1. Purchasing Directors’ Meeting February 16, 2012

2. 2 Welcome Comments – Kelley Scott Introductions – All FACTS/SCRS Update – Christina Smith and Elwood McElhaney Mobile Communication Services Contract – Jonathan Rakestraw Office of Supplier Diversity Mentor-Protégé Program – Thad Fortune MyFloridaMarketPlace Update – Danielle Kosberg State Purchasing Analysis Process – Cliff Chroust Hot topics - All Agenda

3. 3 Department of Financial Services Christina Smith, Director of Accounting and Auditing Elwood McElhaney, Project Manager FACTS/SCRS Update

4. 4 Jonathan Rakestraw Operations Management Consulting Manager Division of Telecommunications Jonathan.Rakestraw@dms.MyFlorida.com Mobile Communication Services Contract

5. 5 AT&T Mobility (Contract No. DMS-1011-008A) Sprint Solutions (Contract No. DMS-1011-008B) Verizon Wireless (Contract No. DMS-1011-008C) Mobile Communication Services Contract

6. 6 State agencies – Eligible customers – –Local governments (cities and counties) –Water management districts –Educational institutions (schools, universities, and community colleges) –Non-profit organizations –Eligible for E-rate funding DMS DivTel MCS – Customers Mobile Communication Services Contract

7. 7 Wednesday, February 29, 2012 at 9 a.m., Eastern time Betty Easley Conference Center, Room 152 4075 Esplanade Way, Building 4075, Tallahassee Seating is limited; please limit the number of people attending DMS DivTel MCS Kick-Off Meeting for CIOs Mobile Communication Services Contract

8. 8 The State of Florida's Mentor-Protégé Program is the first state- sponsored program of its type created to pair certified business enterprises with private corporations. The purpose of this program is to contribute to Florida's economic growth by increasing opportunities, developing joint ventures and providing Florida's minority, women, and service disabled veteran businesses the necessary tools for success. Office of Supplier Diversity Mentor Protégé Program

9. 9 The Mentor-Protégé Program enhances the capability of Florida's certified minority, women, and service disabled veteran businesses participation to compete more successfully for state government contracts. The program also provides an avenue for Florida's certified minority, women, service disabled veteran businesses to achieve entrepreneurial success and contribute to the strength and vigor of the economy in Florida.

10. 10 Office of Supplier Diversity Mentor-Protégé Program Brainstorming Opportunities for mentor businesses –Mentor and protégé businesses work together to develop new business development approaches based on proven business strategies Previous relationships (mentor listed first below): –Office Depot and Magnetic Imaging Supplies Inc. –GTECH and Flamingo Graphics –Deloitte Consulting, LLP, and ISOCORP Inc. –Turner Construction and HZ Construction, Inc. Office of Supplier Diversity has many interested protégé businesses –How can agencies help encourage mentor businesses?

11. 11 MyFloridaMarketPlace Update MyFloridaMarketPlace vendor W-9 statistics as of Feb. 6 24,194 MyFloridaMarketPlace vendors have a valid W-9 on file 88 percent of purchase orders created this fiscal year for vendors with valid W-9s 92 percent of invoices were paid this fiscal year for vendors with valid W-9s DFS W-9 Initiative Vendor Update

12. 12 MyFloridaMarketPlace Update MFMP Process for W-9 The W-9 status is at the Federal Employee Identification Number (FEIN) level MyFloridaMarketPlace receives a nightly batch from DFS that updates the Vendor Information Portal (VIP) The next night VIP sends the updates to Buyer W-9 status in MFMP is for informational purposes only FLAIR will deny encumbered requisitions if the vendor does not have a valid W-9 on file –MFMP will display an error message referencing vendor status in FLAIR Approved invoices will be returned to the invoice manager if the invoice fails processing in FLAIR due to a vendors invalid W-9. MFMP will display an error message referencing vendor status in FLAIR.

