Post on 25-May-2015
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The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
IT Purchasing
Sorting out the mess…
April 22, 2011 MnSCU IT Conference
Nathan Jay Sorensen, MBA
Office of the Chancellor
ITS Contract & Purchasing
Slide 2
Today’s Objectives
• Procurement Strategy
• Review of Compliance
• MnSCU Collaborative Sourcing
Slide 3
COMPLIANCE
» STATE STATUTES
» MnSCU BOARD POLICIES
» VENDOR REQUIREMENTS
PROCUREMENT
» FINANCE
» DELEGATED AUTHORITY
» BID PROCESS
» NEGOTIATIONS
COOPERATIVE PURCHASING
» BUYING POWER
» SOLICIATION PROCESS
CONVENIENCE
» VENDOR MANAGEMENT
AND COMPLIANCE
IT Procurement Strategy Procurement
Strategy
Slide 4
Purpose of IT Procurement
• Buy the right technology
• At the right price
• At the right time
• And on the right terms
Procurement Strategy
Slide 5
MnSCU IT FY 2010 Expenditures
OBJECT CODE DESCRIPTION EXPENSES
1710 Computer Production & Maintenance $1,120,863
1725 Information Technology Maintenance and Support $2,491,963
1730 Software rental/license/subscription $5,091,541
1740 Software Purchase (under $30K per unit) $1,491,643
1745 Major Software Purchase (over $30k per unit) $140,733
1750 Software Maintenance $1,419,154
1755 On-line subscription/system access fee $1,719,219
2020 Network Services $4,665,515
3000 Supplies & Materials (Not for Resale) $47,074,168
3002 Equipment Purchased as Supplies $17,619,827
3004 Software Purchases $2,101,150
3006 Sensitive Equipment Purchased as Supplies $2,315,510
$87.3 Million *unaudited numbers for illustrative purposes only
Slide 6
IT FY 2010 Purchases
• $87.3 Million in IT Expenditures
• From > 900 Vendors
• $12 Million or 14% of Purchases from
State Master Contracts
• > $2.1 Million Purchase Cards
Procurement Strategy
Slide 7
Types of IT Purchases
• Supplies, Materials, & Equipment
– Software
– Hardware
– Network Devices
– Workgroup Printing
Procurement Strategy
Slide 8
Types of IT Purchases
• Professional/Technical Services
– Contractor’s are utilized for consultation,
analysis, evaluation, prediction, planning,
programming and/or recommendations.
– Contractor’s work results in the production of a
report or the completion of a task.
OGC June 7, 2010 Training: "Strengthening The
Contract Process"
http://www.ogc.mnscu.edu/events/workshops.html
Procurement Strategy
Slide 9
Procurement Methods
• Open Market
– A purchase of a good or service made by
soliciting from any available source.
• Quotations
– Obtained from two or more vendors in a
written form.
• Sealed Bids
– Bids are opened at a designated public seal-
bid opening. The contract award is made to
the lowest responsible bidder meeting the
specifications.
Procurement Strategy
Slide 10
Procurement Methods
• Request for Proposal’s
– Formal solicitation of vendors, through an
exact structure and format response, to submit
a proposal on a specific commodity or service.
– Responses may be negotiated with any
vendor other than the one with lowest cost.
• Request for Bid’s
– Solicitation describes the terms, conditions
and specifications, and responses are not
subject to negotiation.
Procurement Strategy
Slide 11
Procurement Methods
• State of Minnesota Department of
Administration
– Competitively awarded Master Contracts with
a variety of IT Vendors.
– Use Master Contract Number in ISRS
http://www.admin.state.mn.us/
• Office of Enterprise Technology
http://mn.gov/oet/
Procurement Strategy
Slide 12
Procurement Methods
• Cooperative Purchasing
– The combining of requirements of two or more
governmental units to obtain the benefits of
volume purchases and/or reduction in
administrative expenses.
– You may use any of the following means of
purchasing instead of undertaking the public
quote or bid process.
http://www.finance.mnscu.edu/contracts-
purchasing/purchasing/cooperative/index.html
Procurement Strategy
Slide 13
Cooperative Purchasing
• Western States Contracting Alliance (WSCA)
• Midwestern Higher Education Compact (MHEC)
• University of Minnesota (Joint Powers Agreement)
• Educational & Institutional Cooperative Purchasing (E&I)
• National Association of Educational Procurement (NAEP)
• US Communities Government Purchasing Alliance
• National Joint Powers Alliance (NJPA)
• The Cooperative Purchasing Network (TCPN)
• GSA Advantage (Federal)
*Request the contract number on the quote
Procurement Strategy
Slide 14
Vendor Management
• Don’t be afraid to share your priorities
• Create a competitive environment by
seeking credible alternatives
• Use vendors to help build a business case
• Always get competitive bids
• Negotiate with the top two
Procurement Strategy
Slide 15
Negotiations
• Essential part of the process
• Prepare, prepare, prepare…
• Don’t be afraid to ask
• Be persistent
• Listen
• Be patient (planning)
• Put it in writing
Procurement Strategy
Slide 16
Purchasing Authority
• Each college and university has a defined
delegation of authority and procedures for
making purchases.
