For fiscal year 2005, the District’s Office of Contracting and Procurement—its lead contracting office—reported conducting over 20,000 transactions valued at $1.2 billion on behalf of 55 District entities, five of which accounted for $596 million (see table 1 for the departments, agencies, and other entities reporting procurements through this office). Over two-thirds of the District’s procurement dollars managed through the lead contracting office was spent on professional and public safety services, human care, and road and highway construction. In addition, some District entities, including the Board of Education for District of Columbia Public Schools and the Department of Mental Health, procure independently of the lead contracting office. According to information available from District sources, these entities spent over $600 million in fiscal year 2005. The District also has special requirements related to being the seat of the federal government. The fiscal relationship between the federal government and the District as well as city governance have been perennial questions for Congress, and the District’s local autonomy has evolved significantly in the last 30 years. In 1973, Congress enacted the District of Columbia Self-Government and Governmental Reorganization Act or Home Rule Act, which established the structural framework of the current District government. The Home Rule Act allowed for an elected Mayor and a council with certain delegated legislative powers. However, Congress explicitly reserved legislative authority over the District. The Home Rule Act generally provides a framework and processes for Congress to enact, amend, or repeal any act with respect to the District. Congress used this authority in the 1990s to enact laws intended to restore the city to financial solvency and improve its management in response to a serious financial and management crisis. Since the 1870s, the federal government has made financial contributions to the District’s operations. In fiscal year 2006, federal government appropriations included $603 million in special federal payments to the District with $75 million for elementary, secondary, and post-secondary education initiatives. In 1997, the council, with the Mayor’s approval, amended the District’s procurement law to centralize procurement under one contracting office, which would be the exclusive contracting authority for all procurements covered under the act. The amendment also authorized the Office of Contracting and Procurement to be headed by a CPO who would be appointed by the Mayor for a 5-year term, with the advice and consent of the council, and could only be removed from office for cause. The CPO was required to have no less than 7 years of procurement experience in federal, state, or local procurement. The CPO, by delegation of the Mayor, was given the exclusive contracting authority for all procurements covered under the law. The amendment was enacted around the same time that various procurement studies were published, with one describing procurement in the District as “in crisis”—as evidenced by over 600 contracts expiring in 90 days and a rushed response to ensure that vital services were not interrupted. The studies reported that procurement processing was inconsistent and responsibilities were widely distributed across the District; training for procurement personnel was insufficient and few were professionally certified; agencies maintained separate databases; and there was no acquisition planning process to define needs. Centralization under the CPO’s office was expected to improve the quality of the District’s procurement operations by promoting accountability, decreasing procurement costs, eliminating duplication of effort, and increasing financial control and performance. In particular, it was reported that centralization of the acquisition function could allow the District to spend money more effectively by promoting more competition and through bulk purchases of goods and services used by multiple agencies. Despite the expected benefits, the District’s inspector general’s and auditor’s offices continued to identify deficiencies across the District’s procurement system that frequently produce negative impacts on the integrity and operations of the District. Moreover, for the past 5 years, the inspector general’s annual reports have cited procurement as a significant area of concern due to lapses in contracting operations resulting in costly inefficiencies, fraud, waste, and abuse. Some of the persistent problems reported by District auditors and inspectors include the following—many of which are similar to those that prompted the 1997 law: Outdated procurement law and regulations that fail to effectively address long-standing procurement deficiencies, policies, and procedures for all aspects of the process specifically in the areas of solicitation, awarding, and monitoring of contracts. Lack of continuity in procurement law, policies, and procedures as applied to some agencies. Noncompliance with procurement law and regulations, and lax accountability over individuals for not complying with the District’s guidelines. Ineffective competition and overuse and misuse of sole-source contract awards. Unauthorized commitments and purchases by District personnel from vendors without valid written contracts. Failure to conduct advanced planning for known projects and procurement requirements that lead to costly sole-source acquisitions often based on faulty justifications. Insufficient independent oversight of agencies that expend significant resources for information technology, construction, and communication projects. Managers not ensuring a sufficient number of experienced procurement personnel, proper training, and certification of procurement workforce. The objective of a