A Performance Audit
An Audit Report on Selected Capitol Complex Project Contracts at the Texas Facilities Commission
The Texas Facilities Commission (Agency) generally complied with contract planning, procurement, formation and oversight requirements for the Capitol Complex Project (Project) contracts and contract amendments audited. While auditors did not identify potential conflicts of interest for the procurements tested, the Agency should strengthen certain processes and controls to ensure compliance with conflict of interest requirements, as well as compliance with nondisclosure, reporting, and vendor insurance requirements. In addition, the Agency should strengthen its information technology controls.
The 84th Legislature authorized $581.2 million in funding for Phase I of the Project. Phase I includes two office buildings; a three-block Texas Mall, which will be a tree-lined walkway on Congress Avenue between 16th Street and Martin Luther King Jr. Boulevard; a five-level underground parking garage under the new Texas Mall; and renovations and expansion of the existing chilled water plant and new utility tunnels. At the completion of Phase I, the new buildings and parking garages will be capable of accommodating approximately 3,600 employees and approximately 3,800 parking spaces. For this report, auditors reviewed all or portions of the Agency’s contracting processes for six procurements. Those procurements resulted in five contracts and five contract amendments.
The Agency had sufficient controls in place to help ensure compliance with most procurement requirements. Specifically, the Agency advertised the solicitations tested in accordance with Texas Government Code, Chapter 2155; it ensured that each proposal included all of the information as required by the solicitation before it accepted the proposal; and it implemented consistent evaluation procedures. The Agency also complied with the statutory requirements for vendor selection for three of four procurements tested. The Agency purchaser responsible for overseeing the procurements tested was a Certified Texas Procurement Manager as required by statute.
The Agency Did Not Consistently Report Contract Information to the Electronic State Business Daily as Required
The Agency did not fully comply with all statutory requirements to report information to the Electronic State Business Daily for Cobb-Excavation A/E, Balfour-CMA, and contract amendment No. 5 for Cobb-Site Services. Not posting the award of services or reporting incomplete information about an award to the Electronic State Business Daily system reduces the transparency of the procurement process.
The Agency did not ensure that Commission members, evaluation team members, and vendors consistently complied with applicable conflict of interest and nondisclosure requirements. It should strengthen its processes to ensure that (1) Commission members disclose potential conflicts of interests as required, (2) all evaluators sign the required forms in a timely manner, and (3) vendors complete all required Certificates of Interested Parties.
For four of the five procurements tested for insurance coverage, the Agency did not ensure that each vendor met all minimum liability insurance coverage requirements in the contracts and contract amendments. Specifically, while Balfour-CMA had the insurance coverage required by the contract, the Agency did not ensure that the other four procurements met 20 (33.3 percent) of 60 minimum liability insurance coverage contract requirements. The Agency verified that Zachry-Excavation CMR obtained the bond coverage for the approved phase as required by the contract.
The Agency Had Monitoring Processes to Help Ensure That It Received Deliverables and Processed Payments as Required; However, It Should Ensure That All Payment Reviews Are Documented
The Agency had monitoring processes to help ensure that it received deliverables as required by the contracts and complied with most payment requirements. However, it did not ensure that certain payments reviews were documented.
The Agency generally reported required contract information to the Legislative Budget Board; however, the Agency should strengthen its processes to ensure that it reports all information timely and reports vendor performance information to the Comptroller of Public Accounts as required.
The Agency Complied With Most Requirements for Contract Planning and Formation; However, It Should Strengthen Some Aspects of Those Processes
The Agency had processes to help ensure that it performed most required activities related to contract planning and formation. However, the Agency should strengthen its processes to ensure that (1) its policies and procedures address all applicable areas, (2) it has support for and consistently develops cost estimates, and (3) its contracts include all required vendor affirmations.
The Agency should implement and strengthen certain controls over three of the four information technology systems that support the contracting processes audited to help ensure compliance with applicable rules and Agency policies and procedures.
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