Presentation on theme: "PROCUREMENT POLICY COUNCIL"— Presentation transcript:
1 PROCUREMENT POLICY COUNCIL OCTOBER 29, 20089:00 am to Noon
2 PPC AgendaFinance Transformation – Jeff Mandel / Sharon MinnichBMWBO – Kathryn Waters-PerezMaterials – Walt QuadeServices – Roxana DietzAgency PO/Contracts – Jeff MandelContract Attachments – Sue RojasProcurement Handbook Updates – Sue RojasSRM – Joan Kraft / Cheryl KleemanE-Marketplace Updates – Scott Cross / Sue PleckerQuality Assurance – Paul WolfTraining – Jeff MandelNote: This PPC Presentation will be available on our Agency Dashboard web site following this Meeting
3 Project Purpose and Goals To further transform the Commonwealth’s current financial administration operations using leading practices, processes and technologiesGoalsIdentify and Implement Strategies to Reduce CostUse Available Resources More EfficientlyImprove AccuracyReduce Transaction Processing TimeImprove Invoice Processing & ImagingImprove Cash Management & Revenue ProcessingDesign Quality Assurance FunctionDevelop a Strong Internal Audit FunctionDevelop Training Organization
4 Project ScopeThe following processes, activities, and systems are being addressed through the Finance Transformation project:Policy & ProcessProcure to PayChart of Accounts/GLRevenue/Cash ManagementAccounts ReceivableBudgetary AccountingComprehensive Annual Financial Report (CAFR)/Financial ReportingInternal AuditTalent & PeopleChange Management and CommunicationsKnowledge Transfer to Commonwealth Project StaffOrganization Realignment and TransitionEducation and TrainingSystems & InformationSAP ECC 6.0 ConfigurationSAP WorkflowScanning, Imaging and Indexing44
5 Focus of PA Finance Transformation Project Current StatusBetween March and June, the following activities were completed:Process reviews including procure to pay, revenue, accounts receivable, reporting/CAFR, chart of accounts, grants, budgetary accounting, special accounting and auditsWorkshops with OB, agency and key stakeholdersWorkshops produced approximately 100 recommendations focused in the following areas:ProcessTechnologyOrganization structureOr, a combination of the aboveIn July, recommendations were validated and analyzed, and grouped into the following categories:Short-Term: able to be completed by May 2009Medium-Term: able to be completed by July 1, 2010Long-Term: beyond 2010 and dependent on other technology not owned by the CommonwealthIn August and September, the recommendations were prioritized, reviewed and ranked by the Steering CommitteeDetailed process and technical design is underway for prioritized recommendationsBuild Phase October through May 2009Focus of PA Finance Transformation Project
6 Financial Transformation Procure-to-Pay RecommendationsCentralize the receipt, mailing, sorting, scanning, and imaging of all PO and non-PO paper invoices received from vendors and granteesProcess PO-related invoices according to current three-way match business rules unless blocked. If exceptions are found in three-way match, invoice is blocked in SAP and sent via workflow to Agency PO Line Item Reconciler for resolutionRoute Non-PO invoices (including grants) to agencies to provide appropriate account information and approval. Once coding is entered and approved, a document to be created in SAP and sent via workflow to PO Invoice Processing group for review, approval, and paymentPhase in non-PO invoice processing between May and September 2009Use special process for Utility invoices that allows agency to view image, enter account assignments and select payment (advancement account, p-card, via treasury)Invoice Processing
7 Recommendations Procure-to-Pay Recommendations (cont’d) WorkflowUse exception processing workflow to agencies and return of documents to Comptrollers for PO invoice processingRequire all purchase requisitions to be reviewed by agency fiscal staffImplement risk-based approach for comptroller involvement in service solicitationsEliminate Comptroller involvement in reviewing approved agency service contracts based on involvement in solicitation processChange thresholds for PO review and approval from $5,000 to:$20,000 for PO against DGS statewide and agency contracts$10,000 for all other PO typesIncrease use of Purchasing Card Program by adding DGS contracts that accept p-card to SRM. Enhance the reporting and posting capabilities
8 Procure-to-Pay Recommendations (cont’d) Anticipated Agency Benefits Faster payment to vendorsAbility to track and monitor invoices from the point of receipt through payment completionReduce errors or incorrect postings involved in processing, as entry will be made at the agency, allowing flexibility based on fund changesDecision on payment mechanism can be made at the agency (e.g., advancement accounts)Agency confirmation of changes more prompt and accurate due to familiarity with the facilitiesSignificant staff time currently dedicated to exceptions processing for marginal amounts or other minor non-matching issues can be redirected to other value added activitiesAgencies become more empowered as end users in accordance with Commonwealth procurement policy
9 Procure-to-Pay Recommendations (cont’d) Anticipated Agency Impacts All paper invoices - Will no longer receive paper invoices at the agency. Will receive an image of the invoice for processing.Non PO invoices - Enter data into system rather than manually recording on the paper invoice. Invalid entries will not move forward for processing. Every agency will be responsible for identification of staff who will be invoice receivers and verifiers and delivering the training to these staff (materials for training will be provided by the project).PO invoices - Blocked PO invoices will be work flowed to agencies for exception processing. This will require communications and job aides for all line item reconcilers in agency.Procurement - Workflow will require agency fiscal staff to review/approve purchase requisitions to ensure proper codingInterfaces for payment – currently no anticipated changes but analysis still in process
10 Financial Transformation Project Recommendation Shopping Cart Approval Requirement:Fiscal officer approval regardless of dollar valueOptions discussed:Create special role for Agency FiscalAllow agencies to rework existing workflowDecision: Use existing workflowAnalysis by agencyDiscuss with user group during Dec 10th 2008 meetingMeet with agencies as neededMust be implemented by May 2009
11 MBE/WBE UtilizationRole of BMWBOPromote contracting and subcontracting opportunities for Disadvantaged Businesses (DB’s).
