Report 2018-108 Recommendation 17 Responses

Report 2018-108: California High‑Speed Rail Authority: Its Flawed Decision Making and Poor Contract Management Have Contributed to Billions in Cost Overruns and Delays in the System's Construction (Release Date: November 2018)

Recommendation #17 To: High-Speed Rail Authority, California

To increase the transparency of its reporting, the Authority should, by May 2019, expand its quarterly small business, DVBE, and DBE utilization reporting to account for the total value of all its contracts and to identify the reasons it has exempted specific contracts.

6-Month Agency Response

The Authority has posted small business, DVBE and disadvantaged business contract information on the Authority's website. The report identifies, for fiscal year, State commitments of total State contract dollars, State small and micro business dollars, State small and microbusiness percentage and state DVBE percentage. In addition, the report identifies federal expenditures of total active contract value to date, applicable contract dollars, total expended by prime contractors, total small business/disadvantaged business enterprise/DVBE/microbusiness expenditures to date and the applicable percentage. http://hsr.ca.gov/docs/programs/small_business/Total_Active_Values_Quarterly_Report_April_2019.pdf A policy has also been developed that defines which contracts are exempt from small business, DVBE, and or disadvantaged business' goals.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

The Authority provided an official version of the small business, DVBE, and disadvantaged business policy it submitted in draft form at the time of our 60-day review. This policy specifies the types of contracts that it exempts and includes a process for approving the exemption of any other contract from the program. The Authority also posted a report that contrasts total active contract dollars with the amount subject to state and federal utilization goals.

60-Day Agency Response

The Small Business Program has collected data related to the total value of all current contracts and contracts that require small business, DVBE, and/or disadvantaged business. They are also working to post the information to the Small Business Program section of the Authority's website.

The Authority is modifying the current annual report to reflect quarterly information. A policy has been drafted that will clearly specify which contracts are exempt from small business, DVBE and/or disadvantaged business according to state and/or federal regulations, policies, and guidelines.

California State Auditor's Assessment of 60-Day Status: Partially Implemented

The Authority provided a draft of its revised small business, DVBE, and disadvantaged business policies, which specifies which types of contracts are exempt under state guidelines and establishes requirements for excluding any other type of contract from the program's utilization goals. The Authority also provided a draft template it plans to utilize to calculate utilization rates based on total contract value. When the Authority has completed those calculations and updated its reporting to include this additional information, we will evaluate the status of this recommendation to determine whether it is fully implemented.

All Recommendations in 2018-108

Agency responses received are posted verbatim.