A review of the Los Angeles County Community Development Commission’s (CDC) competitive solicitation process for the lease of 60 fleet vehicles found inadequate outreach to potential vendors. The report from the Los Angeles County Department of Auditor-Controller, dated Jan. 18, found the CDC had made outreach efforts to 16 vendors rather than the 50 it told the Board of Supervisors; some of the 16 vendors were not in the capacity to lease vehicles to the County. The outreach was “insufficient to justify the sole-source nature of the approved agreement,” the report stated. The CDC has implemented a variety of procedural changes to address the findings in the audit.

In March 2012, the Board of Supervisors approved the CDC’s request for a sole-source agreement with Enterprise for the lease of 60 new vehicles including ongoing maintenance, 24-hour roadside assistance, loaner vehicles, and insurance service for these vehicles and 17 existing CDC fleet vehicles. The five-year contract was for up to $1.75 million. The move to fully outsource the fleet was intended to replace the aging fleet (with vehicles averaging 8 years with more than 76,000 miles) and reduce the fleet pool by using Enterprise for daily rentals as needed. The CDC expected to save $300,000 per year as a result of the contract.

The report found CDC staff made “e-mail only” outreach efforts to 16 vendors based on historical vendor files, violating its own policy of advertising it on both the CDC and County website for procurements in excess of $10,000. Additionally, it claimed CDC staff failed to target the more than 60 retail automotive dealerships in Los Angeles and Orange Counties that offer leasing programs and did not include established car rental companies similar to Enterprise. Only 10 of the 16 had “realistic potential” to provide the services needed; others were not in the leasing business, did not have the required vehicles, or were located too far away.

Enterprise was the only company that responded to the request for information (RFI). The report concluded that because only one company responded, auditors were “unable to determine whether the CDC received reasonably competitive pricing for its fleet services agreement.”

Local media has alleged that the lobbying activities by the son of one of the Supervisors, whose firm represents Enterprise, may have influenced the decision to sole-source services to Enterprise. This report found no connection between the two regarding the contract.

CDC Executive Director Sean Rogan provided a response to Government Fleet via e-mail, stating that the changes the CDC has made include restructuring the procurement division, hiring a new procurement officer whose sole purpose is to ensure competitiveness and compliance in procurement, and requiring all procurement opportunities of more than $10,000 to be posted to the web.

Rogan also wrote that the CDC is “in the process of implementing a more comprehensive corrective action plan to include all of the recommendations contained within the Auditor–Controller report.”

He added that contracting out fleet services for the agency has saved the agency more than $300,000 annually and reduced its insurance risk.

By Thi Dao