OCTOBER 29, 2008 9:00 am to Noon

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OCTOBER 29, 2008

9:00 am to Noon

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PPC Agenda

1. Finance Transformation – Jeff Mandel / Sharon Minnich2. BMWBO – Kathryn Waters-Perez3. Materials – Walt Quade4. Services – Roxana Dietz5. Agency PO/Contracts – Jeff Mandel6. Contract Attachments – Sue Rojas7. Procurement Handbook Updates – Sue Rojas8. SRM – Joan Kraft / Cheryl Kleeman9. E-Marketplace Updates – Scott Cross / Sue Plecker10. Quality Assurance – Paul Wolf11. Training – Jeff Mandel

Note: This PPC Presentation will be available on our Agency Dashboard web site following this Meeting

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Project Purpose and Goals

•Purpose– To further transform the Commonwealth’s current financial

administration operations using leading practices, processes and technologies

•Goals– Identify and Implement Strategies to Reduce Cost– Use Available Resources More Efficiently– Improve Accuracy– Reduce Transaction Processing Time– Improve Invoice Processing & Imaging– Improve Cash Management & Revenue Processing– Design Quality Assurance Function– Develop a Strong Internal Audit Function– Develop Training Organization

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Project Scope

Policy & Process

Procure to Pay

Chart of Accounts/GL

Revenue/Cash Management

Accounts Receivable

Budgetary Accounting

Comprehensive Annual Financial Report (CAFR)/Financial Reporting

Internal Audit

Talent & People

Change Management and Communications

Knowledge Transfer to Commonwealth Project Staff

Organization Realignment and Transition

Education and Training

Systems & Information

SAP ECC 6.0 Configuration

SAP Workflow

Scanning, Imaging and Indexing

The following processes, activities, and systems are being addressed through the Finance Transformation project:

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Current Status

Between March and June, the following activities were completed:‒ Process reviews including procure to pay, revenue, accounts receivable, reporting/CAFR, chart of accounts,

grants, budgetary accounting, special accounting and audits‒ Workshops with OB, agency and key stakeholders

Workshops produced approximately 100 recommendations focused in the following areas:

‒ Process‒ Technology‒ Organization structure‒ Or, a combination of the above

In July, recommendations were validated and analyzed, and grouped into the following categories:

‒ Short-Term: able to be completed by May 2009‒ Medium-Term: able to be completed by July 1, 2010‒ Long-Term: beyond 2010 and dependent on other technology not owned by the Commonwealth

In August and September, the recommendations were prioritized, reviewed and ranked by the Steering Committee

Detailed process and technical design is underway for prioritized recommendations

Build Phase October through May 2009

Focus of PA Finance Transformation Project

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• Centralize the receipt, mailing, sorting, scanning, and imaging of all PO and non-PO paper invoices received from vendors and grantees

• Process PO-related invoices according to current three-way match business rules unless blocked. If exceptions are found in three-way match, invoice is blocked in SAP and sent via workflow to Agency PO Line Item Reconciler for resolution

• Route Non-PO invoices (including grants) to agencies to provide appropriate account information and approval. Once coding is entered and approved, a document to be created in SAP and sent via workflow to PO Invoice Processing group for review, approval, and payment

• Phase in non-PO invoice processing between May and September 2009

• Use special process for Utility invoices that allows agency to view image, enter account assignments and select payment (advancement account, p-card, via treasury)

Procure-to-Pay Recommendations

Financial Transformation

Invoice Processing

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Recommendations

• Use exception processing workflow to agencies and return of documents to Comptrollers for PO invoice processing

• Require all purchase requisitions to be reviewed by agency fiscal staff

• Implement risk-based approach for comptroller involvement in service solicitations

• Eliminate Comptroller involvement in reviewing approved agency service contracts based on involvement in solicitation process

• Change thresholds for PO review and approval from $5,000 to:

– $20,000 for PO against DGS statewide and agency contracts

– $10,000 for all other PO types• Increase use of Purchasing Card Program by adding

DGS contracts that accept p-card to SRM. Enhance the reporting and posting capabilities

Procure-to-Pay Recommendations (cont’d)

Workflow

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Recommendations


Anticipated Agency Benefits

– Faster payment to vendors– Ability to track and monitor invoices from the point of

receipt through payment completion– Reduce errors or incorrect postings involved in

processing, as entry will be made at the agency, allowing flexibility based on fund changes

– Decision on payment mechanism can be made at the agency (e.g., advancement accounts)

– Agency confirmation of changes more prompt and accurate due to familiarity with the facilities

– Significant staff time currently dedicated to exceptions processing for marginal amounts or other minor non-matching issues can be redirected to other value added activities

– Agencies become more empowered as end users in accordance with Commonwealth procurement policy

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Anticipated Agency Impacts

Recommendations


– All paper invoices - Will no longer receive paper invoices at the agency. Will receive an image of the invoice for processing.

– Non PO invoices - Enter data into system rather than manually recording on the paper invoice. Invalid entries will not move forward for processing. Every agency will be responsible for identification of staff who will be invoice receivers and verifiers and delivering the training to these staff (materials for training will be provided by the project).

– PO invoices - Blocked PO invoices will be work flowed to agencies for exception processing. This will require communications and job aides for all line item reconcilers in agency.

– Procurement - Workflow will require agency fiscal staff to review/approve purchase requisitions to ensure proper coding

– Interfaces for payment – currently no anticipated changes but analysis still in process

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Financial Transformation Project Recommendation

Shopping Cart Approval Requirement: Fiscal officer approval regardless of dollar value

•Options discussed:–Create special role for Agency Fiscal

–Allow agencies to rework existing workflow

•Decision: Use existing workflow–Analysis by agency

–Discuss with user group during Dec 10th 2008 meeting

–Meet with agencies as needed

–Must be implemented by May 2009

Microsoft Excel Worksheet

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MBE/WBE Utilization

• Promote contracting and subcontracting Promote contracting and subcontracting opportunities for Disadvantaged opportunities for Disadvantaged Businesses (DB’s).Businesses (DB’s).

