Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
OCTOBER 20, 2021
Subject
SUBJECT: AUDIT SERVICES BENCH AMENDMENT
Action
ACTION: APPROVE CONTRACT MODIFICATION
Heading
RECOMMENDATION
Title
CONSIDER:
A. AUTHORIZING the Chief Executive Officer to execute Modification No. 4 to Contract Nos. PS36627000 through PS36627004, PS36627006, PS36627008, PS36627009, PS36627011 through PS36627018 to exercise the second, one-year option, extending the contract term from January 1, 2022 to December 31, 2022; and increasing the total authorized not-to-exceed amount by $2,288,000 from $9,152,000 to $11,440,000; and
B. AWARDING AND EXECUTING task orders for an aggregate not-to-exceed amount of $11,440,000.
Issue
ISSUE
In May 2017, Metro Board of Directors (Board) approved the establishment of Audit Services Bench contracts (Bench) for a combined total amount not-to-exceed $11,440,000 for a 3-year base term, plus two, one-year options. The Bench provides Management Audit Services (MAS) with consulting and assurance services relating to a broad range of audits and reviews including staffing augmentation support as-needed; and provides supports for specialized audits.
Board authorization is requested to exercise the second one-year option to continue to provide specialized expertise and augmented audit services.
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 which exceeds internal capacity and/or resources. Outsourcing is used depending on the complexity of the audit or if the specialized skillsets and/or capacity is 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 State Transportation Improvement Program including financial, compliance and external audits of subrecipients, Metro, and others.
To date, a total of 66 task orders have been issued against the Bench, for a cumulative total value of $6,636,575.04, or 72.5% of the total not to exceed amount of $9,152,000 for the initial 3-year base term and first year option. Currently, 11 of the 16 firms on the Bench are certified as disadvantage business enterprises (DBE) and small business enterprises (SBE) and task orders have been awarded to the firms in a cumulative amount of $4,873,075.50 or 73.4% of the total awarded value. A list of the awarded task orders is provided as Attachment D.
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 successes and strives to provide a direct route for small businesses to work and grow with Metro. The Bench contract consists of 16 firms, 11 of which are SBEs, which supports Metro's Small Business (SB) Prime Program by providing opportunities for small businesses to perform work with Metro.
Work under the bench is authorized through the issuance of individual task orders. Task orders are competed among firms under the bench subject to the Small Business (SB) Prime (Set-Aside) Program requirements.
To date, sixty-six (66) Task Orders have been awarded to ten (10) out of the 16 primes on the bench. Sixty-one (61) of the Task Orders were awarded to self-performing SB Primes (Set-Aside). Task orders have been primarily awarded to the DBE and SBE firms. Each bench participant exceeded the 27% SBE and 30% DBE commitment (currently 70.2% SBE and 89.1% DBE participation). Please refer to Attachment E for additional details
Financial_Impact
FINANCIAL IMPACT
Funding for FY22 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 FY2023, 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.
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 considered cost effective, because the volume of work is constantly changing making this activity subject to peak periods alternating with periods of low activity. Furthermore, some projects require various technical or specialized skills that are not available since it is not practical to hire staff for each of the particular skillsets. Another alternative would be to obtain the audit services as separate procurements. This also is 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 approval by the Board, staff will execute Contract Modification No. 4 to the Audit Service Bench contracts and continue to award individual task orders for audit services.
Attachments
ATTACHMENT
A. Procurement Summary
B. Contract Modification/Change Order Log
C. Firms on Audit Services Bench
D. List of Task Orders and Values
E. DEOD Summary
Prepared_by
Prepared by: Monica Del Toro, Audit Support Manager, (213) 922-7494
Reviewed_by
Reviewed by: Shalonda Baldwin, Executive Officer, Administration, (213) 418-3265
Debra Avila, Chief Vendor/Contract Management Officer, (213) 418-3051