Contracting and Procurement in the District of Columbia: The Utilization of Local, Small, and Disadvantaged Business Enterprises

Good morning, Chairman Orange, members of the Committee on Government Operations and members of the Council. I am Martha B. Knisley, Director of the D.C. Department of Mental Health. During FY 2004, DMH expended $2,319,939, which is 89 percent of our annual goal for contracting with local, small and disadvantaged business enterprises.

The FY04 appropriated budget for DMH was $128,725,750. After deducting operating expenses, the expendable budget was $5,217,704. One half of that amount -- $2,608,852 -- was the DMH annual set-aside target for LSDBEs.

It is important to note that mental health service providers with whom we contract include LSDBEs as well. In FY 2004 we issued contracts totaling almost $9.9 million to a number of LSDBEs to provide direct mental health services to District residents.

For example, in FY04, DMH awarded in excess of $3.4 million to Coates & Lane Enterprises, Inc.; $4.9 million to LifeStride, Inc.; more than $1.3 million to Psychiatric Center, Chtd.; and in excess of $310,000 to Fihankra Place, Inc.

The types of goods and services procured by DMH are those typically associated with a provider of direct health care services. This includes administrative/ operating needs, e.g., office equipment/supplies, specialized consultant services, staffing services, printing, etc.

As a provider of direct and indirect health care services for the District’s mentally ill population, DMH operates St. Elizabeths Hospital, a full service hospital, as well as the DC Community Services Agency to provide inpatient and outpatient mental health services as well as inpatient service for forensic consumers.

Typical acquisitions include medical surgical equipment and supplies, pharmaceuticals, food, laboratory equipment and services; and a myriad of other goods and services required to deliver the level of care provided by DMH.

DMH has adopted an affirmative policy to commit to “Buy D.C.” This policy requires that DMH staff first seek LSDBEs to fill the requirements for goods and services that historically have been acquired through federal suppliers or those beyond the metropolitan Washington area.

This policy includes a commitment to purchase food, medical supplies and equipment, and other equipment necessary for our operations from DC Supply Schedule contractors with a view toward eventually acquiring all available goods from LSDBEs that are in the best interests of the District.

The DC Supply Schedule has proven invaluable as an efficient means of procurement for DMH. To date, DMH has established a working relationship with Hoods Institutional Foods to meet the nutritional needs of St. Elizabeths Hospital; Computer World and others to meet our IT requirements; and Answer Staffing Services for staffing needs.

DMH has established contractual relationships with numerous vendors on the DC Supply Schedule.

These contractors have proven responsible as well as competitive. Contracts that previously referenced GSA Schedule numbers are now reading “PODS.”

As part of DMH outreach efforts, our Director of Contracts and Procurement not only continues her practice of meeting with LSDBE principals to learn of goods and services offered, but also encourages local businesses that would qualify as LSDBEs to seek certification.

As we move into the construction phase of the new St. Elizabeths Hospital building, DMH has contracted with construction companies that have partnered with LSDBEs, specifically McKissack & McKissack and others. The contracts to be awarded will specifically require significant LSDBE participation.

Recently, we met with a consortium of local construction and other related trades businesses to discuss our unique approach to meeting and even exceeding small, local and disadvantaged businesses participation goals. The consortium complimented us for creating a multi-contracts structure to encourage greater participation by these smaller businesses.

As DMH continues to grow, it remains committed to making business decisions that are in the best interests of the District and its citizens. We expect that when we report to you next year, DMH will have exceeded its FY 2005 goal.

Thank you very much for the opportunity to testify before the committee. I would be happy to answer your questions.