Role of BMWBO

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Procurements with Deminimus Disadvantaged Business (DB)

Participation

BMWBO’s Evaluate submitted proposals as they relate to DB utilization and provides the agency with scores.

BMWBO

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BMWBO

• Memo states if certain vendors are selected which have been identified as having deminimus participation BMWBO is to be notified of such selection

• BMWBO will evaluate best and final offers (BAFOs) as they relate to DB utilization and provide the agency with revised scores

BMWBO provides a memo to user agencies along with DB scores

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BMWBO Example of Memo

COMMONWEALTH OF PENNSYLVANIADEPARTMENT OF GENERAL SERVICES

MEMORANDUMDATE: November 29, 2008SUBJECT: Notification of Unsatisfactory Disadvantaged Business Participation

RFP # DPW-00000000000TO: Casey Miller

Department of Public WelfareFROM: Kathryn Waters-Perez, Director

Bureau of Minority and Woman Business Opportunities

The Bureau of Minority & Women Business Opportunities has received the Disadvantaged Business Participation submittals received in response to the RFP. The explanation for the scoring is found on the attached.The following Proposers provided submittal with unsatisfactory or zero DB participation:

Company ABCDid it Wrong, Inc.

Should your final evaluation result in selection of one of these Proposers for contract negotiations, BMWBO must be immediately notified and given an opportunity to work with you in attempting to increase DB utilization for this contract. BWMBO should be invited to participate in contract negotiations in an effort to increase Disadvantaged Business Participation. Please contact me before initiating any contract negotiations with the selected offeror.Following contract negotiations and the contract being executed, the Disadvantaged Business name, address and amount of commitment made by the contractor must be forwarded to us.

Point of contact in BMWBO is Gayle Nuppnau.

cc: Kathryn Waters-Perez

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BMWBO

Contract Negotiations

• If necessary, BMWBO will negotiate any changes in DB utilization as a part of pre-selection and/or contract negotiations when DB participation is deminimus.

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BMWBO Contact Information

• BMWBO611 North Office Bldg.Harrisburg, PA 17112(717) 783-3119E-mail: [email protected]

• Procurement LiaisonGayle Nuppnau(717) 346-3819E-mail: [email protected]

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Liquid Fuels

• Current Contract Structure– Bid differential price (margin, transport) by county– Commodity price floats on daily index– Two methods of delivery by county: truck transport for over 5000 gal.,

tank wagon for under 5000 gal (Just Discussed).• Disadvantages

– Manages only small portion of our total unit cost (approx. 5%)– Full exposure to the daily volatility of the market– Provides little control over drastic increases in spend

• FY 04-05: $19.5 million• FY 05-06: $25.9 million• FY 06-07: $38.0 million• FY 07-08: $44.7 million

– Daily price changes cause frequent invoice payment problems

Materials - Fuels

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Full Truck Transport Strategy 5000 gallon plus!

• Working through suppliers we plan to lock fuel purchases for large users through NYMEX.– Approx. 40% of end use customers nationwide use

this strategy.– Bid differential price, then make commodity buys

when price is advantageous.• Can make buys for front month or several future months if

prices are attractive.• Target buy is 50% of volume for largest volume truck

transport users and average up or down based on spot market.

Materials - Fuels

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• Advantages of fuel hedging strategy– Gain control of total commodity cost

• Reduce market exposure and variability.• Smooth out large spikes in pricing.

– Can use this strategy to buy incremental components of usage, reduces risk.

• “Diversified Portfolio” of fuel purchase quantities and prices.– Flexibility to purchase one or multiple months of usage when

market prices reach low– BOP will do the PO’s, will provide higher quality usage data,

visibility of delivery frequency.– DGS will make payment to vendors via P-Card and cost

allocated back to Agency when the card is reconciled.

Truck Transport Strategy- 5000 gallon plus. (Cont.)

Materials - Fuels

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Small Fuel Delivery Program:

• We have many small tanks (500 gal. or less) located in remote areas.– Suppliers bite off more than they can chew, causes problems

with on-time deliveries.– Limits supplier base, discourages new entrants.

• Invoice Payment problems.– Recent Petroleum past due balance of over $1.25 million.

• Vast majority of invoices less than $5000.– GR entry problems.– Supplier confusion.

• Those who receive deliveries closer to 5000 gal. and/or pay bills on time subsidize those who don’t.

Materials - Fuels

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Small Fuel Delivery Program:

• ITQ Contract for deliveries less than 5000 gal.– This is a contract of convenience.– Qualify suppliers by county.

• Agencies follow procurement procedures based on low dollar amount.

• Agencies obtain Small Procurement Policy and obtain quotes from qualified suppliers in county, select best price.

– Invoicing• Quoted prices firm, less potential for errors.• Mandated utility card use for orders under $5000 should

remove bulk of past-due payment issues.

