Special Report on the Department of Citywide Administrative Services' COVID-19 Emergency Procurements (FK21-087S)
- Date
- 2023-02-07
Summary
Special Report FK21-087S, issued February 7, 2023 by the Office of the New York City Comptroller under Comptroller Brad Lander, reviews the Department of Citywide Administrative Services' COVID-19 emergency procurements during Fiscal Year 2020. The report states that between March 1, 2020, and June 30, 2020, DCAS initiated procurements with an initial value totaling $1,539,496,345. It finds that DCAS generally documented that procurements were necessary, but did not consistently ensure responsible vendors, document price analysis, obtain or document prepayment approvals, or maintain supporting documentation. For 11 of the 59 sampled procurements, totaling $226,369,500, the auditors found no documentation that background checks were performed. The report includes recommendations and DCAS's written response, which disagrees with the recommendation on rules for advance payments.
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“Special Report on the Department of Citywide Administrative Services' COVID-19 Emergency Procurements (FK21-087S).”
Original at comptroller.nyc.gov, dated 2023-02-07. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-02-07-fk21-087s/
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Maura Hayes-Chaffe
Deputy Comptroller for Audit
Special Report on the
Department of Citywide
Administrative Services’
COVID-19 Emergency
Procurements
FK21-087S | February 7, 2023
Office of the New York City Comptroller Brad Lander FK21-087S
1 Centre Street, New York, NY 10007 • (212) 669-3916 • www.comptroller.nyc.gov • @NYCComptroller
THE CITY OF NEW YORK
OF F I C E O F T H E C O M P T R O L L E R
B R A D L A ND E R
February 7, 2023
To the Residents of the City of New York,
My office has reviewed the Department of Citywide Administrative Services’ (DCAS) COVID-
19 emergency procurements during Fiscal Year 2020 to determine whether they were
necessary and related to COVID-19, adequately documented, consistent with applicable
procurement policies and procedures, and reasonably priced. The Office of the New York City
Comptroller conducts reviews of City agencies with the goal of ensuring that agencies comply
with relevant rules and that City resources are used effectively.
At the outset of the COVID-19 emergency, between March 1, 2020, and June 30, 2020, DCAS
initiated procurements for goods and services with an initial value totaling $1.5 billion. We
recognize the difficult and pressing circumstances in which the emergency procurement
process for COVID-19 was established. Though my office found significant shortcomings, this
report does not minimize DCAS’ accomplishments; rather, it is intended to serve as a guidepost
to help DCAS and other agencies learn from past emergencies and apply lessons from the
pandemic to future crises.
The review determined that DCAS generally maintained documents showing that emergency
procurements related to COVID-19 were necessary to respond to the ongoing crisis. However,
DCAS did not consistently ensure that it procured goods from responsible vendors, obtained
or documented approvals from the prepayment committee, or maintained supporting
documentation for procurements. Additionally, DCAS did not document analysis used to
determine whether vendor prices were reasonable.
The review recommends that for future emergency procurements, DCAS ensure that staff
perform and document responsibility reviews, document its price analyses, and maintain
supporting documentation in procurement files and systems of record. Additionally, the review
recommends that the City determine whether current procurement rules require amendment to
permit advance payments as necessary, and if so, establish rules and protocols to mitigate risks.
The results of the review have been discussed with DCAS officials and their comments have
been considered in preparing this report. DCAS’ complete written response is attached to this
report.
If you have any questions concerning this report, please email my Audit Bureau at
audit@comptroller.nyc.gov.
Sincerely,
Brad Lander
New York City Comptroller
DAVID N. DINKINS MUNICIPAL BUILDING • 1 CENTRE STREET, 5TH Floor • NEW YORK, NY 10007
PHONE: (212) 669-3500 • @NYCCOMPTROLLER
WWW.COMPTROLLER.NYC.GOV
TABLE OF CONTENTS
IMPACT ............................................................................. 1
Summary of Findings ......................................................................... 1
Intended Benefits ............................................................................... 1
INTRODUCTION ............................................................... 2
Background ....................................................................................... 2
Objective............................................................................................ 2
Discussion of Review Results with DCAS ......................................... 2
DETAILED FINDINGS ....................................................... 4
DCAS Did Not Consistently Ensure That the City Procured Goods and
Services from Responsible Vendors .................................................. 4
DCAS Did Not Document Price Analysis ........................................... 5
DCAS Did Not Consistently Obtain or Document Approvals for
Prepayments ..................................................................................... 6
DCAS Did Not Consistently Maintain Supporting Documentation for
Procurements .................................................................................... 7
RECOMMENDATIONS ..................................................... 9
Recommendations Follow-up .......................................................... 9
SCOPE AND METHODOLOGY ...................................... 10
APPENDIX I .................................................................... 12
APPENDIX II ................................................................... 13
ADDENDUM I
ADDENDUM II
Office of the New York City Comptroller Brad Lander FK21-087S
IMPACT
Summary of Findings
The Department of Citywide Administrative Services (DCAS) generally maintained documents
showing that emergency procurements related to COVID-19 were necessary to respond to the
ongoing crisis. However, DCAS did not consistently ensure that it procured goods from
responsible vendors, obtained or documented approvals from the prepayment committee, or
maintained supporting documentation for procurements. Additionally, DCAS did not document its
price analysis.
Intended Benefits
The review identified opportunities to improve future emergency procurements and mitigate risks
to the City.
Office of the New York City Comptroller Brad Lander FK21-087S 1
INTRODUCTION
Background
On March 12, 2020, the Mayor issued Executive Order No. 98, which declared a state of
emergency in New York City due to the threat posed by COVID-19. On March 16, 2020, and
March 17, 2020, the Mayor issued Executive Order Nos. 100 and 101, which suspended certain
procurement laws and rules. Specifically, Executive Order No. 101 suspended several laws and
regulations related to procurement of “goods, services or construction when an agency head
determines in writing that the procurement is necessary to respond to the emergency.” 1
Subsequently, the Mayor’s Office of Contract Services (MOCS) issued guidance to Agency Chief
Contracting Officers (ACCOs) related to COVID-19. 2 This guidance detailed the extent to which
the City’s procurement laws and rules were suspended and specified documentation which must
be provided. This documentation included:
• Agency Head Determinations for all covered contracts and procurement actions, which
were required to contain a statement that the contract or action was necessary to respond
to the COVID-19 emergency, as well as the basis for the determination for the goods or
services sought;
• Written Determinations, which were required to include, among other things, a list of
goods, services, and construction procured; the basis for vendor selection; and prices;
and
• Vendor Responsibility Determinations.
As the City agency responsible for procuring goods and services and maintaining City
storehouses, DCAS was tasked with procuring goods and services needed to respond to the
COVID-19 pandemic, including personal protective equipment (PPE). Between March 1, 2020,
and June 30, 2020, DCAS initiated procurements for goods and services with an initial value
totaling $1,539,496,345.
Objective
The objective of this review was to determine whether DCAS’ COVID-19 emergency
procurements during Fiscal Year 2020 were necessary and related to COVID-19, adequately
documented, consistent with applicable procurement policies and procedures, and reasonable.
