3Organizational Structure Asst. Commissioner State PurchasingDirector, Strategic SourcingTerry DoumkosDirector, Customer AdvocacyGina TiedemannDirector, Knowledge CenterKelly Loll-JonesGood and SuppliesClarence IngramITBrian WirpsaSpecial ProjectsDebra BlountStrategic SupportKatherine BriodyProcess ImprovementDonna FileProcurement ApplicationsKristine SpliethInfrastructureDarryl MitchellCust./Vendor SatisfactionHugh FarleyProfessional DevelopmentMirna BarkerStatewide Cards ManagerPaul KurtzWill we use this org chart or the following slide?Conduct category management, strategic sourcing and supplier development for categories managed by State PurchasingProvide guidance to category teams that reside within agenciesManage procurement of goods/services that have no established category teamsProvide support activities to category teams and special projectsSupport procurement applicationsManage procurement trainingAssist agencies in improving processManage communications to enhance agency/vendor relations
4The Procurement Transformation will be delivered while operating within the context of open and fair competitionOpen CompetitionFairness ConsiderationsTransformation InitiativeA.T. Kearney’s House of ProcurementDrivers of CompetitionBroad participationClear and effective processes that provide open transparency into the procurement processes and criteriaEffective documentation of results and approachFactors for ConsiderationLeverage for minority vendor and small businessEstablish business practices to achieve fairness and equityEffective and Balanced Approach to Drive ResultsCompetition and fairness used to drive the strategic sourcing approach to achieve savings and preserve policy prioritiesDevelop internal capabilities to further sustain procurement excellence
5Professional Development The Training page allows you to obtain information on:Course DescriptionsCourse SchedulesRegistration Information5
7Basic Procurement Certificate Professional DevelopmentEmployees who need basic understanding of State procurement tools, procedures, and policiesBasic Procurement Certificate1Employees who need more advanced understanding of State procurement tools, procedures, and policies as they relate to RFPs and NegotiationsMore specifically, employees responsible for writing and managing the RFP process as well as being the facilitator or responsible for finalizing negotiations or for leading the negotiation processRFPCertificate2SNegotiations Certificate4SEmployees who need more advanced understanding of State procurement tools, procedures, and policies as they relate to Contract ManagementMore specifically, employees responsible for writing and administering the contractsContract Management Certificate5SP-Card CertificateSEmployees whose responsibilities include managing the P-Card Program at their facilities7
8The procurement process can be summarized with seven major stages Overview of Procurement stagesNeed IdentificationPre-SolicitationSolicitation PreparationSolicitation processEvaluation ProcessAward ProcessContract processKey StepsIdentify Internally/externally need for purchaseDecide on Ownership of categoryIdentify sourcing teamDecide on required analysisDevelop category profileGenerate Vendor PortfolioIdentify most appropriate purchasing methodDevelop Sourcing strategyGenerate technical evaluation criteriaInclude standard language for RFxIncorporate standard contract terms and conditions based on categoryPost eRFX advertisement or bid notice on GPRConduct Q&A sessionConduct offeror conferenceSelect Implementation pathDevelop Evaluation/ negotiation planReceive bidsSelect VendorsConduct administrative reviewEvaluate technical proposalAnalyze cost proposal (TCO calculation)Conduct NegotiationIssue intent to awardHandle vendor protestsOperationalize new agreementIssue notice of awardDocument and store contract/purchase detailsCreate contract administration planSustain resultsTrack contract performanceTrack vendor performance
97-Stage MethodologyProvides the necessary process and techniques to improve procurement operationsProvides a consistent method to process information and defines a structure for each step of the process and standardizes the way all events are conductedFacilitates the adoption of communication technology that lead to increase in efficiencies, effectiveness, and accountability