12 Procurements with Deminimus Disadvantaged Business (DB) Participation BMWBOProcurements with Deminimus Disadvantaged Business (DB) ParticipationBMWBO’s Evaluate submitted proposals as they relate to DB utilization and provides the agency with scores.
13 BMWBOBMWBO provides a memo to user agencies along with DB scoresMemo states if certain vendors are selected which have been identified as having deminimus participation BMWBO is to be notified of such selectionBMWBO will evaluate best and final offers (BAFOs) as they relate to DB utilization and provide the agency with revised scores
14 COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF GENERAL SERVICES BMWBO Example of MemoCOMMONWEALTH OF PENNSYLVANIADEPARTMENT OF GENERAL SERVICESMEMORANDUMDATE: November 29, 2008SUBJECT: Notification of Unsatisfactory Disadvantaged Business ParticipationRFP # DPWTO: Casey MillerDepartment of Public WelfareFROM: Kathryn Waters-Perez, DirectorBureau of Minority and Woman Business OpportunitiesThe Bureau of Minority & Women Business Opportunities has received the Disadvantaged Business Participation submittals received in response to the RFP. The explanation for the scoring is found on the attached.The following Proposers provided submittal with unsatisfactory or zero DB participation:Company ABCDid it Wrong, Inc.Should your final evaluation result in selection of one of these Proposers for contract negotiations, BMWBO must be immediately notified and given an opportunity to work with you in attempting to increase DB utilization for this contract. BWMBO should be invited to participate in contract negotiations in an effort to increase Disadvantaged Business Participation. Please contact me before initiating any contract negotiations with the selected offeror.Following contract negotiations and the contract being executed, the Disadvantaged Business name, address and amount of commitment made by the contractor must be forwarded to us.Point of contact in BMWBO is Gayle Nuppnau.cc: Kathryn Waters-Perez
15 Contract Negotiations BMWBOContract NegotiationsIf necessary, BMWBO will negotiate any changes in DB utilization as a part of pre-selection and/or contract negotiations when DB participation is deminimus.
17 Current Contract Structure Materials - FuelsLiquid FuelsCurrent Contract StructureBid differential price (margin, transport) by countyCommodity price floats on daily indexTwo methods of delivery by county: truck transport for over 5000 gal., tank wagon for under 5000 gal (Just Discussed).DisadvantagesManages only small portion of our total unit cost (approx. 5%)Full exposure to the daily volatility of the marketProvides little control over drastic increases in spendFY 04-05: $19.5 millionFY 05-06: $25.9 millionFY 06-07: $38.0 millionFY 07-08: $44.7 millionDaily price changes cause frequent invoice payment problems
18 Full Truck Transport Strategy 5000 gallon plus! Materials - FuelsFull Truck Transport Strategy 5000 gallon plus!Working through suppliers we plan to lock fuel purchases for large users through NYMEX.Approx. 40% of end use customers nationwide use this strategy.Bid differential price, then make commodity buys when price is advantageous.Can make buys for front month or several future months if prices are attractive.Target buy is 50% of volume for largest volume truck transport users and average up or down based on spot market.
19 Truck Transport Strategy- 5000 gallon plus. (Cont.) Materials - FuelsTruck Transport Strategy gallon plus. (Cont.)Advantages of fuel hedging strategyGain control of total commodity costReduce market exposure and variability.Smooth out large spikes in pricing.Can use this strategy to buy incremental components of usage, reduces risk.“Diversified Portfolio” of fuel purchase quantities and prices.Flexibility to purchase one or multiple months of usage when market prices reach lowBOP will do the PO’s, will provide higher quality usage data, visibility of delivery frequency.DGS will make payment to vendors via P-Card and cost allocated back to Agency when the card is reconciled.
20 Small Fuel Delivery Program: Materials - FuelsSmall Fuel Delivery Program:We have many small tanks (500 gal. or less) located in remote areas.Suppliers bite off more than they can chew, causes problems with on-time deliveries.Limits supplier base, discourages new entrants.Invoice Payment problems.Recent Petroleum past due balance of over $1.25 million.Vast majority of invoices less than $5000.GR entry problems.Supplier confusion.Those who receive deliveries closer to 5000 gal. and/or pay bills on time subsidize those who don’t.
21 Small Fuel Delivery Program: Materials - FuelsSmall Fuel Delivery Program:ITQ Contract for deliveries less than 5000 gal.This is a contract of convenience.Qualify suppliers by county.Agencies follow procurement procedures based on low dollar amount.Agencies obtain Small Procurement Policy and obtain quotes from qualified suppliers in county, select best price.InvoicingQuoted prices firm, less potential for errors.Mandated utility card use for orders under $5000 should remove bulk of past-due payment issues.