Discussion of Review Results with DCAS
The matters covered in this report were discussed with DCAS officials during and at the
conclusion of this audit. An Exit Conference Summary was sent to DCAS on November 18, 2022,
and discussed with DCAS officials at an exit conference held on December 5, 2022. On December
1 Suspended laws included: Chapter 13 of the New York City Charter; Title 9 of the Rules of the City of New York
(Procurement Policy Board Rules); and Sections 6-101 through 6-107.1, 6-108.1 through 6-121, and 6-124 through 6-
129 of the New York City Administrative Code.
2 According to MOCS, the guidance applied only to Mayoral agencies subject to Chapter 13 of the New York City
Charter and Procurement Policy Board Rules.
Office of the New York City Comptroller Brad Lander FK21-087S 2
23, 2022, the auditors submitted a Draft Report to DCAS with a request for written comments.
The auditors received a written response from DCAS on January 20, 2023.
In its response, DCAS provided context in which it was operating in the spring of 2020. It stated
that the City received little support from the federal government, that governments were
competing for scarce supplies, and that there were “enormous backlogs” in the manufacturing of
ventilators and PPE. DCAS noted, "In large part through DCAS’s efforts, the City developed an
extremely effective emergency procurement strategy during COVID-19. The team worked
tirelessly to procure ventilators, face masks, gowns, and other essential lifesaving goods from
vendors scattered across the globe, arranging their transport by air, ship, rail, and truck to ensure
distribution to agencies and hospitals. In its intrepid and successful pursuit of lifesaving
equipment, DCAS complied with every legal obligation."
The auditors acknowledge the difficult and pressing circumstances in which the emergency
procurement process for COVID-19 was established and recognize the challenges faced by
DCAS at the time, as well as its achievements in procuring various goods and services at the very
outset of the COVID-19 emergency.
The auditors considered DCAS’ written response to the findings and additional documentation
provided, and where relevant, changes to the report were made. The full text of DCAS’ response
is included as addenda to this report.
Office of the New York City Comptroller Brad Lander FK21-087S 3
DETAILED FINDINGS
Based on the auditors’ review of sampled procurements, DCAS generally documented that
procurements were necessary to respond to the COVID-19 emergency. Specifically, DCAS’
Agency Head Determinations for covered contracts and procurement actions contained a
statement that the contract or action was necessary to respond to the COVID-19 emergency.
However, DCAS did not consistently ensure that the City procured goods and services from
responsible vendors, obtained or documented required approvals for advance payments made to
vendors, or maintained supporting documentation for procurements. Additionally, DCAS did not
document that it compared costs to ensure that they were reasonably priced.
DCAS Did Not Consistently Ensure That the City
Procured Goods and Services from Responsible
Vendors
In March 2020, MOCS issued guidance which stated that agencies must provide a “written
determination for emergency contracts as part of the contract file as soon as practicable” which
includes, among other things, the “past performance history of the selected vendor” and a Vendor
Responsibility Determination. Section 2-08 of the Procurement Policy Board (PPB) Rules states
that a “responsible contractor is one which has the capability in all respects to perform fully the
contract requirements and the business integrity to justify the award of public tax dollars.”
According to DCAS, “MOCS guidance required Agencies to conduct background checks by
consulting three sources and to set forth their findings, in the Agency Head Determinations.”
DCAS staff were responsible for performing background checks which included searching
databases for adverse information and documenting search results in the Warehouse
Management System (WMS). Other DCAS staff were responsible for compiling and reporting
background check search results in Agency Head Determinations, which were submitted to
MOCS and the Law Department for approval.
The auditors reviewed 59 sampled procurements, initially valued at $1,009,222,233. For 11 of the
59 sampled procurements (18.6%), totaling $226,369,500 (22.4%), the auditors found that DCAS
did not provide documentation showing that background checks were performed, documented,
and shared with procurement staff and staff responsible for compiling Agency Head
Determinations as required. 3 4 For four of those 11 procurements, vendors provided defective
goods or did not provide goods at all.
Further, although DCAS identified adverse information for six procurements totaling
$173,126,400, DCAS did not report this information on Agency Head Determinations submitted
to MOCS and the Law Department.
3 DCAS generally did not perform background checks for nine procurements which were made through requirements
contracts.
4 For nine of these procurements, DCAS did not maintain documentation to show that staff checked any sources, and
for the remaining two procurements, DCAS did not maintain documentation that staff checked three sources, as
required by MOCS guidance.
Office of the New York City Comptroller Brad Lander FK21-087S 4
Additionally, although one vendor (Dart Seasonal Products, Inc.) had previously provided
defective goods, and DCAS identified and reported other adverse information for this vendor,
DCAS nevertheless contracted with the vendor to purchase three-ply face masks totaling
$1,320,000.
Since DCAS did not consistently comply with vendor responsibility rules, DCAS may have
contracted with vendors who did not satisfactorily perform and may have incurred additional legal,
contractual, or administrative costs.
After the auditors discussed the findings, DCAS officials stated that “WMS was established
approximately 45-60 days after the commencement of the pandemic. Prior to the establishment
of WMS, all previous background checks were transmitted via email.” Further, DCAS stated that
the Agency Head Determination “attests to the agency’s performance of the requisite background
checks required by MOCS guidance” and that it “should be sufficient enough for documentation
purposes.” In its written response to the Draft Report, DCAS stated, “There were no written
guidelines from MOCS directing agencies to create or preserve any additional documentation on
responsibility checks other than the agency head determination.”
DCAS provided documentation for some procurements to show that background checks which
were not documented in WMS had been completed. Based on this documentation, the auditors
modified the finding. However, to date, DCAS has not provided documentation to show that it
completed background checks for the 11 cited procurements. Since DCAS did not maintain
background check documentation, the auditors cannot be reasonably assured these checks were
conducted.
Regarding the procurements for which DCAS did not disclose adverse information on Agency
Head Determinations, DCAS stated that there were exigent circumstances, particularly at the start
of the pandemic, and that it had procured PPE from all available sources. In its written response,
DCAS stated that, in instances where adverse information had been reported, "circumstances
allowed the contracting officer to make the determination that the adverse finding did not impede
the vendor’s ability to provide the necessary goods or services to the City." DCAS considered the
severity of the vendor's misconduct and when it happened as well as "public health and safety
considerations." Further, DCAS stated that if vendors provide defective goods, DCAS will reject
them and request replacements.
While the Mayor’s Emergency Executive Orders suspended most procurement rules, MOCS
guidance did not suspend vendor responsibility determinations which are intended to mitigate
risk. When vendors fail to provide goods or provide defective goods, the City incurs additional
legal, contractual, and administrative costs.
DCAS Did Not Document Price Analysis
On March 6, 2020, the Mayor’s Office of Management and Budget (OMB) issued a “Memorandum
to Agency Finance Staff regarding Tracking Novel Coronavirus Costs (COVID-19),” which stated
that agencies should be aware of and do their best to comply with procurement requirements
associated with federal funding, including basic principles such as “[c]ost reasonableness/cost
comparison prior to solicitation.”
Office of the New York City Comptroller Brad Lander FK21-087S 5
For each of the 58 sampled procurements that required an Agency Head Determination, the
Agency Head Determination Memo generally stated that the sole basis for vendor selection was
that the price was reasonable. 5 DCAS stated that it conducted price analysis by “comparing
current proposed prices to prior proposed prices and contract prices, as they evolved during the
emergency.” Further, DCAS stated that price reasonableness varied over time based on the state
of emergency, fluctuations in DCAS’ stock, and worldwide availability of PPE, and that it monitored
price changes over time and cancelled higher-priced orders when possible, reordering goods at
better rates when prices came down. However, based on the auditors’ review, DCAS did not
document price comparisons.
