1. CSU 101 - Procurement Buying for the CSU Presented by: Matthew Roberts, C.P.M., CPP, MBA Director of Contracts, Procurement & Risk Management Cal Poly State University 3/10/09

2. Who are you, CSU? CSU is the State of California acting in a higher education capacity The CSU acts through its Trustees of the California State University The CSU is created and defined by Statute CSU is a single legal entity with 24 campuses Consultative governance structure

3. An Overview of CSU: Authority History lesson –Pre 1960’s (Dept of Education & State Colleges) –Post 1960 (Donohoe Higher Education Act = CSU) –Statement of General Principles in the Delegation of Authority and Responsibility Trustees on 8/4/61 (via Standing Orders)

5. CSU Procurement Spend CSU combined FY 07-08 spend was: Over $1.3 Billion ($1,318,946,079)

6. CSU Spend by Type Goods / Commodities »$190 million Services & Consultants »$317 million Info Tech Resources (ITR goods & services) »$155 million Public Works & Professional Services »$657 million

7. Total CSU Spend - Goods Non-IT Services Non-IT Construction IT Total% FY 07/08 1A 2A 3A 4A 1A - 4ATotal Chancellor's Ofc. 2,125,727 4,737,206 8,297,057 30,479,624.00 45,639,6143.46% Bakersfield 4,669,390 4,931,215 20,871,551 2,338,904 32,811,0602.49% Channel Islands 7,735,672 11,555,259 18,113,638 - 37,404,5692.84% Chico 6,378,336 15,754,456 26,639,115 3,327,481 52,099,3883.95% Dominguez Hills 5,692,618 8,470,028 51,019,162 896,535 66,078,3435.01% East Bay 6,208,245 10,675,871 86,437,618 3,315,700 106,637,4348.09% Fresno 6,563,436 15,728,116 10,384,328 5,036,740 37,712,6202.86% Fullerton 8,418,431 31,447,574 55,283,131 17,247,495 112,396,6318.52% Humboldt 4,155,654 8,178,083 4,781,834 13,023,386 30,138,9572.29% Long Beach 10,411,200 7,372,751 22,660,306 4,955,901 45,400,1583.44% Los Angeles 10,471,733 8,257,866 77,594,910 10,451,497 106,776,0068.10% Cal Maritime 2,385,404 3,172,254 3,552,699 1,126,389 10,236,7460.78% Monterey Bay 622,041 8,896,817 22,763,369 5,539,445 37,821,6722.87% Northridge 8,860,214 11,518,322 42,979,317 6,331,155 69,689,0085.28% Pomona 13,339,081 14,719,351 23,740,508 3,705,387 55,504,3274.21% Sacramento 7,494,310 12,729,508 59,133,190 11,166,987 90,523,9956.86% San Bernardino 8,148,228 10,620,223 3,252,520 5,135,388 27,156,3592.06% San Diego 21,525,984 34,925,254 21,452,408 8,901,718 86,805,3646.58% San Francisco 6,633,546 17,091,719 21,952,806 3,306,827 48,984,8983.71% San Jose 14,870,187 41,244,947 2,909,650 5,096,184 64,120,9684.86% San Luis Obispo 19,934,649 10,837,692 6,635,875 7,463,722 44,871,9383.40% San Marcos 3,308,967 7,720,923 6,178,134 2,647,001 19,855,0251.51% Sonoma 3,735,076 8,847,978 38,969,049 1,491,328 53,043,4314.02% Stanislaus 5,896,792 8,345,845 21,347,479 1,647,452 37,237,5682.82% Totals 189,584,921 317,779,258 656,949,654 154,632,246 1,318,946,079100.00%

8. Total CSU Spend - FY 06-07 Goods Non-IT Services Non-IT Construction IT Total % 1A 2A 3A 4A 1A - 4ATotal CO 3,903,746 14,990,963 3,807,152 50,361,725 73,063,5866.03% Bakersfield 3,551,700 4,657,812 2,508,283 824,483 11,542,2780.95% Channel Islands 7,150,326 34,240,040 535,290 2,559,764 44,485,4203.67% Chico 5,772,476 19,362,010 41,438,631 2,954,496 69,527,6135.74% Dominguez Hills 2,651,192 5,191,591 12,453,522 10,877,097 31,173,4022.57% East Bay 2,052,219 4,957,519 24,037,356 2,686,823 33,733,9172.78% Fresno 12,252,278 11,219,663 24,024,085 12,350,243 59,846,2694.94% Fullerton 11,679,576 12,129,918 52,396,324 6,476,943 82,682,7616.82% Humboldt 6,123,007 5,401,633 3,455,744 14,087,427 29,067,8112.40% Long Beach 5,916,329 13,861,371 9,257,047 4,423,104 33,457,8512.76% Los Angeles 3,836,220 12,273,230 5,093,338 2,862,487 24,065,2751.99% Cal Maritime 1,889,174 4,040,811 842,320 595,691 7,367,9960.61% Monterey Bay 3,234,266 4,957,477 75,284,182 2,154,405 85,630,3307.07% Northridge 12,732,364 19,375,743 29,383,861 3,498,205 64,990,1735.36% Pomona 7,477,674 9,818,034 24,631,979 2,677,886 44,605,5733.68% Sacramento 11,277,866 17,849,705 17,793,354 7,048,736 53,969,6614.45% San Bernardino 4,686,265 15,379,000 68,640,402 2,887,068 91,592,7357.56% San Diego 24,117,562 58,975,374 31,561,177 2,474,870 117,128,9839.67% San Francisco 6,466,096 9,168,747 13,414,852 2,987,587 32,037,2822.64% San Jose 13,109,285 15,985,200 6,660,709 10,029,533 45,784,7273.78% San Luis Obispo 12,009,070 15,571,223 79,080,946 10,022,950 116,684,1899.63% San Marcos 2,613,397 9,252,568 1,113,585 4,542,109 17,521,6591.45% Sonoma 1,887,593 25,484,276 3,081,752 921,680 31,375,3012.59% Stanislaus 4,635,627 2,830,723 1,871,265 961,933 10,299,5480.85% Totals 171,025,308 346,974,631 532,367,156 161,267,245 1,211,634,340100.0%

