Contract Administration - VAGP | Virginia Association of
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Transcript Contract Administration - VAGP | Virginia Association of
Adding Value to Procurement
Presented by:
David Dise, CPPO
[email protected]
240/777-9910
Introduction
Session Objectives
Define Value and its Application to
Procurement
Learn Ways to Evaluate the Value of Your
Operation
Identify Short and Long Term Strategies
Pick Up Some Tools and Techniques
A Lesson in Value
What is Value?
“Worth in usefulness or importance to the possessor; having utility or
merit. A principle, standard, or quality considered worthwhile or
desirable.”
(American Heritage College Dictionary)
Cost vs. Value
A Lesson in Value
The Highboy
What is this Queen Anne Highboy worth?
A Lesson in Value
The Personal Computer
What makes a PC valuable…
Frequent malfunctions?
Bugs?
Viruses?
Long waits for help and support?
So…why are they so valuable?
A Lesson in Value
“Worth in usefulness or importance to the possessor; having
utility or merit. A principle, standard, or quality considered
worthwhile or desirable.”
(American Heritage College Dictionary)
Perspectives on Value
“The purchasing profession does not produce a tangible
product per se. What we have to offer is service and value.
Tempering these with world class principles will ensure that
we remain indispensable.”
Randy Shearer, CPCM, Modern Technologies Corp.
Perspectives on Value
Purchasing is a Service Industry
Purchasers Must Ensure Success
Value is Determined by the Customer
Perspectives on Value
Perspectives on Value
What is a Customer?
“One that buys goods or services.”
“An individual with whom one must deal.”
Internal Customers
Departmental Users
Management
Elected Officials
External Customers
Business Community
Constituents
General Public
Press/Media
Determining Value
Determining Value
Evaluating the Process
If your customers had to pay for the services
you render, would they consider it worth the
price?
Determining Value
Understanding “Process” as a Value factor
Getting work done through related
business activities
Kinds of work
Value adding
Non-value adding
Waste
Process Value
Inputs
(Upstream)
Processes
Outputs
(Downstream)
Process Value
Inputs
(Upstream)
Processes
Outputs
(Downstream)
Work-around!
Determining Value
Function vs. Process
Task focus = Process hostility
Determining Value
Function and Process
Do task …Think process
Signs of task focus…
INMJ
IDWIT
IDMB
Determining Value
Procurement Goals
Economy
Efficiency
Effectiveness
What makes an organization successful?
Is Purchasing really strategic?
Align goals and processes
Determining Value
Change must equal Improvement
Tampering vs. Improving
Improvement through…
Identification
Measurement
Self Analysis Questions
Focus on timeliness, quality, helpfulness,
competition, streamlined procedures
“People don’t resist change; they resist being changed.”
– Peter Scholtes
Determining Value
“Laws” of Organizational Change
Peter Scholtes, The Team Handbook
Things are the way they are because they
got that way.
Unless things change, they are likely to stay
the same.
Change would be easy if it weren’t for all
the people.
People don’t resist change, they resist being
changed.
Determining Value
Value is performing work with the
customer in mind
Remember the outcome – keep your
eyes on the prize
Self-check
Customer expectations
“Complexity and inflexibility are the enemies of improvement.”
- Susan Williams, Orion Development Group
Process Identification
Identify your core processes
Impact the delivery of value?
Account for a significant portion of costs
or revenues?
Exist independently of other processes
you have identified?
Measurable outcomes?
“If you can’t measure it, you can’t manage it.”
-Kaplan and Norton, “Using the Balanced Scorecard as a Strategic
Management System”
Process Identification
Identify your core processes
Manage your core processes
Define
Understand
Assess
Improve
Sustain
Process Evaluation
Evaluation Tools
Customer Surveys – KPI’s
Audits, Internal and External
NIGP PMAP
Informal Feedback
Evaluation Tools
Customer survey results...
What’s the problem with Public Procurement?