DCAS stated that it was “operating under a directive to secure as much as it could, as
expeditiously as possible, to save lives and alleviate the dire conditions in New York City.” For this
reason, DCAS was not able to create documentation.
While the auditors acknowledge the difficult circumstances created by the pandemic, DCAS
should have captured this information. MOCS supported DCAS in sourcing PPE and established
an intake form for vendor offers, which could have been used to document DCAS’ price analysis.
The auditors also found that certain procurements exceeded the average price that DCAS paid
for similar goods at that time, as detailed in Appendices I and II of this report. For example, DCAS
paid Plush Apparel $12.87 per face shield—250.7% more than the average price of $3.67 per
face shield. Similarly, DCAS paid Destiny Aprons $7.50 and $4.80 per cloth mask—239.4% and
117.2% more than the average price of $2.21 per cloth mask. This suggests that some pricing
may not have been reasonable.
DCAS officials stated that vendor prices for similar goods may have appeared to vary because:
(1) a single line item on an invoice may include one or more units (e.g., an individual face mask
versus a package or box which included multiple face masks); (2) shipping costs may have been
included in unit prices; and (3) specifications of products weren’t equal in several factors, such as
differences in the materials used, durability, and medical effectiveness. Additionally, in its written
response, DCAS stated that larger orders typically resulted in lower unit prices.
However, the auditors evaluated reasonableness based on unit prices. Regarding shipping costs,
the auditors did not include separate line-item shipping costs in price comparisons because,
among other things, DCAS paid for charter flights carrying PPE. Additionally, auditors compared
prices for goods with similar descriptions, for example, only comparing masks indicated as KN95
to other masks indicated as KN95. Lastly, for procurements that exceeded the average price,
other vendors who provided the same or similar quantities did not significantly exceed the average
unit price.
DCAS Did Not Consistently Obtain or Document
Approvals for Prepayments
In March 2020, the City created a Prepayment Review Committee which was responsible for
approving prepayments to vendors for goods and services needed to respond to the COVID-19
5 The auditors sampled 68 procurements. Of those, 10 procurements did not require an Agency Head Determination
because DCAS procured goods through requirements contracts or a Minority and Woman-owned Business Enterprise
vendor.
Office of the New York City Comptroller Brad Lander FK21-087S 6
emergency. The committee comprised four members from DCAS, MOCS, OMB, and the Law
Department, and was chaired by the DCAS Commissioner.
However, based on the auditors’ review of 32 sampled procurements for which DCAS prepaid
vendors, DCAS did not obtain approval from one or more Prepayment Review Committee
members, or did not document approval for 17 procurements (53.1%).
For five of those 17 procurements, vendors did not provide goods, or provided defective or poor-
quality goods. While the City was generally able to recoup prepayments or obtain substitute goods
from vendors, the City incurred additional legal, contractual, and administrative costs. Notably,
DCAS prepaid Digital Gadgets $9.1 million for ventilators which the vendor was later unable to
deliver. DCAS applied Digital Gadgets’ prepayment to separate procurements for disposable and
N95 masks. However, based on inspection reports, Digital Gadgets initially delivered masks that
were poor quality or not FDA-certified.
After the auditors discussed the findings, DCAS stated that the Procurement team obtained
approvals from the DCAS Commissioner, and while not all email chains contained the full email
trail of individual agency oversight approvals, the Commissioner’s approval signified that
approvals from the other prepayment committee members were received. Additionally, DCAS
stated that the Law Department’s role in the Prepayment Review Committee was only advisory.
However, DCAS did not provide the auditors with documentary evidence in support of those
statements.
In its written response, DCAS stated, “Pursuant to MOCS guidance, the DCAS Commissioner
alone was responsible for providing agency head approvals for prepayments” and that “there was
no rule prescribing the manner in which prepayment approvals were to be documented.”
However, during the course of the review, when the auditors asked DCAS how and where each
of the prepayment committee member’s approvals were maintained, DCAS did not state that the
DCAS Commissioner alone approved prepayments. DCAS stated that prepayment committee
“approvals were received by email and were maintained in email format.”
DCAS also stated that, in some cases, the Chief Contracting Officer/Assistant Commissioner
acted in the DCAS Commissioner’s authority to approve prepayments. In its written response,
DCAS provided documentation to show the personnel who are authorized to act in the Deputy
Commissioner’s absence, and the subject matter areas in which each of them is authorized to
act. However, the documentation does not show that the DCAS ACCO was authorized to approve
prepayments to vendors.
DCAS Did Not Consistently Maintain Supporting
Documentation for Procurements
On March 6, 2020, OMB issued “Memorandum to Agency Finance Staff regarding Tracking Novel
Coronavirus Costs (COVID-19),” which emphasized the critical importance of properly tracking
and documenting pandemic-related activities and expenditures, so that the City could be in “the
best possible position to receive federal & state reimbursement for costs associated with
responding to the emergency.” The memorandum directed agencies to maintain accurate records
“of all expenses related to the response, including labor, contract costs, purchase of supplies, and
use of equipment and supplies.”
Office of the New York City Comptroller Brad Lander FK21-087S 7
On March 25, 2020, OMB sent an email to DCAS stating that “[i]n order to get completely
reimbursed . . . we will need to be able to support all of our costs.” Attached to this email was a
list of supporting documentation which included, among other things, copies of contracts,
invoices, and signed purchase orders.
However, based on the auditors’ review of 68 sampled procurements initiated in Fiscal Year 2020,
DCAS did not maintain one or more required documents, including quotes, contracts, purchase
orders, signed Advice of Awards, invoices, and receiving and inspection reports for 16
procurements (23.5%) with payments or total contract expended amounts totaling $328,290,036. 6
In the absence of required documentation, DCAS cannot be reasonably assured that vendors
provided goods and services of the type, quantity, and quality specified, and were paid correctly.
After the auditors discussed the findings, DCAS officials stated that other records served as
substitutes for the missing documentation. However, each of the above-mentioned documents
were required to be maintained, and, as previously stated, OMB emphasized the critical
importance of maintaining them.
In its written response, DCAS stated, “Substantial documentation was provided during the audit.
However, the Comptroller review team decided to deem the substantial documentation provided
to them as inadequate.” However, DCAS simultaneously acknowledged that “some of the required
documentation may have not been captured in the procurement files or systems of record.”
The FEMA Public Assistance Program and Policy Guide, dated April 2018 (the FEMA Guide),
states that in order to be eligible, costs must be:
• Directly tied to the performance of eligible work;
• Adequately documented;
• Consistent with the Applicant’s internal policies, regulations, and procedures that apply
uniformly to both Federal awards and other activities of the Applicant; and
• Necessary and reasonable to accomplish the work properly and efficiently.
Further, the FEMA Guide states that a cost is reasonable if “it does not exceed that which would
be incurred by a prudent person under the circumstances prevailing at the time […] If FEMA
determines any of the costs to be unreasonable based on its evaluation, FEMA may disallow all
or part of the costs by adjusting eligible funding to an amount it determines to be reasonable.”
Since DCAS did not consistently maintain adequate documentation, comply with policies and
procedures in place at the time, and ensure that costs were reasonable, it is possible that the City
may not be reimbursed or fully reimbursed for certain COVID-19 related expenses.
