Update from ODE on Contract and Grant Agreement Delays

To:              Superintendents, School District Business Managers, and other contracting
                   and granting partners
From:         Colt Gill, Director of the Oregon Department of Education
Date:          November 16, 2021
Subject:     Update from ODE on contract and grant agreement delays you may
                   be experiencing

Dear Colleagues, 

ODE’s Procurement Team has been working tirelessly, many hours each day, to process the more than 10,000 individual contracts and grant agreements that have been legislatively approved this biennium. In this email, you’ll learn about the context for delays you may be experiencing; how contracts, grants, and IGAs are processed at the state; and what considerations must play into prioritizing the order of review. The bottom line is that multiple agreements and payment processes are delayed in implementation. I apologize for how this may be impacting your operations. I’m also grateful for any patience you can offer amidst the many other complexities you are navigating in your work. The goal of this email is to provide transparency and insight about the procurement process in an extremely high volume and somewhat unique time like this. This is not an excuse, it is an explanation. 

In past years, especially at the beginning of a biennium, ODE has experienced procurement delays that we have been working to streamline and resolve. This year, there are several additional factors causing an increase in both the number of contract and grant agreements and delays in approving and paying grants:

1. Every two years at this time of year, there is an influx of contract and grant agreements that come as the Legislature approves a budget for each agency.
2. New funding has recently become available from both state and federal streams related to COVID-19 recovery, early learning, and equity. Compared to just four years ago, ODE is processing an increase of more than $4 billion in payments to school districts, ESDs, tribes, community based organizations, early learning providers, childcare providers, and other partners. These result in a broader array of contractees and grantees than is typical, even at our busiest times.
3. Many new funding sources have come with higher levels of accountability and explicit purposes from the state or federal law makers. This is necessary to ensure tax payers that the dollars are well spent, but the complexity of the contracts and grants and associated reporting slows the process down for the agency and for the grantees and contractors. 
4. ODE’s procurement office has several vacancies that we are working hard to fill. Like many positions that require highly trained individuals in Oregon right now, we are struggling to find quality candidates and are recruiting from out of state. Unfortunately we have too few people processing grant and contract agreements at this time. We have an incredibly talented team, but there is a limit to the number of agreements they can simultaneously execute. There are also constraints at the Department of Justice (DOJ) and many vacancies at the Department of Administrative Services (DAS) that are required to review a large number of grant agreements that come through ODE. 

Procurement at a state level can take time because we are tasked with taking good care of state and federal funds, which are public dollars. For amounts of more than $150,000, the process is more arduous and DOJ and DAS must also review and approve before payments are made. This check and balance is in place to ensure taxpayer dollars are spent appropriately and as the Legislature intended. Smaller amounts also require close review through a process guided by the Oregon Procurement Manual that includes multiple stages before contracting, during the contract period, and after funds have been spent. 

With the influx of federal COVID relief funds, these procurement challenges and delays are not unique to ODE. These procurement challenges impact many sectors of state government, not just education, early learning, educator advancement, and youth development. The overall positive flow of resources to schools and districts is important and appreciated. The flow of several streams of resources at one time across many agencies does create some additional strain and limitations we continue to work on resolving.

These delays do not impact State School Fund payments flowing to school districts and school district’s ability to continue to draw down large pots of federal dollars such as ESSER. 

With the above circumstances and requirements in mind, our Procurement Team and Executive Leadership Team has a system to prioritize contract and grant agreements for processing. Here are some examples of what staff take into consideration as they prioritize agreements:

1. Funding from federal programs is prioritized when that funding would be lost if due dates aren’t met. 
2. Target programs (like equity programs and early learning & childcare programs) that go to community based organizations, small childcare operations, and other small entity partners are prioritized highly because they have less operating dollars at their disposal, so cash flow must increase in order for activities to happen.
3. Large dollar programs like the SSA Student Investment Account and High School Success programs that fund multiple essential programs in school districts.
4. Some school district grants can be retroactive, so staff factor in when a delay doesn't seem to have significant cash flow impacts given that expenditures can't be claimed back to the start of an agreement. 
5. If a grant agreement is not required by federal or state law to be funded or does not have a specified due date, then it may be lower priority for approval in order to ensure that the state prioritizes following the law during a time crunch like this one.

Finally, we are also taking steps to streamline the system further, hire additional staff, and seek position authority and funding for more staff from the Legislature. We believe for the amount of funds processed by ODE and the number of individual agreements we are significantly understaffed even when all current positions are filled.

I’m grateful for your patience, and I know our procurement and program staff are as well. We will continue to work with speed and efficiency to process this year’s dramatic increase in contracts and grants. The timing for review of any one specific contract or grant cannot be precisely anticipated because obstacles may arise in the review process for each contract or grant that can impact the timing of others. Your grant administrator is your best point of contact so that ODE’s procurement staff can fully focus on moving contracts and grants through the process outlined in this communication. I know this explanation will not expedite your agreement, but I’m hopeful the information can help you understand and plan for the delayed agreement.

Thank you,

Colt Gill
Director of the Oregon Department of Education