Materials - Fuels

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Contract Update

Contract Number

Contract

Title

Status Commodity Manager

Material

440003137 Medium Duty Trucks In Award Process Craig Wolford Work Trucks

4400003207 Road patching Equipment

In Award Process Craig Wolford Kettles, patchers, Reheaters

2550-02 Diesel Engines To be Renewed Craig Wolford Engines

6675-02 Surveying Equipment To be Renewed Mary Randolph Surveying Equipment

4400001174 Floor Polishers In Award Process Mary Randolph Floor Polishers and Vacuums

4400001741 Wheelchairs To be Renewed Mary Randolph Wheelchairs

3930-01 Forklifts Bidding Currently Craig Wolford Lifts

7350-05 Commercial Food Equipment

Bidding Mary Randolph Commercial Food Equipment

New Police Lighting and Accessories

Bidding Craig Wolford Accessories for Police

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Contract Update

Contract Number

Contract

Title


Material

5610-49 Cement In Award process Joel Shiffler Cement

5684-02 Corrugated metal Pipe

In Award Process Joel Shiffler Pipe

5610-36 Bituminous Plant Mix

Bid being prepared

Joel Shiffler Plant Mix

5710-01 Bituminous Liquid patch

Bid Being Prepared

Joel Shiffler Liquid Plant Mix

4600010918 Sign Stiffeners Renewed Joel Shiffler Sign Stiffeners

4400003307 Rock Salt Bags Approved Joel Shiffler Bagged Salt

NEW Fuel Management In process Joel Shiffler Fuel Additives

4400002702 Energy Mgt Services

ITQ Joel Shiffler Electricity, natural gas

9140-01 Heating Oil #2 Award in Process Joel Shiffler Oil

9130-03 Unleaded gas Award in Process Joel Shiffler Gas

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Contract Update

Contract Number

Contract

Title


Material

9140-08 Liquid Fuel Award in Process Joel Shiffler Fuel, Large Volume

9140-02 Heating Oil #4 Bid in Progress Joel Shiffler #4 Heating Oil

4400003333 Waste Oil Awarded Joel Shiffler Waste Heating Oil

440003238 Carpet Awarded JP Duvall Carpet

8415-01 Gloves Awarded JP Duvall Gloves

4400002988 VWR MISC LAB Equip

Awarded Jim Pinci General lab Equip not covered by 4600012524

4400002959 Detection Equipment

Awarded Jim Pinci Testing Equipment for Atomic, Chemical, Biological Material

4600013480 Janitorial Awarded Jim Pinci Consumables and paper Product

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Shared Services - Roles & Responsibilities

BOP-003 Delegation Request (Updated)

APPROVALS – The agency is responsible for obtaining any approvals required due to the nature of the material or service or both being procured, in addition to compliance with any applicable Management Directives, Information Technology Bulletins and/or Commonwealth policy.

Method of Procurement: □ RFP □ IFB □ ITQ-RFQ

BOP-003_REV._10-2008

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Shared Services - Roles & Responsibilities

Denied Delegations: Roles & Responsibilities

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IT Procurements

• IT Contracting Office• Consistent with Executive Order 2004-8, the

Office of Administration has established the IT Contracting Office (ITCO).

• Three attorneys will oversee the legal aspects of all IT project procurements that fall within the COP process. – Nora Doyle -General Government Operations & Public Safety

• Sonja Zucker - Environmental– Crystal Fox - Health & Human Services

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IT Procurements

Primary Functions of IT Contracting Office:

1. Providing guidance related to the proper procurement method for IT Services.

2. Establish training programs for DCIO’s, the CIO’s & any agency personnel who wish to participate.

3. During the procurement process, documents will be provided to ITCO through the DCIO in conjunction with the COP review.

4. Review documents related to RFQ’s and RFP’s prior to posting

5. During contract negotiations they will work with the issuing office to ensure requirements, terms & conditions and service level expectations are achieved.

6. At the request of an agency they will review software licenses and advise agencies related to general IT matters.

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IT Procurements

• DGS will assist agency’s in meeting the project timeline; developing procurement strategy and preparing the final RFP documents; receiving proposals; facilitate the evaluation; lead the negotiation team; and processing the necessary documents for the contract award.

• All these activities are joint efforts that will be heavily influenced by the Office of Administration’s and the Agency’s expertise and experience as the administrator of their current contract. DGS will not participate as a voting member of the technical evaluation committee.

• After the contract is successfully awarded, the Agency will retain responsibility for managing the contract with the awarded supplier, including contract maintenance, administration of the contract, including ensuring delivery of expected savings and/or service improvements and contractual obligations, leverage and focus supplier capabilities, ensure rapid resolution of issues and provide consistent direction to the supplier.

• DGS should be informed of any contractual changes necessary or if the supplier defaults their contractual obligations to the Commonwealth.

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Enterprise ITQ System

• Enterprise ITQ System – Phase 1 to be complete by Jan. 2009

– Phase 1: ITQ Administrators can get into the ITQ and create ITQ contracts, and that Suppliers can register (or use their SRM registrations) and pre-qualify.

– Phase 2: ITQ administrators can get into the ITQ and evaluate the Suppliers applications, and approve or deny the applications, and supply any ancillary functionality that works with the Phase 1 functionality but was not vital to Phase 1.

– Phase 3: Local Municipalities and Agencies can get into the ITQ and use the supplied functionality to find Suppliers that can perform the jobs that the Local Municipalities and Agencies need, and supply any ancillary functionality that works with the Phase 2 functionality but was not vital to Phase 2.

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IT ITQ

• IT ITQ Expires June 2009

– OCT 2009: Finalize T&Cs with suppliers– NOV-DEC: Review new IT ITQ with Suppliers and Tech Council– JAN 2009: Allow suppliers to begin qualification process – JAN 2009: New ITQ web site available (proposed date)– APR 2009: Begin issuing RFQs under new IT ITQ– JUN 2009: End all work under old IT ITQ

• For work slippage only• Can go past end of contract by 90 days• Needs DGS approval

– JUL 2009: New ITQ effective date

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IT

• WSCA Cell Phone Contract– Implemented

• Met with TMOs on details• Moving to shared minutes• Suppliers gave TMOs presentation of implementation• What procedures will be available?