9. CSU Campus Spend Top 6 - Procurement Spend (FY 07-08) 1.Fullerton$112M8.52% 2.Los Angeles$107M8.52% 3. East Bay$106M8.09% 4.Sacramento$91M6.86% 5.San Diego$87M6.58% 6.Northridge$70M5.28% Totals$533 million40.4%

10. CSU Campus Spend Top 6 - Procurement Spend (FY 06-07) 1.San Diego$117M9.7% 2.San Luis Obispo$116M9.6% 3. San Bernardino$92M7.6% 4.Monterey Bay$85M7.1% 5.Fullerton$83M6.8% 6.Chancellors Office$73M6.0% Totals$566 million46.8%

11. CSU Campus Spend (FY 07-08) Average Spend $54.9 million Median Spend $45.6 million CSU Lowest Annual Spend $10.2 million (CMA) Single Largest Spend Item $ 86 million (Construction at E-Bay)

12. CSU Campus Spend (FY 06-07) Average Spend $50.5 million Median Spend $44.6 million CSU Lowest Annual Spend $7.4 million (CMA) Single Largest Spend Item $ 79 million (Construction – Cal Poly SLO)

13. What we buy! CMA - Spends $1m+ just to “filler up” in port for the Golden Bear (training ship fuel). CI – Buys explosives so they can train the police bomb sniffing dog Frieda. We all buy body armor, weapons, ammo & pursuit cars. We charter aircrafts for teams, boats for biology students, buses for bands. Athletic teams hire hypnotherapist, chiropractors, psychologists, & physical therapists.

14. What we buy! Pomona & SLO have classes in Animal Husbandry – use your imagination on what that entails. We buy cadavers for anatomy class. The CSU spends over $13 million a year on Office Supplies via Office Max contract. We buy everything you need to run 24 small cities With over 400,000 students ~45,000 Employees Running - 24 x 7 x 365

15. Public vs. Private Purchasing Public Procurement Open & Transparent processes Inclusive & Fair process Ask & you shall receive information –California Public Records Act Protest of Awards Driven by statute and policy Low Bid Time consuming processes

16. Public vs. Private Purchasing Private Procurement Private = confidential, proprietary, secret Knowledge is a Business Advantage If it’s legal it’s OK Cut-throat, survival of the fittest, win at all costs Moves very fast, decisions are made quickly Based on profit motive incentive

17. How we buy Goods & Services Formal vs. Informal Formal –Invitation For Bid (IFB = lowest price) –Request For Proposal (RFP = best value) –Sole Source (Only place / person known) –Established Contracts (Competitive piggybacks) –Sealed Bid process (Opens on - date & time) Informal –Informal bid process Phone Fax E-Mail –Lowest Price –Low Value Procurement Processes (LVPP) P-Card Direct Pay Campus Contracts Petty Cash –Sole Source

18. CSU Procurement Thresholds Goods & Services (non - ITR) Formal >$50,000 Informal <$50,000 LVPP <$ X,XXX.xx (set by campuses, ranges $1 to 5K) ITR Goods & Services Formal >$250,000 Informal <$250,000 Sole Source (not Sole Brands) VP sign off >$100,000 CO sign off >$250,000 Public Works Major Cap >$400,000 Minor Cap <$400,000 JOC’s <$400,000 LVPW <$5,000

19. CSU 101 – Procurement, Buying for the CSU On-Line Resources: –http://www.calstate.edu/CSP/http://www.calstate.edu/CSP/ Contract Services & Procurement Website – lots of resources –http://www.calstate.edu/CSP/crl/policy/Policy.shtmlhttp://www.calstate.edu/CSP/crl/policy/Policy.shtml CSU Procurement Policy Manual - online –http://www.calstate.edu/CPDC/http://www.calstate.edu/CPDC/ Capital Planning, Development & Construction website – more resources –http://www.calstate.edu/CPDC/SUAM/http://www.calstate.edu/CPDC/SUAM/ CSU State University Admin. Manual – online –http://www.calstate.edu/eo/http://www.calstate.edu/eo/ CSU Executive Orders – online –http://www.leginfo.ca.govhttp://www.leginfo.ca.gov Cal. Legislative info such as bills, statutes, etc.

20. CSU 101 – Procurement, Buying for the CSU Notebook section includes: –Excerpts from the CSU Professional Buyer training course, Procurement Law: CSU Legal Structure Overview Overview of CSU Authority to Contract CSU General Provisions for Services (explained) CSU Sovereignty (explained)