1. Procurement Reform Ensured value for the State of Arizona

2. Background Several states have embarked upon procurement reform over the past 10 years Arizona has conducted similar initiatives at the agency/administrative level, but without a comprehensive legislative and organizational focus Arizona is ready for a reform initiative to gain greater value, efficiency, quality, consistency, and cost savings for our taxpayers

3. Procurement Reform Arizona Procurement Code (APC) Before Reform Lobbying Regulations and Registration limited to legislative actions with no provisions for procurement lobbying activities After Reform Expand definition for lobbying to include attempting to influence the procurement of materials, services, and construction Prohibit vendors from soliciting state employees for employment during defined procurement period Prohibit specific actions for state employees, even if employing agency is exempt from APC

4. Procurement Reform Arizona Procurement Code (APC) Before Reform 29 whole or partial APC exemptions for 24 different agencies After Reform Expand exemptions to include products/services where competition is not available or feasible: – Textbooks (School for Deaf and Blind) – Entertainment (State Fair) – Utilities (all agencies) – Certifications, professional memberships, conference registrations (all agencies)

5. Procurement Reform Arizona Procurement Code (APC) Before Reform Limited authority at ADOA for procurement management After Reform Expand authority to: – Establish compliance program – Establish mandatory procurement training/ certification program – Transfer agency Chief Procurement Officer (CPO) positions to ADOA for administrative control; CPOs physically remain at agencies (similar to Personnel Reform) – Establish centralized Procurement Attorney unit

6. Procurement Reform Arizona Procurement Code (APC) Before Reform Excessive written determinations* required Low bid procurements required for all purchases unless otherwise justified (written determination) After Reform Establish flexible approach regarding determinations including: – Change to Pre-Offer Conference Schedule – Adapt contract clauses to solicitations – Refine use of cost-reimbursable contracts Remove need for written determinations to use other procurement methods, i.e. Request for Proposals and Alternative Delivery Methods * A determination is a written justification stating the basis for a particular action.

7. Procurement Reform Arizona Procurement Code (APC) Before Reform Informal bid limit* of $50,000 for all procurements Small Business set-aside requirement for all procurements less than $50,000 After Reform Increase informal bid limit* to $100,000 for all procurements Increase Small Business set-aside requirement for all procurements up to $100,000 *A small dollar procurement that is solicited electronically or by phone to three vendors.

8. Procurement Reform Arizona Procurement Code (APC) Before Reform Extensive information systems and telecommunications procurement evaluation requirements Lack of clear authority to consider vendor performance Cooperative Purchases – Lack authority to “piggyback” – purchase off other contracts – Participation in cooperative purchases limited to political subdivisions, educational and health institutions After Reform Eliminate actions duplicated by other processes, i.e. Project Investment Justification (PIJ) Establish vendor performance standards to use in procurement evaluations Expand cooperative program: – Allow limited “piggyback” purchases from other political entities and cooperatives – Allow all nonprofit companies to utilize statewide contracts

9. Procurement Reform Arizona Procurement Code (APC) Before Reform Lack of defined time period for ADOA Director appeal decisions After Reform Establish required time period for ADOA Director appeal decisions – 42 days after the date of agency report or comments – Additional 14 days permitted, if agreed to by all interested parties – Appeals referred to hearing, if decision is not issued within time period