SCM CPO

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Background 
Procurements and contracting practices of Central Procurement Office (CPO)
have a direct impact on all Port departments and on the outside contracting
community doing business with the Port. It is therefore critical that the CPO
processes, procedures, management controls, and established practices be
efficient, economical, and effective.
Review Period - Jan 1, 2010 - Mar 11, 2014 
Total Number    Number of           Total Contract    Sample Set
of Contracts  Contracts Sampled   %         Value        Contract Value      % 
Small Works                                  136                 8    6%         $32M             $2M      7%
Major Works                          88               16   18%        $266M           $98M     37%
Service/Consultant Related                                    451                 36    8%         $296M            $89M     30%
Purchasing                              48                12   25%          $72M            $59M     82%
Total                                      723                  72   10%         $665M            $248M      37%

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Audit Objectives 
The purpose of the audit was to : 
Assess whether the established processes, procedures, management controls,
and established practices are efficient, economical, and result in an effective
way to provide procurements and contracting services.
Acknowledge risk and evaluate risk management practices to ensure the Port
enters into sound contracts with qualified firms at fair and reasonable contract
rates.
Identify and evaluate best practices in government procurement for delivering
procurements and contracting services. 
Benchmark Port procurement practices with other government agencies best
practices, including applicable private sector practices and the Federal
Acquisition Regulation (FAR).

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 
Port Procurement Environment 
The Port's procurement process is heavily influenced by a wide array of
stakeholders. 
The Port's divisions, management, RDRs, and CPO all play a vital role. 
At every phase of the Port's procurement process, each of the stakeholders
has a direct impact on the results and efficiency of the phase. 
The Port's procurement process is dependent on a highly engaged group of
stakeholders and must work in a collaborative and aligned manner in order to
meet operational expectations, compliance requirements, and key
milestones. 
The Review's analysis, comments, and recommendations made in the report are
meant for all of the Port's procurement stakeholders.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Audit Result 
Procurement process is well managed and is meeting internally set
expectations. 
Procurement process is flexible but very slow. 
Total Procurement Cycle Time (in days) 
Public               Port 
2010  2014 POS
Agencies        Authorities 
Sampled Contracts * 
surveyed *         Surveyed * 
Small Public Works                       83                  40                49 
Major Public Works                       132                 117               127 
Service/Consultant Related               241                  125                86 
Purchasing                              146                  58                52 
*   Significant standard deviations noted (see report). 
The Port does not have a clear procurement strategy that is aligned
from the Commission throughout the organization.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Audit Result 
Procurement process is well managed and is meeting internally set
expectations. 
Port's procurement functions are managed in accordance with Port's Contracting
and Procurement Policies and Procedures as well as Resolution 3605. 
The Port's procurement and contracting practices are meeting the needs of the
Port's stakeholders and the firms and consultants that respond to POS solicitations. 
The Port's procurement and contracting practices are effective in attaining sound
contracts with qualified firms at fair and reasonable contract rates. 
With the exception of using Key Performance Indicators and setting goals, the
Port's procurements and contracting practices are consistent with best practices of
other governmental agencies and port authorities. 
The use of technology in order to effectively deliver contracting services can be
improved in order to improve efficiencies.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 
Audit Result 
Procurement process is flexible but very slow. 
Total Procurement Cycle Time (in days) 
Public               Port 
2010  2014 POS
Agencies        Authorities 
Sampled Contracts * 
surveyed *         Surveyed * 
Small Public Works                                         83                   40                 49 
Major Public Works                       132                 117               127 
Service/Consultant Related                                         241                  125                86 
Purchasing                                         146                  58                 52 
*   Significant standard deviations noted (see report) 
Major works procurements +15 days v. public agencies // + 5 days v. other port authorities. 
Small works procurements +43 days v. public agencies // + 33 days v. other port authorities. 
Service/consultant related procurements +115 days v. public agencies // +155 days v. other
port authorities. 
Purchasing related procurements +87 days v. public agencies // +93 days v. other port
authorities. 
Significant standard deviations noted (see report) indicates due to self-reporting of metrics,
differing process definitions, efficiencies, population, and flexibility. 
The longer procurement process can result in a loss of business opportunity and increase the
Port's cost.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Audit Result 
The Port does not have a clear procurement strategy that is aligned
from the Commission throughout the organization. 
There is no formally stated procurement and contracting practices strategy.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Recommendations 
Short-term (within one year) 
Seven recommendations addressing delegation of authority, strategy, RDR
training, KPI goals, etc. 
Mid-term (two to five years) 
Three recommendations addressing process consistency, database, etc. 

Long term (beyond five years) 
One recommendation to create an association to share best practices with
other Port authorities.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 
Recommendations 
Short-term (within one year) 
Develop a practice to reinforce consistent application of
authorizations, approvals, and segregation of duties in all
procurement and contracting processes. 
Clearly define the Port's contracting and procurement strategy. 
Review and adjust practices in order to achieve strategic goals. 
Provide mandatory RDR training as a prerequisite to initiating a
procurement activity. 
Review all required online procurement documents in order to ensure
relevance. 
Blueprint the departmental needs of the PeopleSoft users in order to
align system capabilities with business needs. 
Set realistic and stretch KPI goals based upon best practices and
review with the departments and commission on a quarterly basis. 
Conduct rate negotiation training and require a CPO certification of
training for all assigned Port negotiators.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Recommendations 
Mid-term (two to five years) 
In order to have consistency of procurement processes and greater
efficiencies, assign CPO contract administrators and buyers for CAT I and
CAT II procurements and designate CPO contract administrators to
departments that infrequently use the Port's procurement process. 
Develop a flowchart for both the internal and external POS stakeholders
showing how the procurement process works and related procurement
expectations. 
Develop and implement a single contract's database in order to maintain
data and reduce redundancy of data entry.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 

Recommendations 
Long term (beyond five years) 
Create a Port Authority Contracts and Procurement Association whereas
port authorities throughout the United States can share best practices,
risk management controls, emerging technologies, procurement and
contracting trends, and their metrics.

Limited Operational Audit 
CPO Efficiency  outsourced to Mobius Industries 


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