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Judicial Branch Procurement Some Superior Courts Generally Followed Requirements but Could Improve Their Procurement Practices Report Number: 2018-301

Introduction

Background

The California Judicial Branch Contract Law (Judicial Contract Law) went into effect in 2011. It requires all judicial branch entities to comply with the provisions of the Public Contract Code that are applicable to state agencies and that relate to the procurement of goods and services. It also requires the Judicial Council of California (Judicial Council)—which is the policymaking body of the California court system responsible for ensuring the consistent, independent, impartial, and accessible administration of justice in the State—to create a contracting manual for all judicial branch entities, such as superior courts, and for these entities to adopt local contracting manuals. In addition, the Judicial Contract Law directs the California State Auditor’s Office (State Auditor), subject to legislative approval, to audit five judicial branch entities other than the Judicial Council every two years to assess their implementation of the Judicial Contract Law. This is our fourth audit of judicial procurement since 2011.

The Judicial Branch Contracting Manual

The Judicial Contract Law requires the provisions of the Judicial Branch Contracting Manual (judicial contracting manual) to be substantially similar to those of the State Administrative Manual and the State Contracting Manual and to be consistent with the Public Contract Code. The State Administrative Manual provides general fiscal and business policy guidance to state agencies, while the State Contracting Manual provides more specific guidance regarding procurement and contract management. The Public Contract Code contains, among other provisions, competitive bidding requirements for state agencies. The Legislature’s objectives in enacting these laws included providing all qualified bidders with a fair opportunity to enter bids and eliminating favoritism, fraud, and corruption in the awarding of public contracts. In addition to establishing procurement requirements, the judicial contracting manual also contains recommended procurement practices for courts. Although those provisions are not mandatory, the judicial contracting manual states that courts should follow the recommended practices unless they have good business reasons for doing otherwise.

Like the Public Contract Code, the judicial contracting manual generally requires judicial branch entities to secure competitive bids or proposals for each contract, with certain exceptions, as the text box shows. For example, the judicial contracting manual exempts purchases under $10,000 from competitive bidding requirements as long as a court determines that the price is fair and reasonable. State procurement rules and the judicial contracting manual also do not require competitive bids for contracts for emergency purchases or for contracts that are with governmental entities.

The judicial contracting manual also allows for several types of noncompetitive procurements. Two types that judicial branch entities can use are sole‑source procurements and certain leveraged procurement agreements (leveraged agreements). A sole‑source procurement is one in which an entity affords only one vendor the opportunity to provide goods or services, as the text box describes.

An entity can use a leveraged agreement to purchase goods and services from certain vendors on the same or substantially similar terms without having to seek competitive bids, as the text box explains. The Department of General Services administers some leveraged agreements for use by state agencies and local governments so that they may buy directly from suppliers through existing contracts and agreements. The judicial contracting manual includes a process for using leveraged agreements, but it recommends that judicial branch entities consider whether they can obtain better pricing or terms by negotiating with vendors or soliciting competitive bids.

Audits of California Superior Courts

Including this report, we have issued four audit reports covering procurement practices at 21 of the State’s 58 superior courts since the Judicial Contract Law went into effect in 2011. We based our selection of the courts we examined on factors including a court’s size, total volume of contracts, previous audits or known deficiencies, and significant or unusual changes in management. We selected only courts we had not already audited.

California’s superior courts are also subject to audit from several other agencies. The Office of Audit Services of the Judicial Council conducts court audits. Likewise, the California State Controller’s Office’s Division of Audits, which performs independent audits of government agencies that spend state funds, also conducts audits of superior courts. Finally, the California Department of Child Support Services—which works with parents and guardians to ensure children and families receive court‑ordered financial and medical support—also conducts such audits. Since 2011 entities have conducted a total of 93 audits of California’s superior courts.The Figure shows a map of California’s 58 counties, their relative population sizes, the superior courts that we have audited, and those that have been audited by the Judicial Council or another independent body since 2011.

Figure
Most Superior Courts Have Been Audited Since 2011

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