22 Contract Update Contract Number Contract Title Status Commodity ManagerMaterialMedium Duty TrucksIn Award ProcessCraig WolfordWork TrucksRoad patching EquipmentKettles, patchers, ReheatersDiesel EnginesTo be RenewedEnginesSurveying EquipmentMary RandolphFloor PolishersFloor Polishers and VacuumsWheelchairsForkliftsBidding CurrentlyLiftsCommercial Food EquipmentBiddingNewPolice Lighting and AccessoriesAccessories for Police
23 Contract Update Contract Number Contract Title Status Commodity ManagerMaterialCementIn Award processJoel ShifflerCorrugated metal PipeIn Award ProcessPipeBituminous Plant MixBid being preparedPlant MixBituminous Liquid patchBid Being PreparedLiquid Plant MixSign StiffenersRenewedRock Salt BagsApprovedBagged SaltNEWFuel ManagementIn processFuel AdditivesEnergy Mgt ServicesITQElectricity, natural gasHeating Oil #2Award in ProcessOilUnleaded gasGas
24 Contract Update Contract Number Contract Title Status Commodity ManagerMaterialLiquid FuelAward in ProcessJoel ShifflerFuel, Large VolumeHeating Oil #4Bid in Progress#4 Heating OilWaste OilAwardedWaste Heating OilCarpetJP DuvallGlovesVWR MISC LAB EquipJim PinciGeneral lab Equip not covered byDetection EquipmentTesting Equipment for Atomic, Chemical, Biological MaterialJanitorialConsumables and paper Product
25 Shared Services - Roles & Responsibilities BOP-003 Delegation Request (Updated)APPROVALS – The agency is responsible for obtaining any approvals required due to the nature of the material or service or both being procured, in addition to compliance with any applicable Management Directives, Information Technology Bulletins and/or Commonwealth policy.Method of Procurement: □ RFP □ IFB □ ITQ-RFQBOP-003_REV._
27 IT ProcurementsIT Contracting OfficeConsistent with Executive Order , the Office of Administration has established the IT Contracting Office (ITCO).Three attorneys will oversee the legal aspects of all IT project procurements that fall within the COP process.Nora Doyle -General Government Operations & Public SafetySonja Zucker - EnvironmentalCrystal Fox - Health & Human Services
28 Primary Functions of IT Contracting Office: IT ProcurementsPrimary Functions of IT Contracting Office:Providing guidance related to the proper procurement method for IT Services.Establish training programs for DCIO’s, the CIO’s & any agency personnel who wish to participate.During the procurement process, documents will be provided to ITCO through the DCIO in conjunction with the COP review.Review documents related to RFQ’s and RFP’s prior to postingDuring contract negotiations they will work with the issuing office to ensure requirements, terms & conditions and service level expectations are achieved.At the request of an agency they will review software licenses and advise agencies related to general IT matters.
29 IT ProcurementsDGS will assist agency’s in meeting the project timeline; developing procurement strategy and preparing the final RFP documents; receiving proposals; facilitate the evaluation; lead the negotiation team; and processing the necessary documents for the contract award.All these activities are joint efforts that will be heavily influenced by the Office of Administration’s and the Agency’s expertise and experience as the administrator of their current contract. DGS will not participate as a voting member of the technical evaluation committee.After the contract is successfully awarded, the Agency will retain responsibility for managing the contract with the awarded supplier, including contract maintenance, administration of the contract, including ensuring delivery of expected savings and/or service improvements and contractual obligations, leverage and focus supplier capabilities, ensure rapid resolution of issues and provide consistent direction to the supplier.DGS should be informed of any contractual changes necessary or if the supplier defaults their contractual obligations to the Commonwealth.
30 Enterprise ITQ System – Phase 1 to be complete by Jan. 2009 Phase 1: ITQ Administrators can get into the ITQ and create ITQ contracts, and that Suppliers can register (or use their SRM registrations) and pre-qualify.Phase 2: ITQ administrators can get into the ITQ and evaluate the Suppliers applications, and approve or deny the applications, and supply any ancillary functionality that works with the Phase 1 functionality but was not vital to Phase 1.Phase 3: Local Municipalities and Agencies can get into the ITQ and use the supplied functionality to find Suppliers that can perform the jobs that the Local Municipalities and Agencies need, and supply any ancillary functionality that works with the Phase 2 functionality but was not vital to Phase 2.
31 IT ITQ Expires June 2009 IT ITQ OCT 2009: Finalize T&Cs with suppliers NOV-DEC: Review new IT ITQ with Suppliers and Tech CouncilJAN 2009: Allow suppliers to begin qualification processJAN 2009: New ITQ web site available (proposed date)APR 2009: Begin issuing RFQs under new IT ITQJUN 2009: End all work under old IT ITQFor work slippage onlyCan go past end of contract by 90 daysNeeds DGS approvalJUL 2009: New ITQ effective date
32 IT WSCA Cell Phone Contract ImplementedMet with TMOs on detailsMoving to shared minutesSuppliers gave TMOs presentation of implementationWhat procedures will be available?PCs, Laptops, Rugged Laptops and Thin ClientsAll punch-out sites up and running, all contracts approvedDell Lease PaymentsProfessional AVMultiple award contractsPeripherals & Networking2 suppliers on PeripheralsRecommend to get 2 quotes on orders over $2500Web Sites to be fully functional in next 30 daysP-card enabledNetworking is multiple awardServers & StorageInterim Agreement in Place, pending approvalBest Value, Multiple AwardTo use other than Best Value, need DGS approvalCan purchase maintenance from this contract, not mandatoryE:\Procurement Policy Council Meeting\PPC_October _docs\Copy of Cell Phone Contract Overview.xls
33 New Procurements in Process ITNew Procurements in Process3rd Party MaintenanceEnterprise IT Help DeskEnterprise Software (3 companies)Film and sundry suppliesIPAMTime ManagementRadio Repair and EquipmentE:\Procurement Policy Council Meeting\PPC_October _docs\IT Contracting Office10.08.pdf
34 Agency PO/Contracts Background Issue – Inconsistent interpretation of MD within comptrollers- Encumbering and Lapsing of Appropriations following the implementation of SRMBackground – Prior to SRM, agencies created the following document types to commit funds:Agency Standard Contract with follow on PO. (contract no commitment, PO commitment)Agency Encumbered Contracts with follow on PO. (contract no commitment, CO creates a funds reservation entered into the contract, and a PO to commit with manual reduction of the funds reservation)Multiple year or single year PO. (PO commitment)Due to the multiple step process and room for error, the Agency Encumbered Contract document type was eliminated with the SRM implementation. Agencies were given the option of a contract with PO’s or multiple year PO’s to encumber funds.Inconsistent interpretation of the MDPerception by CO is that funds must be encumbered at the time of award and only means to do so is via the PO as contract does not trigger encumbrances. Certain offices require a contract and single year PO’s to be created for every year of the contract immediately upon award.Question/issue – Why create the contract if all PO’s have to be created at same time? Defeats purpose of contract=extra work.
