Goal of Today’s Presentation Provide Overview of Sole Source Waiver Acquisition and Reporting Process, including recommendations from Board of Supervisors Budget Analyst Report. Present Annual Sole Source Documents Annual Board of Supervisors Report (Chapter 21) Annual Health Commission Request (Chapter 21.42) Present Requested Additional Health Commission Sole Source Information Discuss whether any changes to current process are needed 2
Citywide Sole Source Contract Waiver Criteria The City’s Administrative Code, Chapter 21.5, lists four acceptable justifications for sole source contracting approval (which translates to skipping the normal solicitation requirements): Good or Services are available from only one source Only one prospective vendor is willing to enter into a contract with the City Item has design and/or performance features that are essential to the Department and no other source satisfies the City’s requirements Licensed or patented good or service The Administrative Code also provides this caveat: Other- If justifiable under a different reason. 3
Additional DPH Only Sole Source Contract Waiver Criteria In 2006, the Board of Supervisors amended the Admin. Code Chapter 21 to add Section 21.42 authorizing the SF Health Commission to designate as sole source, professional services contracts for health, behavioral health and support services provided by non-profit organizations, when recommended by the Department. This legislation was originally enacted to cover a potential gap period between the expiration of an authorized contract term, and the completion of a new RFP process. Thus, this amendment is our legal authorization to contract during a period when we do not have RFP authorization. 4
Approval Process for Sole Source Waivers For requests falling under Admin Code Chapter 21.5, the Department submits a sole source waiver request to the Office of Contract Administration (OCA) describing the rationale for the sole source contract, and must receive OCA approval before proceeding with or entering into a sole source contract. For requests under Admin Code Chapter 21.42, OCA accepts the list of contracts approved by the Health Commission as justification for their approval of a sole source waiver request. Additionally, the department must submit an accompanying waiver of compliance with Administrative Code sections 12B (Equal Benefits) and 14B (Local Business Enterprise) from the Contracts Management Division (formerly the Human Rights Commission) if the proposed sole source vendor is out of compliance. 5
DPH Sole Source Reporting Per City Sunshine Ordinance, an Annual Report given to the Board of Supervisors listing all sole source contracts entered into during the past fiscal year under Chapter 21. Per Chapter 21.42 language, the Department has translated the requirements pertaining to Health Commission approval to be achieved via the following reporting/approval mechanisms: Monthly Health Commission Contract Report indicates the proposed use of a sole source within a contract listed for approval. Annual request of non-profit contractors potentially subject to Chapter 21.42 sole source approval 6
Board of Supervisors Budget Analyst Report on Non Profit Contracting (Nov. 2012) Recommendations Related to Use of Sole Source Waivers The Budget Analyst Report Made the Following Recommendations: Recommendation 1: Develop written policies and procedures for the use of sole source contracts to be approved by the Health Commission. These policies and procedures should specify the necessary justifications for use of sole source contracts in accordance with OCA rules and regulations. (DPH Agreed) Recommendation 2: Expand the current annual reporting to the BOS and Health Commission on use of sole source contracting to (a) include justifications for sole source contracts, and (b) distinguish between sole source contracts and programs awarded on a sole source basis within multi-program contracts. (DPH Agreed) Recommendation 3: Conduct the surveys that are required by Administrative Code Section 21.42 and report the results to the Health Commission by the start of FY 2013-14. (DPH Partially Agreed) 7
Budget Analyst Recommendation 1 Recommendation 1: Develop written policies and procedures for the use of sole source contracts to be approved by the Health Commission. These policies and procedures should specify the necessary justifications for use of sole source contracts in accordance with OCA rules and regulations. DPH Recommendation Comment: The Department will work with the Health Commission to develop written policies and procedures for their consideration and approval prior to April 30, 2014. Status: The Department will utilize today’s conversation and any subsequent needed to develop written policies and procedures that are requested beyond what is stipulated by the legislation. 8
Budget Analyst Recommendation 2 Recommendation 2: Expand the current annual reporting to the BOS and Health Commission on use of source contracting to (a) include justifications for sole source contracts, and (b) distinguish between sole source contracts and programs awarded on a sole source basis within multi-program contracts. (DPH Agreed) DPH Recommendation Comment: These enhanced reporting requirements will be included in the FY12-13 sole source contracting report. Status: (1) The format of the BOS report has been changed to add a Justification column, (2) the FY14-15 BOS report is being presented to the HC today to provide additional information, which identifies the actual sole source waivers requested to OCA (as opposed to the entire list of DPH non-profits), and (3) a new report is being presented today that distinguishes between contracts and programs with a sole source designation. 9
Budget Analyst Recommendation 3 Recommendation 3: Conduct the surveys that are required by Administrative Code Section 21.42 and report the results to the Health Commission by the start of FY 2013-14. (DPH Partially Agreed) What Survey are they talking about? Chapter 21.42 states that prior to the expiration of an existing contract, the Director of DPH will survey the availability of providers for the health and behavioral health services and support services required by the DPH where such services are (1) unique to the DPH, and (2) consistent with its mission and goals, and (3) require specialized knowledge, training, personnel, facilities or other resources that are known to be provided by a limited number of non-profit contractors. Based upon the results of such surveys, the DPH Director may recommend a sole source designation to the SF Health Commission for those services. 10
Budget Analyst Recommendation 3 DPH Recommendation Comment: City Attorney has verbally advised DPH that it is in compliance with the Administrative Code Section 21.42, as they believe that the administrative code allows for informal surveys conducted by those who specialize in overseeing the type of services or program in issue. As DPH program managers have strong connections to the community, they will be familiar with any additional contractors in the community that may arise, and therefore informal surveys are more applicable to DPH . In addition, DPH does regular Requests for Proposals which are publically posted and disseminated widely. DPH agrees to continue these activities. 11
In Conclusion Present the following to Health Commission: BOS Chapter 21. 5 Report (sole source requests in FY14-15) Health Commission Chapter 21.42 Report (FY14-15 non profit contracts and potential sole source categories) Health Commission Additional Information Requested Report (all actual sole source contracts and actual amounts and compared to overall DPH contracts and amounts) Discuss Do these reports meet the needs of the Health Commission in understanding both why we seek sole source waivers, and how we are using sole source waivers? Are there any concerns that the Health Commission would like addressed? 12
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