Using Data to Promote the
Public Procurement Profession
David Davis – Washington State DOT, WA
Brian Smith – Multnomah County, OR
Nelson Park – Seattle City Light, OR
Jonathan White – Spikes Cavell, VA
David Davis – overall reasons for procurement
teams to record and report their value
Brian Smith - example processes to record
your value
Nelson Park – using analytics to support the
value of public procurement narrative
Jonathan White – calculating an ROI for
procurement and procurement projects
How is your department
measured by your bosses
today?
For most, it’s how much you
cost…
It’s time to change that
measurement to “What value
did you add?”
Categories of Savings and Efficiencies
Spend
Management
• Contract savings or discounts
• P-card rebates
• Settlements
Demand
Management
• Duplex printing as default
• Digitizing records vs printing reports
• Reusing serviceable materials
Supply
Management
• Property redistribution
• Investment recovery – disposal
• Supply chain management - VMI
Process
Management
• P-card payments
• Online ordering
• Early influence on decision cycles
Measured Savings and Efficiencies
From Small Beginnings
Create a process for recording savings
Surplus Program – Our First Year
Switching Perspectives – Procurement
Saves your Agency Money
Percent of cost covered
by value delivered
FY 14 29%
FY 15 63%
FY 16 ?
More from Multnomah County
Procurement
http://www.spikescavell.com/learning-about-spend-analysis/
https://multco.us/purchasing/news/multnomah-countypresented-workshop-nigp-forum-2014
How are we doing?
How do we “meaningfully” report
results upwards?
Um,…. Well….
I don’t know,
but….
If you can’t measure it – it didn’t happen
• Who did it?
• What did we do?
• When did we do it?
• Why did we do it?
• How long did it take?
• Did we do it on time?
• What were the costs
• What were gains?
How do we prove it?
How do we measure it?
Metrics is the answer
Steps: ( Be patient, this took us 2 years +)
1) Define what is important to the Stakeholders
2) Define success
3) Determine how success is measured
4) Measure and report the results
5) Revise as necessary
Ask: Did we accurately answer the question
that was asked?
Was
Procurement
involved?
What would
have
happened
otherwise?
Is it
consistent
and will it
stand up to
review?
Simple and Endorsed RFP Savings Calculation
Average of all responsible responsive
bids
Bid accepted
Alternative RFP Savings Calculations
Budget – Bid Accepted
Previous Price – Bid Accepted
Market Rate – Bid Accepted
Bid Accepted – Negotiated BAFO
Simple Surplus Savings Calculation
Net revenue generated from sale of
surplus
Alternative Surplus Savings Calculations
Net Revenue – Staff Time
Net Revenue – Staff & Scrap Value
Net Revenue + Cost of Disposal – Staff
Efficiency Calculations
(Cost to process invoice manually –
cost of pCard/eProcurement
transactions) * number of transactions
avoided
Get As Complicated As You Like
(Award value to local vendor *
corporate/city/land tax rate) =
Revenue
10 * Revenue = Cost of local support
services avoided
Simple Cost of Procurement Calculation
Gains
Procurement Team Cost
Simple Cost of Procurement Calculation
$100,000
$500,000
0.2 or 20%
Simple Cost of Procurement Calculation
For every $1 budgeted for the
procurement team, we actually only
cost the agency $0.80 so…
Simple ROI Calculation
Savings – Procurement Team Cost
Procurement Team Cost
Simple ROI Calculation
$300,000 – $200,000
$200,000
0.5 ROI
Simple ROI Calculation
For every $1 you spend on
procurement, we make the agency
$0.50 in savings and efficiencies so…
 Recorded webinars
 http://www.spikescavell.com/learning-aboutspend-analysis/
 Savings Recording Support Documents
 https://multco.us/purchasing/news/multnom
ah-county-presented-workshop-nigp-forum2014
 Measure Registration
 http://www.nigp.org/measure