13. 13 MyFloridaMarketPlace Update Possible W-9 Status in MFMP: 1.No W-9 on File 2.Pending IRS TIN Matching 3.Failed IRS TIN Matching 4.Valid W-9 on File 5.B Notice Error 6.Passed IRS Tax Identification Number (TIN) Matching without W-9

14. 14 MyFloridaMarketPlace Update Creating Requisitions - Check that your selected vendor has a valid W-9 on file with DFS

15. 15 MyFloridaMarketPlace Update Creating Invoices – check vendor’s W-9 status

16. 16 MyFloridaMarketPlace Update MFMP reports available: All open orders current fiscal year All open orders previous fiscal year All received orders current fiscal year All received orders previous fiscal year

17. 17 MyFloridaMarketPlace Update Vendor Database Cleanup Targeted for end of February Based on four specified criteria (purchase order activity, FLAIR payment activity, vendor location updates, and state term contract status), MyFloridaMarketPlace will inactivate a vendor's location If all the locations associated to a registration are inactivated, the registration also becomes inactive MyFloridaMarketPlace processes updates as one set in VIP but will send in batches to downstream applications (MFMP Buyer, Analysis, FLAIR, MarketView) Continue this yearly within the first two weeks of the fiscal year

18. 18 MyFloridaMarketPlace Update Require State Term Contract Number Targeted for end of March Based on selected method of procurement, MFMP 3.0 will require agencies to specify contact number when creating requisitions Allows State Purchasing increased visibility of spend on contracts

19. 19 State Purchasing Training Seminars: Tampa and Orlando –Trainer is Anne Rabon, MyFloridaMarketPlace Finance and Accounting Process Analyst –Visit our website for details and registration http://www.dms.myflorida.com/business_operations/state_purchasing/myfloridamar ketplace/mfmp_buyers/myflorida_marketplace_toolkit/buyer_training_opportunitie s/statewide_training_sessions http://www.dms.myflorida.com/business_operations/state_purchasing/myfloridamar ketplace/mfmp_buyers/myflorida_marketplace_toolkit/buyer_training_opportunitie s/statewide_training_sessions –Watch for additional MFMP 3.0 training webinars coming in March! State term contract webinars –Learn about renewed and/or new contracts –Coming Feb. 21 – Ammunition and Less-Lethal Training Seminars / Contract Webinars

20. 20 State Purchasing Training Developing a training focus group to look at certification and recertification –Four members from Procurement Process Improvement Project –Four members from Florida Professionals for Public Procurement

21. 21 Avis car rentals Effective Feb. 7, 2012, contract allows unlimited mileage again Effective July 1, 2012, State Purchasing authorized a 4.9 percent increase –When compared to consortia contracts, the July 1, 2012, rate is: 8 percent lower on average on the state’s most common rentals (sub- compact, compact, mid-size) At least14 percent lower on average on all state rentals Department of Financial Services’ policy requires state agencies to rent compact vehicles –DFS requires justification for rental of anything larger than compact –Agencies can choose not to reimburse employees for rental of anything other than compact STC Contract #518-020-10-1 Rental Vehicles

22. 22 Introduction to the analysis process What we have to work with –Vendors Vendors are tracked by Federal Employee Identification Number (FEIN) Vendors can have multiple FEINs for one name Vendors can have multiple names on one FEIN –Total spend FLAIR Fiscal Year 2011: $46,610,859,188.00 MyFloridaMarketPlace Fiscal Year 2011: $ 1,750,205,060.90 –Total mapped spend FLAIR Fiscal Year 2011: $ 6,038,560,067.99 State Purchasing Analysis Process

