Saturday, July 1, 2017

Comptroller Stringer Audit: Major Breakdowns in DCAS Oversight of Auto Parts ContractComptroller Stringer Audit: Major Breakdowns in DCAS Oversight of Auto Parts Contract

DCAS allows late delivery of parts and leaves the City vulnerable to over-billing

  With tens of thousands of vehicles in use across all New York City government agencies, a new audit from Comptroller Scott M. Stringer found that the Department of Citywide Administrative Services (DCAS) has failed to ensure auto parts are delivered on-time and at the right price, potentially leading to delayed repairs, overpayments and an inefficient use of taxpayer dollars. This new audit of DCAS comes on the heels of a February report showing hundreds of recalled vehicles still in daily use by the Department of Sanitation. These audits highlight the need for the City to improve its contract oversight and management of its vital, heavily used vehicle fleet.

To support and expedite vehicle-repair and maintenance at six City agencies – including the New York City Police Department and the New York City Fire Department – DCAS contracts with the Genuine Parts Company to operate on-site auto parts supply rooms at City agency garages throughout the five boroughs. That five-year contract, executed in January 2013, provides the City with price protections and sets unequivocal deadlines for parts-deliveries, to ensure that the City’s vehicles can be repaired promptly and that taxpayer dollars are used efficiently. However, Comptroller Stringer’s audit found that DCAS never tracked the vendor’s delivery times even though the vendor repeatedly missed contract deadlines.  Auto parts arrived late an extraordinarily high percentage of the time, with no discernible action taken by DCAS to enforce the contract. And there was limited evidence that DCAS made sure that the City got the best possible prices.
“It’s not just the City’s fleet that needs fixing. The bureaucracy needs a tune-up, because there seems to be high levels of indifference here. DCAS has an obligation to make sure the vendor delivers the right parts at the right time, and that it gets the parts we need at the best price.  But our audit shows that DCAS doesn’t even check.  It is simply not doing its job. ” New York
City Comptroller Scott M. Stringer said. “Government employees work day-in and day-out to keep New York running, and to do that they need vehicles that are reliable and well-maintained, and that spend minimal time in the shop. This is about much more than paperwork and contracts — it’s about competently supporting our workforce so they can deliver much needed services to all New Yorkers.”
Auto Parts Were Routinely Delivered Late
Under DCAS’s contract with Genuine Parts Company, the company was obligated to provide most parts to agency personnel within ten minutes of a request. The contract grouped parts into four categories:
  • “A-mover” parts — these parts, which are typically ordered by agency employees on a weekly basis, must be delivered within 10 minutes 100 percent of the time;
  • “B-mover” parts — which are used biweekly to quarterly, and must be delivered within 10 minutes 90 percent of the time;
  • “C-mover” parts — those that are requested quarterly to yearly, and must be delivered within 10 minutes 80 percent of the time; and
  • Remaining parts, with the exception of customized parts, which are ordered by agencies less than once a year, and are supposed to be delivered in 24 hours.
The audit, however, uncovered that DCAS failed to track whether parts were delivered on time. When auditors sampled 641 parts ordered by the Department of Sanitation in June 2016, they found that parts among all categories were routinely delivered to agency staff late — increasing the risk that vehicle repairs could be delayed and the City employees who use those vehicles could be left unable to do their jobs.
Specific findings include the following percentages of late deliveries:
  • 96 percent of “A-mover” parts — those that are most-commonly ordered;
  • 77 percent of “B-mover” parts;
  • 62 percent of “C-mover” parts;  and
  • Of all the parts ordered, 25 percent took more than an hour to be delivered.
DCAS Needs to Improve Its Price-checking
To ensure that City resources are spent efficiently, the auto part supply contract includes price protections which require the Genuine Parts Company to charge the City no more than the wholesale cost the company pays for an item plus a fixed markup. If the City finds the company’s prices to exceed prior prices it has paid, the City can require the company to seek bids from multiple vendors and purchase parts that provide the best value for the City.
Auditors, however, found only limited evidence that DCAS checked to ensure that Genuine Parts Company was charging no more than the contract allowed or how its prices compared with those of other vendors. When auditors surveyed the five City agencies that procure parts from Genuine Parts Company, the agencies complained that the vendor’s prices were unclear and sometimes higher than those of other vendors. Those responses suggest that the City — and, by extension, taxpayers — may be paying more for parts than necessary.
Previous Audit
In February, Comptroller Stringer’s office found that the Department of Sanitation had kept hundreds of federally-recalled, defective cars in use, putting the safety of sanitation workers, drivers, and the public at risk. Despite federal recall orders from the National Highway Traffic Safety Administration as recently as January 2017 the DSNY was using 509 cars that may have had dangerous flaws. After discovering these hundreds of recalled vehicles with Sanitation alone, Comptroller Stringer called for an immediate top-to-bottom review of the City’s entire fleet of cars to ensure other departments are not utilizing vehicles that have been federally recalled.
Taken together, the two audits show that the City’s overall fleet management system needs an overhaul.
Recommendations to DCAS
The Comptroller’s Office made fourteen recommendations, including that DCAS:
  • Require Genuine Parts Company to prepare and  submit reports based on delivery times as it is required to do under the contract;
  • Conduct periodic audits of Genuine Parts Company’s wholesale invoices to ensure parts are being billed to agencies at the correct rate; and
  • Perform routine price comparisons to make sure the City is getting the best prices for parts ordered.
To view a full copy of the audit report, click here.

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