OCTOBER 29, 2008
9:00 am to Noon
1
PPC Agenda
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Finance Transformation – Jeff Mandel / Sharon Minnich
BMWBO – Kathryn Waters-Perez
Materials – Walt Quade
Services – Roxana Dietz
Agency PO/Contracts – Jeff Mandel
Contract Attachments – Sue Rojas
Procurement Handbook Updates – Sue Rojas
SRM – Joan Kraft / Cheryl Kleeman
E-Marketplace Updates – Scott Cross / Sue Plecker
Quality Assurance – Paul Wolf
Training – Jeff Mandel
Note: This PPC Presentation will be available on our Agency
Dashboard web site following this Meeting
2
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
3
Project Scope
The following processes, activities, and systems are being
addressed through the Finance Transformation project:
Policy & Process
Talent & People
Systems &
Information
4

Procure to Pay

Budgetary Accounting

Chart of Accounts/GL


Revenue/Cash Management
Comprehensive Annual Financial Report
(CAFR)/Financial Reporting

Accounts Receivable

Internal Audit

Change Management and Communications

Knowledge Transfer to Commonwealth Project Staff

Organization Realignment and Transition

Education and Training

SAP ECC 6.0 Configuration

SAP Workflow

Scanning, Imaging and Indexing
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
Focus of PA Finance
‒ Medium-Term: able to be completed by July 1, 2010
Transformation Project
‒ 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
5
Financial Transformation
Procure-to-Pay Recommendations
Invoice
Processing
6
• 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 threeway 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)
Recommendations
Procure-to-Pay Recommendations (cont’d)
Workflow
• 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
7
Recommendations
Procure-to-Pay Recommendations (cont’d)
Anticipated
Agency Benefits
8
– 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 nonmatching issues can be redirected to other value
added activities
– Agencies become more empowered as end users in
accordance with Commonwealth procurement policy
Recommendations
Procure-to-Pay Recommendations (cont’d)
Anticipated Agency
Impacts
9
– 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
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
10
MBE/WBE Utilization
Role of BMWBO
• Promote contracting and subcontracting
opportunities for Disadvantaged
Businesses (DB’s).
11
BMWBO
Procurements with Deminimus
Disadvantaged Business (DB)
Participation
BMWBO’s Evaluate submitted
proposals as they relate to DB
utilization and provides the agency with
scores.
12
BMWBO
BMWBO provides a memo to user agencies along with DB scores
• 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
13
BMWBO Example of Memo
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF GENERAL SERVICES
MEMORANDUM
DATE:
SUBJECT:
TO:
FROM:
November 29, 2008
Notification of Unsatisfactory Disadvantaged Business Participation
RFP # DPW-00000000000
Casey Miller
Department of Public Welfare
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 ABC
Did 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:
14
Kathryn Waters-Perez
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.
15
BMWBO Contact Information
• BMWBO
611 North Office Bldg.
Harrisburg, PA 17112
(717) 783-3119
E-mail: RA-rfpbmwbo@state.pa.us
• Procurement Liaison
Gayle Nuppnau
(717) 346-3819
E-mail: GNuppnau@state.pa.us
16
Materials - Fuels
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:
FY 05-06:
FY 06-07:
FY 07-08:
$19.5 million
$25.9 million
$38.0 million
$44.7 million
– Daily price changes cause frequent invoice payment problems
17
Materials - Fuels
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.
18
Materials - Fuels
Truck Transport Strategy- 5000 gallon plus. (Cont.)
• 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.
19
Materials - Fuels
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.
20
Materials - Fuels
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.
21
Contract Update
22
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
Contract Update
23
Contract
Number
Contract
Title
Status
Commodity
Manager
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
Contract Update
24
Contract
Number
Contract
Title
Status
Commodity
Manager
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
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
25
Shared Services - Roles & Responsibilities
Denied Delegations: Roles & Responsibilities
26
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
27
IT Procurements
Primary Functions of IT Contracting Office:
1.
2.
3.
4.
5.
6.
28
Providing guidance related to the proper procurement method
for IT Services.
Establish training programs for DCIO’s, the CIO’s & any
agency personnel who wish to participate.
During the procurement process, documents will be provided
to ITCO through the DCIO in conjunction with the COP review.
Review documents related to RFQ’s and RFP’s prior to
posting
During contract negotiations they will work with the issuing
office to ensure requirements, terms & conditions and service
level expectations are achieved.
At the request of an agency they will review software licenses
and advise agencies related to general IT matters.
IT Procurements
29
•
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.
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.
30
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
31
IT
•
WSCA Cell Phone Contract
–
Implemented
•
•
•
•
•
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
•
•
•
–
•
Met with TMOs on details
Moving to shared minutes
Suppliers gave TMOs presentation of implementation
What procedures will be available?
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
32
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
33
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.
34
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.
35
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.
–
•
–
•
Requirements (materials or services) quantity and timing unknown or
uncertain over future years
A multiple year PO was to be created when:
–
36
then create a PO at the time you are ready and another one thereafter
The agency wanted to commit all funds at time of the award
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.