6 For three of the 16 cited procurements, vendors did not deliver or did not fully deliver goods. DCAS recouped
payments totaling $69,840,000 and is in litigation for payments totaling $5,112,337.
Office of the New York City Comptroller Brad Lander FK21-087S 8
RECOMMENDATIONS
To address the above-mentioned findings, the auditors propose that for future emergency
procurements, DCAS:
1. Ensure that staff perform and document responsibility reviews and appropriately
consider and report results.
DCAS Response: DCAS disagreed with this recommendation and the related
finding. However, DCAS did state that “in the event of another emergency, DCAS
will continue to use WMS to document background checks.”
2. Ensure that it documents price analyses, which are used to ensure that prices are
reasonable and form the basis for vendor selection.
DCAS Response: DCAS disagreed with this recommendation and the related
finding. However, DCAS also stated, “Notwithstanding our disagreement, in the
event of a future suspension of laws and rules governing the procurement of
goods and services, DCAS, to the extent practicable, will document the vendor
proposals in connection with price comparisons.”
3. Ensure that staff maintain supporting documentation in procurement files and
systems of record.
DCAS Response: DCAS disagreed with this recommendation and the related
finding.
Regarding prepayments for future emergency procurements, the auditors propose that the City:
4. Determine whether current procurement rules require amendment to permit
advance payments necessary to procure goods, services, and construction during
emergencies, and if so, establish rules and protocols to mitigate risks when
advance payments might be necessary.
DCAS Response: DCAS disagreed with this recommendation and the related
finding but stated, “Should future emergencies arise where advance payments
may be necessary, DCAS will continue to follow any guidance provided by MOCS,
OMB, and/or any other official directive that is established."
Recommendations Follow-up
Follow-up will be conducted periodically to determine the implementation status of each
recommendation contained in this report. Status updates are reported in the Audit
Recommendations Tracker available here: https://comptroller.nyc.gov/services/for-the-
public/audit/audit-recommendations-tracker/
Office of the New York City Comptroller Brad Lander FK21-087S 9
SCOPE AND METHODOLOGY
The scope of the review was March 1, 2020 to June 30, 2020.
To obtain an understanding of applicable procurement policies and procedures in place during
the scope period, the auditors reviewed City Emergency Executive Orders, MOCS and OMB
guidance, and the FEMA Public Assistance Program and Policy Guide (dated April 2018).
The auditors interviewed relevant agency officials from DCAS’ Fiscal Business Management
Team to gain an understanding of how payments were processed and tracked for COVID-19
emergency procurements. Additionally, the auditors conducted a walkthrough with DCAS officials
to observe WMS and the Bureau of Quality Assurance (BQA) inspection portal to gain an
understanding of how inspection reports, receiving reports, and Vendor Responsibility
Determinations were maintained.
To determine a population of payments related to COVID-19 emergency procurements, the
auditors obtained a listing of DCAS’ payment requests for Fiscal Year 2020 from the City’s
Financial Management System (FMS). Additionally, auditors obtained and reviewed an FMS
budget code report for Fiscal Year 2020 to determine which budget codes were associated with
COVID-19. The auditors then separated out all payment requests that were paid using a COVID-
19 budget code (all of which started with “CV”).
The auditors selected a judgmental sample of 68 procurements based on the payment request
amount, payment type, and vendor performance. For those 68 procurements, the auditors
requested and reviewed supporting documentation from DCAS, which included vendor
responsibility checks, invoices, receiving and inspection reports, and Prepayment Review
Committee approvals. The auditors also requested and reviewed supporting documentation from
MOCS that included quotes, contract and/or signed vendor terms and conditions, Agency Head
Determinations, signed Advice of Awards, and purchase orders.
To determine whether purchases were necessary and related to COVID-19, the auditors reviewed
Agency Head Determinations, which included a justification for the purchase and determination
of the emergency, as well as quotes, invoices, and email correspondence.
From the sample of 68 procurements, 59 were made from new contracts and nine were made
from requirements contracts. For the 59 procurements made from new contracts, the auditors
determined whether DCAS staff performed Responsibility Determinations—background checks
and documented searches and search results in WMS. Further, when DCAS staff documented
that they found adverse information in WMS, the auditors checked whether adverse information
was reported on Agency Head Determinations, which were submitted to MOCS and the Law
Department for approval.
To determine whether DCAS ensured procurements were reasonably priced, the auditors
requested that DCAS provide price analysis conducted for COVID-related procurements between
March 1, 2020, and June 30, 2020. However, DCAS stated that the “pace and volume at which
DCAS worked did not permit the creation of documentation.” Consequently, the auditors
independently compared costs for similar goods to determine whether they were reasonable.
Office of the New York City Comptroller Brad Lander FK21-087S 10
The auditors reviewed payment requests made between March 1, 2020 and June 8, 2020. For
each payment request, the auditors reviewed supporting documentation from FMS, including but
not limited to, invoices and quotes. The auditors identified procurements for similar goods based
on the item descriptions. For various categories of similar goods (i.e., face shields, KN95 masks,
N95 masks, cloth masks, and three-ply masks), the auditors calculated the average cost by
dividing the total amount paid for similar goods by the total quantity purchased. Then, the auditors
compared individual vendor prices for similar goods to the average price.
DCAS prepaid vendors, in whole or in part, for 32 of the 68 sampled procurements. For those 32
procurements, the auditors reviewed FMS attachments and, in particular, email correspondence
to determine whether DCAS obtained approval from each of the four Prepayment Review
Committee Members (i.e., DCAS, MOCS, OMB, and the Law Department).
For procurements for which DCAS did not obtain Prepayment Review Committee approval, the
auditors determined whether vendors did not provide goods or provided defective or poor-quality
goods and if so, whether the City was able to recoup prepayments or obtain substitute goods.
For the 68 sampled procurements, the auditors compared invoice item quantities to receiving and
inspection report quantities to determine whether DCAS received all goods for which vendors
were paid. For procurements that had discrepancies, the auditors requested and reviewed DCAS
reconciliation logs for procurements. Additionally, the auditors requested and reviewed additional
invoices and inspection and receiving reports, or documentation to show funds were returned to
the City for any outstanding amounts owed.
The results of the above tests, while not projectable to their respective populations whenever a
sample was used, provided a reasonable basis for the auditors to evaluate whether DCAS’
COVID-19 emergency procurements during Fiscal Year 2020 were necessary and related to
COVID-19, adequately documented, consistent with applicable procurement policies and
procedures, and reasonable.
