Procurement Transformation
State of North Carolina
Jocelyn Thornton, C.P.M.
Transformation Project Manager
April 24-25, 2012
Background
 On January 12, 2009, Governor Perdue issued Executive Order No. 5, which
created the Budget Reform and Accountability Commission (BRAC).
 At approximately the same time, the Office of State Budget and Management
(OSBM) initiated a review of statewide procurement as a result of Executive Order
No. 4, NC Open Book
 The State has a complex set of procurement processes and systems
 Decentralized structures exist, with little collaboration among the agencies to
identify what improvements are needed
 Lack of Central Compliance Resources, Stringent Training Standards
Project Vision
“Create a customer-focused enterprise to achieve
increased procurement effectiveness, efficiency, and
compliance resulting in significant financial benefit for
taxpayers by reducing the costs of acquiring goods
and services.”
Expected Benefits
 Streamline procurement functions across state government by
increasing efficiencies, leveraging buying power and reducing
overlap of key functions.
 Better value and more effective use of tax dollars
 More consistency across the enterprise to leverage buying power
 More efficient processes and systems to provide customers with
what they need—when they need it
 Employees working together to better serve their customers and the
taxpayers
Guiding Principles
 Best Value - Procure at the lowest total cost of ownership
 Customer Focus - Address all stakeholders’ business needs
 Delivery Excellence - Develop, maintain, and execute standardized,
repeatable procurement processes and procedures
 Compliance and Accountability - Enforce compliance with statutes,
administrative codes, executive orders, and policies
 Operational Efficiency - Align people, processes, and technology
 Workforce Excellence – Build and maintain the right knowledge and skills
 Strategic Planning - Strategically plan procurement activities
Six Cross-functional Teams
 Change Management and Communications
 eight members representing six agencies
 Contract Management and Compliance
 nine Members representing seven agencies
 Policies and Procedures
 nine members representing seven agencies
 Staff Organization and Training
 sixteen members representing ten agencies
 Strategic Sourcing
 eleven Members representing six agencies
 Governance
 eight Members representing five agencies
Contract Management and Compliance
 Establish a standard contract management process
 Create standard contract templates such as:
• Contract close-out checklist
• Contract file checklist
• Contractor performance checklist
 Develop and deploy a revised contract administration/monitoring guide
 Finalize contract monitoring requirements, per SB 1213
Change Management and Communications
 Consider communications best practices
 Create standard communications vehicles
 Ensure timely information sharing
 Conduct readiness survey to gauge the effectiveness of initiatives, and
identify issues
 Closely align the change management effort with program leadership
 Leverage Change Agents as a way of formalizing peer-to-peer
information sharing
 Leverage various forums to share successes and leading practices
Policies and Procedures
 Responsible for recommending improvements to North Carolina
procurement related statues and administrative codes to improve
consistency, streamline processes, and encourage best value
procurement
 Consolidate and streamline relevant statutes and administrative
codes
 Clarify rules and exemptions to statutes
 Review and modify IFB/RFP/RFQ templates where appropriate
Staff Organization and Training
 Charged with assessing current procurement training, organizational
structure, job profiles, titles and existing career paths
 Establish a Strategic Sourcing Group within State Procurement
 Establish an Open Market Group within State Procurement
 Establish an Operations group within State Procurement
 Deploy standardized job titles and job profiles
 Create a single purchasing manual for use by all state procurement
organizations
 Deploy a comprehensive procurement training program
Strategic Sourcing
 Responsible for implementing a statewide strategic sourcing
methodology
 Focus on the initial commodity and service groups which will be
sourced
 Assess opportunities and prioritize Wave I, II and III categories
 Solicit input from end users
 Develop category strategy
 Negotiate and develop sourcing recommendations
 Implement agreements
 Monitor and manage agreements proactively
Governance
 Charged with recommending a structure, processes, and
measurements to govern the procurement function after transformation
 Recommend a Procurement Governance Team with representatives from
State agencies, community colleges, universities, LEAs, and local
governments
 Develop a set of key procurement performance metrics
 Continue oversight and guidance through use of a diversified steering
committee
Technology Upgrade
Online catalog Improvement
 Initiative began in October 2011 and had three primary
objectives
 Improve catalog content
 Refine the processes utilized to develop new catalogs
 Establish a continuous improvement program
Summary: Current Priorities:
 Develop standard contract administration/monitoring guide
 Develop standard procurement manual
 Develop standard templates and memo’s
 Deploy training and update websites for refresher training and reference
 Establish tools for continual communication among agencies
 Identify and recommend procurement related changes to General Statues,
Administrative Code and Operating Procedures
 Develop key performance indicators
 Prioritize categories for sourcing; statewide contracts (goods & services)
 Methodology to save dollars and improve processed for tax payer
 Develop modernized job classifications for purchasing positions
 Outline purchasing professional career path
Conclusion
 Long term process 2 – 3 years to implement numerous initiatives
 No longer a project – Just how we conduct procurement
QUESTIONS
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