services must be awarded to the vendor with the lower price. The truck was purchased by Board approval utilizing the state term contract exception. However, no documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. Since the estimated cost was greater than $25,000.01, the Public Works Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. Recommendation: 1. The Public Works Department should stricrly follow the Monroe County Purchasing Policies and Procedures. 2. If this was a valid purchase using the state contract procurement procedures, the contact with other South Florida vendors should be maintained in a written format and attached to the purchase order. This information maybe provided by the requesting department to the Purchasing Department for review or the purchasing staff may obtain it. The contract should be awarded to the vendor with the lower price. 22 STATE CONTRACT PROCUREMENT - PUBLIC WORKS DEPARTMENT County Arlministrator's Response: (0 State Contract Procurement (3 Findings) 14. Finding 14 cites the improper procurement of a vehicle as a state contract from the Florida Association of Counties vehicle/equipment bid contract #04-12-0824 in violation of the Monroe County Purchasing Policy Section 7-B. While it is true that The Florida Association of Counties is not a State Contract, as per the definition of a state contractor, the association does document that competition exists in the bids, for the base model truck, and allows for the a complete list of options that are included in the bid specifically to assist the buyer in adding optional equipment, and subtracting what is not desired in the base model. Although the recommendation specifies that the competitive bid process outlined in chapter 3 of the purchasing policy should be followed, we disagree with this recommendation as the purchase of vehicles using the Florida Sheriffs Association provides documentation of competition, and usually results in the lowest price for the County. The Purchasing department will ensure that the words "state vendor" do not appear in future agenda items whereby the purchase of vehicles uses The Florida Sheriffs Association Program. 23 STATE CONTRACT PROCUREMENT - SOLID WASTE MANAGEMENT DEPARTMENT 15. In April 2004, the Solid Waste Management Department purchased a Sterling Conventional Clam Truck and a Mo Trim Mower/Tractor through state contracts for a total price of $130,212 in violation of Monroe County Purchasing Policy. Finding: The Solid Waste Management Department purchased for Sterling Conventional Clam Truck and Mo Trim Mower/Tractor at a cost of $130,212. See Exhibit EE - Agenda Item for Board Approval. According to the Monroe County Purchasing Policy for state contract procurement procedures, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to detennine if the goods or services are available at a lower price than the price of the existing state contract. If the goods or services are available from another vendor at a lower price than the price of the existing state contract, then the contract for the goods or services must be awarded to the vendor with the lower price. No documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower pnce. Recommendation: 1. The contact with other South Florida vendors should be maintained in a written format and atrached to the purchase order. This information maybe provided by the requesting department to the Purchasing Department for review or the purchasing staff may obtain it. The contract must be awarded to the vendor with the lower price. County Administrator's Response: 15. Finding 15 cites the improper purchase of a Clam Truck and Mo Trim, through a state contract in violation of Chapter 7 -B State Contracts. Purchases over $25,000 from vendors holding current "State" and "GSA" contracts are exempted from the competitive bidding process. However, before any purchase is made through an existing contract, the Purchasing Director must first contact other South Florida vendors in order to detennine if the goods and services are available from another vendor at a lower price than the price(s) of the existing contract. If the goods and services are available from another vendor at a lower price than the price of the existing contract, then the contract for the goods and services must be awarded to that vendor. The goods and services sought may be purchased through the existing contract, if none of the other vendors contacted by the Purchasing Director offered the goods and services at a price lower than that of the existing state contract. No documentation was provided to the auditor to support the attempt of a search by the Purchasing Director to ascettain a lower price was offered by other South Florida Vendors. 24 County Administrator's Response (continued): The putchasing department will contact other vendors and document that such contacts have been made and attached to the putchase order for all "State" and "GSA" contracts. The putchasing policy will be revised to delete and reference to administrative instruction #4803, entitled Usage of S.N.A.P.S II (State Negotiated Agreement Price Schedule) as this program has been cancelled by the State of Florida as per the August 22, 2005 Memorandum from Thomas J. Willi, County Administrator, which cancelled the instruction. 