Purchasing Directors’ Meeting January 15, 2009

Purchasing Directors’ MeetingJanuary 15, 2009

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• Agenda• Pitney Bowes Presentation• Bureau A• Bureau B• MFMP• Governance• Reminder About Next Meeting Date


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STATE OF FLORIDA

WSCA FedEx Contract and

USPS Certified Mail Expense Review

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STATE OF FLORIDA

EXPEDITED CARRIER EXPENSE

December 07 – December 08

$6,257,000?

USPS Certified Return Receipt Service

$5,320,000?

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V.01.07.09

STATE OF FLORIDAExpedited Carrier Expense

Average Cost Per Package: $6.00

Average Number of Packages per Year: 1,042,834

50% (521,417) of packages shipped to another State Agency

5% (26,071) of these packages use hand written ship form

30% (7,821) Illegible Address – Subject to Address Correction Charge

50% (521,417) of packages sent to customers

30% (156,425) of Customer Addresses have Errors – Subject to Address Correction Charge

*Information based on PB historical data and independent studies

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V.01.07.09

FED EX ACCESSORIAL CHARGES

Address Correction $6.00

Delivery Area Surcharge $1.50

Residential Surcharge $2.30

Wrong or Missing Account # $10

Hazardous Material $20

Fuel Surcharge 7% Overnight

Fuel Surcharge 6.75% Ground

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V.01.07.09

STATE OF FLORIDAEXPEDITED CARRIER EXPENSE

ADDRESS CORRECTION EXPENSE

Total Number of Address Corrections: 164,246

164,246 X $6.00= $985,476

Annual Total Revenue Wastage: $985,476

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V.01.07.09

Distribution Solutions

SendSuite™ ShippingCertified/Return Receipt Processing

Capability Overview

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Mail Center Processing

Interactive Address Verification

RDI – Residential Delivery Indicator

Generates multi-carrier routing and rate processing

Automates Customer Carrier Preferences

Compares service options and saves money without compromising the delivery requirements

Intelligent route, carrier and service selection

Multi-carrier processing for mail, express, and parcel

Supports FedEx Air and Ground, UPS, and USPS

Desktop laser printed carrier labels (FedEx, UPS, USPS)

Email Shipment Notification

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Sample Shipping Screen

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Address Verification

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Delivery Options

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SendSuite Shipping Rate Shopping

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SendSuite Shipping Rate Shopping

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Laser Printed Labels

FedEx

Sample

DHL Sample

UPS Sample Use for low volume shipping locations or print from the desktop

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Email Notification

Send to as many as 3 recipients via 3 separate email addresses

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Track Shipments From Your Desk

•Current Shipment Status

•Carrier Performance

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STATE OF FLORIDAUSPS Certified Letter Processing

Estimated Annual Spend: $5,395,000 (1 million pieces)

USPS Certified Electronic Return Receipt Savings

$ 1.20 per Letter

ANNUAL eRR POTENTIAL SAVINGS

$ 1,200,000

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Overview: Electronic Return Receipt

What is it? An alternative option for senders to obtain

recipient signatures from the USPS as proof of delivery

Customers receive PDF files from the USPS It’s an electronic copy of a Return Receipt

that can be accessed online

This can eliminate the need to attach a green card to the envelope

Used today in conjunction with Certified Mail™ (and some other special services)

Customers can choose Electronic Return Receipt or Return Receipt (form 3811), $1.00 vs. $2.20!

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V.01.07.09

SendSuite Shipping

supports both PB pre-printed

and blank Certified Labels

Flexibility in selection of special services

Cover page for Double Window envelope

Print CertifiedLabel

Print Ship Request at the desktop,process in mail center

Once a Certified package is delivered, view confirmation of delivery

SendSuite™ ShippingCertified Letter Processing Screen

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V.01.07.09

Post Rate Change Cost and Savings

Return Receipt(Hard Copy)

Return Receipt(Electronic)

$0.42 $0.42

$2.70 $2.70

$2.20 $1.00

$5. 32 $4.12

Savings/pc $1.20

Postage

Certified

Return Receipt

Total Postage

Favorable Case For Using Certified Mail™ With Electronic Return Receipt

The 2007 USPS Rate Case created an even more favorable case for using Certified Mail with Electronic Return Receipt

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Delivery information and

ability to view USPS

Signature page

SendSuite™ Detail ScreenDelivery Information Detail Screen Includes CustomerName & Tracking Number

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Reference Number: 14785236978965

Electronic Return Receipt Document

File returned to SendSuite history file for storage and printing

Certified Tracking Number is matched with data from SendSuite™

Receiver’s name is displayed

Tracking is completed and loop is closed through SendSuite

Viewable from:

Shipping Screen

Delivery Info Screen

Return Receipt Summary Information Screen

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V.01.07.09

Reporting

Web Client Reporting based upon single location or enterprise wide consolidated data

Wide variety of Transportation Management reports

Customer-defined report generation

CPA Carrier Performance Analysis – Track small parcel carrier on-time performance for guaranteed service

Consolidates all site and account activity

Generates comprehensive reporting of order and shipment status

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V.01.07.09

QUESTIONS

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STATE OF FLORIDANext Logical Step

Implementation of Enterprise SendSuite Shipping Solution

Implementation of Shipping Business Rules

Implementation of SendSuite eRR Solution

State of Florida Potential Annual

Revenue Savings:

$2,185,476

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Bureau A Contract Updates

• Contract Renewals:– Drug Screening Testing Devices renewed through 1/31/10.

