Title
The Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes the Director to approve funds for payment of invoices for services rendered for “Compliance Management Services” without an authorized purchase order totaling $338,233.75 by Baker Tilly Virchow Krause, LLP and also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
Body
Agenda of March 17, 2021
Legistar Item No. 21-0428
Spot Buy Purchase Order No. 3048396
Invoice Nos. BT1630536 (May 2020 for $46,706.25)
BT1647698 (June 2020 for $39,200.00)
BT1698679 (October 2020 for $82,391.25)
BT1753855 (October 2020 through January 2021 for $169,936.25)
Total Amount of Invoices: $ 338,233.75
Dates covered by the invoices: May 2020 - January 2021
TO: The Honorable
Board of Water Commissioners
City of Detroit, Michigan
FROM: Gary Brown, Director
Detroit Water and Sewerage Department
RE: Proposed DWSD Spot Buy Purchase Order No. 3048396
“Compliance Management Services”
MOTION
Upon recommendation of Debra N. Pospiech, Chief Administrative Officer, the Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes the Director to approve funds for payment of invoices for services rendered for “Compliance Management Services” without an authorized purchase order totaling $338,233.75 by Baker Tilly Virchow Krause, LLP; and also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND / JUSTIFICATION
This contract was procured through a Request For Proposals (RFP) that was issued in 2017. The Board of Water Commissioners (BOWC) approved the award to the highest scoring proposer, Baker Tilly Virchow Krause, LLP, on December 20, 2017 for a term of two (2) years (2/1/2018 through 1/31/2020), with a one-year renewal option and a total contract amount not-to-exceed $1,699,265.00. The contract document had a typographical error and stated it was a three (3) year contract with a one-year renewal. When DWSD discovered the error in October 2019, the initial direction was to place a contract amendment on the December 18, 2019, Board agenda to correct the error, exercise the one-year renewal option and add $1 million in funds. However, we did not have budget approval, so DWSD could not process the one-year renewal.
At the end of the January 31, 2020, contract period, $200,490 was left unused. Baker Tilly’s clearances expired prior to the expiry of the contract and they proactively applied for new clearances on January 16, 2020. Chief Administrative Officer Pospiech directed Baker Tilly to continue its services after January 31, 2020, since it was in the midst of drafting numerous policies with DWSD stakeholders. Baker Tilly continued to work while DWSD determined the mechanics to obtain necessary approvals for payment. This was work authorized outside of the contract.
An Exception to Competitive Solication was initiated on July 30, 2020, and approved by Director Brown on September 14, 2020, requesting BOWC approval for invoices only from February 2020 through the end of FY2020. On October 21, 2020, DWSD requested the BOWC’s approval under the unauthorized purchase process (as an Exception to Competitive Solicitation) to pay invoices received for February through May 2020 totaling $242,032.50 (essentially, using the $200,000 in unused funds).
CFO Naughton preferred an amended Scope of Work for any further work performed by Baker Tilly after the contract expired on January 31, 2020. Baker Tilly submitted a proposed revised SOW which included a change from live to electronic training modules, due, in part, to the pandemic; re-drafting numerous HR policies and procedures, due to the change in leadership at the HR/OD Director position; and finalizing critical policies and procedures. During the first half of FY2021 and in January 2021, the BOWC approved all Baker Tilly work product produced after contract expiration. We did not enter into an amended contract in a timely manner, as Baker Tilly’s clearances were not approved until August 2020 and CFO Naughton disapproved of a retroactive amended contract.
Since unauthorized work had been completed, the Legal team initiated this second ECS on
January 28, 2021, based on an estimate of $365,000 for final invoices. Director Brown approved the ECS on February 8, 2021. Baker Tilly submitted final invoices for work completed from
June 1, 2020, to January 31, 2021, totaling $338,233.75.
The CAO’s office has submitted Requisition # 486316 which has been verified by the DWSD budget team and approved February 8, 2021. At present Baker Tilly’s clearances are pending approval with the City of Detroit’s Treasury office. The vendor has confirmed that the application for clearances has been submitted and they are working with the State of Michigan and the City of Detroit’s Treasury Department’s Revenue & Tax Clearance Unit to resolve this. While we anticipate clearances being approved by March 17th, this has, in some cases, taken longer. Therefore, conditional approval is being recommended.
Upon conditional approval by the BOWC, DWSD Procurement will only issue the Purchase Orders after clearances have been approved by the City of Detroit’s Treasury Department.
CAO Pospiech presents this second ECS for Board approval and has ensured it was completed in accordance with DWSD Procurement Department’s standard operating procedure and is in compliance with the DWSD Procurement Policy.
SUMMARY:
A. Spot Buy Purchase Order No.: 3048396
B. Contractor: Baker Tilly Virchow Krause, LLP
C. Term: Not Applicable - for payment only
D. Purchase Order Amount: $338,233.75
E. Funding Source: O&M Funds
F. GL String(s):
5720-20166-481601-617900-000204-10790-0000-000000 - 30%
5820-20177-491601-617900-000225-15805-0000-000000 - 70%
This amendment was presented to the DWSD Finance Committee on March 3, 2021. Per the DWSD Procurement Policy, no other approvals are required.
The Board has voted to waive clearances at the special meeting that was held on March 3, 2021