25 STATE CONTRACT PROCUREMENT - COUNTY ADMINISTRATION DEPARTMENT 16. In November 2005, the County Administration Department requested approval of a consulting agreement with Langton Associates, Inc., under the state contract procurement exception, for assistance with obtaining governmental grants at a cost of $69,000. It was later determined that Langton Associates, Inc., did not have a state contract, but was a state registered vendor. The BOCC granted approval to waive Monroe County Purchasing Policy and Procedures and authorized execution of a Consulting Agreement between Monroe County and Langton Associates, Inc. This does not meet the state contract procurement exception and is in violation of Monroe County Purchasing Policy. Findi~: In November 2005, the County Administration Department initially received approval from the BOCC to have the County enter into a consulting agreement with Langton Associates, Inc. When the agenda item went before the BOCC it was thought that Langton Associates, Inc., had a state term contract, therefore the County Administration Department was utilizing the state contract procurement exception within the Monroe County Purchasing Policy. However, it was determined after the November BOCC meeting that Langton Associates, Inc., did not have a state term contract, but instead was a state registered vendor. In the December BOCC meeting, Tom Willi, County Administrator, addressed the BOCC to clarify the earlier representation to the Board and to have the BOCC waive Monroe County Purchasing Policy and Procedures and authorize execution of a Consulting Agreement between Monroe County and Langton Associates, Inc. The BOCC approved unanimously. Exhibit FF - Agenda Item for Board approval. Since the estimated cost was greater than $25,000.01, the County Administration Department should have complied with Monroe County Purchasing Policy Chapter 4B, Purchase of Professional Services - Methods of Acquisition. According to Monroe County Purchasing Policy Chapter 4B, "Because differences in price may only be a minor concern compared to qualitative considerations, professional services may be exempted by the BOCC from the competitive bidding process. Instead, professional services will be typically acquired through one of the following methods: 1. Competitive Selection and Negotiation... a.) Request for Qualifications (RFQ) is publicly announced. b.) Responding firms are ranked and may be required to make a public presentation to the BOCC. c.) The County will negotiate a contract with the firm selected by the BOCC. d.) The negotiated contract will be reviewed and placed before the BOCC for approval. 2. Requests for outside legal services will be referred to the County Administrator and the County Attorney for review and comment as to whether said services are necessary and/or appropriate. Requests for outside legal services may be exempted from formal competition by the BOCC at the request of the County Administrator of County Attorney." 26 STATE CONTRACT PROCUREMENT - COUNTY ADMINISTRATION DEPARTMENT Recommendation: 1. The County Administration Department should strictly follow the Monroe County Purchasing Policies and Procedures. Coun~ Administrator's Response: 16. Finding 16 cites the County Administration Department requested approval of consulting agreement with Langton Associates, Inc. under the state contract procurement exception, for assistance with obtaining government grants at a cost of $69,000. While it is true that Langton originally led the county to believe it was a State Contract, further investigation with the company revealed that it was just a state registered vendor, and did not have a state term contract. This was not a deliberate attempt to mislead the BOCC into approving a contract that was not acquired through the regular purchasing policies; rather it was an error in communication. Lisa King of Langton & Associates was contacted numerous times and asked for the state contract number. The number she believed to be the state contract number was just her state registered vendor information. Once it was realized by County staff that there was no state contract, the item was taken back before the BOCC at the next meeting and asked to have the purchasing policy waived. In the future, the purchasing department by way of a newly developed checklist/ facesheet will be able to stay within Monroe County Purchasing Policy 4-B, since according to that policy differences in price may only be a minor concern compared to qualitative considerations. Professional services may be exempted by the BOCC for competitive bidding process, but are typically selected by way of a Request for Qualifications, which is publicly announced. The purchasing department will ensure that professional services are procured in accordance with policy 4-B. 27 D. EMERGENCY