Office of the New York City Comptroller Brad Lander FK21-087S 11
APPENDIX I
Comparative Price Analysis for DCAS Procurements of Face Shields between
March 1, 2020 and June 8, 2020
Vendor Legal Name Quantity Price/Unit Extension % Difference
Face Shields - Average Price $3.67
Plush Apparel LLC 10,000 $12.87 $128,700 250.7%
Fastenal Company 50,000 $6.70 $335,000 82.6%
Empire Electronics Inc 25,000 $4.88 $122,000 33.0%
Utech Products Inc 10,000 $4.10 $41,000 11.7%
Applied Medical Distribution Corporation 100,000 $4.00 $400,000 9.0%
Neta Scientific, Inc. 254,000 $3.98 $1,010,920 8.4%
Urban Nation Apparel Inc 299,600 $3.10 $928,760 -15.5%
Magid Glove & Safety Mfg Co LLC 15,000 $3.05 $45,750 -16.9%
LVLM Distribution LLC 200,100 $2.95 $590,295 -19.6%
Clear Image Inc 96,288 $2.95 $284,050 -19.6%
Office of the New York City Comptroller Brad Lander FK21-087S 12
APPENDIX II
Comparative Price Analysis for DCAS Procurements of Face Masks between
March 1, 2020 and June 8, 2020
Vendor Legal Name Quantity Price/Unit Extension % Difference
Disposable Surgical/3 Ply Face Masks - Average Price $0.69
Genuine Parts Company 300,000 $1.16 $348,000 68.1%
Dart Seasonal Products Inc 1,000,000 $1.12 $1,120,000 62.3%
Salsa Professional Apparel LLC 1,000,000 $0.98 $980,000 42.0%
ODY Accessories Inc 999,850 $0.93 $929,861 34.8%
Empire Electronics Inc 500,000 $0.92 $460,000 33.3%
Jamore Inc 111,100 $0.90 $99,990 30.4%
Dart Seasonal Products Inc 1,500,000 $0.88 $1,320,000 27.5%
Specbid Holding Inc 1,500,000 $0.84 $1,260,000 21.7%
MCT Pro Tools Inc 1,300,000 $0.82 $1,066,000 18.8%
GlobalGeeks Inc. 1,000,000 $0.77 $770,000 11.6%
Plush Apparel LLC 48,000 $0.80 $38,400 15.9%
BT Supplies West Inc 5,000,000 $0.76 $3,800,000 10.1%
BT Supplies West Inc 9,800,000 $0.75 $7,350,000 8.7%
Plush Apparel LLC 4,000 $0.70 $2,800 1.4%
BT Supplies West Inc 29,674,300 $0.67 $19,881,781 (2.9%)
Progressive Promotions 250,000 $0.65 $162,500 (5.8%)
Utech Products Inc 840,000 $0.65 $546,000 (5.8%)
Epaul Dynamics Inc 9,800,000 $0.63 $6,174,000 (8.7%)
Twelve Inc 2,400,000 $0.64 $1,536,000 (7.2%)
Propac Inc 16,629,000 $0.62 $10,309,980 (10.1%)
Nel Trends Inc 400,000 $0.62 $248,000 (10.1%)
Progressive Promotions 1,700,000 $0.61 $1,037,000 (11.6%)
Industrial U.S.A., Inc 1,000,000 $0.60 $600,000 (13.0%)
Epaul Dynamics Inc 200,000 $0.59 $118,000 (14.5%)
Dh Commerce LLC 1,000,000 $0.55 $550,000 (20.3%)
Digital Gadgets LLC 707,000 $0.55 $388,850 (20.3%)
Jamn Products Inc 1,000,000 $0.50 $500,000 (27.5%)
N95 Face Mask - Average Price $3.10
NEL Trends Inc 59,090 $5.50 $324,995 77.4%
The Fine Companies LLC 178,000 $4.67 $831,260 50.6%
World Logistics LLC 50,000 $4.56 $228,000 47.1%
Traction & Scale LLC 30,000 $4.48 $134,400 44.5%
Naecoware LLC 122,160 $4.40 $537,504 41.9%
Digital Gadgets LLC 831,780 $4.00 $3,327,120 29.0%
Sid Tool Co Inc 20,000 $2.35 $47,090 (24.0%)
Arbill Industries, Inc. 994,320 $1.67 $1,660,514 (46.1%)
Safeware Incorporated 240 $0.81 $195 (73.8%)
Office of the New York City Comptroller Brad Lander FK21-087S 13
Vendor Legal Name Quantity Price/Unit Extension % Difference
KN95 Face Mask - Average Price $3.14
Global Geeks Inc 2,800,000 $4.05 $11,340,000 29.0%
Tivuna Systems Inc 1,778,000 $3.80 $6,756,400 21.0%
Success Promotions Inc 100,000 $3.45 $345,000 9.9%
Shopworx Inc 3,000,000 $3.25 $9,750,000 3.5%
Saroj International Inc 500,000 $3.25 $1,625,000 3.5%
Utech Products Inc 265,000 $3.25 $861,250 3.5%
Rock Fintek LLC 4,859,100 $3.08 $14,966,028 (1.9%)
Saroj International Inc 1,000,000 $3.05 $3,050,000 (2.9%)
MCT Pro Tools Inc 806,400 $3.04 $2,451,456 (3.2%)
Plush Apparel LLC 100,800 $3.00 $302,400 (4.5%)
Twelve Inc 1,300,000 $2.92 $3,796,000 (7.0%)
Digital Gadgets LLC 2,031,000 $2.84 $5,768,040 (9.6%)
Cetrix Technologies LLC 50,000 $2.79 $139,500 (11.1%)
DH Commerce LLC 38,000 $2.75 $104,500 (12.4%)
Saroj International Inc 20,000 $2.65 $53,000 (15.6%)
Urban Nation Apparel Inc 500,000 $2.60 $1,300,000 (17.2%)
Vizocom Ict LLC 550,000 $2.59 $1,424,500 (17.5%)
Digital Gadgets LLC 2,455,060 $2.42 $5,941,245 (22.9%)
Success Promotions Inc 250,000 $1.80 $450,000 (42.7%)
Cloth Face Mask - Average Price $2.21
Destiny Apron NY 15,000 $7.50 $112,500 239.4%
Destiny Apron NY 72,700 $4.80 $348,960 117.2%
Evergreen Corporate Gifts &
Promotions Inc 500,000 $3.50 $1,750,000 58.4%
Progressive Promotions 240,000 $1.50 $360,000 (32.1%)
Progressive Promotions 1,008,000 $1.48 $1,491,840 (33.0%)
Office of the New York City Comptroller Brad Lander FK21-087S 14
ADDENDUM I
Page 1 of 9
Dawn M. Pinnock
Commissioner
January 20, 2023
Sandra Abeles
Executive Deputy Comptroller
Office of the New York City Comptroller
David N. Dinkins Municipal Building
One Centre Street, Room 1100
New York, NY 10007
Re: Special Report of the New York City Comptroller on the Department of Citywide
Administrative Services’s COVID-19 Emergency Procurements (FK21-087S)
Dear Ms. Abeles:
Thank you for sharing the draft Special Report of the New York City Comptroller on the Department
of Citywide Administrative Services's COVID-19 Emergency Procurements (FK21-087S). As
indicated in our responses to the findings below, the report does not place in proper context the
transactions it recounts, and in some cases, omits or erroneously states important facts related to
the catastrophic emergency the City and DCAS faced in the early months of the pandemic.
Notwithstanding, we appreciate the opportunity to respond and to offer a more balanced and
comprehensive account of the City’s precarious position and the critical services provided by DCAS
procurement staff during those early months of the pandemic.
Context:
The City of New York was the first major American city hit by the pandemic. Its first case of laboratory-
confirmed COVID-19 was diagnosed on February 29, 2020. In a matter of a few weeks, City hospitals
were overwhelmed by the exponentially growing number of patients in need of intensive care –
typically with ventilators – for a deadly and highly transmissible disease. In April 2020, 5,500 new
cases and 900 deaths a day were being reported. By June 30, 2020, the end of the three-month
period covered in this report, more than 22,500 City residents had perished from COVID-19, half of
all the City’s COVID-19 fatalities in the nearly three years of the pandemic.
