January 20, 2013Patrick Stewart, CPA2540 Camino Edward Ortiz, Suite ASanta Fe, NM 87507Re: EXPO ProceduresDear Mr. Stewart:Thank you for all your efforts and time dedicated to the audits for State Agencies. I amwriting in response to our conversation on January 16, 2013 related to the EXPO NM June30, 2012 audit. The Office of the State Auditor Requested that we provide a letter indicatingprocedures performed regarding the State of NM Auditors letter dated December 5, 2012regarding issues at EXPO NM. Below are the issues indicated and the procedures andconclusion to those procedures:
1)
Please evaluate whether Expo New Mexico had enough evidence to support that the Downswas a “responsible bidder” (as defined by Sections 13-1-82 and required by 13-1-108NMSA 1978) with adequate financial resources or a good service reputation, whenconsidering the response to their RFP and in ultimately awarding the contract to the Downs.We reviewed the bids relating to the casino procurement process. It appeared the Downswas a responsible bidder as it appears that all bidders were reviewed and selected foradditional inquiry through a “bid” committee assigned to the task by the Expo NMadministration. As defined by 13-1-82, a responsible bidder is “bidder who submits aresponsive bid and who has furnished, when required, information and data to prove that hisfinancial resources, production or service facilities, personnel, service reputation andexperience are adequate to make satisfactory delivery of the services, construction or itemsof tangible personal property described in the invitation for bids”. The Downs appears tohave met this requirement as all bidders were asked to make presentations to the “bid”committee and clarify any information within the proposals for which the committee hadinquiries.2)
Please perform procedures to determine whether Expo New Mexico failed to provide acopy of the notice or invitation for bids to any businesses that had signified in writing aninterest in submitting a bid, in compliance with Section 13-1-104 (B) NMSA 1978.As indicated in 13-1-104, “In the case of purchases made by other central purchasingoffices, the invitation or notice shall be published at least once in a newspaper of general
circulation in the area in which the central purchasing office is located.” Expo NM didutilize the local paper and advertised the request for proposal for one day and provided a 30day response time. In addition 13-1-104 indicates “ Central purchasing offices shall sendcopies of the notice or invitation for bids involving the expenditure of more than twentythousand dollars ($20,000) to those businesses that have signified in writing an interest insubmitting bids for particular categories of items of tangible personal property, constructionand services and that have paid any required fees.” Expo NM did provide bid documents toall interested bidders. In addition, each bidder was asked to make presentation to thecommittee.3)
Please determine whether there is any evidence that the Downs participated in determiningthe specifications of the RFP, in violation of Section 10-16-13 NMSA1978.Per 10-16-13, “No state agency or local government agency shall accept a bid or proposalfrom a person who directly participated in the preparation of specifications, qualifications orevaluation criteria on which the specific competitive bid or proposal was based. A personaccepting a bid or proposal on behalf of a state agency or local government agency shallexercise due diligence to ensure compliance with this section.” As part of our procedures,we inquired of Expo NM administration and external consultants, Mr. Dupey Bateman, todetermine if the Downs was involved in any shape of manner with the bid process. Theconcern was mainly due to the fact that the Downs already maintained the Casino contractwith Expo and may influence the bid/proposal specifications, qualifications or evaluationcriteria in their favor. We found no evidence of such collusion and was not apprised of suchinvolvement by the Downs. Given the time constraints and the verification of this piece of the bid process by third parties, there is no evidence suggesting participation in thebid/proposal process by the Downs.4)
Please determine whether there is evidence the Downs had information that was pertinent tothe bid that other bidders did not have, in violation of Sections 1.4.1.16 and 1.4.1.19 (D) (3)NMAC, and how this information was obtained.As indicate in the previous item, it does not appear that the Downs was providedinformation regarding the bid that was not provided to other bidders. The Downs appears tohave some advantage as the “incumbent” bidder; however, this is typical of the bid processand not a violation of 1.4.1.16. In addition, all bidders were evaluated by a “bid” committeeand asked to make presentations to the committee. This indicates all timeliness issues andpotential amendments; none of which were noted, could have been addressed by potentialbidders at that time. Therefore, it does not appear that there was a violation of 1.4.1.19 (D)(3) which indicates “ furnish to other bidders information given to one bidder if suchinformation will assist the other bidders in submitting bids or if the lack of such informationwould prejudice other bidders.”
5)
Please determine whether there was an unreasonably quick response required to the largecomplicated RFP, undermining the purpose of the Procurement Code stated in Section 13-1-29 NMSA 1978 and potentially violating of Section 1.4.1.16 NMAC (allow biddersreasonable time to prepare for bids). 13-1-29 indicates “The purposes of the Procurement Code are to provide for the fair andequitable treatment of all persons involved in public procurement, to maximize thepurchasing value of public funds and to provide safeguards for maintaining a procurementsystem of quality and integrity.” As such, the intention of the statute appears to be to insuresufficient time for all bidders to respond to complex bids, Additionally, 1.4.1.16 indicates“Bidding time is the period of time between the date of distribution of the IFB and the timeand date set for receipt of bids. In each case bidding time shall be set to provide bidders areasonable time to prepare their bids. In no case shall the bidding time be shorter than thetime required for publication under Section 1.4.1.17 of this rule.” Section 1.4.1.17 states,“The IFB or notice thereof shall be published not less than ten calendar days prior to thedate set for the opening of bids.” In this case, the bidders were given 30 days to submit theirbids and all bidders presented the proposal the last day before the opening of bids by thecommittee. Although, 30 days may be subjectively construed as not enough time, it doesmeet and exceed the State NMAC requirement of 10 days. GPS did add a finding to thefinancial statements relating to the 30 days as this seemed like a short amount of time toprepare such a complex bid proposal.6)
Please determine whether the “substantive” selection of the contractor took place at theevaluation committee level and whether the State Fair Commission approval was not the“substantive” approval of the contractor. If such is concluded, then the State FairCommission did not comply with the requirement of Section 10-15-1 H (6) NMSA 1978,that “the selection of a contractor be made in an open meeting”.Per review of the process and inquiry of third party, the evaluation process was performedby the “bid” committee and presented to the Expo NM board. The Board then approved thesuggested proposal. The matter in which the approval of the contract appears to be incompliance with 10-15-1 H (6).7)
Please determine whether the public interest was advanced regarding whether the Statereceived a fair amount of revenue from the Down. Did the new lease with the Downsdecrease the amount paid for rent compared to the previous contract with the Downs? Pleaseconsider compliance with Section 10-16-3 NMSA 1978.Per review of the contracts, it appears that the new contract does increase the amount paid toExpo NM in current and future years. The two bids submitted maintained different lease andpay methods. In the case of the Downs lease, payments under the new lease are processed asmonthly payments. In addition, the Downs, i.e. contractor, is now responsible formaintenance and upkeep of facilities, which would also be considered an increase in
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EXPO NM Letter 1-20-13
Letter concerning the controversy over the lease deal that went to the Downs of Albuquerque
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