Transcript Document
State Purchasing Purchasing Directors’ Meeting July 10, 2003 3:30 P.M. Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 2 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Overview of Today’s Session Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 3 Purchasing Directors’ Meeting Excellence In Contracting Audit Report • Propose legislative and administrative changes to address inadequacies and inconsistencies. • DMS should accept and implement the leadership role required by Florida Statute – develop formal procedures for needs assessments, standard formats for contracts – foster user groups to share best practices and common problems. • Undertake a statewide training initiative, and include incentives to encourage professionalism and certification. • Create a uniform vendor rating system to include links to websites, closeout evaluations, and a method for other agencies to access performance evaluations. • Propose legislation to enact a law similar to the federal Truth in Negotiating Act. This will help level the playing field between state negotiators and private contractors. 4 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 5 DMS/State Purchasing Mission DMS Mission To become a customer focused agency providing effective and efficient services in order to better enable state agencies and employees to deliver the Governor’s priorities to the people of Florida. State Purchasing Mission To gladly deliver useful and innovative purchasing services in order to become a customer focused agency providing effective and efficient customer services. 6 State Purchasing Mission Goals (Measures) • Purchasing statutes and rules improved before May 2004 • Recruit at least four employees highly esteemed by their peers before October 2003, and reduce annual turnover by 50% • Increase customer satisfaction by at least 15% before January 2004 • Successful delivery of innovative purchasing solution that reduces costs and saves time – MyFloridaMarketPlace adopted by all initial users before July 2004 7 State Purchasing Mission Tasks • • • • • • • • • Amend purchasing statutes Amend purchasing rules Improve contract management Reorganize division Deliver state term contracts that provide the right commodities and services at lower cost Consolidate purchasing into MFMP Training for division DMS customer satisfaction survey Support Facilities’ ITNs 8 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 9 The Really Big Context What Has DMS Been Doing? • I appoint you over nations and kingdoms to uproot and tear down, to destroy and overthrow, to build and to plant. • There is a time for everything … a time to tear down and a time to build. 10 Context of MyFloridaMarketPlace Modernization of State Management Stand-alone legacy management information systems • LAS/PBS (Budgeting) • FLAIR (Accounting) • COPES (Personnel and Payroll) • SPURS (Purchasing) • CMS (Cash Management) 11 Context of MyFloridaMarketPlace Pre-Modernization Challenges • Lack of standards among subsystems • Lack of complete and efficient integration • Duplication of data input and maintenance • Insufficient management information to support decision making • Incomplete reporting capabilities • Lack of single chart of accounts • Complex external interfaces • High maintenance and modification costs • Inconsistent data 12 Context of MyFloridaMarketPlace Overview of Re-Engineering Initiatives Florida has embarked on three major Enterprise Resource Planning efforts • Human Resources – People First— Modernizing with the personnel system, leave and attendance and benefits management • Purchasing – MyFloridaMarketPlace — Integrating purchasing activities for all State buyers and for vendors doing business with the State • Financial Management – FLAIR Replacement — Will replace the legacy accounting and financial system with an integrated enterprise resource planning system 13 Context of MyFloridaMarketPlace Current Purchasing Systems Manual Process for Matching Web-based Registration Manual Process for Invoicing Vendor Bid System (Bidding) SPURS (Purchasing) FLAIR Agency contract system SPURS View (Reporting) Agency contract system Agency contract system Agency contract system Agency contract system 14 Overview of MyFloridaMarketPlace System Goals FLAIR / FLAIR Replacement Registration Purchasing Bidding Contracts Invoicing Matching Reporting 15 Overview of MyFloridaMarketPlace Goals and Objectives MyFloridaMarketPlace… Connecting Buyers and Vendors… Expanding Opportunities… Goals and Objectives: Implement a single, statewide eProcurement solution enabling electronic buying and selling Aggregate all