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An Audit Report on Selected Contracts at the Health and Human Services Commission

November 2018

Summary Analysis

The Health and Human Services Commission’s (Commission) award decisions for selected emergency purchases and single response awards did not comply with all applicable state and agency requirements that ensure the objectivity of its award decisions. However, the Commission’s award decisions for the selected competitive procurements tested were reasonably supported by its staff’s recommendations.

In addition, the Commission had weaknesses in certain contracting processes, including its monitoring of contracts, resolving vendor protests, complying with reporting requirements, complying with conflict of interest disclosure requirements, and establishing reasonable cost estimates for its procurements.

 Jump to Overall Conclusion

The Commission’s procurement process did not comply with certain requirements that help to ensure the reasonableness and necessity for the three emergency purchases tested. The Commission (1) did not ensure that one of the procurements qualified as an emergency purchase because it was not the result of unforeseeable circumstances, and (2) it did not document the reasons for selecting a vendor for the other two emergency purchases.

Jump to Chapter 1-A 

The Commission did not comply with certain requirements for single response awards. For the three procurements tested that received only one response, the Commission did not consistently (1) document that the single response award met solicitation requirements or (2) ensure that it notified vendors on the Centralized Master Bidders List of the opportunity to submit proposals. In addition, in some cases, the Commission accepted vendor proposals after the established due date.

Jump to Chapter 1-B 

For the three competitive procurements tested, the Commission based its award decisions on the recommendations made by its staff. In making those recommendations, staff from the Commission’s purchasing, procurement, and legal departments developed and submitted to the executive commissioner a memorandum for each procurement that described the evaluation process followed including a summary of the scoring and evaluation results. Auditors determined that the memorandums provided a reasonable justification for the recommendation made to the executive commissioner.

While the Commission’s award decisions were reasonable based on the recommendations that it received, auditors identified in a prior audit significant weaknesses with the Commission’s evaluation scoring process for 2 (67 percent) of the 3 competitive procurements tested. Those two procurements were for (1) business process redesign services and (2) the Provider Management and Enrollment System. For additional information about the evaluation scoring process for those two procurements, see An Audit Report on Scoring and Evaluation of Selected Procurements at the Health and Human Services Commission (State Auditor’s Office Report No. 18-038, July 2018).

Jump to Chapter 2-A 

For the two applicable competitive procurements tested, the Commission obtained required exemptions to allow the awarded vendors to host the information technology systems provided instead of using the State’s Data Center Services Program. Specifically, the Commission obtained exemptions for (1) its contract for the Aging Information Management System and (2) its contract for the Provider Management and Enrollment System.

Jump to Chapter 2-B 

The Commission monitored vendor compliance and processed payments for the contracts tested. However, for its contract for business process redesign services, (1) it did not develop an enhanced monitoring plan as required and (2) it did not consistently ensure the adequacy of contract deliverables before payment.

Jump to Chapter 2-C 

The Commission did not ensure that its legal department reviewed protests and drafted recommendation responses as required by its policies and procedures. The Commission reported to auditors that it received and resolved 11 vendor protests from January 2015 through April 2018. The Commission’s policies and procedures require staff from its purchasing and legal departments to resolve vendor protests.

Jump to Chapter 3-A 

The Commission did not consistently comply with certain reporting requirements for the applicable contracts tested. Specifically, the Commission:

  • Did not consistently report its contracts and amendments to the Legislative Budget Board as required.
  • Did not consistently obtain required disclosures of interested parties from awarded vendors prior to executing contracts.

Jump to Chapter 3-B 

The Commission had weaknesses in its processes for (1) ensuring compliance with statutory disclosure requirements related to potential conflicts of interest and (2) developing reasonable cost estimates for one of the competitive procurements tested.

Jump to Chapter 3-C 

Graphics, Media, Supporting documents

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