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November 8, 2011 Oklahoma House of Representatives Government Modernization Committee.

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Presentation on theme: "November 8, 2011 Oklahoma House of Representatives Government Modernization Committee."— Presentation transcript:

1 November 8, 2011 Oklahoma House of Representatives Government Modernization Committee

2 Four Phases of Purchasing 1.Determining a contract need 2.Solicitation and acquisition of the need 3.Management of the contract performance 4.Contract close-out and lessons learned Review practices from TX, KS, AR, NV, FL, and private sector

3 Current State of State Government Purchasing Decentralized procurement at agency-level Lack consistency across bids –Terms & Conditions –Scope of work (especially large bids) –Methodology –Evaluation criteria determined post-vendor response Oversight is spotty Lack expertise into different bid types (e.g. IT, Construction) Contract performance management rarely occurs Vendors learn the personality of the bidding entity Lack historical performance trending across state and/or states

4 General Best Practices Centralized Purchasing with specific focus –Consistent terms & conditions across agencies –Consolidate and cooperative purchasing power –Assign bid type-specific experts (IT, Construction) –Standards for sectionsproject management, performance, status reporting, technical –Capture cost and schedule benchmarksinternal and external to the State Establish and communicate a consistent Purchasing methodology –Agency to Purchasing process Bid Requirements, Feasibility studies Internal review for approval to bid Solicitation development best practices Vendor target list –Purchasing to Vendor process Communication of solicitation process and bid status Clarification of evaluation criteria Timing between solicitation, award, and initiation Establish contract performance management process

5 IT Solicitation Best Practices - Content Distinguish between project types –Software Implementation –Desktop/Server Licensing –Hardware –Establish project requirements to solicit by type –Consider RFIs for complex, large or new efforts Vendor Solicitation and Engagement –Seek consistency in solicitations –Establish specific evaluation criteria prior to bid release –State project management based on risk assessment –Leverage scenario-based reviews in addition to paper response –For complex projects, establish engagement period first Time & materials, with not to exceed amount Implementation could be stopped if engagement fails –Upon finalists, engage in open discussions regarding Scope Risks Cost Schedule –Identify opportunities for collaborative solicitations

6 IT Solicitation Best Practices - Retainage Software project licenses: –40/40/20 or 30/30/40 splits –Contract, Installation, 90- or 180-day post implementation Services: –Hold back 10% until project completion –Tie to deliverable Acceptance and Penalty clauses 10% penalty if rejected more than 2 times 10% bonus is accepted first time

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