Government spending into an efficient buying channel Leverage new technology and capitalize on best practices Enable and facilitate the One Florida Program Generate savings through Strategic Sourcing and process efficiencies 16 Overview of MyFloridaMarketPlace Supporting the Governor’s Priorities More effective and efficient government that harnesses the use of technology Running government like a business when it makes sense to do so • Enterprise-wide initiative • Private sector best practice Diversifying Florida’s economy / One Florida Performance-based measurement and accountability Public / private partnerships 17 Overview of MyFloridaMarketPlace Project Timeline The project will be completed over four phases: Mobilization, Development, Deployment and Operations, all of which include specific milestones. Phase/Activity Mobilization Phase - Program Establishment - Staffing Development Phase - Conference Room Pilot - Confirm Requirements Contract 2002 2003 2004 2005 2006 2007 Month Oct*-Dec Jan-Mar Apr-JunJul-SepOct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Dec Jan-Oct 1 4-10 Deployment Phase 6-22 6 - Launch Vendor Reg. Portal 8 - Online Contract / Catalog Loading - Pilot Implementation (DMS&DOT) 10 - Initial Users Live 18 - Bring on Additional Users 22 - Transition from SPURS 22 Operations Phase 23-61 18 Overview of MyFloridaMarketPlace Key Dates in Near Past and Future March 31, 2003: Vendors began registering in the system via the Vendor Registration module April 28, 2003: Pilot Agencies (DOT, DMS, STO) began loading contracts June 2, 2003: Pilot Agencies (DOT, DMS, STO) began entering Blanket Purchase Orders July 1, 2003: New rules effective (60A-1.030, -1.031, -1.032) July 1, 2003: Go Live with Transaction Processing for Pilot Agencies (DOT, DMS, STO) September 1, 2003: Begin rollout to remaining agencies 19 Overview of MyFloridaMarketPlace Update on Go-Live As of 7/8/2003… 13,304 vendors are registered DOT, DMS, and STO have created 295 requisitions 13 POs have been transmitted to vendors DMS has issued ITN (7/9/03) 20 Overview of MyFloridaMarketPlace System Functions Initial Users Pilots Eligible Users Other State Agency Initial Users Exec Agencies Eligible Users – Univ, City, County MyFloridaMarketPlace Users General Public State Term Contract Vendors Minority Businesses Agency/ Dept. Contract Vendors Small Businesses Buyers Vendors Buyer Tools Vendor Tools • Vendor search • Self registration • State term contract items “I want to buy” • E-mail notification of formal and informal solicitations • Requisitions/Purchase orders • Online workflow approvals • Online quoting on informal solicitations (< $25,000) • Informal solicitation (quotes < $25,000) • Online submission of sealed bids (> $25,000) • Sealed bids (ITN, ITB, RFx > $25,000, auctions, reverse auctions) • Electronic purchase order receipt “I want to sell” • Electronic submission of invoices • Receipt of Goods • P-Card • Contract development and administration • Catalog creation and updates for State term contracts • Reports • Reports Business Support and Operations • Buyer Help Desk • Vendor Help Desk • Strategic Sourcing • Procurement Assistance • Catalog Enablement • Training and Education 21 Overview of MyFloridaMarketPlace System Functions Vendor Registration – Allows vendors to register and maintain their vendor information in the system. The vendor may also register for CMBE certification within the Vendor Registration System Requisitioning – Online creation of requisition from an online catalog or contract. Supports submitting electronic quotes to vendors and allowing vendors to respond to the quote online. Bidding – Online submission of solicitations to vendors. Vendors will respond to their bids online and the agency may evaluate the responses online as well. Contract tracking – Online tracking of contracts including available balance, contract term, contract pricing, etc. Invoice reconciliation – Online matching of invoice, purchase order, receipt, and/or contract. The discrepancies will be identified and routed to the agency for review Reporting – Customized reporting capabilities providing the agencies with spend visibility, contract compliance, etc. 22 Overview of MyFloridaMarketPlace System Benefits • “E-procurement can deliver more than just lower prices. Indeed, the net impact of its other characteristic deliverables – better productivity, faster processing, greater visibility, the elimination of maverick, or unplanned, ad hoc buying – can have a much higher ROI than what can be achieved by shaving a few pennies off price.” • “Better productivity in the buying department [allows] buyers