1. Purchasing Directors’ Meeting December 9, 2004 4:00 P.M. State Purchasing

2. 2 Purchasing Directors’ Meeting December 9, 2004 Agenda Welcome / Meeting Overview State Purchasing Mission MyFloridaMarketPlace Update Roadmap to Excellence in Contracting Follow Up Fuel Tax Issues Next Meeting Location / Time

3. 3 State Purchasing Mission Alignment with Agency Mission DMS Mission To deliver resource saving solutions to our customers in order to enable them to better serve the people of Florida. State Purchasing Mission To gladly deliver useful and innovative purchasing services in order to provide effective program support to all state agencies.

4. 4 State Purchasing Mission Tasks Deliver state term contracts that provide the right commodities and services at lower cost Improve quality of state term contract presentation Support completion of MFMP roll-out Retire legacy systems Assist CFEG procurements Implement centralized vendor performance rating system Implement centralized contract management system Implement internal processes and procedures (paperless) Complete next waves of training and certification

5. 5 State Purchasing Mission Goals (Measures) Achieve 5% cost savings over last price paid on all contracts awarded this year for similar products and services. Achieve an average 28% savings over MSRP for all contracts. Increase customer satisfaction by 20% (compared to SP survey FY 03-04) Facilitate three CFEG initiatives through Gate 2 (procurement) and into Stage 3 Deliver two new innovations –eForms solution –centralized vendor performance rating system

6. 6 State Purchasing Mission Steve and Charles’ Expectations Cost Savings –At least 28% below MSRP –At least 5% below last price paid Level of Service will not be reduced 20% Improvement in Customer Focus State Purchasing will be seen as an asset State Term Contracts will be easy to use Highly trained and motivated teams

7. 7 State Purchasing Mission Russ’s Expectations My goals: Achieve 5% cost savings over last price paid on all state purchasing agreements awarded this year for similar products and services. Achieve an average 28% savings over MSRP on all state purchasing agreements. Increase customer satisfaction by 20% (compared to SP survey FY 03-04) Deliver two new innovations: eForms solution; centralized vendor performance rating system Key task: Review & revise existing training materials; incorporate rule changes; recruit and schedule other trainers

8. 8 Purchasing Directors’ Meeting December 9, 2004 Agenda Welcome / Meeting Overview State Purchasing Mission MyFloridaMarketPlace Update Roadmap to Excellence in Contracting Follow Up Fuel Tax Issues Next Meeting Location / Time

9. 9 MyFloridaMarketPlace Update Contract Issues Tentative Agreement with Accenture, subject to LBC approval in January -- moving ahead SPURS Sunset Plan Are you aware? prepared?

10. 10 MyFloridaMarketPlace Update From Sourcing to Punchout - Goal Sourcing Contract User View Core (line item bid) Non-core (% discount) All else Contract (periodically refresh) Non-contract Punch-Out via MFMP Customized view for non- MFMP EU’s Commercial Contract items marked

11. 11 Purchasing Directors’ Meeting December 9, 2004 Agenda Welcome / Meeting Overview State Purchasing Mission MyFloridaMarketPlace Update Roadmap to Excellence in Contracting Follow Up Fuel Tax Issues Next Meeting Location / Time

12. 12 Roadmap to Excellence in Contracting Factor Contributing to Current Deficiencies Inadequate systems exist for monitoring and rating vendor performance. We recommend a uniform vendor monitoring and rating system be created which incorporates links to contract monitoring reports, vendor websites, closeout evaluations, and a method for other agencies to access performance evaluations.