• PCs, Laptops, Rugged Laptops and Thin Clients– All punch-out sites up and running, all contracts approved– Dell Lease Payments

• Professional AV– Multiple award contracts

• Peripherals & Networking– 2 suppliers on Peripherals

• Recommend to get 2 quotes on orders over $2500• Web Sites to be fully functional in next 30 days• P-card enabled

– Networking is multiple award• Servers & Storage

– Interim Agreement in Place, pending approval– Best Value, Multiple Award– To use other than Best Value, need DGS approval– Can purchase maintenance from this contract, not mandatory

E:\Procurement Policy Council Meeting\PPC_October.29.2008_docs\Copy of Cell Phone Contract Overview.xls

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IT

• New Procurements in Process– 3rd Party Maintenance– Enterprise IT Help Desk– Enterprise Software (3 companies)– Film and sundry supplies– IPAM– Time Management– Radio Repair and Equipment

E:\Procurement Policy Council Meeting\PPC_October.29.2008_docs\IT Contracting Office10.08.pdf

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Agency PO/Contracts Background

Issue – Inconsistent interpretation of MD 310.3 within comptrollers- Encumbering and Lapsing of Appropriations following the implementation of SRM

Background – Prior to SRM, agencies created the following document types to commit funds:

– Agency Standard Contract with follow on PO. (contract no commitment, PO commitment)– Agency Encumbered Contracts with follow on PO. (contract no commitment, CO creates a

funds reservation entered into the contract, and a PO to commit with manual reduction of the funds reservation)

– Multiple year or single year PO. (PO commitment)Due to the multiple step process and room for error, the Agency Encumbered Contract

document type was eliminated with the SRM implementation. Agencies were given the option of a contract with PO’s or multiple year PO’s to encumber funds.

Inconsistent interpretation of the MD – Perception by CO is that funds must be encumbered at the time of award and

only means to do so is via the PO as contract does not trigger encumbrances. Certain offices require a contract and single year PO’s to be created for every year of the contract immediately upon award.

Question/issue – Why create the contract if all PO’s have to be created at same time? Defeats purpose of contract=extra work.

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Agency PO/Contracts Responses

• Contacted several agencies to see how they processed ongoing services contracts. – L&I: Creates multi-year purchase orders.– DPW: Creates agency contracts for some services that are purchased

on an as needed basis. For ongoing services, multi-year purchase orders are created.

– PSP: Creates multi-year purchase orders. They know their budget for future years, but don’t want to create a contract, then cut a PO every year. They would rather cut one PO for the full term so they don’t have to remember to create a new PO in each consecutive year.

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Use of Agency Contract

Recommended Decisions for Document Types• An agency contract was to be created when:

– More then one entity was purchasing off of it – , i.e. districts creating their own PO’s at time of service

– Agency cannot commit the future year funds or are not ready to commit the funds.

• then create a PO at the time you are ready and another one thereafter

– Requirements (materials or services) quantity and timing unknown or uncertain over future years

• A multiple year PO was to be created when:– The agency wanted to commit all funds at time of the award

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Examples

• Scenario 1 - Intergovernmental Agreements (IGA) for services mandated to be provided that will continue for the next several years, but because they are contingent on State funding, the exact amount to be allocated may not be known years in advance.

IGAs currently take 6-8 weeks for approvals in SRM and because some of the work must be done when school is not in session, agency cannot afford a lapse in services at the start of the FY.

– Solution - Multiply a single year times 5 and enter an agency contract for 5 years with an annual PO to establish exact funding done immediately at the start of the new FY. With this scenario, there would not have a lapse in services and when a PO is issued, would only have Comptroller to approve instead of the original 6-8 weeks for full IGA.

• Scenario 2 - Purchase of educational materials (curriculum) where it is known there will be a multiple year need for the item(s) plus instructional services but do not know exactly how many schools would be serviced each year as it would be contingent on the annual budget allocation.

– Solution - Manage this with a handful of contracts, not the much higher number we would use for IGAs. In this case, again, it would prevent a lapse of services and allow agency to cut a timely purchase order without risking a lengthy break in services. Even though these contracts would only have three or four approvers (based on cost) instead of the six with IGAs, consistently run into the backlog in many of these offices as we try to push through the new purchase orders. This would reduce everyone’s workload as the PO would only go to Comptroller.

– If any one of the agency contracts prove to be too small, could amend to add services or quantities mid-FY cycle so as not to risk the break in services at year end.

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Contract Attachments

•IFB Contract Attachments (Multi Award Hierarchy Contract)

–Electronic Bid utilizing doc builder–eMarketplace–Internal File

•IFB Contract/Purchase Order Attachments

–Electronic Bid utilizing doc builder –eMarketplace–Internal File

•RFP Contract Attachments (paper submittal not using doc builder)

–SRM–eMarketplace–Internal File

•RFP Contract Attachments (using doc builder)

–SRM–eMarketplace–Internal File

Contract Attachments Location: Contract Attachment Documents

This list of required attachments was created to assist in maintaining the correct documents within contracts. They were derived based on:

• Minimum Right to Know requirements• SRM compatibility

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Procurement Handbook Changes

Non-contract purchases under $10K (reinstated)

Part I Chapter 7 Thresholds and DelegationsSection B Thresholds for Specific Procurements

Agencies are authorized to procure on a non bid basis, up to $10,000 for the following:• Repair, maintenance, modification, or calibration of equipment services to be performed by, and repair parts supplied by, the manufacturer of the equipment or by the manufacturer's authorized dealer• Software license maintenance agreements and extensions of software licenses• Agency leasehold construction improvements

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Complete Procurement Handbook Changes

70% Thresholds

Part I, Chapter 6: Methods of Awarding Contracts

In order for a proposal to be considered for selection for BAFO or selection for contract negotiations, the total score for the technical submittal of the proposal must be greater than or equal to 70% of the highest scoring technical submittal.

Relating to the PO or Contract issued to the Supplier, a Political Contribution Letter is to be sent to the supplier reminding them of their responsibility to file a report of Political Contributions, by February 15 of each year. This report is to be sent to the Secretary of the Commonwealth for all political contributions exceeding $1,000 during the preceding year.

Sole Source Procurements of Materials, Services and Construction.

Political Contribution Letter for Sole Sources (new)

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Procurement Handbook Pending

BMWBO Changes

Part 1, Chapter 3: Responsibilities

Currently, the agency evaluates the STD-168 over $250K

- At any dollar amount, an STD-168 MBE/WBE Subcontractor and Supplier Solicitation form, will be sent to the supplier to complete, sign and return to the agency.