35 Agency PO/Contracts Responses Contacted several agencies to see how they processed ongoing services contracts.L&I: Creates multi-year purchase orders.DPW: Creates agency contracts for some services that are purchased on an as needed basis. For ongoing services, multi-year purchase orders are created.PSP: Creates multi-year purchase orders. They know their budget for future years, but don’t want to create a contract, then cut a PO every year. They would rather cut one PO for the full term so they don’t have to remember to create a new PO in each consecutive year.
36 Recommended Decisions for Document Types Use of Agency ContractRecommended Decisions for Document TypesAn agency contract was to be created when:More then one entity was purchasing off of it – , i.e. districts creating their own PO’s at time of serviceAgency cannot commit the future year funds or are not ready to commit the funds.then create a PO at the time you are ready and another one thereafterRequirements (materials or services) quantity and timing unknown or uncertain over future yearsA multiple year PO was to be created when:The agency wanted to commit all funds at time of the award
37 ExamplesScenario 1 - Intergovernmental Agreements (IGA) for services mandated to be provided that will continue for the next several years, but because they are contingent on State funding, the exact amount to be allocated may not be known years in advance.IGAs currently take 6-8 weeks for approvals in SRM and because some of the work must be done when school is not in session, agency cannot afford a lapse in services at the start of the FY.Solution - Multiply a single year times 5 and enter an agency contract for 5 years with an annual PO to establish exact funding done immediately at the start of the new FY. With this scenario, there would not have a lapse in services and when a PO is issued, would only have Comptroller to approve instead of the original 6-8 weeks for full IGA.Scenario 2 - Purchase of educational materials (curriculum) where it is known there will be a multiple year need for the item(s) plus instructional services but do not know exactly how many schools would be serviced each year as it would be contingent on the annual budget allocation.Solution - Manage this with a handful of contracts, not the much higher number we would use for IGAs. In this case, again, it would prevent a lapse of services and allow agency to cut a timely purchase order without risking a lengthy break in services. Even though these contracts would only have three or four approvers (based on cost) instead of the six with IGAs, consistently run into the backlog in many of these offices as we try to push through the new purchase orders. This would reduce everyone’s workload as the PO would only go to Comptroller.If any one of the agency contracts prove to be too small, could amend to add services or quantities mid-FY cycle so as not to risk the break in services at year end.
38 Contract AttachmentsThis list of required attachments was created to assist in maintaining the correct documents within contracts. They were derived based on:Minimum Right to Know requirementsSRM compatibilityIFB Contract Attachments (Multi Award Hierarchy Contract)Electronic Bid utilizing doc buildereMarketplaceInternal FileIFB Contract/Purchase Order AttachmentsRFP Contract Attachments (paper submittal not using doc builder)SRMRFP Contract Attachments (using doc builder)The new Right To Know (RTK) rules require us to attach certain documents to our contracts. DGS is providing these lists as a minimum requirement within legal and RTK. You can find these documents at this URL.Contract Attachments Location: Contract Attachment Documents
39 Procurement Handbook Changes Non-contract purchases under $10K (reinstated)Part I Chapter 7 Thresholds and DelegationsSection B Thresholds for Specific ProcurementsAgencies are authorized to procure on a non bid basis, up to $10,000 for the following:Repair, maintenance, modification, or calibration of equipment services to be performed by, and repair parts supplied by, the manufacturer of the equipment or by the manufacturer's authorized dealerSoftware license maintenance agreements and extensions of software licensesAgency leasehold construction improvementsThe matrix is not yet posted, but will be soon.
40 Complete Procurement Handbook Changes Political Contribution Letter for Sole Sources (new)Relating to the PO or Contract issued to the Supplier, a Political Contribution Letter is to be sent to the supplier reminding them of their responsibility to file a report of Political Contributions, by February 15 of each year. This report is to be sent to the Secretary of the Commonwealth for all political contributions exceeding $1,000 during the preceding year.Sole Source Procurements of Materials, Services and Construction.70% ThresholdsPart I, Chapter 6: Methods of Awarding ContractsIn order for a proposal to be considered for selection for BAFO or selection for contract negotiations, the total score for the technical submittal of the proposal must be greater than or equal to 70% of the highest scoring technical submittal.If your supplier’s proposal does not score at least 70% of the highest technical submittal score, it may not be considered for BAFO or contract negotiations.
