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For some time now, D.C.’s Office of Contracting and Procurement has been treating a section of the local contracting and procurement law more like a guideline. In a motion for reconsideration filed with the Contract Appeals Board, the District acknowledges that OCP regularly lets slide contract bids that are technically deficient. The motion also asks for permission to continue bending the rules, at least for now.
In January, OCP illegally awarded a $77 million contract for a Medicaid management information system, according to a ruling from the Contract Appeals Board. OCP gave the contract to the technology firm DXC and rejected the offer from the current vendor, Conduent State Healthcare, LLC.
Conduent protested the award, arguing that DXC’s original proposal should have been rejected because it did not include the minimum 35 percent subcontracting set-aside for local businesses as required by law. The CAB agreed and ordered the District to terminate the contract.
Under D.C. procurement laws and regulations, bids on contracts worth more than $250,000 must include a subcontracting plan where at least 35 percent of the total contract goes to small local businesses. The law and the request for proposal for the MMIS contract state that bids must include a compliant subcontracting plan or they will be rejected. OCP’s contracting officers have been letting some bids slide on that requirement if “it’s in the best interest of the District,” the city’s motion says.
Conduent and DXC were the only two bidders on the MMIS contract, according to CAB records. A panel of technical evaluators awarded DXC a score of 60 and gave Conduent a 48. The contracting officer’s final score for each company, which includes an evaluation of price and technical capabilities, was 65.97 for DXC and 63 for Conduent.
But Conduent’s proposal included subcontracts with four small local businesses for 35 percent of the total contract. DXC’s original proposal listed local subcontractors but did not meet the 35 percent threshold.
Still, OCP’s contracting officer opted to negotiate with DXC based on both firms’ overall proposals, and allowed DXC to submit revised subcontracting plans at least three times throughout the negotiations.
Now, the District is asking the CAB to reconsider its ruling. The District, through the Office of the Attorney General, argues that OCP typically allows contracting officers to use their discretion to negotiate with vendors whose bids are technically incomplete. The contracting officers then seeks to bring vendors into compliance or obtain a waiver from the Department of Small and Local Business Development during negotiations.
“Requiring the District to immediately change its practices will likely jeopardize its ability to take advantage of what would have been the most advantageous proposals. … The established business community expected to be able to negotiate the value of subcontracting plans,” the District argues in its motion.
In its motion, D.C. says the CAB’s order will “significantly disrupt the District’s procurement plans and activities,” and asks the board to stay the ruling until the D.C. Council can clarify through potential legislation whose interpretation is correct: OCP or the CAB.
“The District believes the Council may well affirm through legislation the District’s longstanding practice,” the motion says.
But that’s news to At-Large Councilmember Robert White, who chairs the facilities and procurement committee that has oversight of OCP and believes the CAB’s interpretation of the law is correct.
“OCP’s practices are concerning, as they tend to weaken our subcontracting requirements and to allow for more waivers than may be necessary,” White writes in an email referring to subcontracting waivers. “The problems with the enforcement and application of the CBE program have been apparent for years. This is just one more example of how the program has failed to live up to its important purpose.”
White writes that he is willing to consider any contracting and procurement reforms that Mayor Muriel Bowser has in mind (though she has not yet publicly proposed any), “but I would be deeply concerned about any plan that tends to weaken our opportunities for small businesses even further.”
Bowser’s office did not immediately respond to an email, and a spokesperson for OCP declined to comment because the issue is still pending before the CAB.