Overview
MCCA could not demonstrate that it obtained original quotes for all purchases between $10,000 and $50,000. Specifically, MCCA could not provide evidence that it obtained three quotes, as required by MCCA policy, for 13 out of our sample’s 35 purchases (37%) between $10,000 and $50,000 that were not purchased through Operational Services Division–approved contractors (see table below).
Purchases without Original Procurement Documents
| Vendor Name | Amount | Purchase Date | Purpose of Procurement |
|---|---|---|---|
| Anixter Brothers, Inc. | $11,846.32 | June 5, 2019 | Electrical cable |
| Integration Partners Corporation | $26,255.24 | June 5, 2018 | Computer network software |
| Integration Partners Corporation | $14,595.00 | July 25, 2019 | Network configuration |
| Integration Partners Corporation | $35,216.00 | December 18, 2019 | Network equipment |
| Jackson Lewis, LLP | $39,721.12 | March 14, 2022 | Legal fees |
| John F. Bailey | $10,000.00 | January 30, 2019 | Consulting firm |
| John F. Bailey | $16,232.22 | March 18, 2019 | Consulting firm |
| Joseph’s Transportation | $19,065.00 | June 8, 2020 | Transportation services |
| Kaman Automation, Inc. | $13,500.00 | October 23, 2018 | Drive systems |
| Krokidas & Bluestein | $25,000.00 | December 8, 2022 | Legal fees |
| LexisNexis | $17,510.00 | August 1, 2019 | Law review subscription |
| Searchwide Minnesota, LLC | $35,000.00 | February 3, 2020 | Job recruiting service |
| Walker Parking Consultants | $20,120.00 | January 22, 2019 | Parking study of the MassMutual Center parking garage |
For an additional 4 out of these 35 purchases (11%), MCCA documented the amounts of the three quotes but did not retain the original quotes (see table below). As a result, we were unable to independently verify the value of the quotes stated by MCCA or the lowest cost vendor.
Purchases with Documented (but Not Retained) Quote Amounts
| Vendor Name | Amount | Purchase Date | Purpose of Procurement |
|---|---|---|---|
| Integration Partners Corporation | $40,823.20 | January 31, 2018 | Computer network software |
| Milton Cat | $39,500.00 | April 29, 2019 | Portable generator |
| Presidio Networked Solutions | $42,900.00 | June 13, 2019 | Information security strategy assessment |
| The Eagle Leasing Company | $11,778.00 | November 26, 2018 | Storage containers |
Circumventing the procurement process may result in, and itself may constitute, inappropriate or illegal behavior on the part of public officials. This matter has been referred to appropriate officials for further review. If MCCA does not obtain and retain original quotes from vendors, then it cannot be sure that it awards contracts to the most appropriate vendors at the lowest available cost. This also risks wasting public resources, elevates risk for potential bid splitting, increases the possibility of ethical violations, etc.
Authoritative Guidance
MCCA’s “Procurement, Purchasing and Payment Policy and Guidelines” states:
PURCHASES BETWEEN $10,000 - $50,000
- Competition is required during vendor selection. Written price quotations must be obtained from at least three (3) different vendors prior to an order being placed. . . .
- The contract will be awarded to the responsible vendor offering the supplies or services needed at the lowest prices.
- Buyers [in this case, MCCA] must keep a record of the names and addresses of all persons contacted for quotations, as well as the names of all persons who submitted quotations and the date and amount of each quotation. This information will be required as supporting documentation for the MCCA purchase requisition and the MCCA’s Finance Department.
Reasons for Issue
MCCA’s director of procurement told us that original quotes were not always retained because of the small size of the procurement department and workload demands. MCCA did not have sufficient monitoring controls in place to ensure that original quotes were obtained and retained from vendors.
Recommendations
- MCCA should retain evidence of all quotes received for purchases between $10,000 and $50,000.
- MCCA should implement sufficient monitoring controls to ensure that original quotes from vendors are obtained and retained.
- MCCA should modify its “Procurement, Purchasing and Payment Policy and Guidelines” to require compliance in full with Chapter 30B of the Massachusetts General Laws.
- MCCA’s board of directors should exercise appropriate oversight of MCCA management to ensure the agency’s compliance with procurement, ethics, and all other applicable laws.
Auditee’s Response
The MCCA acknowledges that it did not retain several of the “original quotes” for some purchases between 2018 and 2022. That said, in each instance mentioned the [Office of the State Auditor’s (OSA’s)] findings, the MCCA demonstrated that all quote information or business justifications were electronically recorded, even though the “original quotes” were not retained. In any case where quote information was not electronically recorded, the MCCA provided the [OSA] with a recorded business justification, such as Emergency Procurement or Sole Source, demonstrating why collection of quotes was not required for that particular procurement.
Vendor Name Amount Purchase Date Purpose of Procurement Category Anixter Brothers, Inc. $ 11,846.32 6/5/2019 Electrical cable Emergency procurement Integration PartnersCorp. 26,255.24 6/5/2018 Computer network software State blanket Integration Partners Corp. 14,595.00 7/25/2019 Network configuration State blanket Integration PartnersCorp. 35,216.00 12/18/2019 Network equipment State blanket Jackson Lewis, LLP 39,721.12 3/14/2022 Legal fees Sole source procurement John F. Bailey 10,000.00 1/30/2019 Consulting firm Sole source procurement John F. Bailey 16,232.22 3/18/2019 Consulting firm Sole source procurement Joseph’s Transportation 19,065.00 6/8/2020 Transportation services Electronic record of three quotes Kaman Automation, Inc. 13,500.00 10/23/2018 Drive systems Sole source procurement Krokidas &Bluestein 25,000.00 12/8/2022 Legal fees Sole source procurement LexisNexis 17,510.00 8/1/2019 Law review subscription Sole source procurement Searchwide Minnesota, LLC 35,000.00 2/3/2020 Job recruiting service Sole source procurement Walker Parking Consultants 20,120.00 1/22/2019 Parking study of Mass Mutual parking garage Sole source procurement Integration PartnersCorp. 40,823.20 1/31/2018 Computer network software State blanket Milton Cat 39,500.00 4/29/2019 Portable generator Electronic record of three quotes Presidio Networked Solutions 42,900.00 6/13/2019 Information securitystrategy Assessment Electronic record of three quotes The Eagle Leasing Company 11,778.00 11/26/2018 Storage containers Electronic record of three quotes In 2020, the MCCA transitioned to a new business system that automatically retains all original quotes and business justifications. The MCCA agrees that evidence of quotes and business justifications must be appropriately collected and retained.
Auditor’s Reply
The Office of the State Auditor seeks to verify procurements to original procurement documents for several reasons, including because not maintaining original records violates public records law, and because non-original records of the procurement documents could allow for abuse in the procurement process. Given its response and the new business system referenced above, we believe MCCA is taking sufficient steps to resolve this issue.
| Date published: | August 19, 2024 |
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