41 Procurement Handbook Pending BMWBO ChangesPart 1, Chapter 3: ResponsibilitiesCurrently, the agency evaluates the STD-168 over $250KAt any dollar amount, an STD-168 MBE/WBE Subcontractor and Supplier Solicitation form, will be sent to the supplier to complete, sign and return to the agency.- The agency will evaluate their responsibility for a value of up to $50K and BMWBO will review if the contract is over $50K.Part 3, Chapter 7: Competitive Sealed Proposals (RFP Process)Will read the same as Part 2, Chapter 7:BMWBO assigns the minimum weight for DB participation at 20% of total pointsAgency establishes a maximum point value for each major evaluation criterion prior to RFP issuance- Cost criterion must be a minimum of 30% total points
42 Procurement Handbook Pending BMWBO ChangesPart 1, Chapter 20: Non DiscriminationCurrently the Form GSMWBE-16 is completed only on construction contracts. They will be needed for any contract over $50K.- The Form GSMWBE-16, "MBE/WBE Subcontractor and Supplier Certification Solicitation and Commitment Form", is to be included in contracts with sole source contractors when the total procurement is estimated to be more than $50,000 annually for single or multiple year awards. The contractor must complete Form GSMWBE-16.- Before processing a contract in the amount exceeding $50,000 (or such higher amount as BMWBO may establish for a particular agency), including those amendments and change orders that directly affect MBE/WBE participation, the purchasing agency is required to forward the bidder-completed GSMWBE-16 to BMWBO which will determine the contractor's responsibility in regard to nondiscrimination unless exempted from the BMWBO Program requirements.- If BMWBO determines the contractor is nonresponsive and/or not responsible, and the agency decides to make an award, the agency must consult with its Office of Chief Counsel, and its agency head or appropriate Deputy Secretary and fully justify, in writing, its reasons for proceeding with award. The agency must forward a copy of this justification to BMWBO.Part 2, Chapter 3: Delegated Formal Competitive Sealed Bidding- This section of the Handbook is under review to eliminate the need for agencies to send solicitations to suppliers. BMWBO will require suppliers to provide an address so that the supplier can receive Ealerts.
43 Procurement Handbook Pending Modifications to Document Builder – MBE/WBEThe following issues are being addressed:- List the number of documents required- Link to BMWBO websiteRFP TemplatePart 1, Sections 12 and 13: will update the phone, fax and website for BMWBOPart 1, Section 19: will address confidential information and the Right To Know requirementsPart 2, Section 9a: revises the number of Disadvantaged Business submittal copies to 2Part 3, Section 4: adds the 70% rule for technical proposals, language to disclose the weights for technical, cost and Disadvantaged Business scoring and bonus pointsPart 4, Section 6: adds “through any renewal or extension of the contract”Appendix B: Domestic Workforce Utilization Certification form was revisedRFP TemplateArchiving templates from DGS websiteRFP template will be changed:Part 1 Sections 12 and 13 to update the phone and fax numbers for BMWBO and their websitePart 1 Section 19 to address confidential information and info due to RTKPart 2 Section 9a: number of Disadvantaged business submittal copies is revised to 2 copiesPart 3 Section 4: added the 70% rule for technical proposals, language to disclose the weights for technical, cost and DB scoring and bonus points.Revised the Domestic workforce utilization certification formAmong others- Templates commonly found on the DGS website are being archived to allow agencies to find templates from prior years- DGS templates only will be saved- Agencies are recommended to archive their own “agency specific” documents- Templates can be found at PUForms/ArchivedForms
44 Procurement Handbook Pending Publishing RFP WeightsIt is DGS’ intention to publish RFP weightsUsing this process makes debriefings easier and clearerSuppliers cannot claim the scoring weights/criteria were inappropriate, as they were pre-publishedTreasury- Developing a new chapter on Department of Treasury which will include ‘Right To Know’ requirements.Green ProcurementPart 1, Chapter 22: Green Procurements- Currently drafting policy on Environmentally Preferable Purchasing- Developing tools and website resources along with training- Identifying 3-5 commodities for pilot projects
45 Procurement Handbook Pending SubscriptionsPart 1, Chapter 1: General Provisions- Clarifying the scope surrounding subscriptions.GSA Schedules- There are schedules (contracts) available from the Federal government- They are used on a limited basis- DGS will be reviewing policy to allow limited usage of GSA Schedules- Establish DGS as a initial checkpoint prior to purchase
46 Requisition Pricing Purpose Changing Settings Some agencies are occasionally changing the “Do not adopt” to “As net price” setting in the Line Item Details section of an R3 requisition.Changing SettingsRequisitioners should not change the valuation setting of “Do not adopt”.This setting is necessary so that contract pricing is maintained throughout the documents.When a requisitioner pulls up a contract item, the correct price will be pulled into the document.
47 Bidding Guide To create your bid: To complete your bid: Go toGo to Supplier Log OnSelect “Bidder” TabSelect “Process Bids”Locate Bid OpportunitySelect “Create” Action IconTo complete your bid:Go to: General Data TabSelect “Attributes” and respond to all questions/statementsAdd Attachments by selecting “Browse” – locate file & upload by selecting “Add”Enter PriceSubmit the BidThe “Submit” button will not be available until the “Check” button is invoked.To delete a bid completed incorrectly:1.Search for previously submitted bid. Once it appears, click the pencils for “Change mode”2. Select the “Hold” button3. Select the “Change” button, “Delete” button should appear4. Select the “Delete” buttonSupport OptionsLive Support exists for suppliers available via the Customer Support CenterPhone: (local)Phone: (outside Harrisburg)This checklist, which is provided to the supplier complete with screenshots, offers a simple guide to creating, completing and deleting a bid offering. The Training section has also provided brochures which are more thorough. They are available here today for your use.Document can be found: Bidders Guide - Checklist for Creating, Responding and Deleting a Bid
48 Live AuctionLive Auction Cockpit (LAC) refers to an auction that takes place online in “real time” via the SRM portal. Live auctions are held to get the best available market price at the time of the bid. Throughout the bidding process the price is driven down, which often results in a lower price paid than traditional sealed bids or negotiations. A matrix is available for use which will allow a user to decide if Live Auction is the right tool.DGS offers this service to agenciesTo access the EUP: Live Auction EUP