to do what they ought to do – buy better, not shuffle paper. …[Purchasing agents’] jobs used to be transaction-based. Now they are performing a higher value role.” CIO Magazine, 6/15/03 23 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 24 State Purchasing Reorganization Work Completed Through Feb. 2003 – Validated As-Is structure and headcount Reviewed As-Is job titles and pay grades Reviewed As-Is job descriptions Confirmed State vs. Outsourcing To-Be roles & responsibilities Determined evaluation criteria & weights* Completed spend and STC analysis and factored to organization structure Based on spend & vendors, benchmarked for appropriate organization sizing Conducted 23 Agency interviews Developed, profiled, and scored multiple To-Be organization structure options* Discussed and refined leading option* Developed To-Be job descriptions Prepared implementation plan – Key Findings – • • • • Organization lacks vision, strategy, leadership and direction; is reactive Over the last 2-4 years have gotten way off the best practices path and instilled practices that detract value (e.g., STCs without best pricing; 1-year only contracts) On average, personnel are not capable past tactical activities; are unresponsive Significantly overstaffed vs. benchmarks * Work completed via Workshops with State & DMS Departmental Purchasing involvement. 25 State Purchasing Reorganization DMS obtained input from the CRP and multiple agency interviews. A number of opportunity themes for State Purchasing emerged. – Subset of Interview Questions – • • What services does State Purchasing provide to you? How well do they provide these services (i.e., what is and isn’t working)? What other services would you like to see State Purchasing provide? – STC Themes of Opportunities – • • • • • • Inconsistent competitive value Unresponsive to new STC opportunities Slow renewals Overuse of contract extensions New RFQ requirement on STCs makes them redundant (provides bid list only) Inconsistent and poorly written contracts N = CRP + 23 Interviews – Other Themes of Opportunities – • • • • • • • • • • • • • • Involvement / input from Agencies Interaction with Agencies Communication with Agencies Assistance / support Services rec’d are less value than 1% fees Unavailable Unresponsive Inconsistent (answers, guidelines, procedures, processes, interpretations) VBS cumbersome and inefficient Slow on single-source exception reviews Legal unresponsive and “liberal” Purchasing expertise Training Leadership 26 State Purchasing Reorganization The workshop process led to evaluation criteria and weights, which State Purchasing used to develop and evaluate the organization design alternatives. ID Criteria A Aggregated purchasing power & consolidated supply base 21 B Responsive to OneFlorida & furthering CMBE * 16 C Drives use of State Term Contracts 13 D Closes the communication gap 13 E Exploits procurement technology 12 F Builds relationships with agencies, eligible users & vendors 9 G Focus on speed to value / efficiency 8 H Clear policy, procedures and rules ownership 8 Total N=9 Weight * CMBE – Certified Minority Business Enterprise 100% 27 State Purchasing Reorganization INTERIM To-Be Organization Structure Director State Purchasing DMS Administration Chief of State Purchasing Operations Administrative Assistant Bureau Chief of Commodities (A) Administrative Assistant Administrative Assistant Bureau Chief of Commodities (B) Administrative Assistant Operations Manager Governance (Policy, Procedures, Legislation, Bid Room) Purchasing Analyst - Automotive, Marine & Filters Purchasing Analyst - Computers, Computer Supplies & Principle Technology Operations Manager Finance (Revenue, Budget, LBR, Audits, P-Card, Metrics) Purchasing Specialist Purchasing Specialist Purchasing Analyst - Energy & Transportation Services Purchasing Analyst - Telecommunications Equipment Operations Manager Records (Retention, Public Inquires, Contracts, PEC) Operations Manager IT (Software, Hardware, Help Desk, Web Site, Training) Operations Specialist - IT SPURS Team SNAPS Team Operations Specialist - VBS Operations Manager Customer & Vendor Satisfaction (CMBEs, Surveys, Disputes) Purchasing Operations Purchasing Manager DMS Dept. Purchasing Purchasing Analyst - Insurance, Travel & Law Enforcement Purchasing Analyst - Office Equipment & Supplies, & Audio & Visual Equipment Purchasing Specialist Purchasing Specialist Purchasing Analyst - Medical, Traffic Supplies, & PRIDE & RESPECT Coordination Purchasing Analyst - Food & Service Items, Furn. & Floor Covering, & Library Materials Purchasing Analyst - Commercial Printing & State / Agency Print