10Solicitation Preparation Need IdentificationNeed IdentificationPre-SolicitationSolicitation PreparationSolicitation processEvaluation ProcessAward ProcessContract processThe identification of the need involves the broad identification of what isrequiredAs part of this process, the agency will identify stakeholders, may carry out some stakeholder analysis or surveys, and undertake spend and demand analysisFollowing this activity APOs/UPOs will have some preliminary views on the required services and solutionsPartnership with the State Purchasing Division may enhance the APOs/UPOs’ comprehensive knowledge of the market, as it is necessary to perform an appropriate level of market research to develop a good business case and to make a good decision on the specific procurement methodology to follow
11Planning Your Procurement “The critical importance of the Recovery Act…require heightened management attention on acquisition planning.” (Peter Orszag Letter, 2/18/09)
12Lead Measure 5: Reduce Average Cycle Time For RFXs (# of days) by 10% 2008RFX Goals161106RFQ GoalRFP GoalDrivers and what we’re doing to address them:Early engagement and customer relationship managementIncreasing trainingIntroducing standard templatesInclude metrics for SWC’s in 4th Quarter
14Pre-SolicitationResearch is conducted to help write the requirements/ specifications and identify the sources that provide the goods or services requiredA cross functional team is assemble in order to conduct the research, write the requirements, and help identify what is neededIf necessary, an evaluation team is assembled together in order to perform the evaluation of the proposalsThe best method of solicitation is identified
15Pre-SolicitationHelps identify, examine, select and implement sourcing alternatives for a specific Sourcing Group (SG).Encompasses the whole process for evaluating, selecting and aligning with supplier(s) to achieve operational improvements and support overall strategic objectives.Focuses on total costs and not just the purchase priceAssists an organization by gaining a good understanding of its requirements, knowing how it must map to the existing supply market, and then develop a plan for both short and long-term objectives.
16The procurement process can be summarized with seven major stages Overview of Procurement stagesNeed IdentificationPre-SolicitationSolicitation PreparationSolicitation processEvaluation ProcessAward ProcessContract processKey StepsDevelop Sourcing strategyGenerate technical evaluation criteriaInclude standard language for RFxIncorporate standard contract terms and conditions based on category
17Solicitation Preparation Identify the method of solicitationFinalize the requirementsWrite the RFxCreate an evaluation methodology for the RFx – Assign points to each Proposal Factor and each question/requirement within each proposal factorCreate the cost methodologyHave the cross functional team review and edit the RFx to ensure that it addresses the requirements
18Vendor RegistrationImportance of contacting prospective bidders to register on the Georgia Procurement RegistryRegistration Determine whether your company is a Sourcing Bidder or a Supplier Sourcing Bidder - If your company provides goods or services but has never had a purchase order, received a remittance, or been awarded a contract by the State of Georgia, you need to register as a sourcing bidder. Your company may fit into this category even if it was active in our current Vendor Registration System. Supplier - If your company has had a purchase order, received a remittance, or has been awarded a contract by the State of Georgia, you need to register as a supplier. A company in this category will have a PeopleSoft vendor number in our Financials system. After reading the definitions, if you are unsure whether you are a bidder or supplier, try registering as a supplier first. If you are a supplier, your company information will pop up when after you've added all the required fields and click in the Vendor ID box. If no record is found, register as a bidder.Read and Print the Quick Reference Guides Register as a Sourcing Bidder Register as a Supplier Register in Team Georgia Marketplace New Hours: Team Georgia Marketplace is available 24 hours a day, 7 days a week, except between 7:00 PM and 7:30 PM daily when the system is down for routine maintenance. If you are registering, you must complete the process prior to 7:00 PM or you will lose it.