- The agency will evaluate their responsibility for a value of up to $50K and BMWBO will review if the contract is over $50K.

Part 3, Chapter 7: Competitive Sealed Proposals (RFP Process)

Will read the same as Part 2, Chapter 7:

- BMWBO assigns the minimum weight for DB participation at 20% of total points

- Agency establishes a maximum point value for each major evaluation criterion prior to RFP issuance

- Cost criterion must be a minimum of 30% total points

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BMWBO Changes

Part 1, Chapter 20: Non DiscriminationCurrently the Form GSMWBE-16 is completed only on construction contracts. They will be needed for any contract over $50K.

- The Form GSMWBE-16, "MBE/WBE Subcontractor and Supplier Certification Solicitation and Commitment Form", is to be included in contracts with sole source contractors when the total procurement is estimated to be more than $50,000 annually for single or multiple year awards. The contractor must complete Form GSMWBE-16. - Before processing a contract in the amount exceeding $50,000 (or such higher amount as BMWBO may establish for a particular agency), including those amendments and change orders that directly affect MBE/WBE participation, the purchasing agency is required to forward the bidder-completed GSMWBE-16 to BMWBO which will determine the contractor's responsibility in regard to nondiscrimination unless exempted from the BMWBO Program requirements.

- If BMWBO determines the contractor is nonresponsive and/or not responsible, and the agency decides to make an award, the agency must consult with its Office of Chief Counsel, and its agency head or appropriate Deputy Secretary and fully justify, in writing, its reasons for proceeding with award. The agency must forward a copy of this justification to BMWBO.

Part 2, Chapter 3: Delegated Formal Competitive Sealed Bidding- This section of the Handbook is under review to eliminate the need for agencies to send solicitations to suppliers. BMWBO will require suppliers to provide an email address so that the supplier can receive Ealerts.

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The following issues are being addressed:

- List the number of documents required

- Link to BMWBO website

RFP Template

Modifications to Document Builder – MBE/WBE

- Part 1, Sections 12 and 13: will update the phone, fax and website for BMWBO- Part 1, Section 19: will address confidential information and the Right To Know requirements- Part 2, Section 9a: revises the number of Disadvantaged Business submittal copies to 2- Part 3, Section 4: adds the 70% rule for technical proposals, language to disclose the weights for technical, cost and Disadvantaged Business scoring and bonus points- Part 4, Section 6: adds “through any renewal or extension of the contract”- Appendix B: Domestic Workforce Utilization Certification form was revised- RFP Template

Archiving templates from DGS website

- Templates commonly found on the DGS website are being archived to allow agencies to find templates from prior years- DGS templates only will be saved- Agencies are recommended to archive their own “agency specific” documents- Templates can be found at PUForms/ArchivedForms

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- It is DGS’ intention to publish RFP weights- Using this process makes debriefings easier and clearer- Suppliers cannot claim the scoring weights/criteria were inappropriate, as they were pre-published

Publishing RFP Weights

Treasury

- Developing a new chapter on Department of Treasury which will include ‘Right To Know’ requirements.

Green Procurement

Part 1, Chapter 22: Green Procurements- Currently drafting policy on Environmentally Preferable Purchasing- Developing tools and website resources along with training- Identifying 3-5 commodities for pilot projects

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Subscriptions

Part 1, Chapter 1: General Provisions- Clarifying the scope surrounding subscriptions.

GSA Schedules

- There are schedules (contracts) available from the Federal government- They are used on a limited basis - DGS will be reviewing policy to allow limited usage of GSA Schedules- Establish DGS as a initial checkpoint prior to purchase

www.gsa.gov

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Requisition Pricing

Purpose• Some agencies are occasionally changing

the “Do not adopt” to “As net price” setting in the Line Item Details section of an R3 requisition.

Changing Settings• Requisitioners should not change the

valuation setting of “Do not adopt”.

• This setting is necessary so that contract pricing is maintained throughout the documents.

• When a requisitioner pulls up a contract item, the correct price will be pulled into the document.

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Bidding Guide

To create your bid:• Go to www.pasupplierportal.state.pa.us

• Go to Supplier Log On

• Select “Bidder” Tab

• Select “Process Bids”

• Locate Bid Opportunity

• Select “Create” Action Icon

To complete your bid:• Go to: General Data Tab• Select “Attributes” and respond to all

questions/statements• Add Attachments by selecting “Browse” –

locate file & upload by selecting “Add”• Enter Price• Submit the Bid• The “Submit” button will not be available until

the “Check” button is invoked.

To delete a bid completed incorrectly:• 1.Search for previously submitted bid.

Once it appears, click the pencils for “Change mode”

• 2. Select the “Hold” button

• 3. Select the “Change” button, “Delete” button should appear

• 4. Select the “Delete” button

Support Options• Live Support exists for suppliers available via

the Customer Support Center • Email: [email protected]• Phone: 717-346-2676 (local)• Phone: 877-435-7363(outside Harrisburg)• www.pasupplierportal.state.pa.us

Document can be found: Bidders Guide - Checklist for Creating, Responding and Deleting a Bid

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Live Auction

• Live Auction Cockpit (LAC) refers to an auction that takes place online in “real time” via the SRM portal. Live auctions are held to get the best available market price at the time of the bid. Throughout the bidding process the price is driven down, which often results in a lower price paid than traditional sealed bids or negotiations. A matrix is available for use which will allow a user to decide if Live Auction is the right tool.

DGS offers this service to agenciesTo access the EUP: Live Auction EUP

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Live Auction Decision Tool

The Decision Tool is utilized to determine the viability of performing a Live Auction.

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Why conduct an Auction?