49 Live Auction Decision Tool The Decision Tool is utilized to determine the viability of performing a Live Auction.
50 Why conduct an Auction?To get the best available market price at the time of the bidAuctions drive down costs, often resulting in a lower price paid than traditional sealed bids or negotiationsReal cost savings of 10% or more can be realizedFor example: An item which is purchased in a significant quantity, and there is pricing flexibility in the marketTo improve and streamline the strategic e-procurement processPrecise specifications will be provided to potential suppliersHistorical spend data can be used to develop business forecastsNegotiation time is reduced from weeks to minutesAuction events are easily duplicatedAuction events are visible and the results measurableThe live web-based event is viewed in real timeSRM reporting offers detailed analysis across auctionsIncreased competitiveness within the public sectorOngoing cost reductions and improved productivity are essential in government activitiesResults and benefits are measurable and easily reportedMany suppliers appreciate the openness of auctions
52 MRP OR NON MRP, THAT IS THE QUESTION Material Requirements Planning OverviewPurpose of today’s overview:Provide an understanding of MRP & its useProvide information for use when making purchasing decisionsClarify misconceptions regarding the methods of procurement for inventoryMRP OR NON MRP, THAT IS THE QUESTION
54 MRP does not simply mean “an order for inventory” - MRP is a process - Inventory & MRP FactsMRP use is limited for the CommonwealthMRP Process Plans, Creates Planned Orders, Converts Planned Orders into Requisitions, and Creates Purchase ordersTakes into consideration such things as re-order point, prior and future consumption, replenishment, lot size, lead-time and useIn order to use MRP an agency must have an established MRP Controller, Inventory Planner, and material masters set up for MRP requirements.Material masters should be listed as contract line items when a statewide or agency contract is createdMRP does not simply mean “an order for inventory” - MRP is a process -
56 Many contract replication requests use the justification “MRP” Inventory PurchasesThere is a misconception that SRM cannot be used to order inventory items – SRM can be used to order inventoryMany contract replication requests use the justification “MRP”with Hershey Creamery for Ice CreamOnly Corrections ordered for inventory and PO’s were not generated through MRPNo need to maintain contract in both places – should be SRM onlyR3 Document type NNB – New Standard PO
57 SRM for InventorySRM can be used for inventory purchase orders not procured via the MRP processAfter the product ID (material master) has been entered the “Order as Direct Material” indicator appears:If non-valuated, use normal process - account assignment is required
59 Operated by DGS Bureau of Procurement (BOP) SRM CSC BackgroundSRM Customer Support Center (CSC)Operated by DGS Bureau of Procurement (BOP)Established in Aug 2006Created to provide interim support during and postgo-live SRM implementationProvides two separate servicesSupplier Registration and SupportSRM Agency Support
61 Call Volume From Agencies CSC SRM Agency SupportAverages 403 Automated Call Distribution (ACD) calls per month (93 per week)Approximately 20% are not answered due to conflicting priorities
62 Incoming calls directly to Commodity Specialists Other Influx to CSCIncoming calls directly to Commodity SpecialistsAverage 50 per weekRemedy TicketsAverage 28 per weeks to SRM Resource AccountAverage 20 per weekAdditional time needed to research issuesAverage 25 hours per week
63 Initial Agency Inquiries Original types of inquiries received from Agencies by CSC were SRM related:How do I set my attributes?How do I enter ship to addresses?I can’t find a vendor.How do I create a shopping cart?What is a product category?How do I reference a contract?
65 Agencies can reduce the number of inquiries to the CSC by: Agency AssistanceAgencies can reduce the number of inquiries to the CSC by:Limiting inquiries to only those related to CSC’s core mission ► SRM questions onlyCall Commodity Specialists directly for sourcing issuesEncourage procurement professionals to utilize the Self Service ResourcesEnd User ProceduresSRM Website – FAQ’s, AIT Library, Resource GuideeNewsEncourage associates to take advantage of the various Procurement Training Programs offered by BOP
66 Password Reset Login Screen: Suppliers insert user name in “Logon ID”.Suppliers click on “Reset Password”.Password reset comes from(Recommend checking SPAM settings.)
67 Support Packs SRM & Core System What is a Support Pack? Support packs contain all the current “fixes” from SAP in one bundle rather than applying individual notes on an as needed basis. Support packs normally fix things, but on occasion may create a problem. IES will do testing of the Support PacksAll changes as a result of the support packs should be found at this time and IES will communicate this information to the agencies.If end users notice anything different in the core or SRM systems once the support packs are put into production they should report the issue through the helpdesk/remedy ticket process.Tentative Schedule for Latest Support Packs:Development - November 10, 2008Quality - November 17, 2008Production - December 6, 2008
68 Effects all systems including ESS SRM & Core SystemUpgradesERP 6.0 UpgradeEffects all systems including ESSCut-over dates for system unavailabilityPA Supplier Portal: Thursday, October 30th 5:00 PM thru Monday, November 3rd 6:00 AMMyCommonwealthWorkplace: Friday, October 31st 4:00 AM thru Monday, November 3rd 6:00 AM.xml Supplier Transmittal of Invoices: Thursday, October 30th 5:00 PM thru Monday, November 3rd 6:00 AMScreen change documentHandoutSent via eNews on 10/22/08Mention handout regarding “portal favorites may be lost” Not sure if functionality will remain.