During that time period, the federal government was missing in action, providing no leadership and
little support. Governments across the world were competing for scarce supplies. There were
enormous backlogs in the manufacturing of ventilators and Personal Protective Equipment. Global
supply chains were collapsing.
On March 12, 2020, the Mayor issued Executive Order No. 98, declaring a state of emergency.
Mayor’s Executive Order No.101, issued on March 16, 2020, suspended laws and rules governing
The David N. Dinkins Municipal Building
1 Centre Street, New York, NY 10007
212-386-6266
nyc.gov/dcas
ADDENDUM I
Page 2 of 9
the procurement of goods, services, and construction “when an agency head determines in writing
that the procurement is necessary to respond to the emergency.”1
On March 18, March 20, and March 25, 2020, the Mayor’s Office of Contract Services issued
guidance to agencies on making emergency procurements in response to the COVID-19 emergency
and under the suspension of the laws and regulations affected by Executive Order No. 101(EO 101).
It required a written agency head determination for procurement of all covered contracts and
procurement actions. It provided that “[t]he determination must contain a statement that the contract
or action is necessary to respond to the COVID-19 emergency and the basis for the determination
for the goods or services sought’’ and that “[a]gencies must notify the Mayor’s Office of Contract
Services (MOCS) and the Law Department each time they intend to initiate a covered contract or
contract action.”
On March 31, 2020, the Deputy Comptroller for Accountancy, exercising the Comptroller’s contract
review authority under Section 5 of Comptroller’s Directive No. 24 (FMS Contract Document), issued
a waiver that authorized DCAS to make prepayments for all ventilator purchases made pursuant to
EO 101. On April 7, 2020, the Comptroller issued a similar waiver authorizing prepayments for all
personal protective equipment made pursuant to EO 101 during the pandemic. In doing so, the
Comptroller endorsed the City’s “determin[ation] that it is in the best interest to take the measured
risk of paying . . . ahead of delivery in exchange for securing this critically-needed equipment.”
This emergency is the first time that the City has paid for goods before delivery, a reflection of the
severe peril that its residents faced. Due to the extreme shortage and high demand for lifesaving
equipment throughout the world, the prepayment of all or part of the costs of procurement was critical
to ensuring the City’s bids would be competitive.
In large part through DCAS’s efforts, the City developed an extremely effective emergency
procurement strategy during COVID-19. The team worked tirelessly to procure ventilators, face
masks, gowns, and other essential lifesaving goods from vendors scattered across the globe,
arranging their transport by air, ship, rail, and truck to ensure distribution to agencies and hospitals.
In its intrepid and successful pursuit of lifesaving equipment, DCAS complied with every legal
obligation.
Finding 1 - DCAS Did Not Consistently Ensure That the City Procured Goods and Services
from Responsible Vendors
DCAS disagrees with this finding as it does not paint an accurate picture of the procurement and the
prepayment approval process during the pandemic. MOCS’s March 18, 2020, guidance concerning
EO 101 required only a written agency head determination that the contract or action is necessary
to respond to the COVID-19 emergency and the basis for the determination for the goods or services
sought. With respect to vendor responsibility, in a March 25, 2020 e-mail, MOCS’s guidance advised
agencies to set forth the findings in the agency head determinations. There were no written
guidelines from MOCS directing agencies to create or preserve any additional documentation on
responsibility checks other than the agency head determination.
1
Section 2 of EO 101 suspended Chapter 13 of the New York City Charter, the Procurement Policy Board Rules,
Sections 6-101 through 6-107, 6-108.1 through 6-121, and 6-124 through 6-129 of the New York City
Administrative Code for the procurement by the City of goods, services, and construction necessary to respond to
the emergency.
2
ADDENDUM I
Page 3 of 9
Weeks into the pandemic, for internal purposes, DCAS began to keep additional records of
background checks and other procurement records in the Warehouse Management System (WMS).
There was no guidance issued by MOCS or any legal requirement that it do so. The eleven
procurements’ responsibility records which do not appear in the WMS, preceded the creation of
WMS. Thus, the Report is wrong in asserting that the absence of the responsibility records from the
WMS for those eleven procurements is a deficiency because DCAS was not required to preserve
those records in WMS.
In its assertion that DCAS did not conduct appropriate background checks, the report cites section
2-08 of the Procurement Policy Board (PPB) Rules, implying that a full-blown vendor responsibility
review was required. But that cannot be true, as the PPB rules were suspended specifically to
streamline and accelerate the emergency procurement of goods.
The Report also faults DCAS for procuring goods from vendors for which its background investigation
uncovered adverse information. It is true that in several procurements, adverse information was
reported during the contracting officer’s review. But in those instances, circumstances allowed the
contracting officer to make the determination that the adverse finding did not impede the vendor’s
ability to provide the necessary goods or services to the City. DCAS knew from experience and
public reporting that Personal Protective Equipment (“PPE”) was extremely scarce and in high
demand during these months. When DCAS submitted a procurement for registration that contained
an adverse finding, circumstances, such as the remoteness in time of the adverse information, the
severity of the vendor’s alleged misconduct, and emergent public health and safety considerations,
allowed and justified the determination of the Agency Chief Contracting Officer (ACCO) that the
expected benefit of the procurement outweighed its risks and was therefore in the best interest of
the City at that time. Faced with unprecedented challenges, DCAS nevertheless operated within
appropriate guidelines. This matter should not be flagged as a finding.
Irrespective of background check results, vendors, at times, may provide defective goods. However,
DCAS inspects all goods received and ensures they comply with DCAS’s required standards. If
goods are deemed unsatisfactory, DCAS rejects the defective items and requests that the vendor
replaces the items. In some circumstances, DCAS terminated the contracts and procured from other
vendors, where feasible. The Report cited DCAS’s purchase of three-ply face masks from Dart
Seasonal Products, Inc. for $1,320,000 as an example of procuring from a vendor with an adverse
background. However, none of the three-ply masks delivered by Dart Seasonal Products Inc. were
defective, and they were not rejected, as demonstrated by the supporting documents DCAS
provided.
Finding 2 - DCAS Did Not Document Price Analysis
DCAS disagrees with this finding. The global pandemic created a new market and pricing for PPE
and other necessary equipment and services. DCAS had to compete with other aggressive
purchasers, including the federal government, to acquire scarce supplies. DCAS had no acceptable
alternative but to compare prices submitted by competing vendors at the very moment that a product
was needed and available. Also, it was public knowledge that the demand for and supply of PPE
and other necessary equipment and services, including the cost of freight from overseas, escalated
throughout the pandemic as supply chains deteriorated. Price reasonableness varied based on the
state of emergency, especially during the early months of the pandemic, the cost of goods and freight
shifted hourly. DCAS did not have the luxury of time both to perform a standard comprehensive and
3
ADDENDUM I
Page 4 of 9
deliberative price analysis and respond responsibly to the deathly threats that the rapidly spreading
virus posed to the City’s residents. As the pandemic continued, DCAS became better able to monitor
price changes and responded by canceling higher-priced orders and reordering at lower prices.
Overall, DCAS acted consistently with the Comptroller’s waivers, taking measured risks in
purchasing goods and services that were critically needed to save the lives of New Yorkers.