• To get the best available market price at the time of the bid

– Auctions drive down costs, often resulting in a lower price paid than traditional sealed bids or negotiations

– Real cost savings of 10% or more can be realized For example: An item which is purchased in a significant quantity, and there is

pricing flexibility in the market

• To improve and streamline the strategic e-procurement process

– Precise specifications will be provided to potential suppliers

– Historical spend data can be used to develop business forecasts

– Negotiation time is reduced from weeks to minutes

– Auction events are easily duplicated

• Auction events are visible and the results measurable

– The live web-based event is viewed in real time

– SRM reporting offers detailed analysis across auctions

• Increased competitiveness within the public sector

– Ongoing cost reductions and improved productivity are essential in government activities

– Results and benefits are measurable and easily reported

– Many suppliers appreciate the openness of auctions

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Three Auction Profiles used by DGS

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Purpose of today’s overview:• Provide an understanding of MRP & its use • Provide information for use when making

purchasing decisions• Clarify misconceptions regarding the methods of

procurement for inventory

MRP OR NON MRP, THAT IS THE QUESTION

Material Requirements Planning Overview

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MRP Transactions in R3

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• MRP use is limited for the Commonwealth

• MRP Process Plans, Creates Planned Orders, Converts Planned Orders into Requisitions, and Creates Purchase orders

• Takes into consideration such things as re-order point, prior and future consumption, replenishment, lot size, lead-time and use

• In order to use MRP an agency must have an established MRP Controller, Inventory Planner, and material masters set up for MRP requirements.

• Material masters should be listed as contract line items when a statewide or agency contract is created

MRP does not simply mean “an order for inventory” - MRP is a process -

Inventory & MRP Facts

55

Process Flow - Inventory via MRP

Inventory via MRP Process

Rec

eive

rR

equi

sitio

ner

Pur

chas

erA

ppro

ver

Issu

erIn

vent

ory

Pla

nner

Stock below Reorder Point?

Create Planned Order(s)

End

Convert to Purchase

Requisition

Create PO

Approve PO (If required)

Issue PO to Vendor

Yes

Receive into Inventory Stock (MIGO) Updates quantity on hand

Order material via COPA internal

catalog

Approval (if required)

System creates Stock Transport

Order in SAP

Stock is decremented at

issuing point. Reduces quantity

on hand

Inventory Issuer Performs Goods

Issue

Execute MRP

No

Follow Established Process for

Procurement

56

Inventory Purchases

• There is a misconception that SRM cannot be used to order inventory items – SRM can be used to order inventory

• Many contract replication requests use the justification “MRP”– 4600010375 with Hershey Creamery for Ice Cream

• Only Corrections ordered for inventory and PO’s were not generated through MRP

• No need to maintain contract in both places – should be SRM only

• R3 Document type NNB – New Standard PO

57

SRM for Inventory

• SRM can be used for inventory purchase orders not procured via the MRP process

• After the product ID (material master) has been entered the “Order as Direct Material” indicator appears:

If non-valuated, use normal process - account assignment is required

58

High Level Process Flow - Inventory Non-MRP

Inventory via Normal Process (non-MRP)Re

ceive

rAg

ency

Appr

over

Purc

hase

rCo

mpt

rolle

rAp

prov

erSR

MRe

quisi

tione

r

Make necessarychanges as

requested byapprover

Followestablishedprocess for

procurement

Create PO

Approve PO(If required)

Receive intoInventory Stock

(MIGO)

Issue PO toVendor

CreateShopping

Cart as DirectMaterial

Approve or RejectCart

Approve

Reject

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SRM CSC Background

• SRM Customer Support Center (CSC)

– Operated by DGS Bureau of Procurement (BOP)

– Established in Aug 2006

– Created to provide interim support during and post

go-live SRM implementation

– Provides two separate services• Supplier Registration and Support

• SRM Agency Support

60

Current CSC Flow

CSC Inquirers

(Phone Calls, Emails, Remedy Tickets)

Supplier Registration and Support

SRM Agency Support

BOP Bid Room Team of Commodity Specialists

IES

Overflow Agents

Is it technical? Yes

No

CS Responds

Is it technical? IES

Agent Responds

No

Yes

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Call Volume From Agencies

• CSC SRM Agency Support – Averages 403 Automated Call Distribution (ACD) calls per month (93 per week)– Approximately 20% are not answered due to conflicting priorities

Monthly ACD Answered / Abandoned Calls

100

150

200

250

300

350

400

450

500

550

Aug07

Sep07

Oct07

Nov07

Dec07

Jan08

Feb08

Mar08

Apr08

May08

Jun08

Jul08

Aug08

Sep08

Answered Calls Abandoned Calls

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Other Influx to CSC

• Incoming calls directly to Commodity Specialists – Average 50 per week

• Remedy Tickets – Average 28 per week

• Emails to SRM Resource Account – Average 20 per week

• Additional time needed to research issues– Average 25 hours per week

63

Initial Agency Inquiries

• Original types of inquiries received from Agencies by CSC were SRM related:

– How do I set my attributes?

– How do I enter ship to addresses?

– I can’t find a vendor.

– How do I create a shopping cart?

– What is a product category?

– How do I reference a contract?

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Current Agency Inquiries

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Agency Assistance

• Agencies can reduce the number of inquiries to the CSC by:

– Limiting inquiries to only those related to CSC’s core mission ► SRM questions only

– Call Commodity Specialists directly for sourcing issues

– Encourage procurement professionals to utilize the Self Service Resources

• End User Procedures• SRM Website – FAQ’s, AIT Library, Resource Guide• eNews

– Encourage associates to take advantage of the various Procurement Training Programs offered by BOP

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Password Reset

– Suppliers insert user name in “Logon ID”.

– Suppliers click on “Reset Password”.

• Password Reset Login Screen:

– Password reset e-mail comes from [email protected]. (Recommend checking SPAM

settings.)

