Presentation on theme: "Procurement Transformation State of North Carolina"— Presentation transcript:
1 Procurement Transformation State of North Carolina Jocelyn Thornton, C.P.M.Transformation Project ManagerApril 24-25, 2012
2 BackgroundOn January 12, 2009, Governor Perdue issued Executive Order No. 5, which created the Budget Reform and Accountability Commission (BRAC).At approximately the same time, the Office of State Budget and Management (OSBM) initiated a review of statewide procurement as a result of Executive Order No. 4, NC Open BookThe State has a complex set of procurement processes and systemsDecentralized structures exist, with little collaboration among the agencies to identify what improvements are neededLack of Central Compliance Resources, Stringent Training StandardsIts charge was to “advise the Governor on…measures that improve efficiencies, cost-savings and effectiveness…”Open Book, which directed OSBM to create a searchable website on all grants and contracts awarded over $10,000, which would also include specific vendor and agency informationDuring the initial stages of identifying the data systems that might feed such a website, it became apparent that there is not a unitaryprocurement process or entity. Rather, the State has a complex set of procurement processes and systems
3 Project Vision“Create a customer-focused enterprise to achieve increased procurement effectiveness, efficiency, and compliance resulting in significant financial benefit for taxpayers by reducing the costs of acquiring goods and services.”
4 Expected BenefitsStreamline procurement functions across state government by increasing efficiencies, leveraging buying power and reducing overlap of key functions.Better value and more effective use of tax dollarsMore consistency across the enterprise to leverage buying powerMore efficient processes and systems to provide customers with what they need—when they need itEmployees working together to better serve their customers and the taxpayers
5 Guiding PrinciplesBest Value - Procure at the lowest total cost of ownershipCustomer Focus - Address all stakeholders’ business needsDelivery Excellence - Develop, maintain, and execute standardized, repeatable procurement processes and proceduresCompliance and Accountability - Enforce compliance with statutes, administrative codes, executive orders, and policiesOperational Efficiency - Align people, processes, and technologyWorkforce Excellence – Build and maintain the right knowledge and skillsStrategic Planning - Strategically plan procurement activitiesBest Value - Procure goods and services at the lowest total cost of ownership by leveraging the State's buying power using the most appropriate channels to deliver economic value for North Carolina taxpayersCustomer Focus - Address all stakeholders’ business needs and manage their expectations in a timely, informative, and responsive mannerDelivery Excellence - Develop, maintain, and execute standardized, repeatable procurement processes and procedures across the procurement function – supported by technology where appropriate – to achieve targeted business outcomesCompliance and Accountability - Enforce compliance with statutes, administrative codes, executive orders, and policies while providing appropriate transparency for stakeholders through monitoring, measuring, and reporting activitiesOperational Efficiency - Align people, processes, and technology to optimize the procurement function against defined procurement goals and metricsWorkforce Excellence - Maintain a workforce with the right knowledge and skills to be viewed as a trusted partner on procurement related issues to achieve targeted business OutcomesStrategic Planning - Strategically plan procurement activities using a proactive and collaborative approach to optimize the return on investment for the State of North Carolina
6 Six Cross-functional Teams Change Management and Communicationseight members representing six agenciesContract Management and Compliancenine Members representing seven agenciesPolicies and Proceduresnine members representing seven agenciesStaff Organization and Trainingsixteen members representing ten agenciesStrategic Sourcingeleven Members representing six agenciesGovernanceeight Members representing five agencies
7 Contract Management and Compliance Establish a standard contract management processCreate standard contract templates such as:Contract close-out checklistContract file checklistContractor performance checklistDevelop and deploy a revised contract administration/monitoring guideFinalize contract monitoring requirements, per SB 1213Standard contract management process that includes specific protocol for managing contract templates, tracking contract reviews, establishing notifications for upcoming contract reviews and expirations,
8 Change Management and Communications Consider communications best practicesCreate standard communications vehiclesEnsure timely information sharingConduct readiness survey to gauge the effectiveness of initiatives, and identify issuesClosely align the change management effort with program leadershipLeverage Change Agents as a way of formalizing peer-to-peer information sharingLeverage various forums to share successes and leading practices