Shop Coordination Purchasing Analyst - MRO & Equipment (Floor Maintenance, HVAC, Ice Making) Purchasing Specialist Purchasing Specialist Purchasing Analyst - Professional Services (Consulting, HR, Legal & Misc. Services) Purchasing Analyst - Equipment (Lawn, Park & Playground, Appliances, Industrial) Purchasing Specialist Secretary's Office, Legislative Affairs, & Communications Purchasing Specialist Retirement, DSGI & Fleet Purchasing Specialist Facilities & Construction DMS Dept. Purchasing Special Projects & Transition Team Supervisor Special Projects Team Members Transition Team Members 28 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 29 Strategic Sourcing Objectives Leverage StateWide Volume Obtain Best Prices & Value Obtain StateWide Savings Increase Demand / Volume on STCs Manage Compliance Reduce StateWide Supply Base Identify New STC Opportunities Strategic sourcing is a proactive process to leverage demand and select vendors that offer the best value. 30 Strategic Sourcing Benefits – State – • Leveraged savings • Reduced supply base • STC compliance management • Increased spend visibility • Data capture for future leveraging • Reduced transactional workload • Increased vendor compliance with transaction fee collection – Agency – – Vendors – • Best price STCs to leverage • No additional purchasing effort required – vendors, contracts, pricing, and service levels “ready to go” on most contracts • Users “release” – reduced transactional workload • Increased time to spend on Agency- unique needs • Increased volume • Reduced rework (e.g., no more STC events followed by Agency events for same goods / services) • Lowered cost of doing business with the State • Increased visibility into demand over time • Longer-term contracts • More ROI in State business 31 Strategic Sourcing Methodology Kick-Off - & Kick-Off & Assess Assess Opportunities Opportunities Level High Data Collection & Analysis Key Worksteps Segment Purchases Form CrossCross Functional Sourcing Teams Typical Deliverables In-Scope Categories Profile Profile Internally Internally & & Externally Externally Fast Track to Value Validate & Profile Category Ariba Analysis Source: Accenture Best Practices Build Total Cost of Ownership Model Build Supplier Vendor Selection Decision Matrix Conduct Industry Analysis Develop Category Strategy Conduct Supplier Vendor Analysis Category Profile TCO Model Industry Profile Category Strategy Selection Decision Matrix CFSTs (Cross-Functional Sourcing Teams) Tools Develop Develop Strategy Strategy Develop Screen Selection Suppliers Factors && Selection Screen Factors Vendors Ariba Contracts Ariba Analysis Conduct Conduct Competitive Auctions & Event Complete ITB/ITN/ RFQ/RFP Prepare Shape & Value Negotiate Proposition Value & Award Propositions Implement Implement Agreements Agreements Develop Prepare - Fact Value Based Proposition Negotiation Around “Packages” Options Measure Results & Trends Make Negotiate Award Value Decision Propositions Develop Vendors - and / or Conduct Auctions ITB/ITN/RFQ/RFP Auctions Ariba Sourcing Value Propositions Award Decision (ITA) Ariba Sourcing Benefits Realization Continual Vendor Improvement Ariba Contracts Ariba Analysis 32 Spend Analysis Overview Profile Profile Internally Internally & & Externally Externally Kick-Off - & Kick-Off & Assess Assess Opportunities Opportunities FLAIR Spend was Analyzed & “Sourceable” Spend Identified & Categorized Spend was Segmented by Benefit Potential & Ease of Implementation Develop Develop Strategy Strategy Develop Screen Selection Suppliers Factors & & Selection Screen Factors Vendors Conduct Conduct Competitive Auctions & Event Categories were Mapped to 9 Waves of 3 Categories Each 89% 80% 32% $ $ $ 29,489,796 16,319,174 28,000,000 2 2 2 MRO Services IT Hardware Travel $ $ 184,511,919 73,344,149 70% 80% $ $ 129,158,343 58,675,319 8% $ 9% $ 7% $ 9,686,876 5,390,000 1,439,263 3 3 Telecom Furniture And Equipment $ $ 152,691,544 72,086,215 75% 60% $ $ 114,518,658 43,251,729 11% $ 6% $ 12,826,000 2,775,000 Office Machinery Motor Vehicles - Passenger Motor Vehicles - Other $ $ $ 14,271,115 32,514,967 2,965,577 90% 80% 80% $ $ $ 12,844,004 26,011,973 2,372,461 8% $ 8% $ 8% $ 998,000 2,080,958 189,797 Food Products Medical Supplies Financial & Insurance $ $ $ 67,379,747 182,870,285 89,919,017 29% $ 10% $ 70% $ 19,337,987 17,500,000 62,943,312 10% $ 10% $ 4% $ 1,933,799 1,750,000 2,517,732 Building And Fixed Equipment IT Software Medical Services $ $ $ 44,034,058 23,167,469 75,071,935 60% $ 30% $ 60% $ 26,420,435 6,950,241 45,043,161 10% $ 10% $ 5% $ 2,642,043 695,024 2,252,158 Postage & Freight Janitorial