–
•
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.
–
–
37
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 - 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 midFY cycle so as not to risk the break in services at year end.
Contract Attachments
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
38
•IFB Contract Attachments
(Multi Award Hierarchy
Contract)
–Electronic Bid utilizing
doc builder
–eMarketplace
–Internal File
•IFB Contract/Purchase
Order Attachments
•RFP Contract Attachments
(paper submittal not using
doc builder)
–SRM
–eMarketplace
–Internal File
•RFP Contract Attachments
(using doc builder)
–SRM
–eMarketplace
–Internal File
–Electronic Bid utilizing
doc builder
–eMarketplace
–Internal File
Contract Attachments Location: Contract Attachment Documents
Procurement Handbook Changes
Non-contract purchases under $10K (reinstated)
Part I Chapter 7 Thresholds and Delegations
Section 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
39
Complete Procurement Handbook Changes
Political Contribution Letter for Sole Sources (new)
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.
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.
40
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
41
Procurement Handbook Pending
BMWBO Changes
Part 1, Chapter 20: Non Discrimination
Currently 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.
42
Procurement Handbook Pending
Modifications to Document Builder – MBE/WBE
The following issues are being addressed:
- List the number of documents required
- Link to BMWBO website
RFP Template
- 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
43
Procurement Handbook Pending
Publishing RFP Weights
- 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
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
44
Procurement Handbook Pending
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
45
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
•
•
•
46
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.
Bidding Guide
To create your bid:
To complete 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
•
•
•
•
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:
Support Options
•
•
•
•
•
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
•
•
•
•
Live Support exists for suppliers available via
the Customer Support Center
Email: ra-srmhelp@state.pa.us
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
47
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 agencies
To access the EUP: Live Auction EUP
48
Live Auction Decision Tool
The Decision Tool is utilized to determine the viability of performing a Live Auction.
49
Why conduct an Auction?
•
•
•
•
50
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
Three Auction Profiles used by DGS
51
Material Requirements Planning Overview
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
52
MRP Transactions in R3
53
Inventory & MRP Facts
• 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 -
54
Process Flow - Inventory via MRP
Execute MRP
Stock below
Reorder Point?
Yes
Create Planned
Order(s)
Convert to
Purchase
Requisition
No
Purchaser
Inventory
Planner
Inventory via MRP Process
Follow Established
Process for
Procurement
Approver
End
Approve PO
(If required)
Receiver
Requisitioner
Issuer
55
Create PO
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
Inventory Issuer
Performs Goods
Issue
Stock is
decremented at
issuing point.
Reduces quantity
on hand
Issue PO to
Vendor
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
56
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
57
High Level Process Flow - Inventory Non-MRP
Agency
Approver
SRM
Requisitioner
Inventory via Normal Process (non-MRP)
Create
Shopping
Cart as Direct
Material
Approve or Reject
Cart
Make necessary
changes as
requested by
approver
Reject
Receiver
Comptroller
Approver
Purchaser
Approve
58
Follow
established
process for
procurement
Issue PO to
Vendor
Create PO
Approve PO
(If required)
Receive into
Inventory Stock
(MIGO)
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
59
Current CSC Flow
CSC Inquirers
(Phone Calls, Emails, Remedy Tickets)
Supplier Registration
and Support
SRM Agency Support
BOP Bid Room
Team of
Commodity
Specialists
Overflow Agents