9 Policies and Procedures Responsible for recommending improvements to North Carolina procurement related statues and administrative codes to improveconsistency, streamline processes, and encourage best valueprocurementConsolidate and streamline relevant statutes and administrative codesClarify rules and exemptions to statutesReview and modify IFB/RFP/RFQ templates where appropriateConsolidate and streamline relevant statutes and administrative codes making the legislation for theprocurement of goods and services easier to understandClarify rules and exemptions to statues reducing the room for error and improving compliance
10 Staff Organization and Training Charged with assessing current procurement training, organizational structure, job profiles, titles and existing career pathsEstablish a Strategic Sourcing Group within State ProcurementEstablish an Open Market Group within State ProcurementEstablish an Operations group within State ProcurementDeploy standardized job titles and job profilesCreate a single purchasing manual for use by all state procurement organizationsDeploy a comprehensive procurement training programTwo central purchasing authorities (P&C and IT Procurement) perform similar functions under differentstatutes, utilizing different processes resulting in duplication of efforts and added complexityPurchasing professionals in P&C and IT Procurement spend significant time on tactical activities (open marketorders) preventing them from pursuing more strategic activitiesThere are 24 different formal procurement-related job titles and many additional working job titlesThere is no formalized procurement training curriculum tied to each job profileOperations Group to support the operational aspects of the procurement function (training, compliance, analytics) Complete the implementation of organizational changes within 16 months of beginning the ImplementationState Procurement, state agencies, and community colleges) for all procurement-related positions using relevantindustry/trade benchmark findings and leading practices
11 Strategic SourcingResponsible for implementing a statewide strategic sourcing methodologyFocus on the initial commodity and service groups which will be sourcedAssess opportunities and prioritize Wave I, II and III categoriesSolicit input from end usersDevelop category strategyNegotiate and develop sourcing recommendationsImplement agreementsMonitor and manage agreements proactivelyTalk about WSKA contracts, UPS/FEDEX Medical supplier etc.
12 Governance Charged with recommending a structure, processes, and measurements to govern the procurement function after transformationRecommend a Procurement Governance Team with representatives from State agencies, community colleges, universities, LEAs, and local governmentsDevelop a set of key procurement performance metricsContinue oversight and guidance through use of a diversified steering committee
13 Technology Upgrade Online catalog Improvement Initiative began in October 2011 and had three primary objectivesImprove catalog contentRefine the processes utilized to develop new catalogsEstablish a continuous improvement programTo allow end users to more easily search for and select items they wish to purchase2. Refine processes updating existing catalogs, remove expired catalogs to ensure the catalog library accurately reflects the underlying portfolio of P&C and ITS contracts3. To maintain high quality standard and further improve coordination around catalogs between vendors, P&C and ITS contract administrators, end users, and the E-Procurement teamYou will be hearing more about this initiative as part of the E-procurement software update.
14 Summary: Current Priorities: Develop standard contract administration/monitoring guideDevelop standard procurement manualDevelop standard templates and memo’sDeploy training and update websites for refresher training and referenceEstablish tools for continual communication among agenciesIdentify and recommend procurement related changes to General Statues, Administrative Code and Operating ProceduresDevelop key performance indicatorsPrioritize categories for sourcing; statewide contracts (goods & services)Methodology to save dollars and improve processed for tax payerDevelop modernized job classifications for purchasing positionsOutline purchasing professional career pathGoal is to improve consistency, streamline processes, encourage best value procurement standardize existing solicitation forms (RFQ, IRB, and RFP Develop instructional guidelines on when to use the forms and standard paragraphs. Reviewed by appropriate management.Sub Rule team, eliminate obsolete references, inaccurate references (administer disposal of state property etc.)
15 ConclusionLong term process 2 – 3 years to implement numerous initiativesNo longer a project – Just how we conduct procurement