• Check with your business office
• VC/CFO Approval Required
– Purchase > $100,000
– Contract ≥ 5 Years
Procurement Strategy
Slide 17
Compliance
• Board Policy 5.14
– Procurement and Contracts
– http://www.mnscu.edu/board/policy/514.html
• Procurement Dollar Thresholds
http://www.finance.mnscu.edu/contracts-
purchasing/docs/threshold_table.pdf
Procurement Strategy
Compliance
Slide 18
Supplies, Materials, & Equipment
Procedure 5.14.5 Purchasing
– Funds must be encumbered prior to making
an obligation to pay
– Purchases greater than $100,000 require Vice
Chancellor/CFO approval
– Sealed bid is not required for purchases from:
Dept. of Admin., OET, MnSCU master
contracts, and approved cooperative
purchasing agreements Procurement
Strategy
Compliance
Slide 19
Supplies, Materials, & Equipment
• <$25,000.00
– Quotations (prefer 2 or more) or Open Market
• $25,000.01 - $50,000.00
– Sealed Bids (RFB) or 2 or More Written
Quotes
• $50,000.01 - $100,000.00
– Sealed Bids (RFB)
Procurement Strategy
Compliance
Slide 20
Supplies, Materials, & Equipment
• $100,000.01 - $3,000,000.00
– Sealed Bids (RFB)
– Vice Chancellor/CFO Approval
• >$3,000,000.01
– Board of Trustees Approval
Procurement Strategy
Compliance
Slide 21
Software License Agreements
Types of Agreements
• Written
• Click Agreements
• Installment Agreements
• Shrink-Wrap Agreements
All Agreements Require
• Attorney General Review
• Patricia.Notle@state.mn.us Procurement Strategy
Compliance
Slide 22
Professional/Technical Services
• Intellectual in character and result in the
completion of a task or a specific report or
deliverable.
• Contractors are utilized for consultation,
analysis, evaluation, prediction, planning,
programming, and/or recommendations.
• Contractor is an “Independent Contractor”
not employee per IRS work classification. Procurement
Strategy
Compliance
Slide 23
Professional/Technical Services
• If individual, must not be current State
employee or have received an early
separation incentive under Minnesota
State Colleges and Universities Board
Policy 4.11, Board Early Separation
Incentive Program (BESI), during the one
year period prior to the effective date of
this contract.
Procurement Strategy
Compliance
Slide 24
Professional/Technical Services
Procedure 5.14.2 Consultant, Professional or
Technical Services
– Grants college/university authority to enter into
contracts up to $100,000
– A 2-week public notice of RFP’s shall be given for
contracts greater than $50,000
– Vice Chancellor/CFO approval required for contracts
greater than $100,000 or longer than 5-year term
– Vice Chancellor/CFO approval required for inter-
agency, intra-agency, joint powers agreements, and
master contracts in excess of $1 million Procurement
Strategy
Compliance
Slide 25
Professional/Technical Services
• < $50,000
– Open Market or Direct Negotiations
• $50,000.01 - $100,000.00
– Request for Proposals
• $100,000.01 - $3,000,000.00
– Request for Proposals
– Vice Chancellor/CFO Approval
• > $3,000,000.01
– Request for Proposals
– Board of Trustees Approval
Procurement Strategy
Compliance
Slide 26
OET Professional Services
• Accelerated Staff Augmentation Program
(ASAP-IT)
http://www.oet.state.mn.us/mastercontract/mcp1
0ats/mcp10ats.html
• Master Contract Program 902TS
http://www.oet.state.mn.us/mastercontract/mcp9
02ts/mcp902ts.html
Procurement Strategy
Compliance
Slide 27
ASAP-IT Program
• Temporary IT Staff Augmentation
• Engagement Request
– Select Eligible Vendor
– Engagements ≤ $100,000
• Call for Resumes
– Competitive Process (≥ 3 Vendors)
– Any dollar amount ≥ $100,000
• Requires Evaluation of Vendors performance for
any work that exceeds $50,000 Procurement
Strategy
Compliance
Slide 28
ASAP-IT Program
• Skill Sets - Basic and Senior Levels
– Architect
– Business Analyst
– Java Programmer
– .NET Programmer
– Project Manger
– Quality Assurance
– Security Analyst
– System Analyst Procurement Strategy
Compliance
Slide 29
OET Professional Services
• Master Contract Program – 902T
– The IT Professional Technical Services Master
Contract Program helps agencies to complete
Information Technology (IT) project work, or to
provide agencies with additional IT personnel
needed to assist in completing current IT
projects.