PROCUREMENT - PUBLIC WORKS DEPARTMENT 17. In May 2005, the Public Works Department issued a purchase order to Florida Keys Electric, Inc., for the replacement of the automatic transfer switch at the Key West Courthouse at a purchase price of $52,366 in violation of Monroe County Purchasing Policy. Findi~: On March 21, 2005, the Public Works Department held a walk through at the Key West Courthouse with two contractors so they could submit a quote for the replacement of the existing automatic transfer switch. On April 11, 2005, Florida Keys Electric, Inc. submitted a quote of $52,366. See Exhibit GG - Quote and Agenda Item for Board Approval. According to the Monroe County Purchasing Policy dated May 2003, this project should have gone through the competitive bidding process. The Department wanted this completed before hurricane season. According to Carlos Victores, Purchasing Supervisor, for bids under $500,000 vendors have 21 days to send their bids into the Purchasing Department, so there appears to have been enough time for this to go through the competitive bidding process. Since the estimated cost was greater than $25,000.01, the Public Works Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest confirming bid by a responsible bidder. From the walk through in March to when the purchase order was issued in May it appears there would have been enough time for this to go through the competitive bid process and the switch to be replaced before hurricane season started. Recommendation: 1. The Public Works Department should strictly follow the Monroe County Purchasing Policies and Procedures. County Administrator's Response: (0) Emergency Procurement (1 Findinil 17. Finding 17 cites the Public Works department issued a purchase order to Florida Keys Electric, Inc. for the replacement of the automatic transfer switch at the Key West Courthouse in violation of the Purchasing Policy. Exhibit GG, the agenda item summary, describes the purchase as being done for emergency purposes before hurricane season. The purchasing Policy does not currently have any specific wording on procurement policies during an emergency. The Policy will be amended to include procurement policy guidelines in the event of an emergency, what constitutes an emergency, and how long these emergency procurement policies may stay in effect. 28 E. OTHER PROCUREMENTS - FIRE RESCUE DEPARTMENT 18. In March 2005, the Fire Rescue Department asked the BOCC to waive the purchasing policy requiring two or more written quotes for goods or services not to exceed $25,000 in cost and to enter into a contract with Advanced Data Processing, Inc., for approximately $24,000 a year. The total contract cost exceeds $25,001 and therefore violates Monroe County Purchasing Policy. Finding: The Monroe County purchasing policy for purchases from $10,000.01 - $25,000 is to have two or more written price quotes along with the County Administrator's approval. But this contract's term is for three years from June 1, 2005 through May 31, 2008, with the option to renew for two additional one-year periods. The effective cost of the contract is approximately $72,000 with two one-year option periods at approximately $24,000 a year. Ibis contract should have gone out for competitive sealed bid. See Exhibit HH - Agenda Items for Board Approval. Since the estimated cost was greater than $25,000.01, the Fire Rescue Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest confinning bid by a responsible bidder. OTHERPROCUREMENTS-BOCC 19. In April 2002, the BOCC signed a contract for web posting services with Advanced Data Solutions, Inc., for an amount not to exceed $24,500 a year. In March 2003 and February 2004 the BOCC signed additional one year contracts for the same services and terms. See Exhibit II _ Agenda Items for Board Approval. Findi~ According to Monroe County purchasing policy Chapter 2, for purchases from $10,000.01 - $25,000 is to have two or more written price quotes along with the County administrator's approval. The County administrator's approval was noted, but there was not two (2) or more written price quotes for any of years the BOCC signed off on the contracts. The price quotes should be maintained in a written format and attached to the BOCC agenda item surnrnary so the Board can see these quotes were obtained before they sign off on any contracts. These quotes maybe provided by the requesting department to the Purchasing Department for review or the purchasing staff may obtain them. The contract should be awarded to the vendor with the lower price. 