Administration Response to Procurement, Elections, Personnel/Employment, Facilities and Related Financial Matters Examination Report

1. Findings and Recommendations Status Comments Completion Date
6.1 Procurement Process Issues:
6.1.4 Vendor Contract Approval
The examination found that meeting procurement calendar schedules is hampered by
delays in contract approval after the vendor is selected by the Board. There are
generally no procurement timelines or deadlines for contract execution. Knowing they
were Board‐approved as the selection, vendors may take a harder stance in
negotiations that may cause a delay in contract execution. When multiple vendors are
approved by the Board without contract execution at the same time, negotiations with
each will likely result in different final execution dates. This will cause different
contract terms for the same procurement and the loss of the uniformity among the
selected vendors.
Recommendation
The Board should approve a vendor contract when it approves selection of the vendor.
The administration would present a contract that it has negotiated, approved and the
vendor has signed. The Board would approve the vendor and contract in the same
motion. This process provides a more effective and efficient procurement process.
Administration Response to Procurement, Elections, Personnel/Employment, Facilities and Related Financial Matters Examination Report
September 1, 2018The process of working a procurement through contract
negotiations and presenting to the Board an agenda item
to "approve" the award of a project has been
implemented. Working with client departments and the
Office of General Counsel, following the evaluation
process, negotiations with the highest ranked firm to
include price, deliverables and terms and conditions is
currently being done. This process will continue to be
improved to further reduce cycle times and help expedite
the procurement process. Where applicable, it may be
necessary to present an agenda item recommending
permission to negotiate and award as may be practicable
with regards to the specific good or service being
procured.
Completed
As public stewards, HCC has continually refined its procedures to improve continued protection from interference. The Special Counsel’s report was finalized on June 29,
2018 and published on the HCC Compliance and Ethics website available to the public. Since the publication of the report, the administration has continuously worked to
implement additional recommended strategies to strengthen all areas of the processes noted in the report. As support for maintaining a continued level of confidence and
trust, a detailed administration report responsive to the recommendations made in the Special Counsel’s Examination Report is provided below for public review. This
administrative report will be updated periodically as recommendations are completed.
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2. Findings and Recommendations Status Comments Completion Date
6.2.2 Barring Vendor, Subcontractor, Other Vendor Contractors
from Employing Relatives of Trustees and Employees
Past investigative reports have addressed allegations that vendors have employed HCC
officials or relatives. This employment can be in a business context unassociated with
HCC and, therefore, may not be subject to various current reporting requirements.
Even when HCC officials in a business relationship with a vendor had no involvement in
the vendor procurement with HCC, such circumstances give the appearance of
cronyism.
Recommendation
We recommend adoption of policies or procedures that prohibit vendors, their
subcontractors, and their affiliates from employing or contracting in any capacity with
HCC Trustees certain employees, and certain family members. The administration
should determine employees covered by this proposed recommendation taking into
account the level or category of employee which could influence the procurement
sought or obtained by the vendor. The administration should also determine the degree
of family relationship covered by this proposed recommendation in a manner similar to
the way it makes this determination for campaign contribution vendor reporting.
Currently the disclosure of interest statutes in Chapter 176 of the Texas Local
Government Code require disclosure of familial relationships but do not prohibit them,
and only clearly apply to direct contractors, which may exclude affiliates and
subsequent subcontractors. The current HCC policies prohibit contracting with vendors
that employ Trustees’ and senior staffs’ family member only in a capacity as an officer
or director.
September 1, 2018HCC has existing policies that address the matters noted
in the recommendation under Policy Section B, which is
specific to the Board of Trustees and Section C specific to
employees and suppliers. As part of the formal
solicitation process, numerous disclosures are secured
from suppliers as part of the certifications. In addition,
conflict of interest and financial interest disclosures are
also required. These disclosures require the ownership
interest of all parties associated with the awarded
supplier, including subcontractors. Conflict of interest
disclosures are required of all evaluation committee
members that participate in the evaluation and selection
process of a procurement under the Bylaws. Said
requirements apply to HCC staff that are at level E‐10 and
above under the Talent Engagement employee
classification, and include the entire Procurement
Operations Department staff. As part of our continued
effort to strengthen the process, we will continue to
monitor these processes to further strengthen and
improve current requirements.
Completed
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