69 Guid Error – Public Advertising Supplier SRM UpdatesGuid Error – Public Advertising SupplierThe contact information for the “public advertising supplier” was deleted from the vendor record in error This caused a “Guid” (Globally Unique Identifier) error on bids created prior to 8/12/08 using the “public advertising supplier” This error is undetectable until workflow is initiatedThis error is uncorrectable ResolutionThe “public advertising supplier” record was correctedDo not reuse or copy a bid created prior to 8/12/08 Create a new bid
70 Supplier Enablement - ERS Evaluated Receipt Settlement (ERS)A shortened, easier process to pay suppliersUpon receipt of order receiving agency enters GROvernight process generates an electronic invoice2-way match: PO quantity & GR quantityTreasury processes payment via ACHEliminates need for issuing and processing invoicesNo action is needed by the comptrollerTurnaround time for payment is reducedGoods Receipts must be accurate and timely!Failure to enter GR – Supplier will not be paidLate entry of GR – Supplier payment will be delayedIncorrect GR entry – Supplier will be paid an incorrect amount and purchasing agency must process a credit memo
71 Supplier Enablement - ERS Evaluated Receipt Settlement (ERS) - Pilot ProgramCut over date - September 10, 2008Suppliers:Todd Heller, LLC -Contract Glass BeadsEnnis Paint, Inc. –Contract Traffic Line PaintAgency: TransportationCurrent activity: 4 POs were created and 5 payments successfully processedEnd of paint season – not much activity anticipatedInvestigating expanding the pilot to include:Calcium ChlorideRock SaltCorrugated Boxes
72 Assignment of Payments in SRM Method for assigning payment on invoices related to SRM-generated POs to an Assignee rather than the Assignor’s default remit-to address.CVMU creates a “902” Partner Record within the suppliers master data.To request a “902” Partner Record - purchaser must:Complete “902” Partner Record Request form (found under Procurement Forms on the DGS website)Request must include the following info:Complete name and address of AssigneeVendor number of the AssigneeSigned letter from the Assignor documenting the assignment of paymentMust be on Assignor’s letterheadMultiple Assignees require separate request forms for eachSubmit documents to CVMU Resource Mailbox atIf approved, the Partner Record will be created. If disapproved, the form will be returned to the requester with the reason for rejection.EUP is available on the DGS website 902 Form & EUP9/18/08 eNews
73 Procurement Connection Group ObjectivesProvide information and guidance to agency users on current and future procurement related matters.Provide support in resolving issues relative to procurement functions.Give agencies an opportunity to offer input into DGS procurement projects and contracts.Provide a forum for agencies to have open discussion on issues that are affecting them and how they do their business and will allow for sharing of ideas and individual agency successes.ScheduleFirst meeting held Wednesday, October 15, 2008Meetings will occur every 8 weeksAgendasAgencies are encouraged to submit agenda items for discussion.Meeting notices will be sent requesting agenda itemsOpportunity for smaller group discussions on specific topic areasAgenda items can be submitted any timeSubmit to: Cheryl Kleeman via -
74 Procedure for Simplifying Contract Search in eMarketplace eMarketplace UpdatesProcedure for Simplifying Contract Search in eMarketplaceHas been added to “Tips & Tricks” under the “Help” section on eMarketplace
76 eMarketplace UpdatesA list of all contracts will display by Parent Number, Description, and Ending Date. You can sort by any of these fields by selecting the word at the top of the column. You can search for your contracts here, or Export to Excel for easier sorting and searching capabilities.
77 eMarketplace UpdatesContracts fitting your criteria will be highlighted on the spreadsheet as shown below. To view the vendors contracts for that parent contract, select the highlighted numbers under the Parent column.
78 eMarketplace UpdatesThis will take you back into eMarketplace and display a list of contracts that belong to the Parent contract you selected.
79 Tabulation & Award Information eMarketplace UpdatesTabulation & Award InformationAgencies may elect to post solicitation tabulations & award information to eMarketplaceInstructions will be sent via to the PPC and all registered users on eMarketplaceInstructions on how to upload these documents on eMarketplace will be added to the EUP created by the Training Section & the “Help” section on eMarketplace
80 eMarketplace UpdatesSolicitation Tabulations – Required information for input
81 eMarketplace UpdatesAwards – Required information for input
82 Sole/Single Source Section eMarketplace UpdatesSole/Single Source SectionSecretary’s initiative to have sole/single source information publicNew section to be added to eMarketplaceSource Justification Form will be a web-based form with routing approvalsSpecific information will be made public (will review info on another slide)Seeking agencies to volunteer to assist us in testing before go live
83 eMarketplace UpdatesProcurement Description will appear for public viewing
88 Quality Assurance Procurement Review Background As part of the Financial Transformation (FT) Project Comptroller Operations (CO) is in the process of redefining many core functions. While they will remain a part of procurement document review, their role will transition to more of a financial focus vs. a comprehensive and all inclusive review of procurement documents, solicitations and contract processes.Future StateSelective reviewMore post audit vs. 100% inspection prior to document releaseFocus more on financial aspect vs. procurement processThis change in roles and responsibilities places increased accountability on agency procurement personnel to:Ensure accuracy and compliance upon document creation, transactions performed, as well as oversight of the procurement process.88
89 BOP’s Quality Assurance Procurement Review BackgroundBackgroundFuture State with Quality Assurance Procurement ReviewBOP’s Quality Assurance Procurement Review
90 BackgroundAs the lead procurement agency responsible for policy, systems and processes, Bureau of Procurement (BOP) should assume an increasing role formerly managed by CO.Title 62, Chapter 3; Section 11, of the Pennsylvania Consolidated Statutes, allows the Department of General Services (DGS) to monitor the implementation of its regulations for the procurement of all supplies, services and construction by Commonwealth agencies.Policies and Procedures are stated in the DGS Procurement Handbook.90
91 BackgroundMassachusetts, Texas, South Carolina and California have programs established to assess procurements made by their state agencies.BOP intends to establish a Quality Assurance Procurement Review to ensure compliance and offer assistance to agencies.