29 OTHER PROCUREMENTS - BUILDING DEPARTMENT 20. From November 2001 through July 2004, the Building Department had Advanced Data Solutions, Inc., scanning and indexing building permit files for a cost of $199,073 for the period. Findiqg: The Building Department did not obtain a contract for the services that Advanced Data Solutions, Inc., was performing for them. They would submit an audit slip with an invoice attached for payment. There were 41 payments made during that time frame with most of them being less than $10,000. See Exhibit JJ - Spreadsheet on Payments to Advanced Data Solutions, Inc. Monroe County's purchasing policy for purchases from $5,000.01 - $10,000 is to have 2 or more written price quotes along with the Division Director's approval. The Division Director's approval was noted, but there were not two (2) or more written price quotes for any of the invoices that were submitted for payment. Since the estimated cost of this project was greater than $25,000.01, the Building Department should have complied with Monroe County Purchasing Policy Chapter 3, Competitive Bid Process. The award of bid is made by the BOCC to the lowest conforming bid by a responsible bidder. With the award of a bid, the Building Department should have received a contract from the vendor and with the BOCC approving the contract a purchase order should be created in order to encumber the funds. OTHER PROCUREMENTS. BOCC 21. In 2005 the BOCC approved two professional services agreements with Advanced Data Solutions, Inc. Contract #101-555-2565 is for IT consulting and services for the development and implementation of the Sterling core competencies throughout all departments within the government of Monroe County, at a cost of $210,652 for a four-year period. Contract #101-555- 2567 is for IT consulting and services throughout all departments within the government of Monroe County at a cost of $192,408 for a two year period with an option to renew up to an additional two years. See Exhibit KK - Professional Service Agreements with Advanced Data Solutions, Inc. Finding: The rates for certain tasks to be performed by Advanced Data Solutions, Inc., according to the professional service agreements with Monroe County did not agree with rates for their state term contract. The County Attorney has rewritten these professional service agreements to agree with the rates according to the state term contract. These new agreements were approved by the BOCC at the April 19th board meeting. 30 OTHERPROCUREMENTS-BOCC According to Monroe County Purchasing Policy Chapter 7B, before any purchase is made through an existing state contract, the Purchasing Director must first contact other South Florida vendors in order to determine if the goods or services are available at a lower price than the price of the existing state contract. If the goods or services are available from another vendor at a lower price than the price of the existing state contract, then the contract for the goods or services must be awarded to the vendor with the lower price. The Advanced Data Solutions, Inc., professional service agreements had Board approval utilizing the state term contract exception. However, no documentation was provided to the auditor to support that there was any attempt by the Purchasing Director to search for other vendors and their prices to ascertain that there were not other vendors in South Florida with a lower price. Recommendation for 18 through 21: 1. The respective departments and/or the BOCC should strictly follow the Monroe County Purchasing Policies and Procedures. County Administrator's Response: (E) Other Procurements (4 Findings) 18-21 Finding 18 tbru 21 cites violation of not having two or more written quotes of goods or services that exceed $25,000. In the future, the purchasing department by way of a newly developed checklist/ facesheet will be able to stay within Monroe County Policy 4-B, since according to that policy differences in price may only be a minor concern compared to qualitative considerations. Professional services may be exempted by the BOCC for competitive bidding process, but are typically selected by way of a Request for Qualifications, which is publicly announced. The purchasing department will ensure that professional services are procured in accordance with policy 4-B, and is available to review and instruct all county departments about purchasing policy and procedures. 31 VI. SUBSEQUENT EVENT The County's auditors Cherty, Bekaert & Holland, Certified Public Accountants issued an Independent Auditors' Management Letter for the fiscal year ended September 30, 2005, in which they commented on the County's purchasing policies. According to the Management Letter, "purchasing policies are established to promote accountability, to obtain the most value for goods and services purchased by the County, and to maintain appropriate internal controls to ensure the County is being a responsible steward of the taxpayer's funds. In reviewing the minutes of the Board of County Commissioners during the current year, we noted numerous waivers of the County's purchasing policy, even when the County was not in an emergency situation as defined by Monroe County Code Section 2-541 Competitive Bidding Procedures Section (k)(1) due to the recent hurricanes." The auditors recommended, "the Board consider revising the purchasing policy regarding procedures for emergency situations. Further, the purchasing policy should be reexamined to limit the need for waivers to rare occurrences, preserving the integrity of the authorized policy." 32