23. 23 State Purchasing Analysis Process ExclusionsFLAIR SumExclusions (continued)FLAIR Sum Care and Subsistence - Client Benefits and Allowances $ 17,161,420,442.12Refunds $ 113,287,033.22 Aid to Counties - Educational $ 6,608,043,138.63Other Current Charges and Obligations $ 62,390,710.47 Other $ 3,560,618,196.44Other Pensions and Benefits $ 29,396,929.94 Distributions and Transfers $ 2,486,548,980.00Building and Construction Materials $ 26,118,119.70 Other Structures and Improvements $ 1,921,455,545.41Care and Subsistence - Transition Services $ 20,135,118.13 State Financial Assistance $ 1,524,716,212.81Loans $ 17,979,431.25 Other Distributions $ 1,491,883,301.49Expert Witness Fees $ 17,944,678.72 Care and Subsistence - Other Vendor Services $ 1,027,274,684.95Distributions and Transfers (Continued) $ 16,876,852.24 Aid to Counties - Other $ 971,437,954.81Building and Fixed Equipment $ 14,884,333.10 Engineering $ 695,702,926.36Payments for Information and Evidence $ 12,169,619.81 Educational Aids $ 452,249,176.12Architectural $ 6,106,231.76 Principal $ 433,771,741.80Relief Acts $ 4,610,000.00 Construction $ 281,892,327.17Rental from Other Governmental Units $ 4,378,693.63 Interest $ 264,019,143.70Operating Distributions and Transfers Required by Law $ 3,163,483.09 Aid to Municipalities $ 258,032,300.32Royalties $ 3,071,827.98 Care and Subsistence - Medical Services $ 254,790,038.42Jurors and Witnesses Fees $ 2,420,873.48 Employer Contributions - Optional Retirement/Annuity Plan $ 219,861,578.25Training – In State Travel $ 1,525,409.61 Land $ 182,243,666.69Mileage – In State Travel $ 1,054,571.04 Rental from Non-Government Entities $ 156,590,798.8223 Excluded items under 1 Million $ 4,430,910.36 Worker's Compensation Benefits $ 122,679,963.54Grand Total $ 40,437,176,945.38 From $46 billion to $6 billion

24. 24 State Purchasing Analysis Process FLAIR Object Codes Mapped to Spend Cube - $6 Billion in Spend

25. 25 Consortia Contracts Available sources –National Association of State Procurement Officials –Multi State Contracting Alliance –Minnesota Alliance for Pharmacy –Novation –Educational Institute Coop –US Communities –Houston Area Council Coop Purchasing –National Joint Powers Alliance –National Intergovernmental Purchasing Alliance State Purchasing Analysis Process

26. 26 Pipeline 40 current contract actions 20 new opportunities –Eight possible co-op / consortia opportunities –ITN comprise a majority of the remainder –Multiple roll-up opportunities State Purchasing Analysis Process

27. 27 Pipeline – Goods: New Activity State Purchasing Analysis Process Contract NameEst AnnualSpendMethodNotes Auto parts$25,000,000.00ITN Consortia available: Western States Contracting Alliance (WSCA), U.S. Communities, National Joint Powers Alliance (NJPA), National Intergovernmental Purchasing Alliance(National IPA); Option to source and be lead for a consortium contract.DOT interested in parts contract. Second most requested contract by Other Eligible Users Chemicals: Agricultural and Herbicides (e.g., fertilizer) $75,000,000.00ITN Consortia search yielded no viable results. Option to source and be lead for a consortium contract. Number one request from Other Eligible Users. Possible Single Source issues. Equipment Rental (Heavy)$25,000,000.00ITN Consortia available: National Joint Powers Alliance (NJPA), U.S. Communities, National Intergovernmental Purchasing Alliance(National IPA); Option to source and be lead for a consortium contract. Medical Equipment$10,000,000.00ITN Existing State Term Contract - Identified possible maverick spend or need to add line items; conducting research; Consortia available: Western States Contracting Alliance (WSCA), National Intergovernmental Purchasing Alliance(National IPA), National Joint Powers Alliance (NJPA), Educational and Institutional Cooperative Purchasing (E&I). Park and Playground Equipment 22,000,000.00 ITN Consortia available: National Joint Powers Alliance (NJPA), U.S. Communities; Option to source and be lead for a consortium contract. Restaurant and Kitchen Equipment$1,000,000.00ACS Consortia available: National Joint Powers Alliance (NJPA), U.S. Communities; research will be conducted to determine which contract to utilize. School Buses, Small Buses, Specialty Vans $75,000,000.00ITN Consortia available: National Joint Powers Alliance (NJPA); State Term Contract existed in past - need to research reason for not pursuing since. Walk-up Building Supplies$3,000,000.00ACS Consortia available: Western States Contracting Alliance (WSCA), U.S. Communities, National Joint Powers Alliance (NJPA), National Intergovernmental Purchasing Alliance(National IPA), The Cooperative Purchasing Network (TCPN) Weight Calibration$4,000,000.00ITN Consortia search yielded no results. Further research is required to determine if State Term Contract would add value.

