Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
OCTOBER 16, 2025
Subject
SUBJECT: AUDIT SERVICES BENCH
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to execute Modification No. 1 to Audit Services Bench Contract Nos. PS86611000 through PS86611007 (Attachment C) to exercise the first one-year option in an amount Not-To-Exceed $2,476,605, increasing the cumulative contract value from $7,142,240 to $9,618,845 and extending the period of performance from January 1, 2026 to December 31, 2026.
Issue
ISSUE
In October 2022, the Metro Board approved the establishment of the Audit Services Bench Contracts (Bench) for a combined total amount NTE $12,144,985 for a 3-year base term, plus two one-year options. The Bench provides Management Audit Services (MAS) with consulting and assurance services related to a broad range of audits and reviews, including as-needed staffing augmentation support and specialized audits.
Board authorization is requested to exercise the first one-year option to continue to provide specialized expertise and augmented audit services.
Background
BACKGROUND
The Bench was established to support MAS in conducting a wide range of specialized audits and reviews, including as-needed staff augmentation and subject matter expertise. It provides flexibility in bringing in external resources that supplement staff capabilities, enabling the delivery of the Board-approved audit plan by ensuring timely access to specialized expertise and augmented staffing resources. The initial contracts were structured with a not-to-exceed value and options to ensure continuity of audit services. Further background regarding the initial procurement, as well as the price analysis supporting the recommended option, is included in Attachment A. The requested modification, which is the first and only modification to date, is reflected in Attachment B.
Discussion
DISCUSSION
MAS is required to comply with Generally Accepted Government Auditing Standards (GAGAS). GAGAS has a due professional care standard which requires MAS to bring in outside experts to supplement staff when the area being audited requires technical or specialized skills that are not available within the department. Co-sourcing is typically used to supplement staff expertise with highly specialized audits that exceed internal capacity and/or resources. Outsourcing is used when the complexity of the audit or the specialized skillsets and/or capacity required are not available in-house. Specialized audits that generally fall under this requirement include information technology projects, including construction or operations projects, programs and/or processes. Other areas of work outsourced or co-sourced to expert firms include Call-for-Projects closeout audits, grant audits such as the State Transportation Improvement Program, as well as financial, compliance, and external audits of subrecipients, Metro, and other entities.
To meet these needs effectively, the Bench is divided into two disciplines, staff augmentation and subject matter expertise, based on the nature of the audits (Attachment C). The firms selected for each discipline reflect the specialized capabilities required for these types of audits.
To date, a total of 17 task orders have been issued against the Bench, for a cumulative total value of $6,200,181, or 87% of the total NTE amount of $7,142,240 for the initial 3-year base term. Currently, four of the eight firms on the Bench are certified as Small Business Enterprises (SBE), and task orders have been awarded to these firms in a cumulative amount of $5,620,561, or 91% of the total awarded value. Because the bench is subject to the Small Business Set-Aside Program, priority is given to SBE firms. As a result, three of the four non-small business firms have not been awarded any task orders to date.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
The recommendation does not impact the safety of Metro employees, passengers and/or customers.
Equity_Platform
EQUITY PLATFORM
Metro is committed to small business success and strives to provide a direct route for small businesses to work and grow with Metro. Each prime consultant has established distinct commitments for Small Business Enterprise/Disabled Veteran Business Enterprise (SBE/DVBE) participation. The bench currently includes eight prime consultants, four are SBE certified. To date, seventeen task orders have been awarded under this bench. The overall cumulative participation level across all bench participants is 76.14% SBE and 0% DVBE.
While each prime consultant also made an overall Disadvantaged Business Enterprise (DBE) commitment on this bench contract, the U.S. Department of Transportation has issued an Interim Final Rule (IFR) that makes changes to the DBE Program, including suspension of goals and enforcement, effective October 3, 2025. Metro is currently reviewing the IFR to identify necessary program and procedural changes to ensure full compliance. As such, while the DBE commitment is not a factor in the staff recommendation, there are 10 certified small businesses participating in this contract. This is noteworthy since small businesses are vital for the economy as they drive job creation, foster innovation, and strengthen local communities.
Vehicle_Miles_Traveled _Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide. These declining VMT trends are due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
As part of these ongoing efforts, this item is expected to contribute to further reductions in VMT. While this item does not directly encourage taking transit, sharing a ride, or using active transportation, it is a vital part of Metro operations, as the professional services provided through the Audit Services Bench support the agency's goal of promoting effective and efficient operations and continuous improvement within the organization. Because the Metro Board has adopted an agency-wide VMT Reduction Target, and this item generally supports the overall function of the agency, it is consistent with the goal of reducing VMT.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Financial_Impact
FINANCIAL IMPACT
Funding for FY26 is included in the department cost center budgets. Each task order awarded to a Contractor will be funded with the source of funds identified for the specific project. Recognizing the Bench option will continue into FY2027, the cost center manager(s) will be accountable for budgeting future costs.
Impact to Budget
The funding for the task orders is dependent upon the specific project.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
Approval of this item supports Metro Vision 2028 Goal #5: Provide responsive, accountable, and trustworthy governance within the Metro organization. The Audit Services Bench will enable MAS to conduct specialized and time-sensitive audits in a responsive manner, supporting the agency’s projects, programs, and initiatives.
Alternatives_Considered
ALTERNATIVES CONSIDERED
Two alternatives were considered. One alternative would be to hire additional full-time staff to perform the specialized audits. However, this alternative is not cost-effective because the volume of work fluctuates constantly, making this activity subject to periods of peak activity alternating with periods of low activity. Furthermore, some projects require various technical or specialized skills that are not readily available, as it is not practical to hire staff for each particular skill set. Another alternative would be to obtain the audit services through separate procurements. This is also not recommended, as this would prolong the procurement process, making it difficult to complete time-sensitive audits within the planned timeframe.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Contract Modification No. 1 to the Audit Services Bench Contracts Nos. PS86611000 through PS86611007 and continue to award individual task orders for audit services.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - Contract Modification/Change Order Log
Attachment C - Firms on the Audit Services Bench
Attachment D - DEOD Summary
Prepared_by
Prepared by: Monica Del Toro, Senior Manager, Audit (213) 922-7494
Lauren Choi, Senior Director, Audit, (213) 922-3096
Alfred Rodas, Senior Director, Audit, (213) 922-4553
Kimberly Houston, Deputy Chief Auditor, (213) 922-4720
Carolina Coppolo, Deputy Chief Vendor/Contract Management Officer, (213) 213-4471
Reviewed_by
Reviewed by: Sharon Gookin, Deputy Chief Executive Officer, (213) 418-3101