No pricing changes.– Comprehensive Energy Strategy (Natural Gas) renewed

through 12/31/13. Renewed with a 15% price reduction.

• New Contracts:– ACS: WSCA contract for MRO (Grainger) effective

11/14/08.– ACS: GSA Schedule 84 effective 11/21/08.– SPA: Reclaiming Mercury effective 1/7/09.– STC: MRO Lamps (Marpan Supply) effective 1/9/09.

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Bureau A Contract Updates

• STCs and SPAs in Development– MRO Air Filters– Medium & Heavy Trucks– Tires

• Solicitations in Progress:– Motor Vehicles– MRO Testing Equipment (in evaluation)

• Solicitations in Development:– Security Guard Services. Customer meeting on 1/23/09.

(Donna Smith 488-8855)

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Bureau A Activity Updates

• Energy & Transportation Team:– Medium & Heavy Trucks: Sterling products have been removed.– Tire: valve stem recalls. (Chris Walker 488-7540)

• Furnishings & Institutional Supplies Team:– Carpet: removed the RFQ requirement 11/24/08.

• MRO & Law Enforcement Team:– Welcome new Purchasing Specialist, Greg Hill.– Ammunition: multiple amendments to product listings.– Uniforms: re-organization at Superior Uniform Group.

• SPAs & Special Projects Team:– Quarterly update to Green Products List– HIRE contract: added Ahura Scientific effective 12/01/08.

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Bureau BContract Updates

• New Contracts:– ACS for FedEx through the WSCA Contract. Negotiating with FedEx

as second to DHL on the previous State Term Contract.– REMINDER about the new IT Hardware Contracts: Separate

Contracts and Contract Numbers. PCs Laptops Monitors, including Ruggedized and MAC OS (250-040-08-1) and Network Infrastructure (250-000-09-1). Please reinforce with your staff to use the correct contract numbers and some FEINs that associate certain vendors with the specific contract. These practices are crucial for us to track contract spend and product usage.

• Renewals: – Recommending MAC Papers for renewal for Paper: Office, Virgin and

Recycled Content Contract #645-120-04-1– BMC Software ACS: Extension until Software Phase 1 completed– IBM Software ACS: Extension until Software Phase 1 completed

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Bureau BContract Updates

• Solicitations in Development:– P-Card. Specs received from DFS, launch January 19th. Ommet Mbiza,

488-7804– IT Staff Augmentation (Project Area 4) to be separate STC from

“Project Solutions” under IT Consulting Services (Project Areas 1, 2, and 3).

– Management Consulting to take similar approach to IT Consulting Contract. Same timeframe.

– Printing Services and Quick Copy Services (was a SPA). Fran Shewan 488-4946

– Mail Services currently with Pitney Bowes. Gary McGee 487-6592– Rental Vehicles. Avis will not be renewed in favor of a new

solicitation. Gary McGee 487-6592– Printers and multi-function copiers to be combined in pending

solicitation. Mark Foss 488-1086

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Bureau BActivity Updates

• Technology & Telecommunications Team:– Audio/Visual ITN to replace current contract. Evaluation ended Friday,

entering negotiations with promoted vendors (Michelle MacVicar, 414-6131)

– Microsoft Licensing. Responses due Tuesday, January 13th (Lori Potts, 487-4196)

– Software Phase 1: Mainframe – Re-solicitation to launch this week. (Lori Potts, 487-4196)

– Software Phase 2: Distributed Network – Launch TBD (Lori Potts, 487-4196)

– Software Phase 3: COTS Software – Early 2009 and possible ACS with NASPO Southern Regional solicitation.

• NOTE: New Software Contracts (except COTS) could include full line of awardees’ software products if negotiations are successful

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Bureau BActivity Updates

• Office Supplies & Equipment, Avis, Pharmaceuticals Team:– Revisiting travel services for possible state contract– Re-working price structure of Office Depot ACS to account for

rebates– Welcome Shameka Smith to Team 5!

• Special Services, Property Insurance, PRIDE and RESPECT Team:– Computer Software Training. TCC to take over Leon County/North

Florida Region from FSU. Working with three to five more universities to cover the rest of the State. Recommending New Horizons to remain on contract for online course offerings. Universities to also offer online courses.