28. 28 Pipeline – Services: New Activity State Purchasing Analysis Process Contract NameEst AnnualSpendEst State Spend MethodNotes Janitorial Services / Property Management $58,700,000.0030%$17,600,000.00ITN Aggregating spend; increased transparency; economies of scale. RESPECT has contract for Janitorial Services. Potential contractual limitations of outsourced services (Dept. of Transportation rest areas is an example). Large variation in agency needs; fragmented market which may require regional awards. By way of example, the decision for sourcing is made at the county level for Dept. of Health county health depts. Decisions are also made on a park by park basis for Dept. of Environmental Protection Vehicle / Fleet Maintenance Services $15,000,000.0030%$5,000,000.00ITN NY has an estimated $5 million state and $104K non-state spend in fleet vehicle maintenance. Each state agency manages maintenance on their own Staffing Management$330,000,000.0030%$100,000,000.00ITN Possible roll-up of temp labor and additional labor related services. (Currently Temp Labor and IT contracts exist) Nursing / Medical Services (Staffing) $33,000,000.0030%$10,000,000.00ITN Economies of scale, aggregating spend, transparency in spend, agency demand Previous state term contract did not allow enough flexibility to adjust rates as demand for nurses increased. Some medical services are exempt from competitive bid requirements in Ch. 287, F.S. Call Centers$62,000,000.0030%$18,700,000.00ITN Visibility and transparency into actual costs; economies of scale (keeps the state from paying for and maintaining duplicate call centers); aggregating spend. Agency reluctance to combine call centers; existing contractual limitations Landscaping services / mowing services $12,300,000.0030%$3,700,000.00ITN Aggregating spend; increased transparency; economies of scale. Large variation in agency needs; fragmented market which may require regional awards. By way of example, the decision for sourcing is made at the county level for Dept. of Health county health depts. Decisions are also made on a park by park basis for Dept. of Environmental Protection

29. 29 Pipeline – Information Technology: New Activity State Purchasing Analysis Process Contract Name Est AnnualSpend Est State Spend MethodNotes eLearning$12,000,000.0033% 4,000,000.00 ITN There may be another contract we could leverage. Because of travel restrictions and limited budgets, entities have a greater need for eLearning. Need flexibility to deal with changing industry Oracle Software & Services $6,000,000.0033% $2,000,000.00 ITN This would be used across many agencies. A GSA contract exists for this category. Document Management Solutions $11,424,000.0033% $3,808,000.00 ITN This uses emerging technology. The state is looking to reduce occupancy. Indexing should make it easier to find information. There may be other agencies that have develop these systems already. Voting System Devices $50,000,000.000% 0.00 ACS NY spends an estimated $71 million annually on voting machines. They indicate that NY state specs are very unique in what the contractors have to provide, so they don't know if their specs based on NYS law would meet FL's needs. Bulk of spend my have already occurred Do any State Agencies purchase voting machines? Cloud Computing Services $4,200,000.0033% $1,400,000.00 ITN This utilizes emerging technology. There are already sunk costs associated and could be high cots associated with transition. Security may be an issue. Additional research Required.

30. 30 State Purchasing Analysis Process Reach out to other agencies –Regarding spend and to better understand needs –Possible alternate contract sources Use consortia as alternate contract sources Address maverick spend –Increased marketing of existing state term contracts Survey other eligible users, e.g., Florida local governments Survey identified vendors

31. 31 Hot Topics Open Discussion