Okaloosa County BOCC — July 6, 2016 — County Administrator's response to Inspector General Report — reading text

- A= County Administrator’s Office P e & State of Florida June 28, 2016 Sam Scallan Inspector General 302 N. Wilson Street Suite 203 Crestview, Florida 32536 OKALOOSA COUNTY’S RESPONSE TO THE REPORT ON REVIEW OF THE PRODUCTION AND PRINTING OF OKALOOSA COUNTY’S 2015 VISITOR’S GUIDE The County is in receipt of the Report on Review of the Production and Printing of Okaloosa County’s 2015 Visitor’s Guide (the “Report™) prepared by the Clerk of Court Inspector General. Please find the County’s response to the findings and recommendation contained in the Report. Review Committee and the Sunshine Law FINDING: Board appointed review committees, such as the one established to review RFQ submissions, makefrreeom—m%datie1—1s%e4he436arekan&a&wchfirvconductingthemubh’c% business, subject to Florida’s Sunshine law. In discussions with the Purchasing Department Manager, she indicated that the meeting of the Board appointed evaluation committee was not advertised and minutes were not kept. This is contrary to both the Board approved Purchasing Policy and Florida Sunshine law. RECOMMENDATION: We recommended the Purchasing Department ensure that meetings of the evaluation committee are conducted in accordance with County policy and the Sunshine Law by providing notice of the meeting, opening it to the public and taking minutes. RESPONSE: The County agrees with this recommendation. This was an isolated incident and the Purchasing Department recognizes that review committee meetings must comply with the Sunshine Law and County Purchasing Manual. Although the Purchasing Department historically maintained logs of solicitations submitted to the County, such logs failed to include a time entry. The Purchasing Department has since created a more detailed log, which now requires the signature of a Purchasing Department employee, the vendor submitting the solicitation, and the time the submittal is received by the County. Okaloosa County Administration Building 1250 N Elgin Parkway. Srrite 102 Shalin: v, Florida 32579 (850) 651-7515 « FAX: (850) 651-7551 e-mail: jhofstaidzeco.olkaloosaflus Bid Award and Permission to Negotiate FINDING: The TDD director placed an item on the agenda for the Board meeting held July 1, 2014, regarding the recommendation of the selection committee. While the Board Purchasing Policy permits the requesting department to prepare an executive summary of a proposed purchase that defines the scope of work and justification, it is silent as to who should present the results of the selection committee’s ranking. RECOMMENDATION: We recommend that procurement matters be presented by the Purchasing Department, especially in a case where the department director is a member of the selection committee. This point gets to the heart of the issue of independence and transparency in county procurement matters both in perception and fact. We recommend the county policy be clarified as related to who presents a recommendation to the board. RESPONSE: The County generally agrees with this recommendation. However, depending on the complexity of the goods/services being procured, it may be more appropriate for the requesting department, as the subject-matter expert, to submit and present the request to the Board. No Contact Clause FINDING: The No Contact provision in the RFQ is different than that contained in the Board’s Purchasing Policy and is unclear as to when the no contact period commences. We noted an email between a prospective bidder and the TDD director (a member of the bid evaluation committee). In that email the bidder is requesting to submit the bid two days after the bid deadline. The TDD director responded to the bidder by email and instructed the vendor to submit the proposal late. While such correspondence between a member of the evaluation team and a prospective bidder does not violate the policy as written, we believe that it does not fulfill the intent of the policy. The vendor was later notified by a member of the County’s Purchasing Department that the bid would be rejected for failing to meet the bid deadline. While the County Purchasing Department has a clear understanding of the intent and purpose of such a policy, the policy as written, is ineffective. ' RECOMMENDATION: We recommend that the Purchasing Policy be amended to reflect its intended purpose. RESPONSE: The County agrees with this recommendation. The County will review the Purchasing Manual and consider revisions thereto. Bid Negotiations and Contract Award FINDING: The TDD director indicated that he personally conducted negotiations with the vendor in order to arrive at the terms, conditions, specifications and price of the publication. The Board approved the contract award and a contract was entered into between the Board and Life’s a Beach Publications, LLC on August 12, 2014. However, there are no minutes or record of negotiations of the terms, conditions and pricing with the vendor. This is contrary to the request submitted to the Board and disregards direction given by it. In addition, failure to maintain records of this meeting is contrary to the requirements in the Florida law requiring a record be kept of such negotiations and those records be made public upon award of the bid. RECOMMENDATION: To strengthen the centralized procurement functions of the County, we recommend the Purchasing Department oversee the contract negotiation process. RESPONSE: The County agrees that the Purchasing Department should oversee the contract negotiation process, but disagrees that negotiations between the TDD Director and vendor are subject to Sunshine Law. The Florida Supreme Court has considered this issue and determined that negotiations as to the terms of a specific contract are not subject to the Sunshine Law nor are records of such negotiations required to be maintained. See Sarasota Citizens for Responsible Government v. City of Sarasota, 48 