19The procurement process can be summarized with seven major stages Overview of Procurement stagesNeed IdentificationPre-SolicitationSolicitation PreparationSolicitation processEvaluation ProcessAward ProcessContract processKey StepsPost eRFx advertisement or bid notice on GPRConduct Q&A sessionConduct offeror conferenceSelect Implementation pathDevelop negotiation planReceive bids
20Solicitation ProcessDuring this Stage, the procurement staff is responsible for the following:Post the solicitation – This begins the Solicitation Process stageConduct offerors’ conferences, if appropriateRespond to any offerors’ questions in writing. Questions could be received directly from the offeror or documented as part of the offerors’ conference. Post these answers for all offerors to seeDefine a negotiation methodologyReceive the bids or proposals from the suppliers/offerors – This marks the end of the Solicitation Process stage
21Competitive Bid Process Options Sourcing teams have several options to complete a competitive bidding processCompetitive Bid Process OptionsApplicability(e)RFQ, AwardSourcing of standard commodity with clear understanding of specificationsProcurement is relatively small with limited potential for savings(e)RFQC, eAuction, AwardAppropriate for sourcing groups with the following criteriacompelling spendcompetitive marketplacecredible switching threatclear category definitionclear product specificationInvitation to auction requires pre-screening of suppliers through RFQC to gather qualitative data(e)RFP, Award(e)RFP, Negotiations/Multiple Revision to Cost and Technical, Award (1) (2)(e)RFP, Negotiations/Multiple Revision to Cost Only, Award (1) (2)Sourcing of complex categories and/or compelling spendUsed to gather qualitative, technical and cost information from suppliersNegotiations with multiple offerors can be conducted during the RFP process to increase savings opportunitiesNote: (1) Authorized to disclose information derived from (but not contained in) the proposals to competing offerors such as overall rankings and overall scores for the purpose of soliciting ongoing revisions to cost proposals via an auction process or meetings(2) Depending on existing code, the use of negotiations may be restricted
22The procurement process can be summarized with seven major stages Overview of Procurement stagesNeed IdentificationPre-SolicitationSolicitation PreparationSolicitation processEvaluation ProcessAward ProcessContract processKey StepsSelect VendorsConduct administrative reviewEvaluate technical proposalAnalyze cost proposal (TCO calculation)Conduct Negotiation
23Solicitation Evaluation During this Stage, the procurement staff is responsible for the following:Conduct the Administrative review to ensure all necessary documentation was submitted and all offerors passed the requirementsEvaluate the proposals based on the evaluation methodology, if appropriateEvaluate the cost proposalCombine the cost and proposal evaluations to arrive to the combined evaluation in order to select the best supplierConduct negotiations based on the negotiation methodologyEvaluate new submittals from the offerors involved in the negotiation process
24Predetermined Vendor Criteria Suppliers are ranked and a competitive range is used to determine a final list of suppliers for award or further negotiationsPredetermined Vendor CriteriaCost/ TechnicalCriteriaWeightCostPrice30%TechnicalCapabilitiesTermsValue addedSupplier StatusQuality15%20%10%5%RFPRFPRFP+ResponseResponseResponseAnalysisThis Is The MostRankingChallenging Step#1 Supplier#2 Supplier#3 Supplier
25In Summary, how to embed the sourcing process? Profile Sourcing GroupSelect Sourcing StrategyGenerate Supplier PortfolioSelect ImplementationPathSelect Competitive Supplier (s)ImplementSuppliersBenchmark Supply MarketUnderstand internal spend and external marketOpen supply base and identify all viable suppliersCreate “go to market” approachDecide most appropriate execution strategyEvaluate proposal and select suppliersOperationalize supplier agreementsMonitor market and supplier performance1234567PlanningIssue Bid & Select SuppliersImplement SuppliersOn-going Category ManagementRoles and Responsibilities – Strategic Sourcing Initiatives Led by PurchasingPurchasingPlan, manage, and complete key milestonesShare milestones with selected stakeholders and ensure buy-inContact stakeholders to profile spend and fully understand end-user requirementsCollect supplier spend (i.e., line item detail)Standardize specsLead bidding/negotiation processPlan implementation activitiesMonitor implementationMonitor savings tracking and complianceSelected Department StakeholdersSupport Purchasing in profiling spend (i.e., validate spend data and submit specs/requirements)Support development of key milestones and support bidding processComply with supplier communication requirements and ensure engagement of department end-users as neededFully support new supplier implementation and complianceTrack department savings and monitor implementation progress
26Georgia Procurement Manual The State Purchasing Division is currently working on a project that will combine the Georgia Procurement Manual (GPM) and the Georgia Vendor Manual (GVM). Release date set for April, 2009 This document contains the state’s sources of policy and guidance for procurement issues.