Is it technical?
No
Agent
Responds
60
Yes
IES
Is it technical?
No
CS
Responds
Yes
IES
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
Answered Calls
Abandoned Calls
550
500
450
400
350
300
250
200
150
100
Aug Sep Oct
07
07
07
61
Nov Dec
07
07
Jan
08
Feb Mar
08
08
Apr May Jun
08
08 08
Jul
08
Aug Sep
08
08
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
62
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?
63
Current Agency Inquiries
64
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
65
Password Reset
• Password Reset Login Screen:
– Suppliers insert user
name in “Logon ID”.
– Suppliers click on
“Reset Password”.
– Password reset e-mail comes from
ra-srmhelp@state.pa.us. (Recommend checking SPAM
settings.)
66
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
67
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
68
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
69
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
70
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
71
Assignment of Payments in SRM
• Method for assigning payment on invoices related to SRMgenerated 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 ra-co-bfmcvmu@state.pa.us.
• 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
72
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 - ckleeman@state.pa.us
73
eMarketplace Updates
Procedure for Simplifying Contract
Search in eMarketplace
• Has been added to “Tips & Tricks” under
the “Help” section on eMarketplace
74
eMarketplace Updates
75
eMarketplace Updates
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.
76
eMarketplace Updates
• 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.
77
eMarketplace Updates
• This will take you back into eMarketplace and display a list of
contracts that belong to the Parent contract you selected.
78
eMarketplace Updates
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
79
eMarketplace Updates
Solicitation Tabulations – Required information for input
80
eMarketplace Updates
Awards – Required information for input
81
eMarketplace Updates
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
82
eMarketplace Updates
Procurement Description will appear for public viewing
83
eMarketplace Updates
84
eMarketplace Updates
85
eMarketplace Updates
86
eMarketplace Updates
87
Quality Assurance
Procurement 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.
88
Background
Future State with Quality Assurance Procurement Review
Agency
Agency
Agency
CO
Agency
Agency
Agency
89
BOP’s
Quality Assurance
Procurement
Review
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.
90
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.
91
Process Cycle
BOP Conducts
Procurement
Review
Agency Develops
& Implements
Corrective
Actions
BOP & Agency
Review Findings
Identify
Opportunities for
Improvement:
Policies, Procedures,
Systems & Training
Requirements
92
Quality Assurance Review Process
PRE-VISIT
PREPARATION
POST-VISIT
EVALUATION
•Identify Candidate
•Document Site Visit
•Record Rankings
• Perform Electronic
Review
•Finalize Summary
Package
• Create Agency
Outreach Package
•Identify Corrective
Actions & Opportunities
for Improvement
•Set Up Site Visit
SITE VISIT
•Review Reports &
Documentation
•Evaluate Compliance
•Complete Review
Documents
93
RECALIBRATE AS
REQUIRED
•Implement Changes
•Stay Current on
Changes, Additions,
Deletions,
Modifications to Policy
& Procedures
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 to
mitigate risk
7) Promote compliance by providing continuous communications to inform the agencies on
new/revised policies and procedures and training programs
94
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
95
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
96
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
97
Procurement Policy & Process
Purchasing 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.
98
Procurement Policy & Process
Purchasing 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.
99
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 Supplier
 Registering as an Existing Supplier
 Supplier Response to a Solicitation
PDF versions of these brochures are available on the DGS BOP Training
page under “News and Updates”
100