The review of the price differential of purportedly comparable products is inadequate for a host of
reasons:
• The review did not consider the varying specifications of the product. It compared
commodities that were not equal due to differences in the materials used, durability, medical
effectiveness, and other factors.
• In analyzing the unit prices, which were set as “Delivery Duty Paid (DDP),” the review failed
to consider the price difference in shipping methods. The cost for ground shipping is not the
same as shipping via a private air carrier. Those differences result in differing unit costs for
the same commodity. DCAS frequently had no choice but to use costly means of
transportation to deliver urgently needed products.
• The review did not consider the variance in the quantities ordered. Larger orders typically
resulted in lower unit prices.
Finding 3 - DCAS Did Not Consistently Obtain or Document Approvals for Prepayments
DCAS disagrees with this finding. Pursuant to MOCS guidance, the DCAS Commissioner alone was
responsible for providing agency head approvals for prepayments. The prepayment committee was
not established pursuant to a law or rule but was created voluntarily as a rational and cautionary
measure to assess the merits of the opportunity to procure goods where the vendor demanded
prepayment. When an urgent procurement need arose, DCAS’s Commissioner sought the
concurrence of MOCS and the Mayor’s Office of Management and Budget (OMB), the other
prepayment committee voting members, to review and approve the prepayment. The Law
Department served in the prepayment committee in an advisory capacity. No rule required that
approvals be documented in any particular manner. The DCAS Commissioner, after working with
the OMB, MOCS, and the Law Department, provided prepayment approval to the DCAS
Procurement team. Proof of the Commissioner’s approval of every prepayment– which is all that was
necessary under the MOCS guidelines – was provided to the Comptroller’s review team. Most
approvals were accompanied by email confirmation of the concurrence of other committee members.
In four instances, when the DCAS Commissioner and the Deputy Commissioner for the Office of
Citywide Procurement were both absent, DCAS’s ACCO was authorized to provide prepayment
approval pursuant to internal delegations, copies of which are annexed as Exhibit A. The report
alleges that DCAS prepaid Digital Gadgets for goods that were not delivered. The report conflates
prepayment for goods with the delivery of goods, which are two separate issues. First, during the
height of the pandemic, prepayment was a necessary process required to secure goods, particularly
ventilators, on the open market. In the pre-pandemic era, payment occurred after the delivery of
goods. As set forth in DCAS’ response above, under the heading “Context”, the agency has
explained, at length, the Comptroller’s March 31, 2020, waiver authorizing prepayment for all
ventilator purchases due to the unprecedented global emergency and the scarcity of goods.
Second, the report neglects to mention that upon learning that Digital Gadgets was unable to deliver
ventilators, DCAS terminated three purchase orders for ventilators and applied the $9.1 million dollar
ventilator prepayment to open orders for three-ply and KN95 masks.
4
ADDENDUM I
Page 5 of 9
Accordingly, the insinuation that DCAS inappropriately distributed funds because it did not obtain
approvals from other prepayment committee members is unsupported; those approvals, while
provided for every prepayment, were not required. Similarly, the report’s finding that DCAS failed to
appropriately document the approvals is without basis because there was no rule prescribing the
manner in which prepayment approvals were to be documented.
Finding 4 - DCAS Did Not Consistently Maintain Supporting Documentation for Procurements
DCAS disagrees with this finding. Sufficient documentation was maintained to support the
emergency procurements and the payments issued. Substantial documentation was provided during
the audit. However, the Comptroller review team decided to deem the substantial documentation
provided to them as inadequate. Additionally, the contention that DCAS may not meet the
requirements for federal and state reimbursement of COVID-19-related expenses based on the
guidance issued by OMB regarding federal and state reimbursement is unsubstantiated and
overreaching. DCAS is fully prepared and able to provide FEMA with the necessary supporting
documents for reimbursement. The Report’s suggestion that it may be unable to do so is unfounded
and irresponsibly prejudicial to the City’s interest in obtaining FEMA reimbursement.
DCAS will continue to strengthen the review and monitoring process of emergency procurements
and will continue to make every effort to ensure compliance with all applicable policies and
procedures.
Should you have any questions, please contact Sonia Lamrhari, Executive Director of DCAS’s Audit
and Compliance Services at 212-386-6266.
Sincerely,
Dawn M. Pinnock
Commissioner
Enclosure
c: Josefina Soto
Maryanne Mullany
Kolbein Netland
Marjorie Landa
Doug Giuliano
Roman Gofman
Shanna Midelton
Sonia Lamrhari
5
ADDENDUM I
Page 6 of 9
ADDENDUM I
Page 7 of 9
CITY OF NEW YORK
DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES
April 9, 2020
DCAS ORDER NO. 63
MODIFICATION OF DCAS ORDER NO. 56
DELEGATION OF AUTHORITY
CITYWIDE PROCUREMENT/MUNICIPAL SUPPLY SERVICES
DCAS Order No. 56 appointing Mersida Ibric as Deputy Commissioner/Chief Acquisition Officer
is hereby modified effective April 10, 2020 to identify those personnel to whom she is
delegating her authority to conduct the business of the Office of Citywide Procurement Line of
Service when she is absent, on leave, or otherwise unavailable.
The attached Exhibit A identifies the personnel who are authorized to act in Mersida Ibric’s
absence, and the subject matter areas in which each of them is so authorized.
This delegation of authority shall remain in effect until revoked, in writing, by a subsequent
DCAS order.
Lisette Camilo, Commissioner
ADDENDUM I
Page 8 of 9
Exhibit A
Physical Sign Off
Item Person Responsible Notes
Purchase Orders Larry Siegel
Personnel Reimbursements Adam Buchanan, Roman Gofman for their respective staffs, if outside of
procurement groups then Roman is point
Fuel Inspection Waiver Adam Buchanan
FMS Access Adam Buchanan, Roman Gofman for their respective staffs, if outside of
procurement groups then Roman is point
APT Access Adam Buchanan, Roman Gofman for their respective staffs, if outside of
procurement groups then Roman is point
PassPort Adam Buchahan
Contracts Adam Buchahan, Roman Gofman
Travel Authorization Larry Siegel
Appeals Suzanne Lynn
Right to ask for a Deduction Adam Buchanan
E‐sign Off
Item Person Responsible Notes
CityTime Larry Siegel Roman and Adam can approve for Larry
E‐hire system Larry Siegel
HR Promotion Larry Siegel
ADDENDUM I
Page 9 of 9
Escalation
Business unit Issue Person responsible
OT Requests Dan Callies
BQA
Vendor Disputes Adam Buchanan
OT Requests Larry Siegel
CSH NYCEM requests Larry Siegel
Contracts Adam Buchanan
Citywide Contracts Suzanne Lynn, Lisette Camilo
Agency Contracts Suzanne Lynn, Lisette Camilo
Policy Roman Gofman
M/WBE
Events, Operations Larry Siegel
Labor All Roman Gofman
PassPort Adam Buchanan
Adam Buchanan, Roman Gofman (depending on
Data
source)
SPI
Adam Buchanan, Roman Gofman (depending on
Legacy Systems
source)
Operations/Admin Larry Siegel
Physical Representation
Meeting Person Responsible
Commissioner Meeting Adam Buchanan, Roman Gofman, Jose Jimenez
Budget Hearing Adam Buchanan, Roman Gofman
Executive Team Meeting Roman Gofman (Adam as backup)
Executive Steeriing Committee, PassPort Adam Buchanan
PASSPort/DCAS Executive Meetings Adam Buchanan
OMB Jose Jimenez, Sara Ahluwalia, Larry Siegel
NYCEM Larry Siegel (Juan as backup)
NIGP Personnel Development Larry Siegel
Monthly DC meetings Larry Siegel
Mayors Office of MWBE Julieann Lee, Roman Gofman
ACCO meeting Adam Buchanan, Roman Gofman
ADDENDUM II
Page 1 of 4
NYC DEPARTMENT OF CITYWIDE ADMINISTRATIVE SERVICES
Corrective Action Plan (CAP) Response
Audit Name: NYCC Review of the Department of Citywide Administrative Services' COVID-19 Emergency Procurements (FK21-087S)
Date: January 20, 2023
Audit Recommendations Agency Response Corrective Action Target Date
1. Ensure that staff perform and Disagree None N/A
document responsibility reviews and
appropriately consider and report It is DCAS’s practice to review report results of vendor(s) during the
results. procurement process. Documentation was provided to the auditors for the list
of vendors identified by the audit team. In addition, where adverse information
was found, the Contracting officer has the authority to make a responsibility
determination whether such an adverse finding would not impede the vendor’s
ability to provide the necessary good or service to the City. It was public
knowledge, and the Comptroller’s Office is aware that Personal Protective
Equipment (“PPE”) was extremely scarce and in high demand during the
pandemic. Each individual procurement was necessary for the public’s health
and safety. Accordingly, in instances in which DCAS submitted a procurement
for registration that contained an adverse finding, there were circumstances,
including public health and safety, that allowed the Agency Chief Contracting
Officer (ACCO) to make the determination that such procurement was in the
best interest of the City at that time.
