Audit finds gaps in Oregon procurement oversight; DAS director outlines overhaul

A state performance audit released in July found significant shortcomings in Oregonstate procurement oversight and called for a centralized contracting compliance program, improvements to customer service delivered by the Department of Administrative Services (DAS), and fixes to the OregonBuys e-procurement system.

"Overall, we found DAS must enhance statewide contract compliance, monitoring, improve service delivery, and maximize the functionality of the OregonBuys procurement system," Olivia Raqued, performance audit manager at the Secretary of State said during the joint committee hearing.

The audit team said DAS lacked a formal compliance function that would routinely review agency procurements and contracts, that procurement services have inconsistent customer support and communication, and that OregonBuys (rolled out starting in 2021 and mostly completed in 2023) does not capture all state spending and is not a full contract life-cycle management system.

DAS Director Betsy Eimholt, who told legislators the governor directed her to analyze the procurement system on her first day in the job, acknowledged operational gaps the audit identified and described a multiyear response. "On my first day in this job, which was June 16, the Governor issued me a letter, with a very specific direction on that same day to conduct an analysis of the state's procurement system. And I had 90 days to do so and to report back to her," Eimholt said.

Eimholt described immediate priorities that include standardizing procedures and templates, improving training, creating a centralized contract data repository, and developing clearer roles and expectations between DAS and partner agencies. She said staff shortages and workflow problems have prompted shadow systems and inconsistent practices that disadvantage small and disadvantaged businesses.

On the question of whether OregonBuys is a custom or off-the-shelf product, Eimholt said the e-procurement system is "software as a solution" (an off-the-shelf product) and that DAS is conducting testing to determine whether the software can be adapted to meet all of the state's needs.

The audit included eight recommendations that the agency agreed to, including: working with the legislature and partner agencies to stand up a statewide contracting compliance program; improving procurement services' customer support and staffing alignment; coordinating with the vendor to clarify roles and expectations; conducting benefits and feasibility studies for contract-management systems; and regularly reporting progress to the legislature.

Committee members asked whether auditors had surveyed vendors; Raqued said vendor experience was outside the audit scope. Several legislators pressed DAS on whether automation or emergency-prioritization mechanisms could be built into procurement workflows; Eimholt said automation and priority handling should be part of system design, and that some authorities for expedited action already exist but are not always easy to find.

At the start of the session the committee adopted its organizational rules by motion. Senator Robinson moved adoption of the committee rules; the rules were adopted by voice with Representative Wallen verbally recorded as voting "yes." The rules allow the committee, under certain conditions, to continue business without a quorum.

Whatcomes next: the DAS director told members she will return with timelines and asked the legislature to consider simplification of procurement statutes. The Secretary of State's office said it will follow up on implementation progress in coming months.