Supplies & Services Advertising $ $ $ 35,381,999 23,861,491 97,557,990 35% $ 55% $ 60% $ 12,206,790 13,123,820 58,534,794 6% $ 8% $ 4% $ 732,407 1,049,906 2,341,392 Temporary Employment Services Fuel $ $ 15,614,795 20,754,101 60% $ 80% $ 9,368,877 16,603,280 10% $ 6% $ 936,888 996,197 Construction Services Legal Building & Construction Material $ $ $ 198,972,579 47,692,521 22,671,688 20% $ 40% $ 60% $ 39,794,516 19,077,008 13,603,013 6% $ 4% $ 6% $ 2,387,671 763,080 816,181 5 5 6 6 6 7 7 7 8 8 8 9 9 9 Level 2 Category Professional Services $2,450MM Independent Contractor-NEC* $1,360MM IT & Telecom $399MM Facilities Mgmt. $300MM Medical $261MM Office Equip. & Services $175MM Utilities and Fuel $91MM Food (Products and Services) $85MM Vehicles & Equip. Rental $38MM Structures $1,671MM Telecom $153MM MRO Services $185MM Medical Supplies $183MM Furniture and Equipment $72MM Utilities $71MM Food Products $67MM Passenger Vehicles $33MM Construction Services $199MM IT Services $150MM MRO Material $87MM Medical Services $75MM Postage and Freight $35MM Consulting $214MM Equipment $44MM IT Hardware $73MM Janitorial $24MM Medical Equipment $3MM Office Supplies $33MM Advertising $98MM Building Material $23MM IT Software $23MM Property Services $5MM Financial & Insurance $90MM Other $1MM Fuel $21MM Agricuture Supplies $18MM • • • • • • • • • # Agencies using commodity # of STCs in existence Existence of Agency agreements STC penetration % Assessment of STC attractiveness Catalog complexity Assessment of DMS expertise Degree of P-Card leakage Nature of commodity (e.g., OEM) Agricultural Supplies Professional Development Other Professional Services Other Categories Total Cumulative Total Construction $1,937MM Engineering $585MM $ 20,560,895 100% $ 20,560,895 – Compliance % Considerations – $ $ $ 17,606,785 27,945,992 10,785,905 60% $ 20% $ 60% $ $ 4,062,462,307 $ 5,757,156,857 10,564,071 5,589,198 6,471,543 0% $ 6,018,307 15% $ 870,352,705 10% $ 13% $ 5% $ 2,890,000 2,133,900 1,344,000 FY2003-04 FY2004-05 FY2005-06 $ 2,047,083 $ 1,155,863 $ 2,890,000 $ 2,133,900 $ 2,890,000 $ 2,133,900 $ $ 481,667 711,300 $ $ $ 840,000 $ 1,210,859 $ 673,750 $ 1,344,000 $ 9,686,876 $ 5,390,000 $ 1,344,000 $ 9,686,876 $ 5,390,000 $ $ $ FY2006-07 336,000 7,265,157 4,042,500 $ $ $ FY2007-08 $ - $ 8,016,250 $ 12,826,000 $ 12,826,000 $ 3,206,500 $ $ $ - $ 1,734,375 $ 623,750 $ 260,120 $ 2,775,000 $ 998,000 $ 2,080,958 $ $ $ 2,775,000 998,000 2,080,958 $ $ $ 693,750 249,500 1,560,718 $ $ $ - $ $ $ $ 189,797 $ 1,933,799 $ 1,750,000 $ $ $ 189,797 1,933,799 1,750,000 $ $ $ 142,348 1,450,349 1,312,500 $ $ $ - $ $ $ - $ 1,573,583 $ 1,651,277 $ 434,390 $ $ $ 2,517,732 2,642,043 695,024 $ $ $ 2,517,732 2,642,043 695,024 $ $ $ - $ $ $ - $ $ $ $ $ $ 2,252,158 732,407 1,049,906 $ $ $ 2,252,158 732,407 1,049,906 $ $ - $ $ - $ $ - $ $ 1,463,370 585,555 $ $ 2,341,392 936,888 $ $ $ - $ $ $ - $ $ $ - $ $ $ 622,623 298,459 95,385 $ $ $ 996,197 2,387,671 763,080 $ $ $ - $ $ $ - $ $ $ - $ $ $ 102,023 - $ $ $ 816,181 396,153 209,595 $ $ - $ $ - $ $ - $ $ $ $ 161,789 - $ 179,908 $ % 1,439,263 $ 1,439,263 $ 1,079,447– $ – Savings Considerations • • • • • • 6% $ 6% $ 4% $ • - Sourceable spend Vendors = 80% spend Marketplace competitiveness Sourceability Assessment of spend and vendor consolidation in existence today Range of savings %s obtained at other private and public companies Over 100 ACN Procurement clients 633,844 335,352 258,862 $ 316,805 7% $ 65,113,134 $ 6,107,463 $ 6,107,463 23,725 241,725 218,750 $ 34,002,733 $ 40,110,196 281,520 91,551 131,238 $ 49,601,151 $ 89,711,346 - $ 49,526,309 $ 139,237,656 $ 27,513,881 $ 166,751,536 Travel $21MM – Wave 1 – – Office Supplies – MRO Supplies – Printing Other Vehicles $3MM Easy Rented Equip. $2MM 2 Printing $20MM Copy Equip. $14MM •Janitorial Supplies & Services-$24 Legal $48MM Prof. Dev. $28MM Temp. Labor and Other $26MM •Office Machinery-$14 Ease of Implementation • # of Agencies • # of STCs • STC Penetration % • Competitive Demand • Vendors = 80% Spend • Sourceability •Motor Vehicles – Other - $3 •Food Services - $0.09 1 Consolidated •Motor Vehicles – Passenger - $33 •IT Software-$23 •Financial & Insurance-$90 •Agricultural Supplies - $18 •Fuel-$21•Temp. Employment - $16 •Building & Fixed Equip. - $44 •Other Prof. Svcs.-$11 •Property Svcs.- $5 •Advertising-$98 •Legal-$48 •Medical Equip. - $2 •Printing-$20 •Utilities-$71 •Engineering Svcs. - $585 3 •Other Rental Equip.