• Can be used for up to $2,000,000
• No need for formal RFP Procurement
Strategy
Compliance
Slide 30
Intra-Agency Agreements
• An Intra-Agency Agreement is a written
arrangement between or among MnSCU
components.
http://www.finance.mnscu.edu/contracts-
purchasing/contracts/forms/index.html
• Special Assignment of Personnel
http://www.hr.mnscu.edu/intra-
agency_agreement/index.html
Procurement Strategy
Compliance
Slide 31
MnSCU Collaborative Sourcing
• Mission Statement
– We collaborate to drive innovative strategic
sourcing solutions to achieve sustainability
and best value by leveraging the system’s
buying power.
http://www.finance.mnscu.edu/contracts-
purchasing/collaborative/index.html
Procurement Strategy
Collaborative Sourcing Compliance
Slide 32
Collaborative IT Sourcing
• Enterprise Software Agreements
– http://www.its.mnscu.edu/contracts/index.html
• Desk Top Hardware Purchasing
• IT Recycling Program
– http://www.finance.mnscu.edu/contracts-
purchasing/collaborative/docs/computer-
electronics_disposition.pdf
• MnSCU CDW-G Discount Program
– http://cdwg.com/mnscu Procurement
Strategy
Collaborative Sourcing Compliance
Slide 33
Enterprise Software Agreements
– Microsoft Campus Agreement ($1.4 M)
– Autodesk Academic Initiative ($280 K)
– Symantec Antivirus Agreement ($230 K)
– Novell Academic License Agreement ($130 K)
– Lumension ($50 K)
– Microsoft Premier Support ($60 K)
– WebEx ($180 K)
– VMware (???)
System Savings > $2 M Annually Procurement Strategy
Collaborative Sourcing Compliance
Slide 34
Desk Top Hardware Purchases
• Estimated Refresh Quantity
– > 3000 units annually
• Top Brands
– Dell
– HP/Compaq
– Lenovo
• Consolidating purchasing from April – July
to leverage volume for additional savings Procurement
Strategy
Collaborative Sourcing Compliance
Slide 35
IT Recycling Program
MnSCU Master Contract CST-125
http://www.finance.mnscu.edu/contracts-
purchasing/collaborative/index.html
Meets ITS Security requirements for disposal
• Asset Recovery Corp.
– Joy McClellan, 651-621-2680
http://www.assetrecoverycorp.com/
– MnSCU may receive a credit for the
disposition of computers and other
miscellaneous electronic equipment
Procurement Strategy
Collaborative Sourcing Compliance
Slide 36
MnSCU CDW-G Discount Program
• Cooperative Purchasing Agreement
– NJPA Contract #111309-CDW
– MnSCU Purchases > $5 Million Annually
http://cdwg.com/mnscu
• Cisco SMARTNet
– Currently negotiating with Cisco and CDW-G
on a system wide maintenance agreement. Procurement
Strategy
Collaborative Sourcing Compliance
Slide 37
MnSCU CDW-G Discount Program
CATEGORY DISCOUNT CATEGORY DISCOUNT
Accessories 8% Sound/Multimedia 6%
Battery Back-
up/Power/Surge 5% NetComm Products 7%
Desktop Computers 4% Office Equipment 7%
Data Storage/Drives 6% Printers 6%
Digital Imagining –
Camera/Scanner 6% Warranty/Installs 3%
Servers 4% Software 6%
Keyboard/Mice/Input
Devices 6% Telephony 7%
Laptops 3% Memory/System Components 11%
Companion PCs 1% Video/Monitors/Cards/Projector 8%
Mobile Devices 5% Cables 12%
Training (AT Services) 3% Books/DVD Movies 6%
Slide 38
MnSCU IT Research Subscriptions
• Burton Group
– Membership available to all IT staff
– Enter all of the required information, including
your MnSCU email to request access
– Login credentials will be sent via email
www.burtongroup.com/newuser
• Gartner
– CIO Access
– IT Staff Access Coming Soon Procurement Strategy
Collaborative Sourcing Compliance
Slide 39
Today’s Objectives
Procurement Strategy
Collaborative Sourcing Compliance
Slide 40
Questions
Slide 41
Employee Code of Conduct
• WHY IS EMPLOYEE ETHICAL
BEHAVIOR IMPORTANT?
• We are obligated to comply with law.
• Violations can result in
– Criminal penalties;
– Employment sanctions-including termination.
http://www.mnscu.edu/board/procedure/1c0p1.html
Slide 42
Business Office Resources
• Purchasing Web Page
http://www.finance.mnscu.edu/contracts-
purchasing/purchasing/index.html
• Contract Forms Web Page
http://www.finance.mnscu.edu/contracts-
purchasing/contracts/forms/index.html
• Contracts Web Page
http://www.finance.mnscu.edu/contracts-
purchasing/contracts/index.html
Slide 43
Resources
• MnSCU Finance Contracts Web Site
http://www.finance.mnscu.edu/contracts-
purchasing/contracts/index.html
• MnSCU Board Policies and Contract
Procedures
http://www.mnscu.edu/board/policy/index.html
Slide 44
Assistance for RFP,
Procurement & Tax
• Mike.Nordby@so.mnscu.edu
– Campus Assistance Supervisor
– 651-201-1723
• Steve.Gednalske@so.mnscu.edu
– System Director – Tax and Financial Services
– 651-201-1886
• Nathan.Sorensen@csu.mnscu.edu
– ITS Contract and Purchasing
– 651-201-1524
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Thank You!
IT Purchasing
Sorting out the mess…
April 22, 2011 MnSCU IT Conference
Nathan Jay Sorensen, MBA
Office of the Chancellor
ITS Contract & Purchasing