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CONSUMER FINANCIAL PROTECTION BUREAU
1700 G ST NW, Washington DC 20552
March 18, 2013
Mr. Mark Bialek
Board of Governors of the Federal Reserve System and
Consumer Financial Protection Bureau
20th and C Streets, NW
Washington, DC 20551
Dear Mr. Bialek:
Thank you for the opportunity to review and comment on the Office of Inspector General's draft report entitled CFPB Contract Solicitation and Selection Processes Facilitate FAR Compliance, but Opportunities Exist to Strengthen Internal Controls. We have reviewed the report and concur with the recommendations.
The Consumer Financial Protection Bureau's (CFPB or Bureau) Office of Procurement was created to establish processes and execute contract actions to provide goods and services in support of the Bureau's mission. We are pleased that you agree that our office has established internal processes and procedures for contract solicitation and selection activities that are aligned with the Federal Acquisition Regulation (FAR). These include acquisition planning, market research, providing opportunities for contractors to compete for CFPB contracts, and conducting evaluations of contractor proposals. We also appreciate your recognition of our efforts in designating an advocate to promote competition for CFPB contracts as well as the implementation of several specific internal controls as listed in Table 1 of your report.
The contracts sampled for this report were awarded between October 1, 2010 and December 31, 2011. During this period, the Office of Procurement was developing while it was also responsible for the timely execution of essential procurement needs required for startup and implementation. In addition to a deputy, we were able to bring aboard a procurement analyst in June 2011 and two additional contracting officers in July 2011. Since that time, the Office of Procurement continues to create policies where needed in a continuing effort to improve our processes. Your report verifies that we have built a solid foundation upon which we can look for further opportunities for improvement.
David P. Gragan
Assistant Director for Procurement
Recommendation 1: Develop an internal policy describing how the CFPB implements the Federal Acquisition Regulation requirements pertaining to the agency's competition advocate.
We concur with this recommendation, while noting that progress has been made since the audit was conducted. The Office of Procurement takes competition very seriously as its promotion and practice allow the Bureau to receive the benefits of commercial market pricing and/or discounts for goods and services by allowing the vendor community to compete for CFPB business. Furthermore, it improves quality of service, enhances solutions, and promotes fairness and openness that leads to public trust. As the report notes, our office collects and evaluates competition data on a monthly and fiscal year basis through internal and external reporting methods. In fiscal year 2011, 86% of contract dollars were competed and for fiscal year 2012, 93% of contract dollars were competed. We have made progress toward completing a competition policy that will address the role of the competition advocate and the duties required in accordance with the FAR. Moving forward, competition reporting and activities will be explicit and aligned with the role of the competition advocate as defined by the FAR. Consistent with best practice as noted in your report, my Deputy Assistant Director for Procurement shall continue in the advocate role with support from my analyst team and staff assistance in order to carry out required duties.
Recommendation 2: Finalize, disseminate, and implement the Small Business Review Form to facilitate FAR compliance related to small business participation.
We concur with this recommendation, while noting that progress has been made since the audit was conducted. The Office of Procurement has approved and released a small business policy with a supplemental small business review form. The policy standardizes the usage of the review form to ensure coordination with the small business specialist and consideration of small businesses during acquisition planning. Since the inception of our office, we have considered small business participation in CFPB procurements as a planning priority. This is significant because during the review period for this report, the Bureau had not yet established its Office of Minority and Women Inclusion (OMWI) and did not have another inter-Bureau office advocating for small business participation. As a result, the Office of Procurement established a goal for small business participation to include specific socio-economic categories as defined by the FAR. 36% of contract dollars were awarded to small businesses in fiscal year 2011 and 27% were awarded in fiscal year 2012. We exceeded our goals for women and small disadvantaged (minority owned) businesses in both years.
Recommendation 3: Enhance CFPB Procedures to require documentation from the program official justifying urgent procurement requests.
We concur with this recommendation. As you note, the review period of your report was during our early implementation stages, which necessitated the need for expedited procurement processes in order to support the emergent and growing needs of the Bureau. We are pleased that you found these expedited awards compliant with the FAR. For the particular contract mentioned, the acquisition plan was not required at the time due to the dollar value, but was completed nonetheless to further outline planning decisions for the file. Also, while some competed actions were expedited through various means, there were no instances of limiting competition to a restricted number of sources per FAR section 6.3. Further, we have made progress in limiting expedited timelines since the audit was conducted. As the Bureau matures and our staffing plan is fully realized, our focus has been applied to enterprise-wide procurement planning across the Bureau. Coordination efforts have been conducted with other Bureau offices in order to ascertain procurement needs well in advance, which are tracked in a pre-award pipeline. This pipeline is now a part of our planning infrastructure and identifies all procurement actions in progress along with planned milestone dates from solicitation release to award. Although we have taken great care in ensuring our procurement processes (to include expedited awards) are in conformance with the FAR, our pipeline infrastructure puts us in even a better position to plan and solicit for procurement actions without the use of expedited timelines. Nonetheless, we will also institute an "Expedited Need" request form, which will be reviewed for approval by the Office of Procurement. The form will require justification of expedited processing times when such a case exists.