Arizona Department of Administration—Department Should Strengthen Its Management, Support, and Oversight of the State-wide Procurement System

The Arizona Department of Administration (Department) is the State’s central procurement authority with responsibility to procure and supervise state purchases of goods and services. Arizona’s decentralized procurement system includes 95 state agencies with delegated purchasing authority, meaning that these agencies are able to procure goods and services up to their delegated purchasing amount without the Department’s prior approval; more than 5,560 active department and state agency contracts as of July 1, 2014; and approximately $9.8 billion in expenditures for goods and services in fiscal year 2014. Some important elements of a sound state-wide procurement system include a strategic plan, a comprehensive procurement manual, and oversight and management of procurement processes and activities. Although the Department has updated its strategic plan to better focus on improving the state procurement system, it needs to strengthen its procurement strategic planning by conducting an assessment of the state-wide procurement system, developing specific action steps to implement the plan, and developing and monitoring sufficient performance measures. The Department also needs to develop a comprehensive procurement manual to guide the solicitation and administration of state contracts. Finally, the Department should further strengthen its oversight of state agencies’ procurements by implementing a risk-based compliance review approach and improving its compliance review checklist and policy.