Source: Doing Business with Government, NY: Paragon House
Bad specifications, written too narrowly to permit real competition (35%)
Too difficult to make contact with actual user (31.6%)
Confusion over individual responsible for specific purchasing decision (26.9%)
Reluctance to consider new products/services (23.9%)
Specifications written too generally and imprecisely (23.9%)
Absence of rigorous standards to weed out bad contractors (19.6%)
Mandated set-aside requirements (13.9%)
Too many sole source contracts (11.7%)
Unrealistic delivery requirements (10%)
Evaluation Tools
…more survey results
Business Ratings of Public Policies and Procedures
Source: Doing Business with Government, NY: Paragon House
GOVERNMENT
TYPE
Counties
Cities
Schools
EXCELLENT
13%
10%
14%
RATING
GOOD
FAIR
45%
28%
44%
29%
45%
27%
POOR
14%
17%
14%
Short Term Strategies
Communication
Verbal and Written Skills
Listening Skills
User-Friendly Documents
Standardize Specifications
Meet Regularly with Users
Short Term Strategies
Communication
[insert mail delivery memo]
Short Term Strategies
Communication
Cooperation
Active Participation in Organization
Build Interdepartmental Relationships
Intergovernmental Participation
Short Term Strategies
Communication
Cooperation
Timeliness
Establish Process Schedules
Stick to Them
Respond to Situations in a Timely Manner
Return Calls and Messages
Short Term Strategies
Communication
Cooperation
Timeliness
Streamline the Purchasing Process
Delegate Small Purchases
Establish Controls
Take away the Pain
Remove Roadblocks
Short Term Strategies
Value-based purchasing procedures
Plan and schedule operations proactively
Prepare cost-effective specifications
Make effective purchasing decisions
Choose the right contractor/vendor for the job
Use appropriate technology
Promote a healthy competitive environment
Regularly evaluate the effectiveness of the
purchasing and materials management program
Long Term Strategies
Professional Development
Maintain Ethical Standards
Education and Training
Professional Certification
Professional Association
Long Term Strategies
Professional Development
Agency Training Program
Conduct Seminars for Users
Conduct Seminars for Vendors
Joint Seminars with Other Entities
Long Term Strategies
Professional Development
Agency Training Program
Develop Cross Functional Teams
Quality Circles
Standards Committee
Directed Work Teams
Long Term Strategies
Professional Development
Agency Training Program
Develop Cross Functional Teams
Build a Reputation of Accessibility
Invite Feedback
Respond to Criticism
Build Bridges in the Business Community
Long Term Strategies
Professional Development
Agency Training Program
Develop Cross Functional Teams
Build a Reputation of Accessibility
Develop a Customer-Focused Operation
Emphasize Service and Line Functions
Seek Out Staff Support and Buy-In
Lead By Example
Place a Supreme Value On People
Treat Staff the Same as Customers
Long Term Strategies
Professional Development
Agency Training Program
Develop Cross Functional Teams
Build a Reputation of Accessibility
Develop a Customer-Focused Operation
Develop a Value-Added Mindset
Seek Opportunity
Cultivate Resourcefulness
Pursue Innovation
Adding Value in the Process
Prior to Solicitation
Alternative Procurement Methods
Value-Based Factors
Competitive Negotiation vs. Bid
Prequalification
Contract Options
Adding Value in the Process
Prior to Solicitation
Alternative Procurement Methods
Specification Development
Standardization
Clear, Concise, and Competitive
Favorable Contract Terms
Adding Value in the Process
Prior to Solicitation
Alternative Procurement Methods
Specification Development
Coordinate with Customers
Utilize Existing Contracts
Look for Cooperative Opportunities
Consider Strategies and Options
Adding Value in the Process
Solicitation Phase
Take Ownership
Administrate the Process
Ensure Bases are Covered
Deal with Inquiries and Protests
Serve as Agency “Buck Stopper”
Adding Value in the Process
Award Phase
Lead in Negotiations
Safeguard Your Agency’s Interests
Handle Protests
Ensure Contract Execution
Required Signatures
Coordination with Contractor
Bonding, Insurance, Licensing Requirements
Adding Value in the Process
Contract Administration
Ensure Delivery and/or Performance
Verify Inspection
Know the Rules
Don’t Settle for Less
Take Care of Disputes
Don’t Disappear When Things Go Bad
Adding Value in the Process
Contract Administration
Ensure Delivery or Performance
Take Care of Disputes
Handle Contract Amendments, Extensions
Certified Payroll
Price Changes in Term Contracts
Progress Payments, Retainage
Contract Close Out
Anticipate Change
Value-adding Tips
Learn About Your Using Departments
Spend Time at Their Place
Give Your Users Options
Don’t Just Say No
Know Your Stuff
Be the Procurement Expert
Know Your Staff
Be a Teacher, Trainer and Mentor
Value-adding Tips
Involve Users in Your Policy Decisions
Seek Input for Manuals, Procedures
Be Accessible to Your Customers
Internal and External
Seek Out Opportunities to Add Value
Be an In-trepreneur
Take on the Tough Stuff
Protests, Disputes, etc.
Value-adding Tips
Seek Outside Assistance When Needed
Colleagues, Consultants, Auditors
Take Care of the Business of Purchasing
Perform the Purchasing Function
Cooperate, Communicate & Participate!
Summary of Objectives
Define Value and its Application to
Procurement
Learn Ways to Evaluate the Value of
Your Operation
Identify Short and Long Term
Strategies
Pick Up Some Tools and Techniques
Adding Value to Procurement
Presented by:
David Dise, CPPO
[email protected]
240/777-9910