Agenda Item 9-A
Action Item
To:
Chairman Cook and the VRE Operations Board
From:
Doug Allen
Date:
March 20, 2015
Re:
Authorization to Execute a Contract for Financial
Auditing Services
Recommendation:
The VRE Operations Board is asked to authorize the Chief Executive Officer to
execute a contract with PBMares, LLP of Harrisonburg, Virginia for financial
auditing services. The contract will be for a base period of three years with options
to extend for up to four additional years, in two year increments, in an amount not
to exceed $385,100 for the seven –year period, plus a contingency of $30,000, for a
total not to exceed amount of $415,100, with the CEO exercising the option years at
his discretion.
Background:
In May 2008, VRE entered into a contract with PBMares (formally PBGH) for the
audit of the VRE financial statements, as the result of a joint solicitation issued by
the Northern Virginia Transportation Commission (NVTC) for the audits of the VRE
and NVTC financial statements. The contract was for a three-year period with
options to extend for up to four additional years. The last year of the extension was
for the recently completed audit of the FY 2014 financial statements. (PBMares also
served as the auditor for the Potomac and Rappahannock Transportation
Commission, PRTC, but as the result of a separate procurement.)
As joint owners of VRE, NVTC and PRTC each recognize a portion of VRE as a fund in
their audited financial statements. Contracting all three engagements with the same
firm is believed to be cost effective and maximizes the opportunity for timely
completion of the audits. On December 19, 2014 the VRE Operations Board
approved a request for VRE to participate in a joint Request for Proposals (RFP) for
financial auditing services to be issued by NVTC on behalf of both Commissions and
VRE. An RFP was issued in accordance with Section 2.2-4303 of the Virginia
Public Procurement Act.
A mailing list of 11 prospective Offerors was established for the solicitation to
ensure access to adequate sources of services. On February 2, 2015 NVTC issued a
Request for Proposals for financial auditing services on behalf of both Commissions
and VRE, with the intention of each organization entering into a separate contract
with the mutually selected auditor. Proposals were submitted by five firms on the
due date of February 25th.
The proposals were evaluated by a selection committee made up of financial staff
from NVTC, PRTC, VRE and the Northern Virginia Transportation Authority.
The selection committee met to discuss and evaluate the Proposals using the
following criteria and scoring system:
CRITERIA
Qualifications and government experience of the firm
Qualifications and government experience of assigned staff
Audit understanding, approach and work plan
Ability to complete audit by required deadlines
Commitment to provide continuity of audit staff
Experience with Virginia localities and the public transit
industry
References from clients with similar size and complexity
TOTAL POINTS
SCORE
15 points
15 points
20 points
10 points
10 points
15 points
15 points
100 points
In accordance with the requirements of state law for the process of competitive
negotiation for professional services, cost may not be used as a ranking factor or
requested for submission by all Offerors, although a nonbinding estimate of costs
may be requested at the interview stage.
Interviews were conducted with the top three firms. It was determined that the
proposal from PBMares was technically compliant and it was awarded the highest
rank by the selection committee. Negotiations were successfully conducted with
PBMares for the audit of the VRE financial statements at a price considered fair
and reasonable. NVTC and PRTC will proceed separately on their respective
contractual arrangements with PBMares.
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The final ranking of firms who submitted proposals for financial accounting services
is listed below:
1.
2.
3.
4.
5.
Offerors
PBMares, LLP, Harrisonburg, VA
Brown, Edwards & Company, LLP, Harrisonburg, VA
Cherry, Bekaert, LLP, Tysons Corner, VA
Robinson, Farmer, Cox Associates, Fredericksburg, VA
Rubino & Company, Chartered, Bethesda, MD
PBMares, LLP has served as the financial auditors for NVTC and VRE since 2003.
They are a regional firm, headquartered in Virginia with offices in Fairfax,
Fredericksburg, Harrisonburg, Newport News, Norfolk, Richmond, Warrenton,
Williamsburg, and Baltimore. VRE and the Commissions will continue to receive
services from the government practice team in the Harrisonburg office, co-led
by Michael Garber and Betsy Hedrick.
PBMares’ current and recent audit clients include the Northern Virginia
Transportation Authority, the Prince William County School Board, the Prince
William County Service Authority, and the Town of Herndon. The firm is a
member of the McGladrey Alliance, which gives them access to the extensive
resources of the fifth largest accounting firm in the country.
The nonbinding cost proposals submitted during the interview stage were in the
range of $337,100 to $471,290 for the seven year period. VRE staff has certified
the highest ranked Offeror’s price is fair and reasonable based on the cost estimate
for this project.
The contract will be for a base period of three years, with two optional two-year
extensions with the VRE CEO exercising the option years at his discretion, at the
following cost:
Base period – annual amount not to exceed $51,000 for the first year of contract
service, with 2.5% increases for each subsequent year, or $156,875 for the three
year base period.
First option period - annual amount not to exceed $111,275 for the two year
option period
Second option period - annual amount not to exceed $116,950 the two year
option period.
Total cost for all periods - $385,100
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The VRE Audit Committee concurred with the staff recommendation at their
meeting on March 20, 2015, prior to the Operations Board meeting.
Fiscal Impact: Funding for auditing services in the amount of $70,000 is provided
in the FY 2016 operating budget for audit and accounting fees in the Finance and
Accounting department. Funding for future years will be included in each proposed
annual budget.
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