27Templates – RFP, RFQ and eQuote Link to RFP templatePaper/Non-PeopleSoft templateElectronic templateLink to RFQ templateLink to eQuote template
28Language in Our DOAS Agency and Statewide Contract Templates Regarding Auditing – Agreement to Cooperate (Vendor)“Record Retention and Access. The Contractor shall maintain books, records and documents in accordance with generally accepted accounting principles and procedures and which sufficiently and properly document and calculate all charges billed to the State throughout the term of the Contract for a period of at least five (5) years following the date of final payment or completion of any required audit, whichever is later. Records to be maintained include both financial records and service records. The Contractor shall permit the Auditor of the State of Georgia or any authorized representative of the State, and where federal funds are involved, the Comptroller General of the United States, or any other authorized representative of the United States government, to access and examine, audit, excerpt and transcribe any directly pertinent books, documents, papers, electronic or optically stored and created records or other records of the Contractor relating to orders, invoices or payments or any other documentation or materials pertaining to the Contract, wherever such records may be located during normal business hours.
29The Contractor shall not impose a charge for audit or examination of the Contractor’s books and records. If an audit discloses incorrect billings or improprieties, the State reserves the right to charge the Contractor for the cost of the audit and appropriate reimbursement. Evidence of criminal conduct will be turned over to the proper authorities.” CAUTION As discussed, DOAS contract templates are not mandatory; therefore, not all contracts established by SPD on behalf of other state agencies will contain the same auditing language. In addition, not all DOAS contracts are established utilizing these contract templates as they are only required for purchases of $100,000 or more (which generally covers all of our multi-year agreements where we would have multiple purchases as opposed to a single payment for our less expensive purchases).” Note For ARRA funds this language should be used irregardless of the dollar amount of the purchase.
30Complying With Federal Law Regarding Use of ARRA Funds Federal law regarding the appropriate use of ARRA funds has several implications for the state procurement process, including:Building solicitation specifications and requirements so that they adhere to ARRA regulations such as the Buy American provision,Ensuring the evaluation and award process correctly implements the ARRA regulations, andUtilizing effective contract administration tools to ensure the goods and services delivered by the awarded vendors are in compliance with the contracts.
31Key Action to Ensure These Goals Are Met Include: Issue a communication alert to state entities requesting these entities receiving ARRA funds to contact DOASBegin discussions with GSFIC (DOAS’ partner for establishing public works contracts) as well as BOR and GDOT to address the need to draft compliance provisions and or policy regarding ARRA funded contractsPartner with GSFIC and individual state agencies to ensure appropriate evaluation and award of contracts utilizing ARRA funds
32Buy American Provision DOAS understands Section 1605 of the ARRA imposes a mandate that certain manufactured products must be produced in the United States.During discussions with state entities establishing public works contracts, DOAS will address this mandate and its correct application, including the definition of US-made products as well as cost-based waivers to this requirement.
