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

Thursday, January 30, 2003

Good afternoon, Chairman Orange, members of the Committee on Government Operations and members of the Council. I am Martha B. Knisley, Director of the DC Department of Mental Health. We are pleased to have the opportunity to report on our commitment to contracting with local, small and disadvantaged business enterprises.

The Department of Mental Health was in receivership until May 2002 and fiscal year 2003 is the first full year the Department will exercise full authority over its budget since termination of the receivership. Prior to May 2002, a significant amount of DMH's acquisitions had already been planned, with funding obligated to complete those acquisitions according to the purchasing plan that had been developed and implemented during the receivership. The District's LSDBE requirements were not necessarily incorporated into the decision making process.

While the Department did not reach its FY 2002 goal of $3,821,102 in contracts with LSDBEs, I am happy to report that in the first quarter of FY 2003, we already have exceeded LSDBE expenditures made during all of FY 2002. In fact, we have fulfilled more than one-third of our FY 2003 goal. Thus far, we have spent more than $1 million with LSDBEs.

The FY02 appropriated budget for DMH was $142,279,665.00. After deducting operating expenses, the expendable budget is $7,642,203.00. One half of that amount -- $3,821,102.00 -- was the DMH annual set-aside target for LSDBEs. Our FY 2002 spending with LSDBEs totaled $981,822, or about 26 percent of our expendable budget.

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 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 DC" 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 operation from DC Supply Schedule contractors with a view toward eventually acquiring all available goods from LSDBEs that are in the best interest of the District.

The DC Supply Schedule has proven invaluable as an efficient means of procurement just this quarter alone. To date, DMH has established a working relationship with Hoods Institutional Foods to meet the nutritional needs of St. Elizabeths Hospital; Computer World and Circle Networks, Inc. to meet our IT requirements; Answer Staffing Services for staffing needs and we exploring doing business with IRA, Inc. for medical and surgical supplies.

DMH has established contractual relationships with V-Tech Solutions and Thompson, Cobb, Bazilio and Associates, also on the DC Supply Schedule.

To date DCSS 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 has not only met with LSDBE principals to learn of goods and services offered, but has also encouraged local businesses that would otherwise qualify as LSDBEs to seek certification.

DMH is excited about the giant steps that have been taken in the first quarter of FY03 alone. While our LSDBE dollars were far below the expectations of DMH and the Mayor in FY02, we have already exceeded our entire FY02 LSDBE expenditures by more than 100% in just three months.

It is important to note that mental health service providers with whom we contract include LSDBEs as well. Those dollars are not reflected in our FY02 report. In FY02, for example, more than $9 million was spent on LSDBE providers. In FY02 to date, DMH has awarded in excess of $2.1 million to Coates & Lane Enterprises, Inc.; $2.0 million to LifeStride, Inc.; as well as awards to Psychiatric Center, Chtd. DMH does substantial business with a number of local behavioral health care providers that would qualify as LSDBEs.

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 Delon Hampton & Associates.

Restoring control of the Department of Mental Health to the District means, in practical terms, restoring our ability to make decisions that are in the best interest of the District and its citizens. I will be happy to report next year that we met our FY 2003 goal.

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