-$3 •Other Construction - $0.7 •Travel-$21 •Medical Svcs. - $75 4 •Structures - $1,671 Wave 1 Wave 2 Wave 3 Difficult •Building/Const. Material-$23 Low Benefit Potential • Sourceable Spend • Savings Potential High – Waves 2+ – – Straw Modeled – Built Into Model – Being Finalized 23 Agency Interviews Conducted Waves Reflect Agency Input & DMS Feedback Estimated Potential Savings by Fiscal Year Wave Wave 33,028,259 20,322,758 87,108,798 4 4 5 Level 1 Super Category Potential Annual Estimated S avings % from Potential Savings Sourceable Spend $ $ $ 3 4 4 FLAIR FY2001-02 Sourceable Spend $5,757MM Estimated Sourceable Spend Compliance % Office Supplies Printing MRO Material Implement Implement Agreements Agreements Sourcing Business Model was Developed from Savings Goals Estimated Potential Savings by Fiscal Year Originally Identified Spend for Pilot and Initial User Agencies Spend Category 1 1 1 Prepare Shape & Value Negotiate Proposition Value & Award Propositions Spend Category Originally Identified Spend for Pilot and Initial User Agencies Compliance % Estimated Sourceable Spend Potential Annual Estimated S avings % from Potential Savings Sourceable Spend 1 1 1 Office Supplies Printing MRO Material $ $ $ 33,028,259 20,322,758 87,108,798 89% 80% 32% $ $ $ 29,489,796 16,319,174 28,000,000 10% $ 13% $ 5% $ 2,890,000 2,133,900 1,344,000 2 2 2 MRO Services IT Hardware Travel $ $ $ 184,511,919 73,344,149 20,560,895 70% 80% 100% $ $ $ 129,158,343 58,675,319 20,560,895 8% $ 9% $ 7% $ 9,686,876 5,390,000 1,439,263 3 3 Telecom Furniture And Equipment $ $ 152,691,544 72,086,215 75% 60% $ $ 114,518,658 43,251,729 11% $ 6% $ 12,826,000 2,775,000 3 4 4 Office Machinery Motor Vehicles - Passenger Motor Vehicles - Other $ $ $ 14,271,115 32,514,967 2,965,577 90% 80% 80% $ $ $ 12,844,004 26,011,973 2,372,461 8% $ 8% $ 8% $ 998,000 2,080,958 189,797 4 4 5 Food Products Medical Supplies Financial & Insurance $ $ $ 67,379,747 182,870,285 89,919,017 29% $ 10% $ 70% $ 19,337,987 17,500,000 62,943,312 10% $ 10% $ 4% $ 1,933,799 1,750,000 2,517,732 5 5 6 Building And Fixed Equipment IT Software Medical Services $ $ $ 44,034,058 23,167,469 75,071,935 60% $ 30% $ 60% $ 26,420,435 6,950,241 45,043,161 10% $ 10% $ 5% $ 2,642,043 695,024 2,252,158 6 6 7 Postage & Freight Janitorial Supplies & Services Advertising $ $ $ 35,381,999 23,861,491 97,557,990 35% $ 55% $ 60% $ 12,206,790 13,123,820 58,534,794 6% $ 8% $ 4% $ 732,407 1,049,906 2,341,392 7 7 Temporary Employment Services Fuel $ $ 15,614,795 20,754,101 60% $ 80% $ 9,368,877 16,603,280 10% $ 6% $ 936,888 996,197 8 8 8 Construction Services Legal Building & Construction Material $ $ $ 198,972,579 47,692,521 22,671,688 20% $ 40% $ 60% $ 39,794,516 19,077,008 13,603,013 6% $ 4% $ 6% $ 2,387,671 763,080 816,181 9 9 9 Agricultural Supplies Professional Development Other Professional Services $ $ $ 17,606,785 27,945,992 10,785,905 60% $ 20% $ 60% $ 10,564,071 5,589,198 6,471,543 6% $ 6% $ 4% $ 633,844 335,352 258,862 Other Categories Total Cumulative Total $ 4,062,462,307 $ 5,757,156,857 0% $ 6,018,307 15% $ 870,352,705 $ 316,805 7% $ 65,113,134 FY2003-04 FY2004-05 FY2005-06 $ 2,047,083 $ 1,155,863 $ 2,890,000 $ 2,133,900 $ 2,890,000 $ 2,133,900 $ $ 481,667 711,300 $ $ $ 840,000 $ 1,210,859 $ 673,750 $ 1,344,000 $ 9,686,876 $ 5,390,000 $ 1,344,000 $ 9,686,876 $ 5,390,000 $ $ $ 336,000 7,265,157 4,042,500 $ $ $ $ $ $ 1,439,263 $ 8,016,250 $ 1,439,263 $ 12,826,000 $ 1,079,447 $ 12,826,000 $ $ 3,206,500 179,908 - FY2006-07 FY2007-08 - $ $ $ - $ 1,734,375 $ 623,750 $ 260,120 $ 2,775,000 $ 998,000 $ 2,080,958 $ $ $ 2,775,000 998,000 2,080,958 $ $ $ 693,750 249,500 1,560,718 $ $ $ - $ $ $ $ 189,797 $ 1,933,799 $ 1,750,000 $ $ $ 189,797 1,933,799 1,750,000 $ $ $ 142,348 1,450,349 1,312,500 $ $ $ - $ $ $ - $ 1,573,583 $ 1,651,277 $ 434,390 $ $ $ 2,517,732 2,642,043 695,024 $ $ $ 2,517,732 2,642,043 695,024 $ $ $ - $ $ $ - $ $ $ $ $ $ 2,252,158 732,407 1,049,906 $ $ $ 2,252,158 732,407 1,049,906 $ $ - $ $ - $ $ - $ $ 1,463,370 585,555 $ $ 2,341,392 936,888 $ $ $ - $ $ $ - $ $ $ - $ $ $ 622,623 298,459 95,385 $ $ $ 996,197 2,387,671 763,080 $ $ $ - $ $ $ - $ $ $ - $ $ $ 102,023 - $ $ $ 816,181 396,153 209,595 $ $ - $ $ - $ $ - $ $ $ $ 161,789 - $ 6,107,463 $ 6,107,463 23,725 241,725 218,750 $ 34,002,733 $ 40,110,196 281,520 91,551 131,238 $ 49,601,151 $ 89,711,346 - $ 49,526,309 $ 139,237,656 $ 27,513,881 $ 166,751,536 33 Agency Participation on Category Teams 3rd Tier Agency Users Benefit From STC 2nd Tier Agency Users Data & SMEs to Category Team Top Agency Users Category Team Core Members 34 Strategic Sourcing Wave 1 Kick-Off - & Kick-Off & Assess Assess Opportunities Opportunities Profile Profile Internally Internally & & Externally Externally Develop Develop Strategy Strategy Develop Screen Selection Suppliers Factors && Selection Screen Factors Vendors Conduct Conduct Competitive