City pauses procurement and audits Office Depot contract; committee trims proposed amendment

The Budget & Finance subcommittee moved to forward a resolved amendment to the Office Depot office‑supply contract to the full Board with a recommendation to reduce the requested increase after the Office of Contract Administration (OCA) proposed a six‑month amendment and an audit of the current contract.

Naomi Kelly, city purchaser in OCA, said OCA rejected the apparent low bidder after recent negative publicity about Office Depot and will audit current contract transactions. "We decided to reject all bids, audit the current contract, and work with the controller's office to improve our existing protocols and check for pricing accuracy under the current contract," Kelly said. The audit will compare roughly 8,000–10,000 monthly transactions against invoices and price sheets; if overcharging is discovered, OCA said it would pursue legal remedies under contract provisions and a fidelity bond.

Kelly said future contracts will use a single flat discount rate and include a 10% penalty for overcharging; OCA will also provide department training on ordering and invoice review. The resolution before the committee would increase the contract's dollar amount to $20,035,000 pursuant to Charter Section 9.118(b).

The budget analyst recommended deducting $689,005.59 from the requested increase, reducing the proposed seventh amendment increase to $1,310,004.41 and lowering the not‑to‑exceed amount to approximately $19,000,003.45; Kelly agreed with the analyst's computation. The committee accepted the recommendation and moved the item forward to the full Board with recommendation.

Next steps: the full Board will consider the six‑month amendment and the OCA audit results; if the audit finds overcharging, OCA indicated it may seek contract remedies.