North Carolina
Department of Administration
Beverly Perdue, Governor
Moses Carey, Secretary
Division of Purchase & Contract
James D. Staton, State Purchasing Officer
MEMORANDUM
TO:
Purchasing Officers
FROM:
James D. Staton, State Purchasing Officer
DATE:
November 17, 2010
SUBJECT:
Procurement Initiatives
This memorandum is to update all state agencies about recent initiatives that will affect
procurement-related activities. The Division of Purchase & Contract (P&C) offers this summary of
these initiatives to keep you informed of our efforts and your responsibilities relative to recent
legislation, as well as keeping you abreast of upcoming efforts. I encourage you to share this with your
procurement staff and your management team.
First, as you are all aware, an RFP (#201001069) was issued soliciting proposals to transform
procurement in North Carolina. It called for a thorough review of the organization, staffing, statutes and
technology in use, and to develop recommendations and a method for making changes. A contract has
been awarded for this study with a Notice to Proceed issued on November 10, 2010. State agencies will
be asked to partner with DOA during this entire process by working with the consultant team, by
participating on advisory groups, and by offering input as to what you, as procurement professionals,
believe need to be changed for the State if we are to effect significant cost efficiencies and structural
improvements. To that end, Purchase and Contract will establish a Purchasing Officers Council to
provide a formal avenue for input into the transformation project team. Because this is a project that
crosses all state agency lines, it will be managed out of the DOA Secretary’s Office by Patti Bowers,
who has most recently served as Chief IT Procurement Officer. Once the project office is established,
you will be hearing more about how you can participate in this important effort.
Second, P&C has been working with our IT division to make the reporting process more automated
for Executive Order 50/NC Preference Automation using features in the Interactive Purchase System
(IPS). This should be implemented by January 2011, and reduce agency time in providing data for the
monthly reports.
Mailing Address:
1305 Mail Service Center
Raleigh, NC 27699-1325
Internet Home Page: www.ncpandc.gov
Phone: 919-807-4500
An Equal Opportunity / Affirmative Action Employer
Location Address:
116 West Jones Street
Raleigh, NC 27603-8002
Revised 03/01/2010
Third, P&C is moving forward with implementation of S.B. 1213 (Session Law 2010-194). Some of
the key elements include:

Compliance Staff: A new section in P&C has been formed to comply with Section 21 of
SB1213 calling for increased compliance and monitoring of contracts while they are still active.
This is a significant change to how we have done compliance reviews in the past. A team has
been established to write the procedures for how these reviews will be conducted following the
model set up for monitoring Stimulus projects. Testing of these procedures will begin in
December. Job announcements for the chief Compliance position, as well as compliance staff,
will be posted in November. Information about the changed procedures and a schedule of
agency reviews will be sent out in early January, and implemented beginning in February.

Training: Responding to Section 21 of SB1213, in partnership with the Office of State
Personnel’s Training and Development Center, P&C is working on a multi-faceted training
effort:
- It will consult with the UNC School of Government to develop a state-based Contract
Management and Certification Program with increasing levels of complexity. This will
ensure that all agency and statewide procurement staff can have basic training as well as
ongoing professional development leading to certification levels. A program is expected to
be launched in the spring of 2011.
- Compliance staff will develop a process for isolating issues as part of their compliance
reviews to form the basis for special training programs, guides, and/or incorporation into
existing programs to ensure corrective actions are being taken as patterns of problems appear
in compliance reviews so that problems can be resolved early and consistently statewide.
Additional training staff will be hired by P&C to ensure this can be carried out.
- Basic training requirements and expectations will be established as part of the Procurement
Transformation project. Training positions will be established in P & C as part of the
Compliance Section to implement and support these requirements and educational/training
curricula.
- Prior to rollout of any new technology, primary training in both system and business process
will be delivered to the agency procurement staff to ensure a smooth implementation of new
processes. It is anticipated that any new or improved procurement technology will be fully
implemented in 2012.
Agencies will be asked to provide feedback on training initiatives as they are rolled out.

Modification to Terms and Conditions: P&C has amended its terms and conditions that relate to
access to records , and directs state agencies to do so as well in compliance with Section 21 of
SB1213 that states: “To include a standard clause in all contracts awarded by the State and
departments, agencies, and institutions of the State, providing that the State Auditor and internal
auditors of the affected department, agency or institution may audit the records of the contactor
during the term of the contract to verify accounts and data affecting fees or performance.”

Competitive Bidding Procedure: Please be aware that under Section 22 of SB1213, G.S.143-52
has been amended to strictly prohibit cost plus percentage of cost contracts.
Page 2

Contract Reviews and Turnaround Times: SB1213, under Section 23, directs agencies to have
certain contracts over $1 million to be reviewed by the Attorney General’s Office or their
designee. The Attorney General will be issuing guidance on this, but it is important for
procurement staff to alert your department’s program staff about this as it inserts additional
requirements in the procurement process. Program staff needs to factor in additional time to
allow for the additional review. It is hoped that these additional reviews will improve the quality
of these key contracts and reduce the likelihood of problems. If you have further questions
regarding the types of contracts requiring review, please direct these to the Attorney General’s
staff assigned to your agency.
It is essential the agencies become familiar with the requirements of SL 2010-194, to assure that current
and future solicitations are in compliance with the provisions of the legislation. To review details of SL2010-194 (as SB 1213, version 4, ratified), visit http://ncleg.net/. Under “Find Bills by Number” enter
2009 in the Session block and S1213 for the bill number. The bill history will appear. Click on the link
for the ratified bill.
In closing, please do not hesitate to contact me or my management team with ideas or suggestions you
may have related to the topics discussed above. Over the next few months, the Division of Purchase &
Contract and the Statewide Procurement Transformation Project will provide guidance concerning the
new requirements and initiatives. Thank you for helping us build a better procurement program in North
Carolina. We look forward to working with you.
CC:
Moses Carey, Secretary
Anne Bander
Speros Fleggas
Patti Bowers
David McCoy
George Bakolia
Page 3