Auctions & Event Office Supplies MRO Supplies Printing Prepare Shape & Value Negotiate Proposition Value & Award Propositions Implement Implement Agreements Agreements • DMS Lead – Tom Butler • Sourcing Event – Auction • Target STC Date – Oct. 2003 • DMS Lead – David Comer • Sourcing Event – ITB • Target STC Date – Oct. 2003 • DMS Lead – Charles Day • Sourcing Event – RFP • Target STC Date – Nov. 2003 35 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 36 Purchasing Directors’ Meeting Operational Issues • IT Consulting Contracts • Single Source Applications • Commodity Codes • Microsoft Settlement 37 Operational Issues IT Consulting Contracts • Potential Y2K crisis led to change in consulting procurement practices, away from time-consuming formal competitive bid process and toward prompt, non-exclusive, pre-qualification process • Led to audits, both in-house and by others, criticizing number of contracts (70), lack of competition, inadequate terms, and confusion of use. See Audit of State Term Procedures for Acquiring IT Consultant Services (DMS IG Report No. 2000-118); Selected State Agencies’ IT Consultant Procurement Practices (AG Report No. 02-050 Oct. 2001); IT Consultant Services Contract Audit (EOG IG Report Sep. 2001) • DMS Purchasing memoranda provided interim guidance. See Multiple Award State Term Contracts, Memo. No. 5 (00/01) (Oct. 5, 2000); State Term Contracts for Information Technology Consulting Services, Memo. No. 1 (00/01) (rev. Sep. 5, 2000). Interim statutory fix validated request for quotes (RFQ) process in May 2001 38 Operational Issues IT Consulting Contracts • In October 2001, DMS and STO began review of best IT procurement practices. First (prototype) new solicitation was IT Hardware contract in June 2002. Detailed review done of federal experience procuring IT services (federal spend went from $8 billion in 1997 to $17 billion in 2001). • DMS worked with STO and DCF resources (purchasing and technology) to develop new formal competitive solicitation documents (RFP). Expect to release before September 1, 2003. • Effective July 1, 2003, State Purchasing has ceased the old method of awarding IT Consulting contracts. For those in queue, applicant must have done everything necessary by June 30, otherwise its application will be denied and its recourse will be to bid new contract (or contract directly with user agency). • New contract will follow federal schedule model – unassailably, a best practice. Number of contractors will decrease significantly. 39 Operational Issues IT Consulting Contracts • Transition period will require adjustment • Some contracts are expiring between now and September 1 and will not be renewed – – – – – – – – – – Unisys Corporation 7/17/03 Motorola 7/22/03 Gulf Computers, Inc. 7/23/04 United Consulting Systems, Inc. 8/04/03 Advanced Data Solutions, Inc. 8/14/03 Bearing Point, Inc. 8/18/03 Anteon International Corp. 8/26/03 I.S. Consulting 8/27/03 Xerox Corp 8/27/03 Digital Fusion 8/27/03 40 Purchasing Directors’ Meeting Operational Issues • IT Consulting Contracts • Single Source Applications • Commodity Codes • Microsoft Settlement 41 Operational Issues Single Source Processing - Problems • Single source purchases over Category Four ($150,000) require review and approval by DMS following agency posting of the single source description on the Vendor Bid System (VBS) (see sections 120.57(3) and 287.057(5)(c), FS) • Agency Feedback – The process is slow – Uncertain as to content to post on VBS, both in the single source description posting and the single source notice of intended decision following DMS approval – Uncertain as to the content of the Exceptional Purchase Request submitted to State Purchasing 42 Operational Issues Single Source Processing - Solutions State Purchasing proposes the following for comment: • To speed up the process, we will accept single source requests via email at [email protected]. Attach signed and scanned Exceptional Purchase Request forms and supporting documents. We will return approvals by email if you provide an email address. • To reduce uncertainty as to content, we are furnishing suggested formats for the Exceptional Purchase Request for a single source purchase, and for the Vendor Bid System before-and-after postings. When posting please use an “SS” prefix to distinguish from competitive solicitations. We are investigating the cost of a posted list separate from competitive solicitations, and will keep you informed on that possibility. • You may use these suggested formats now. • Please also feel free to suggest changes, and email them to [email protected]. If changes are incorporated, revised formats with the changes will be distributed to the agency purchasing directors. 