In addition, the New York City Charter and Title 9 of the Rules of the City of
New York (the Procurement Policy Board Rules) were suspended based on the
March 17, 2020, Mayoral Executive Order No. 101; and the Mayor’s Office of
Contracts (MOCS) issued guidance pertaining to the administration of COVID
emergency procurements during this period. The guidance required Agencies
to conduct background checks by consulting three sources and to set forth their
findings in the Agency Head Determinations (“AHD”), which was also provided
to the auditors.
ADDENDUM II
Page 2 of 4
Audit Recommendations Agency Response Corrective Action Target Date
Notwithstanding our disagreement, as DCAS noted, weeks into the pandemic,
DCAS began to keep, among other records, background checks in the
Warehouse Management System (WMS), and in the event of another
emergency, DCAS will continue to use WMS to document background checks.
2. Ensure that it documents price analysis Disagree None N/A
which are used to ensure that prices
are reasonable and form the basis for The Comptroller’s review of price differential of purportedly comparable
vendor selection. products is inadequate for a host of reasons. First, the review did not consider
the varying specifications of the product. The review compared commodities
that were not equal in several factors, including but not limited to differences in
the materials used, durability, medical effectiveness, etc. Second, in analyzing
the unit prices, which were set as “Delivery Duty Paid (DDP)”, the Comptroller
failed to consider the price difference in shipping methods. For example, the
cost for ground shipping is not the same as shipping via a private air carrier
resulting in differing unit costs for the same commodity. DCAS frequently had
no choice but to use costly means of transportation to deliver urgently needed
products. Third, the review did not consider the variance in the quantities
ordered. Larger orders result in lower unit prices.
The global pandemic created a new market and pricing for PPE and other
necessary equipment/services. DCAS had to compete with other aggressive
purchasers, including the federal government, to acquire scarce supplies.
DCAS had no acceptable alternative but to compare prices submitted by
variable vendors at the moment that a product was available. As the Comptroller
is aware, the supply/demand for PPE and other necessary equipment/services
escalated throughout the pandemic, including the cost of freight from overseas
as supply chains deteriorated and price reasonableness varied based on the
state of emergency. Accordingly, DCAS could not effectively perform a
comprehensive and deliberative standard price analysis as the cost of goods
and freight shifted hourly and at the same time respond quickly and responsibly
to the deathly threats that the rapidly spreading virus posed to the City’s
residents.”
ADDENDUM II
Page 3 of 4
Audit Recommendations Agency Response Corrective Action Target Date
Notwithstanding our disagreement, in the event of a future suspension of laws
and rules governing the procurement of goods and services, DCAS, to the
extent practicable, will document the vendor proposals in connection with price
comparisons.
3. Ensure that staff maintain supporting Disagree None N/A
documentation in procurement files
and systems of record. DCAS duly maintains supporting documentation related to procurements. As
previously stated, during the COVID-19 pandemic, DCAS was required to issue
prepayments to vendors to secure lifesaving supplies and equipment for the
City, such as masks, ventilators, and personal protective equipment (PPE).
Waivers were provided by the Comptroller’s Office to allow DCAS to bypass
standard payment procedures and to pay before goods and services have been
provided. The Comptroller’s waivers stated, “The City has determined that it is
in the best interest to take the measured risk of paying ahead of delivery in
exchange for securing the critically needed equipment”.
Based upon these waivers, a prepayment approval committee was formed with
representatives from multiple NYC entities, including the Mayor’s Office of
Contract Services (MOCS) and the Office of Management and Budget (OMB).
DCAS’s Commissioner was the chairperson of the Prepayment Committee and
was responsible for providing Agency Head approvals for prepayments. The
DCAS Commissioner, after working with the members of the prepayment
approval committee, provided approvals for prepayments to the DCAS
Procurement team via email. Due to the urgent need to issue the prepayment
and secure the goods, and in conjunction with the prepayment waivers received
from the Comptroller’s Office, DCAS determined that it would not be prudent or
practical to wait for the vendor to submit an invoice and risk losing the goods.
Therefore, the prepayment approval email was used as supporting
documentation for the prepayment in lieu of an invoice. The approval emails
stated the name of the vendor, the terms of the agreement, and the amount that
must be prepaid prior to the shipment of goods.
ADDENDUM II
Page 4 of 4
Audit Recommendations Agency Response Corrective Action Target Date
Also, at the beginning of the pandemic, most of the procurements were done
prior to the implementation of the WMS system. WMS, which is now DCAS’
system of record, was initiated in May 2020.
Therefore, while DCAS made diligent efforts to adequately document and
maintain all supporting documentation, some of the required documentation
may have not been captured in the procurement files or systems of record.
Also, refer to the response for recommendations 1 & 2.
4. Determine whether current rules Disagree None N/A
require an amendment to permit
advance payments necessary to As forementioned, DCAS followed protocols that were established based on
procure goods, services, and guidance outlined in the Mayoral Executive Order 101 and MOCS guidance.
construction during emergencies and DCAS provided the Comptroller’s Office with emails documenting the DCAS
if so, establish rules and protocols to Commissioner’s approval and, in her absence, the ACCO’s approval for each
mitigate risks when advance prepayment issued. The Commissioner of DCAS served as the head of the
payments may be necessary. prepayment committee, and therefore, the emails with her approval should be
sufficient on behalf of the committee.
Should future emergencies arise where advance payments may be necessary,
DCAS will continue to follow any guidance provided by MOCS, OMB, and/or
any other official directive that is established.
1 Centre Street, New York, NY 10007
www.comptroller.nyc.gov
@NYCComptroller
(212) 669-3916
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- nyc-comptroller-dcas-covid-emergency-procurements-2023.pdf
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- Original
- comptroller.nyc.gov