– Help in a tough economy: Review the Equipment Maintenance Management Services contract to cut your current equipment maintenance costs, especially with Information Technology hardware. Also look at Recycling, End of Life Electronics prior to replacing old equipment.

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eQuotes in MyFloridaMarketPlace

• The current threshold above which state agencies must do a formal competitive procurement is $25,000 for Category 2 procurements (FS 287.017)

• The threshold was last increased in 1999 from $15,000• A survey of other states and the Federal Government

indicates that most governments have a discretionary threshold of $50,000 to $100,000

• Cost of procurement:– A recent informal, non-scientific analysis shows the cost

of procurement to be about $9,000 (281 hours per procurement x $32.00/hr. = $8,992)

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Who would like to see the discretionary threshold raised from $25,000 to $50,000 or more?

It is not an easy sell

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Office of Program Policy Analysis and Governmental Accountability (OPPAGA)

• OPPAGA July 8, 2008 Audit Report of State Purchasing Report No. 08-43 stated:

“Many services are still exempted from competitive bidding requirements. However, while the bulk of the dollar value of procurements is subject to competitive processes, most purchases are not made through such processes because the state makes many purchases that cost less than the statutory thresholds for competition ($25,000) or are statutorily exempt. In Fiscal Year 2006-07, over half (51%) of non-construction related acquisitions by state agencies were exempted from competitive processes. Specifically, $205 million in goods and services (45% of all purchases), were not required to be competitively bid because their value was below the cost threshold of $25,000.” 10

10 Agencies may have used informal competitive processes, such as soliciting telephone quotes, for purchases that are below the cost threshold for competition.

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• The Legislature wants to see competition

• To raise the threshold the Legislature has to be convinced that competition is not lost

• How do we as an enterprise and as a state demonstrate that competition under the Category 2 discretionary threshold level still exists?

A) Written letter quotes attached to purchase ordersB) Telephone quotesC) eQuotes

THE ANSWER IS “C” eQuotes

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Benefits of eQuotes

• Enterprise and agency level purchasing documentation

• MFMP is developing new reporting capabilities, by agency, to document use of eQuotes for purchases under $25,000 and for STCs

• Documentation for audit purposes:– State Term Contracts: Many STCs require obtaining a quote. Without

eQuote, an agency would have to create special tracking and reporting of STC purchases with a quote and would have to produce letter quotes manually for each PO issued. With eQuote, reports can be run and data captured over time.

– Purchases below the threshold of Category Two require written documentation of quotes as per rule 60A-1.002 (2)(3). Similar to STCs, reports can be run and data captured over time.

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Benefits of eQuotes

• eQuotes can be directed to known suppliers or you can search for suppliers by their category of commodity/services provided

• eQuotes, on average, take 15 to 30 minutes to complete in MFMP (compare to 281 hours for a formal bid procurement)

• eQuote facilitates the post quote purchasing process. The requisition is processed as normal, however the eQuote responses are viewable electronically (vs. as an attachment) and feed into your requisition/purchase order once you award the eQuote. Letter or telephone quotes do not.

• Since eQuotes are an electronic version of a quote, there is no need to scan written documents and attach them to the requisition/purchase order

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GovernanceLegislative Update

• SB 44-A – CS for Sen. Alexander’s Bill – – Limit travel to activities critical for the agency’s mission– Renegotiate all existing and proposed contracts to achieve better

savings– OPPAGA will consult with DMS regarding issuance and use of state-

owned cell phones, PDA’s and other elec. devices– Review to ensure agencies are receiving maximum amount of federal

funds based on services

• HB 137 – Rep. Anderson – Establishes 11 member Advisory Committee on State Procurement to evaluate the state procurement process. This bill requires a $5 million appropriation.

• SB 542 – Sen. Fasano – Similar to Rep. Anderson’s bill except it establishes a 13 member Advisory Committee and requires a $4 million appropriation.

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GovernanceActivity Update

• Secretary South decided to postpone the Chapter 287 Revision Project for this legislative session– However, the Secretary is in discussions with Rep.

Anderson and Sen. Fasano to possibly include some of the ideas from the 287 project in their Procurement Advisory Committee bills. One idea is to expand CEG to review procurement.

– DMS is considering legislation to fix issues raised by JAPC.• Rule 60A-1.044 – Exceptions to use of STC• Rule 60A-1.025/PUR 7722 – State Purchasing

Agreements (SPA)

• DMS will engage in rulemaking to address several issues in Chapter 60A, F.A.C.

• SP is also working on internal Policies and Procedures.

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Next Meeting

February 19, 2009

2:00 – 4:00 pm

Purchasing Directors’ Meeting January 15, 2009

Documents

Transcript of Purchasing Directors’ Meeting January 15, 2009