33“In today’s edition of the Federal Register, the General Services Administration (GSA) posted six new documents relating to the Federal Acquisition Regulations (FAR) within the American Recovery and Reinvestment Act (ARRA). While the postings only affect federal agencies, the Office of Management and Budget (OMB) has stated in previous conversations that the FAR regulations would likely be similar to the OMB issued regulations for Title 2 regarding federal assistance to states. OMB is anticipating publishing these regulations as early as Friday, April 3. The six FAR postings cover the following topics:Publicizing Contract Actions Reporting Requirements Whistleblower ProtectionsGAO Access to Contractor EmployeesBuy American Requirements for Construction MaterialGAO/IG Access”
34Ethics PolicyIn order to maintain public trust and transparency in State Purchasing, DOAS has implemented policies and procedures on standards of conduct for its employees and contractors. Below you can access these policies.Standards of ConductCode of Ethics for Government Service
35Ethics Policy In order to maintain public trust and promote transparency in government, an ethics policy has beenestablished by Governor Perdue to ensure the highestethical standards within the State of GeorgiaLink to State Ethics PolicyOffice of Inspector General directiveIG Directive - FINAL VERSION (3).doc
36Ethical Standards Ethics-govt.pdf Standards of Conduct Policy.pdf Code of Ethics for Government ServiceStandards of Conduct Policy.pdfState Purchasing Standard of ConductWhite House Memo pdfEnsuring Responsible Spending of Recovery Act Funds
37Accountability & Auditing Audit Risk Alert 2.docAmerican Recovery and Reinvestment Act of 2009 (ARRA)Audit Risk Alert #2 – Responsible Spending of Recovery Act FundsMarch 24, 2009On March 20, 2009, President Obama issued a memorandum to heads of Executive Departments and Agencies emphasizing responsible spending and transparency of Recover Act Funds.Recovery Act funds are to be used to stimulate the Nation’s economy, and are not intended to fund projects for special interest.To that end, please be advised of the following:1. Limit on Funds – Section 1604 of the Recovery Act states that none of the Recovery Act funds may be sued by any State or local government for:“any casino, or other gambling establishment, aquarium, zoo, golf course, or swimming pool.”Consequences of Noncompliance: In the event of a recipient has not complied with Section 1604, appropriate corrective action may include, but not be limited to:a) Disallowing or otherwise recovering improperly spent amounts.b) Imposing additional requirements on the recipient.c) Initiating a proceeding for administrative civil penalties.d) Initiating a proceeding for suspension and debarment.2. Transparency of Registered Lobbyist Communications – An executive department or agency official shall not consider the view of a registered lobbyist concerning particular projects, applications, or applicants for funding under the Recovery Act unless such views are in writing.All written communications form a registered lobbyist concerning the commitment, obligation, or expenditure of Recovery Act funds for particular projects, applications, or applicants shall be posted publicly by the receiving agency or governmental entity on its recovery website within 3 business days after receipt of such communication.
38Monitoring System Best Practices_Contract Monitoring.pdf
39Ethics IG Directive - FINAL VERSION 3-24-09 (3).doc
40Audit Language for Vendors (contained in “Best Practices in Government, Components of an Effective Contract Monitoring System” from the State Auditing OfficeAccess to Records/Right to Audit Clauses The right to audit the vendor’s books is a standard contract clause and a fundamental concept of contract administration. When government services are contracted out, the vendor represents the state in providing the service. Agencies have a responsibility to verify the information that the vendor reports to them and to ensure that funds are expended properly. This is especially important when there is a high degree of risk involved due to the type of contract or service, a high degree of liability exists for the state, or the potential for severe consequences in the event of poor vendor performance. Because the records are the property of the vendor, the contract must include an agreement that the agency has access to and can audit those records. The ability of agencies to audit vendor records should also extend to the records of any subcontractors. Other States’ Use of Access to Records/Right to Audit: Access to vendor records and the right of the state to audit the contractor is present either through existing law or as a standard contract clause in five of the six states surveyed by the audit team. The clause is used only for some contracts in the remaining state. Georgia’s Use of Access to Records/Right to Audit: • The survey of 25 state agencies found that 23 of the agencies (92%) reported that access to vendor records and the ability to audit those records was a contract management tool. This was the most frequent practice used, according to the surveyed agencies. • Contract file reviews found that 17 of 20 contracts (85%) contained clauses related to the right of access of vendor records and the ability to audit those vendors. The three remaining contracts (15%) either addressed access to confidential information or stated that the vendor’s records would become the agency’s property at the end of the contract. • The Georgia Procurement Manual does not require an access to records/right to audit clause but does reference it.