43 Operational Issues Single Source Processing - Solutions Suggested Content for form PUR 7006 (Exceptional Purchase Request) • The following documents are attached to this request for DMS approval of a single source purchase: (1) A copy of the advertisement in the Vendor Bid System, including posting start and end date. (2) A copy of the Single Source Description (including complete justification) posted in the attached or equivalent format on the Vendor Bid System with the advertisement, including start and end dates in accordance with s. 287.057(5)(c), FS. • Responses received from other vendors during advertisement of the single source description: __ No __ Yes. If yes, attach copies of vendor responses, and any written reply by the agency, with written explanation of the agency’s decision to continue with a single source acquisition. • Registration with Department of State (sunbiz.org) ___ Copy of Dept of State registration attached. ___ Copy of Dept of State registration not attached. Agency understands DMS will verify registration if copy is not attached, and reject single source purchase if vendor has not complied with statutory requirement for corporate registration (ref. Ch. 607 FS). • Registration in MyFloridaMarketPlace: ___ Yes ___ No If “No” cite administrative rule authority for failure to register: 44 Purchasing Directors’ Meeting Operational Issues • IT Consulting Contracts • Single Source Applications • Commodity Codes • Microsoft Settlement 45 Operational Issues Commodity Codes - Uses Commodity Codes are used … … to code purchases and solicitations for vendor selection and miscellaneous search and reporting purposes. … in vendor registration to facilitate buyer searches for vendors of specific commodities and services. … in vendor email notice registration in order for vendors to be notified of marketing opportunities (formal competitive solicitations, quotes, single source descriptions) … in determining where we are spending our dollars, to facilitate order consolidation/aggregation, determine bid thresholds, receive quantity discounts, strategic sourcing, etc. 46 Operational Issues Commodity Codes - Problems • Some newer items/technologies/services have not been coded. • The definitions of some coding classifications and/or groups do not include all the appropriate items. • Some classes, e.g., 973 for professional services and 991 for technical services, include vastly different types of services, some of which, e.g., medical related and construction related, might better be broken out into new classes. • Commodity codes are difficult for vendors and buyers to search on the State Purchasing web site, because they are essentially scrolling through a condensed list (classes), and must open a sub-list (groups) to look for specific products. 47 Operational Issues Commodity Codes - Solutions • Add/delete items to existing classes and groups • Add/delete groups to existing classes • Add new classes with appropriate groups, perhaps removed from over-broad classes • Explore the possibility of a word search capability for vendor registration in MFMP and solicitation/single source coding in VBS 48 Operational Issues Commodity Codes – Next Steps YOUR HELP IS NEEDED • Email Ron Brown at [email protected] with your suggestions related to “SOLUTIONS” above, and any other related improvements you’d like to suggest • Be prepared to discuss proposed changes with Ron or his designee 49 Purchasing Directors’ Meeting Operational Issues • IT Consulting Contracts • Single Source Applications • Commodity Codes • Microsoft Settlement 50 Operational Issues Microsoft Settlement • Agency OGC and CIO should review information at www.microsoftproductssettlement.com/florida • Settlement provides vouchers worth $5 for each license of certain MS products • Claims for vouchers must be postmarked by December 24, 2003 • “Opt out” deadline is October 13, 2003 • “Fairness hearing” scheduled November 24, 2004 • Suggested that DMS and STO coordinate Enterprise response 51 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 52 Purchasing Directors’ Meeting July 8, 2003 Agenda Welcome / Meeting Overview Excellence in Contracting Audit Report DMS/State Purchasing Mission MyFloridaMarketPlace Overview State Purchasing Reorganization Strategic Sourcing Operational Issues Open Floor / New Issues Next Meeting Location / Time 53 Next Meeting: Time / Location Determine Frequency of Meetings Monthly? August 7 Bi-Monthly? September 11 Quarterly? October 9 3:30 p.m. – 4:30 p.m. State Purchasing, Room 301 (or call in) 54