Testimony of Director Nancy Hapeman for the FY2027 Budget Oversight Hearing of the Office of Contracting and Procurement

Good morning, Chairperson Nadeau and members of the Committee on Public Works and Operations. I am Nancy Hapeman, Chief Procurement Officer of the District of Columbia. Thank you for the opportunity to discuss the Office of Contracting and Procurement's (OCP) Fiscal Year (FY) 2027 budget.

Mayor Bowser's proposed FY27 Budget, Grow DC, was formulated with three key considerations in mind: how to drive growth in our economy to fund the services and programs residents count on, how to keep families in DC and attract new residents, and how to create a business environment that draws new investment and creates new jobs. The federal dollars that once expanded our programs in unprecedented ways have been exhausted, and federal workforce reductions have introduced new pressures on our economy and commercial corridors. Revenues have slowed, but the city maintains a strong financial foundation on which we can build by making the kinds of strategic and targeted decisions that will allow DC to continue growing while delivering the high-quality services our residents depend on.

Reflecting the Mayor's vision, OCP remains steadfast in its mission to procure high-quality goods and services for 79 District agencies. For FY27, OCP's proposed operating budget is $26.7 million, a net decrease of $2.8 million, or 9.5%, from the FY26 approved budget.

Despite the reduced operating budget, a $7.9 million capital investment will enable a bold transformation of our procurement system. Working closely with the Executive Office of the Mayor and Assistant City Administrator, we are advancing the Procurement Automated Support System (PASS) Modernization Project to significantly upgrade our procurement infrastructure, replacing manual workflows with a streamlined, end-to-end process.

To understand the urgency of this project, it is important to look at the history of our current system. The legacy PASS infrastructure has served as the backbone of District procurement for over two decades. Over time, however, its aging architecture has led to fragmented workflows, disjointed integrations, and a heavy reliance on manual workarounds. While previous efforts to modernize the system were paused due to shifting resources, restarting this project is now a critical operational necessity. Upgrading PASS is essential to mitigate the risk of system failure, adapt to modern security standards, and eliminate the administrative bottlenecks that burden both our workforce and our vendor community.

OCP is now actively working towards the replacement of our legacy procurement and vendor management system. This past quarter, we onboarded a team of 10 contractors to work alongside District technology experts. These team members have already identified dozens of business and technical requirements, documented workflows, and created task lists to ensure a successful system go-live in FY28. We are actively collaborating with the Office of the Chief Financial Officer (OCFO) and the Office of the Chief Technology Officer (OCTO) to ensure the system meets the business requirements of all agencies while also modernizing data flows. Requirement-gathering sessions between OCFO, OCTO, and OCP for Phase 1 are wrapping up at the end of April. To advance this effort, a contract with a software implementer is in the final stages and we aim to award this contract in the coming weeks.

A major priority of this modernization is improving the vendor experience-making it easier for businesses across the District to interact and do business with the DC Government. This system upgrade will consolidate registration, invoicing, and solicitation interfaces, reducing the number of portals required by a vendor from three down to just one. This unified experience will eliminate redundant logins and simplify the entire procurement journey. This phase will go live to vendors at the beginning of FY27.

While we are eager to launch this modernized procurement platform, it is equally critical to maintain the stability of our current system. OCP manages the purchase of $5.2 billion in goods, services, and construction annually. Until the new system is fully implemented and tested, we rely entirely on our legacy infrastructure to support our client agencies. Continued funding for the maintenance of legacy PASS is essential to prevent operational downtime and ensure uninterrupted service delivery across the District during the transition period.

In closing, while the FY27 budget reflects difficult choices, it prioritizes our shared DC values and maintains vital core services. OCP is proud to support these priorities as we build a best-in-class, transparent procurement system. We are grateful for the leadership of Mayor Bowser, City Administrator Donahue, and Assistant City Administrator Rodriguez, who have been instrumental in supporting us through the fiscal year as we serve the District. We also extend our appreciation to Chairperson Nadeau and the members of the Committee on Public Works and Operations for their support and for providing us with this opportunity to testify.

I am happy to answer any questions you may have.