Instead of simply addressing the findings, CMS attacks the Auditor General’s operations starting on Page 19 of the CMS Response
CMS Response:
First, CMS did not use any of the firms listed in the finding to develop specifications. This is clear in the work papers (Meeting minutes, CMS and OAG: 12/20/04, 1/13/05, 1/20/05, 1/24/05) and it is clear in the RFPs and contracts themselves. Furthermore, although permitted to do so, the Department does not use contractors to develop specifications and then bid on the RFP for which they developed the specification.
Rather, as CMS has repeatedly stated and demonstrated, it used these firms to gather factual information that was included as background information in these RFPs?and which was shared with all other bidders and publicly disclosed. See the face sheets from each RFP. 2 This undisputable fact alone removes the stated basis for the finding and requires its removal. CMS is providing with this response an affidavit signed by the CMS Assistant Director that attests to the veracity of the Department?s claims. Second, although the use of these firms to collect data and identify opportunities for improvements within the organization is entirely permissible?and the auditors do not contend otherwise?the Department nonetheless went above and beyond any requirements to ensure that the procurement process for these contracts was transparent.
It required these firms to fully disclose the information they provided the State to their competitors, negating any de facto advantage in the procurement process. This transparency went beyond not only the requirements of the Procurement Code and Administrative Rules, but it exceeded National Association of State Procurement Officials Guidelines.
Moreover, the auditor?s assertion that CMS has not followed procurement ?best practices? is disingenuous and hypocritical. As part of the Legislative Audit Commission (?LAC?) ?Audit Review Program,? the Office of the Auditor General participates with certain accounting firms relating to their audit programs. Interestingly, the firms who participate in this Program receive an overwhelming number and amount of auditing contracts from the Auditor General.
Auditor Comment:
Comment 55: The finding acknowledges that using potential vendors to develop RFP specifications is permissible under CMS? procurement rules if the agency head determines in writing that it would be in the State?s best interest to accept a proposal from such a vendor, and if a notice to that effect is published in the Procurement Bulletin. 44 Ill. Adm. Code 1.2050 (i). The auditors were not provided with any such written determination by the Director of CMS, and no notice to that effect was published in the Procurement Bulletin. The auditors believe that the type of information provided by potential vendors constitutes ?specifications? as that term is defined in the Procurement Code, and that is the basis of our finding. Please see Auditors?Comment 50.
CMS continuing (If you look at the PDF’s you’ll see how this works):
While CMS has no reason to believe that these decisions were anything other than entirely proper — as were CMS? procurements — these actions are inconsistent with the auditors? statements in this finding.
Third, the finding omits the following, relevant facts:
? The finding is based on the statistically and otherwise invalid sample of 9 contracts as referenced in response to Finding 04-2. Thus, the finding excludes contracts, like the legal services efficiency contract awarded to Hildebrandt, in which one of the other bidders provided pro bono background information, but was not selected. It also omits the other efficiency contracts?not to mention both: (1) the 25 contracts the external auditors tested, but omitted from their report, and (2) the thousands of other contracts CMS awarded during the audit period?in which no contractor provided information. Thus, it is highly misleading for the finding to use this improperly selective group of contracts to tout percentage statistics that would only lead a
Auditor Responds:
Comment 56: CMS? response here reflects a fundamental lack of understanding about the Legislative Audit Commission process. The accounting firms listed in CMS? response attended LAC hearings and provided testimony pertaining to audits those firms had conducted as Special Assistant Auditors to the Auditor General. Such testimony is completely unrelated to our procurement process since the testifying firms are already under contract with our Office at the time their testimony is given. For additional information, please see Auditors?Comment 49.
CMS Response Continued:
reasonable reader to conclude that most of the Department?s contracts are awarded to vendors who have provided background information. It simply is not true.
? None (0%) of the selected contracts reviewed by the auditors involved a contractor winning a bid it wrote the specifications for, and
? None (0%) of all Department contracts involved such a contractor winning
such a bid.
There were multiple potential vendors who provided background information, and not all of them were selected for an award. This fact was conveniently omitted from the finding, including the table on page 20. (i.e. Procurement Assessment- BearingPoint, Accenture; Strategic Marketing- IEG, Promotion Group Central, Civic Entertainment Group, Sustain Communications, SponsorAid, The New England Consulting Group; Software Review- McKinsey, IBM; Server Consolidation- McKinsey, IBM.)
Auditor Comment:
Comment 57: The use of judgmental selection is consistent with generally accepted government auditing standards. In this audit, the auditors judgmentally selected large contracts related to CMS? efficiency initiatives. It was a deliberate process set forth in an audit program at the outset of the engagement. That audit program was discussed with CMS personnel at the audit entrance conference held on June 14, 2004, and a copy of the audit program was provided to CMS at its request. At the time these 9 specific contracts were selected for testing by the auditors, we had no idea what we would find. Somehow CMS seems to be saying that we purposefully selected contracts for which our findings would cast CMS in a bad light. While we certainly agree the
results of our testing are not favorable to CMS, the Department does not explain ? short of our being psychic ? how the auditors might have known which CMS contracts to select to achieve such a result.
I read one comment over at Capitol Fax by Ralph that it’s very strange that this is so political. Even DCFS under Edgar’s wasn’t this over th tope, but it becomes clear once CMS started trying to attack the Auditor, the Auditor realized what was going on and got his ducks in a row.
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