13. 13 State Term Contract User Survey (Active) Contractor Performance Rating (?) Contract Management Software (?) MFMP Vendor Performance Tracking (In Development) 4 3 21 New Constellation of Integrated Systems (See Nov Meeting for full details)

14. 14 Requestor completes transaction in MFMP VPT System receives completed survey and updates vendor’s scores VPT System generates email to requestor with link to survey Requestor completes optional survey with pre-populated header Is transaction against a STC, SPA or Agency Term Contract? YES NO STOP Is payment made over $2,500 threshold? NO YES NO (2) Proposed MFMP/VPT System Survey Generation Process

15. 15 Roadmap to Excellence in Contracting Factor Contributing to Current Deficiencies The state’s corporate culture does not foster the sharing of best contracting practices among agencies. We recommend that DMS create and foster user groups of professional procurement staff that meet on a regular basis to share best practices and common problems. Output from this group could be used to spearhead changes in legislation and policy direction.

16. 16 “Professional Procurement Staff” Who Are They? (from NASPO Strategic Plan) Procurement encompasses the entire process of obtaining commodities and services –assessing need and planning the acquisition –preparing and processing a requisition –determining the contractor source selection method and drafting and issuing a solicitation –evaluating bids or proposals and awarding a contract –administering the contract –receiving and accepting goods or services –managing delivery, payment, inventory and property disposition

17. 17 “Professional Procurement Staff” Who Are They? (from NASPO Strategic Plan) Purchasing is one component of the procurement process. Procurement also embraces activities such as –quality assurance –training and education –dispute resolution –system oversight –streamlining the acquisition and businesses processes –embedding the best of supply chain management techniques in public policy and process

18. 18 Engaging Contract Administrators Creating user group of agency contract administrators to supplement purchasing directors Meeting scheduled for January 13, 2005, in conjunction with next purchasing directors’ meeting

19. 19 Purchasing Directors’ Meeting December 9, 2004 Agenda Welcome / Meeting Overview State Purchasing Mission MyFloridaMarketPlace Update Roadmap to Excellence in Contracting Follow Up Fuel Tax Issues Next Meeting Location / Time

20. 20 2005 Tax Law Change - Excise Tax on Gasoline IRS Changes Prior to January 2005, fleet card companies like Voyager and others have been permitted to pass Federal Excise Tax exemptions on gasoline charges forward to tax exempt buyers. Florida is exempt from this tax on gasoline and diesel. Tax fraud has led the IRS to change this process. The IRS plans to issue guidance in December 2004 explaining the changes. Industry meeting scheduled for December 18. Currently, only IRS registered “Ultimate Vendors” may invoice tax exempt buyers minus this tax on diesel.

21. 21 2005 Tax Law Change - Excise Tax on Gasoline Solutions For State Agencies to receive this exemption for taxes paid on diesel, they have to apply for a refund using IRS Form 8849, Schedule 1 [details on next 2 slides]. Bidders on the new state term contract must be IRS registered “Ultimate Vendors,” able to invoice agencies the tax exempt rate. When the new contract is awarded, agencies will no longer need to apply for a tax refund.

22. 22 2005 Tax Law Change - Excise Tax on Gasoline IRS Form 8849 and Schedule 1 Form 8849 is used by tax exempt purchasers to receive a refund for taxes paid on several types of fuel. The detail provided to agency F&A offices by Voyager can be used to complete the form’s Schedule 1. See the Form’s Instructions for more detail. Resulting refund can be reapplied to the agency’s administrative trust fund and subsequently re- allocated to divisions.

23. 23 2005 Tax Law Change - Excise Tax on Gasoline IRS Form 8849 and Schedule 1 See Publication 378 Fuel Tax Credits and Refunds (available on the IRS website) for more information. http://www.irs.gov/publications/p378 Forms also available on our website with these meeting materials.

24. 24 Purchasing Directors’ Meeting December 9, 2004 Agenda Welcome / Meeting Overview State Purchasing Mission MyFloridaMarketPlace Update Roadmap to Excellence in Contracting Follow Up Fuel Tax Issues Next Meeting Location / Time

25. 25 Purchasing Directors’ Meeting Next Meeting Time:3:00 pm to 5:00 pm (First hour for contract administrators) Date:Thursday, January 13, 2005 Location:Betty Easley Center, Room 152