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SRM & Core System

Support Packs

• What is a Support Pack?– Support packs contain all the current “fixes” from SAP in one bundle

rather than applying individual notes on an as needed basis. – Support packs normally fix things, but on occasion may create a

problem. – IES will do testing of the Support Packs

• All changes as a result of the support packs should be found at this time and IES will communicate this information to the agencies.

– If end users notice anything different in the core or SRM systems once the support packs are put into production they should report the issue through the helpdesk/remedy ticket process.

• Tentative Schedule for Latest Support Packs:– Development - November 10, 2008– Quality - November 17, 2008– Production - December 6, 2008

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SRM & Core System

Upgrades

ERP 6.0 Upgrade• Effects all systems including ESS

– Cut-over dates for system unavailability• PA Supplier Portal: Thursday, October 30th 5:00

PM thru Monday, November 3rd 6:00 AM

• MyCommonwealthWorkplace: Friday, October 31st 4:00 AM thru Monday, November 3rd 6:00 AM

• .xml Supplier Transmittal of Invoices: Thursday, October 30th 5:00 PM thru Monday, November 3rd 6:00 AM

• Screen change document – Handout– Sent via eNews on 10/22/08

69

SRM Updates

• Guid Error – Public Advertising Supplier– The contact information for the “public advertising

supplier” was deleted from the vendor record in error – This caused a “Guid” (Globally Unique Identifier) error

on bids created prior to 8/12/08 using the “public advertising supplier”

– This error is undetectable until workflow is initiated– This error is uncorrectable

• Resolution– The “public advertising supplier” record was corrected– Do not reuse or copy a bid created prior to 8/12/08 – Create a new bid

70

Supplier Enablement - ERS

Evaluated Receipt Settlement (ERS)• A shortened, easier process to pay suppliers

– Upon receipt of order receiving agency enters GR– Overnight process generates an electronic invoice– 2-way match: PO quantity & GR quantity – Treasury processes payment via ACH

• Eliminates need for issuing and processing invoices

• No action is needed by the comptroller

• Turnaround time for payment is reduced

• Goods Receipts must be accurate and timely!– Failure to enter GR – Supplier will not be paid– Late entry of GR – Supplier payment will be delayed– Incorrect GR entry – Supplier will be paid an incorrect amount and

purchasing agency must process a credit memo

71

Supplier Enablement - ERS

Evaluated Receipt Settlement (ERS) - Pilot Program• Cut over date - September 10, 2008

• Suppliers:– Todd Heller, LLC -Contract 4600013343 Glass Beads– Ennis Paint, Inc. –Contract 4600010851 Traffic Line Paint

• Agency: Transportation

• Current activity: 4 POs were created and 5 payments successfully processed

• End of paint season – not much activity anticipated

• Investigating expanding the pilot to include:– Calcium Chloride– Rock Salt– Corrugated Boxes

72

Assignment of Payments in SRM

• Method for assigning payment on invoices related to SRM-generated POs to an Assignee rather than the Assignor’s default remit-to address.

• CVMU creates a “902” Partner Record within the suppliers master data. – To request a “902” Partner Record - purchaser must:

• Complete “902” Partner Record Request form (found under Procurement Forms on the DGS website)

• Request must include the following info:– Complete name and address of Assignee– Vendor number of the Assignee– Signed letter from the Assignor documenting the assignment of payment– Must be on Assignor’s letterhead

• Multiple Assignees require separate request forms for each• Submit documents to CVMU Resource Mailbox at

[email protected].• If approved, the Partner Record will be created. If disapproved, the

form will be returned to the requester with the reason for rejection. • EUP is available on the DGS website 902 Form & EUP• 9/18/08 eNews

73

Procurement Connection Group

Objectives– Provide information and guidance to agency users on current and future

procurement related matters.– Provide support in resolving issues relative to procurement functions.– Give agencies an opportunity to offer input into DGS procurement projects and

contracts.– Provide a forum for agencies to have open discussion on issues that are

affecting them and how they do their business and will allow for sharing of ideas and individual agency successes.

Schedule– First meeting held Wednesday, October 15, 2008– Meetings will occur every 8 weeks

Agendas– Agencies are encouraged to submit agenda items for discussion.

• Meeting notices will be sent requesting agenda items• Opportunity for smaller group discussions on specific topic areas• Agenda items can be submitted any time• Submit to: Cheryl Kleeman via email - [email protected]

74

eMarketplace Updates

Procedure for Simplifying Contract Search in eMarketplace

• Has been added to “Tips & Tricks” under the “Help” section on eMarketplace

75


76


A list of all contracts will display by Parent Number, Description, and Ending Date. You can sort by any of these fields by selecting the word at the top of the column. You can search for your contracts here, or Export to Excel for easier sorting and searching capabilities.

77


• Contracts fitting your criteria will be highlighted on the spreadsheet as shown below. To view the vendors contracts for that parent contract,

select the highlighted numbers under the Parent column.

78


• This will take you back into eMarketplace and display a list of contracts that belong to the Parent contract you selected.

79


Tabulation & Award Information

• Agencies may elect to post solicitation tabulations & award information to eMarketplace– Instructions will be sent via email to the PPC

and all registered users on eMarketplace – Instructions on how to upload these

documents on eMarketplace will be added to the EUP created by the Training Section & the “Help” section on eMarketplace

80


Solicitation Tabulations – Required information for input

81


Awards – Required information for input

82


Sole/Single Source Section

• Secretary’s initiative to have sole/single source information public– New section to be added to eMarketplace– Source Justification Form will be a web-based

form with routing approvals– Specific information will be made public (will review

info on another slide)

– Seeking agencies to volunteer to assist us in testing before go live

83


Procurement Description will appear for public viewing

84


85


86


87


8888

Quality AssuranceProcurement Review Background

• As part of the Financial Transformation (FT) Project Comptroller Operations (CO) is in the process of redefining many core functions. While they will remain a part of procurement document review, their role will transition to more of a financial focus vs. a comprehensive and all inclusive review of procurement documents, solicitations and contract processes.