public procurement system is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy goals. The federal government achieves this through guiding principles established in the FAR. NASPO and the ABA model procurement code have also established key guiding principles and practices that are generally accepted and should be incorporated into an effective procurement system. In addition, our work has identified best practices and other accepted elements that are essential for an efficient and accountable acquisition function. Key characteristics of a successful procurement system include: Transparency—Comprehensive procurement law with clear and written policies and procedures that are understood by all sources. Accountability—Clear lines of procurement responsibility, authority, and oversight. State and local governments recommend the CPO have full- time, sole, and direct responsibility for the procurement program. Integrity—Public confidence earned by avoiding any conflict of interest, maintaining impartiality, avoiding preferential treatment for any group or individual, and dealing fairly and in good faith with all parties. Competition—Specifications that do not favor a single source and solicitations widely publicized to benefit from the efficiencies of the commercial marketplace. Organizational Alignment and Leadership—Appropriate placement of the acquisition function in the organization to cut across traditional organizational boundaries with stakeholders having clearly defined roles and responsibilities. For state and local governments to operate effectively, recommended practice is central leadership in the executive branch. Human capital management—Competent workforce responsive to mission requirements, with continued review and training to improve individual and system performance. Knowledge and information management—Technologies and tools that help managers and staff make well-informed acquisitions decisions. The District lacks a uniform procurement law that applies to all District entities and that provides the CPO with adequate authority and responsibility for the entire acquisition function—an essential component to promoting transparency, accountability, and competition. In addition, the law has been amended to exempt certain District entities and procurements from following the law’s competition and other requirements. According to current and former District procurement officials, District entities are seeking to expand independent procurement authority—a move that would undermine attempts to establish a central authority. Finally, the law limits competition by broadening the exceptions under which sole-source contracts can be awarded; authorizing dollar thresholds for small purchases that are higher than those provided for in other city and federal government procurement regulations, including the FAR; requiring the use of a local supply schedule with limited vendors for a variety of goods and services; and encourages agencies under certain circumstances to bypass contracting rules to directly pay vendors without valid written contracts. In contrast, other cities’ procurement laws emphasize the competitive process and having a strong centralized authority for their CPOs in order to safeguard the integrity of their procurement systems. Contrary to sound procurement principles and practices as identified by a variety of sources, the District lacks a uniform procurement law that uniformly applies to all District entities and provides clear authority to the CPO. To promote transparency, accountability, and maintain integrity of public procurement, NASPO and the ABA model procurement code for state and local governments describe concepts for creating a uniform procurement law that provides for central management of the entire procurement system and broad discretion and authority to a CPO to implement policies. Similarly, in the federal procurement system, the FAR establishes uniform policies and procedures for acquisition by most executive agencies under the President. Without such a foundation, the District’s procurement system is vulnerable to poor acquisition outcomes and less capable of maintaining public trust. Twelve District entities, including the Water and Sewer Authority and Housing Authority, are not under the authority of both the District’s procurement law and Office of Contracting and Procurement, and are allowed to follow their own procurement rules and regulations. In many cases, the procurement law specifically exempts these entities from following the law, which is contrary to the central statutory purpose of the District’s procurement law to (1) eliminate overlapping or duplication of procurement activities; (2) improve the understanding of procurement laws and policies by organizations and individuals doing business with the District government; and (3) promote the development of uniform procurement procedures governmentwide. As a result, the District’s law has created a procurement environment where some entities follow different rules and practices, undermining the District’s ability to capture an overall view of its procurements as well as placing an added burden on vendors to understand how to do business with the District. According to NASPO, it is essential to have one uniform law that applies to all agencies and their procurements and exclude blanket exemptions for any executive agency or department. If exclusions are necessary, the law should define them narrowly by types of goods and services procured. NASPO state procurement leaders we spoke with said that they would be unable to effectively run their own procurement systems without one governing law. Without it, vendors are discouraged from competing since they do not know what rules apply, which increases the risk that taxpayers pay more for goods and services.