92 Process Cycle BOP Conducts Procurement Review Agency Develops & Implements Corrective ActionsBOP & Agency Review FindingsIdentify Opportunities for Improvement: Policies, Procedures, Systems & Training Requirements
93 Quality Assurance Review Process PRE-VISIT PREPARATIONPOST-VISIT EVALUATIONDocument Site VisitRecord RankingsFinalize Summary PackageIdentify Corrective Actions & Opportunities for ImprovementIdentify CandidatePerform Electronic ReviewCreate Agency Outreach PackageSet Up Site VisitRECALIBRATE AS REQUIREDSITE VISITImplement ChangesStay Current on Changes, Additions, Deletions, Modifications to Policy & ProceduresReview Reports & DocumentationEvaluate ComplianceComplete Review Documents
94 Scope The Intent of the Quality Assurance Procurement Review is to: 1) Identify the Agencies’ level of compliance with Title 62 and the procurement proceduresestablished by DGS and documented in the Procurement Handbook2) Determine if the procedures stated in the Procurement Handbook require clarification3) Identify agency training requirements4) Mitigate risk5) Provide an objective assessment of the agency’s compliance and the associated risk6) Assist the agencies with the development and implementation of Corrective Actions tomitigate risk7) Promote compliance by providing continuous communications to inform the agencies onnew/revised policies and procedures and training programs94
95 Benefits of the Quality Assurance Procurement Review Ensures Compliance with the Procurement HandbookIdentifies Opportunities for ImprovementIdentifies Training RequirementsProvides Process and Tools to Manage ChangeProvides Mitigation StrategiesProvides Prevention StrategiesPromotes Feedback Mechanism95
96 PilotBOP is soliciting for an Agency to participate as the pilot, assisting in the development of the processPilot to begin early 2009Contact Paul Wolf
97 Training Negotiations Course BW/SRM Course RFP Process Course - Developed for Commodity Specialist and Agency Purchasing Agents.Currently with OA-HRD for articulation.Made available via WBT and administered via E-LMS mid-November.BW/SRM CourseExpanded to Purchasing Agents. A training announcement with scheduled offerings will be sent to Policy Council Members and Training Officers for dissemination in the near future.RFP Process Course -Pilot course scheduled 12/2/2008One day instructor led course.Agencies contacted for plot participation.Mix of DGS/BOP Commodity Specialists and Agency Procurement Professionals.Penn State Supply Chain Management15 Students completed Penn State Program.BOP awarded certificates at recognition ceremony in September
98 Procurement Policy & Process Purchasing Certification Purpose –As business owner BOP has developed formal, 4-day, ILT to give new and less experienced PA’s fundamental understanding of COPA procurement policies, procedures and processesThis classroom training, coupled with practical work experience, will raise the standards of all COPA Procurement Professionals.It will also establish a uniform knowledge base for all PA’s, which will reduce inconsistencies among agencies and ensure that all purchases are performed according to Procurement Handbook guidelines.As such, the training was determined to be “mandatory” and we will also be requiring experienced Purchasing Agents to attend.Recap of Procurement Policy and Processes Pilot Course -Session held 9/8-11.Varying levels of experience - few weeks to >20 yearsThanks for participation and feedback.10 Students7 agenciesSurvey responses were very positiveFeedback incorporated into curriculum and Knowledge ReviewAgency Purchasers who are not PA’s (ex. AA’s and AO’s) will be able to attend this course.
99 Procurement Policy & Process Purchasing Agents Training Future Training Schedule & Location-Conducted on quarterly basis in new BOP Learning Center.1st scheduled dates are 11/ Next session – Feb./09This class is currently full with a wait list.Prior to each session, BOP Training Mgr will review the enrollment and waiting list to make a determination on the final class roster.With max. # 18 students, want to ensure that newer PA’s have preferential seatingThis course will be available for self-enrollment through ELMS. Please visit BOP’s Training Community Calendar atKnowledge Review-A comprehensive Knowledge Review will be given at the end of each 4-day session. The Knowledge Review is comprised of questions with multiple-choice and True/False answers, as well as open-ended or “essay” questions. A score of 75% or higher is required in order to receive your Certificate of Achievement. When necessary, the Knowledge Review can be re-taken if a passing score is not achieved.
100 Supplier Guide Brochures DGS has developed three guides to assist suppliers with registration and responding to an electronic bid in SRMRegistering as a New SupplierRegistering as an Existing SupplierSupplier Response to a SolicitationPDF versions of these brochures are available on the DGS BOP Training page under “News and Updates”