• Future State– Selective review– More post audit vs. 100% inspection prior to document release– Focus more on financial aspect vs. procurement process

• This change in roles and responsibilities places increased accountability on agency procurement personnel to:– Ensure accuracy and compliance upon document creation, transactions

performed, as well as oversight of the procurement process.

89

BackgroundBackground

Future State with Quality Assurance Procurement Review

Agency

Agency

Agency

Agency

Agency

Agency

CO BOP’s

Quality Assurance Procurement

Review

9090

Background

• As the lead procurement agency responsible for policy, systems and processes, Bureau of Procurement (BOP) should assume an increasing role formerly managed by CO.

• Title 62, Chapter 3; Section 11, of the Pennsylvania Consolidated Statutes, allows the Department of General Services (DGS) to monitor the implementation of its regulations for the procurement of all supplies, services and construction by Commonwealth agencies. – Policies and Procedures are stated in the DGS Procurement

Handbook.

91

Background

• Massachusetts, Texas, South Carolina and California have programs established to assess procurements made by their state agencies.

• BOP intends to establish a Quality Assurance Procurement Review to ensure compliance and offer assistance to agencies.

92

Process Cycle

BOP Conducts Procurement

Review

BOP & Agency Review Findings

Identify Opportunities for

Improvement:Policies, Procedures, Systems & Training

Requirements

Agency Develops & Implements

Corrective Actions

93

Quality Assurance Review Process

•Identify Candidate

• Perform Electronic Review

• Create Agency Outreach Package

•Set Up Site Visit

PRE-VISIT PREPARATION

•Review Reports & Documentation

•Evaluate Compliance

•Complete Review Documents

SITE VISIT

•Document Site Visit

•Record Rankings

•Finalize Summary Package

•Identify Corrective Actions & Opportunities for Improvement

POST-VISIT EVALUATION

RECALIBRATE AS REQUIRED

•Implement Changes

•Stay Current on Changes, Additions, Deletions, Modifications to Policy & Procedures

9494

Scope

The Intent of the Quality Assurance Procurement Review is to:

1) Identify the Agencies’ level of compliance with Title 62 and the procurement procedures established by DGS and documented in the Procurement Handbook

2) Determine if the procedures stated in the Procurement Handbook require clarification

3) Identify agency training requirements

4) Mitigate risk

5) Provide an objective assessment of the agency’s compliance and the associated risk

6) Assist the agencies with the development and implementation of Corrective Actions tomitigate risk 7) Promote compliance by providing continuous communications to inform the agencies on new/revised policies and procedures and training programs

9595

Benefits

Benefits of the Quality Assurance Procurement Review

• Ensures Compliance with the Procurement Handbook

• Identifies Opportunities for Improvement

• Identifies Training Requirements• Provides Process and Tools to

Manage Change• Provides Mitigation Strategies• Provides Prevention Strategies• Promotes Feedback Mechanism

96

Pilot

• BOP is soliciting for an Agency to participate as the pilot, assisting in the development of the process

• Pilot to begin early 2009

• Contact Paul Wolf

97

Training

• Negotiations Course Developed for Commodity Specialist and Agency Purchasing Agents. Currently with OA-HRD for articulation. Made available via WBT and administered via E-LMS mid-November.

• BW/SRM Course Expanded to Purchasing Agents. A training announcement with scheduled offerings will be

sent to Policy Council Members and Training Officers for dissemination in the near future.

• RFP Process Course - Pilot course scheduled 12/2/2008 One day instructor led course. Agencies contacted for plot participation. Mix of DGS/BOP Commodity Specialists and Agency Procurement Professionals.

• Penn State Supply Chain Management 15 Students completed Penn State Program.

• BOP awarded certificates at recognition ceremony in September

98

Procurement Policy & ProcessPurchasing Certification

• Purpose – As business owner BOP has developed formal, 4-day, ILT to give new and less

experienced PA’s fundamental understanding of COPA procurement policies, procedures and processes

This classroom training, coupled with practical work experience, will raise the standards of all COPA Procurement Professionals.

It will also establish a uniform knowledge base for all PA’s, which will reduce inconsistencies among agencies and ensure that all purchases are performed according to Procurement Handbook guidelines.

As such, the training was determined to be “mandatory” and we will also be requiring experienced Purchasing Agents to attend.

• Recap of Procurement Policy and Processes Pilot Course - Session held 9/8-11. Varying levels of experience - few weeks to >20 years Thanks for participation and feedback.

10 Students 7 agencies

Survey responses were very positive Feedback incorporated into curriculum and Knowledge Review Agency Purchasers who are not PA’s (ex. AA’s and AO’s) will be able to attend this course.

99

Procurement Policy & ProcessPurchasing Agents Training

• Future Training Schedule & Location- Conducted on quarterly basis in new BOP Learning Center. 1st scheduled dates are 11/17-20. Next session – Feb./09

This class is currently full with a wait list. Prior to each session, BOP Training Mgr will review the enrollment and waiting list to

make a determination on the final class roster. With max. # 18 students, want to ensure that newer PA’s have preferential seating

This course will be available for self-enrollment through ELMS. Please visit BOP’s Training Community Calendar at www.dgs.state.pa.us.

• Knowledge Review- A comprehensive Knowledge Review will be given at the end of each 4-day session.

The Knowledge Review is comprised of questions with multiple-choice and True/False answers, as well as open-ended or “essay” questions. A score of 75% or higher is required in order to receive your Certificate of Achievement. When necessary, the Knowledge Review can be re-taken if a passing score is not achieved.

100

Supplier Guide Brochures

• DGS has developed three guides to assist suppliers with registration and responding to an electronic bid in SRM

Registering as a New SupplierRegistering as an Existing SupplierSupplier Response to a Solicitation

PDF versions of these brochures are available on the DGS BOP Training page under “News and Updates”

OCTOBER 29, 2008 9:00 am to Noon

Technology

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