Transcript Contract Administration - VAGP | Virginia Association of

Adding Value to Procurement
Presented by:
David Dise, CPPO
[email protected]
240/777-9910
Introduction
Session Objectives
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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)
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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?
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“One that buys goods or services.”
“An individual with whom one must deal.”
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Internal Customers
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 Departmental Users
 Management
 Elected Officials
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External Customers
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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
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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
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Do task …Think process
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Signs of task focus…
 INMJ
 IDWIT
 IDMB
Determining Value
Procurement Goals
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Economy
Efficiency
Effectiveness
What makes an organization successful?
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Is Purchasing really strategic?
Align goals and processes
Determining Value
Change must equal Improvement
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Tampering vs. Improving
Improvement through…
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Identification
Measurement
Self Analysis Questions
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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
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Self-check
Customer expectations
“Complexity and inflexibility are the enemies of improvement.”
- Susan Williams, Orion Development Group
Process Identification
Identify your core processes
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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
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Define
Understand
Assess
Improve
Sustain
Process Evaluation
Evaluation Tools
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Customer Surveys – KPI’s
Audits, Internal and External
 NIGP PMAP
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Informal Feedback
Evaluation Tools
Customer survey results...
What’s the problem with Public Procurement?
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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
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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
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Active Participation in Organization
Build Interdepartmental Relationships
Intergovernmental Participation
Short Term Strategies
Communication
Cooperation
Timeliness
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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
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Delegate Small Purchases
Establish Controls
Take away the Pain
Remove Roadblocks
Short Term Strategies
Value-based purchasing procedures
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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
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Maintain Ethical Standards
Education and Training
Professional Certification
Professional Association
Long Term Strategies
Professional Development
Agency Training Program
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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
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Quality Circles
Standards Committee
Directed Work Teams
Long Term Strategies
Professional Development
Agency Training Program
Develop Cross Functional Teams
Build a Reputation of Accessibility
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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
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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
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Seek Opportunity
Cultivate Resourcefulness
Pursue Innovation
Adding Value in the Process
Prior to Solicitation
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Alternative Procurement Methods
 Value-Based Factors
 Competitive Negotiation vs. Bid
 Prequalification
 Contract Options
Adding Value in the Process
Prior to Solicitation
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Alternative Procurement Methods
Specification Development
 Standardization
 Clear, Concise, and Competitive
 Favorable Contract Terms
Adding Value in the Process
Prior to Solicitation
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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
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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
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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
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Ensure Delivery and/or Performance
 Verify Inspection
 Know the Rules
 Don’t Settle for Less
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Take Care of Disputes
 Don’t Disappear When Things Go Bad
Adding Value in the Process
Contract Administration
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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
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Anticipate Change
Value-adding Tips
Learn About Your Using Departments
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Spend Time at Their Place
Give Your Users Options
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Don’t Just Say No
Know Your Stuff
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Be the Procurement Expert
Know Your Staff
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Be a Teacher, Trainer and Mentor
Value-adding Tips
Involve Users in Your Policy Decisions
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Seek Input for Manuals, Procedures
Be Accessible to Your Customers
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Internal and External
Seek Out Opportunities to Add Value
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Be an In-trepreneur
Take on the Tough Stuff
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Protests, Disputes, etc.
Value-adding Tips
Seek Outside Assistance When Needed
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Colleagues, Consultants, Auditors
Take Care of the Business of Purchasing
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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