So.3d 755 (Fla. 2010). The County strongly disagrees with the Inspector General’s interpretation of Florida law. Contract Constitutes Entire Agreement FINDING: Section 14 of the LABP contract states the contract constitutes the entire agreement and that it may not be changed, modified or supplemented in any way except by an instrument in writing executed by both the contractor and the County; however, the TDD director negotiated and authorized a change to the visitor’s guide for an additional cost of $2,200.00 and directed one of his staff to pay for it with her p- card. RECOMMENDATION: The TDD Director should ensure compliance with both county policies and applicable contract terms. In addition, to effectively track all expenditures under a contract we recommend that any changes to the contract be memorialized through an amendment to the contract. RESPONSE: The County agrees with this recommendation. The County will review the Purchasing Manual and consider revisions thereto. Contract Awarded for Additional Services not Included in Original Bid FINDING: The 6-page flyer included in the visitor’s guide was outside the scope of work authorized by the Board in the original RFQ. Further, the delivery date of the publication under the RFQ was September 30; however, the contract awarded specified a delivery date of November 30. Although the resulting contract was approved by the Board we do not know what effect, if any, such changes may have had on proposals submitted by other prospective vendors had they been given this option. This point should be evaluated in context of the Purchasing Policy which states: “All bidders must be afforded equal opportunity to submit quotes and shall compete on equal terms.” RECOMMENDATION: We recommend that any material deviations from the scope of work authorized in the original RFQ should be subject to a competitive selection process. RESPONSE: The County agrees with this recommendation. The County will review the Purchasing Manual and consider revisions thereto. RFQ vs Bids FINDING: The County solicited prospective vendors for the design and production of the visitor’s guide through a Request for Qualifications. The Purchasing Manual does not address the process or procedures for issuing an RFQ. However, we did find authorization in the Purchasing Policy Manual for the use of a Request for Proposals. We noted that the RFQ sent out by the County contained detailed production and print specifications such that a prospective vendor could have provided a fixed price per guide; however, the County chose to seek Requests for Qualifications rather than a fixed price bid. In conversations with the TDD director he indicated the decision to solicit business through an RFQ and to exclude price as a consideration in awarding the work was his decision, the purpose of which was to ensure the price would not overly influence the outcome of the award. Subsequent correspondence from the County’s Purchasing Manager indicated that she conceded that competitive fixed price bidding may have been the more appropriate way of seeking the services requested by the department. RECOMMENDATION: To strengthen the centralized procurement function of the County, we recommend the Purchasing Department evaluate and make a determination as to the type of procurement method to be utilized by the requesting department. RESPONSE: The County agrees with this recommendation. However, the visitor’s guide could have been procured through a bid, RFP or RFQ. There is nothing in the Purchasing Manual or Florida law that prohibits the use of any one of these procurement methods. In this case, the TDD Director suggested the use of the RFQ process. The TDD Director and Purchasing Manager had lengthy discussions regarding the scope of services and the Purchasing Manager ultimately determined that an RFQ should be utilized to procure the design, production and printing of the visitor’s guide. The Purchasing Manual will be amended to address the RFQ process. Bids and Bid Specifications Obtained by Peter A Maver FINDING: We obtained copies of the bid specifications published by Peter A. Mayer, as well as copies of the bids received. The first thing we note is that Peter Mayer sought and received competitive bids which included prices. From this we can conclude that the advertising firm was confident they could define the scope of work in sufficient detail to enable competitive bidding. RECOMMENDATION: We recommend the County seek bids rather than RFP or RFQ when the scope of work or specifications of goods can be determined. RESPONSE: The County generally agrees with this recommendation. However, there are instances where price should not be the sole determining factor in awarding a contract, such as when procuring professional services. Comparison of Bid Specifications FINDING: The most significant difference noted between the bid specifications prepared by Peter A. Mayer to those subsequently issued by Okaloosa County is the fact Peter A. Mayer sought competitive bid pricing and the County did not. Rather, the County chose to seek Requests for Qualifications absent pricing. The firm which was ultimately awarded the design and printing contract by Okaloosa County was the high bidder by almost 400% when prices were quoted in 4 the bid issued by Peter Mayer. See following: Vendor Price (Based on 150,000 copies) Compass $ 60,000 Life’s A Beach $116,686 Avanti $ 32,895 RESPONSE: It is important to note that Peter Mayer’s bid issuance was flawed and may well have violated the County’s Purchasing Manual. The PMA Bid Specification requested bids for only developing the visitor’s guide. Printing costs were not specified so bidders had no idea whether to include printing costs or not. Also absent from the bid specifications was a requirement to sell ads only to Okaloosa based businesses unless otherwise approved. Additionally, there were concerns about the process employed by PMA in soliciting certain vendors. These were corrected by staff in the