OCTOBER%2029,%202008

1
PROCUREMENT POLICY COUNCIL

• OCTOBER 29, 2008
• 900 am to Noon

2
PPC Agenda

• 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

3
Project Purpose and Goals

• Purpose
• To further transform the Commonwealths 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

4
Project Scope
The following processes, activities, and systems
are being addressed through the Finance
Transformation project
Policy Process Procure to Pay Chart of Accounts/GL Revenue/Cash Management Accounts Receivable Budgetary Accounting Comprehensive Annual Financial Report (CAFR)/Financial Reporting Internal Audit
Talent People Change Management and Communications Knowledge Transfer to Commonwealth Project Staff Organization Realignment and Transition Education and Training Change Management and Communications Knowledge Transfer to Commonwealth Project Staff Organization Realignment and Transition Education and Training
Systems Information SAP ECC 6.0 Configuration SAP Workflow Scanning, Imaging and Indexing SAP ECC 6.0 Configuration SAP Workflow Scanning, Imaging and Indexing
5
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
• Medium-Term able to be completed by July 1, 2010
• 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

6
Financial Transformation
Procure-to-Pay Recommendations

• 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
  three-way 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)

Invoice Processing
7
Recommendations
Procure-to-Pay Recommendations (contd)

• 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

Workflow
8
Recommendations
Procure-to-Pay Recommendations (contd)
Anticipated Agency Benefits

• 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 non-matching issues can be redirected
  to other value added activities
• Agencies become more empowered as end users in
  accordance with Commonwealth procurement policy

9
Recommendations
Procure-to-Pay Recommendations (contd)
Anticipated Agency Impacts

• 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

10
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

11
MBE/WBE Utilization
Role of BMWBO

• Promote contracting and subcontracting
  opportunities for Disadvantaged Businesses
  (DBs).

12
Procurements with Deminimus Disadvantaged
Business (DB) Participation
BMWBO

• BMWBOs Evaluate submitted proposals as they
  relate to DB utilization and provides the agency
  with scores.

13
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

14
BMWBO Example of Memo

• COMMONWEALTH OF PENNSYLVANIA
• DEPARTMENT OF GENERAL SERVICES
• MEMORANDUM
• DATE November 29, 2008
• SUBJECT Notification of Unsatisfactory
  Disadvantaged Business Participation
• RFP DPW-00000000000
• TO Casey Miller
• Department of Public Welfare
• FROM 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.

15
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.

16
BMWBO Contact Information

• BMWBO
• 611 North Office Bldg.
• Harrisburg, PA 17112
• [phone]
• E-mail RA-rfpbmwbo_at_state.pa.us
• Procurement Liaison
• Gayle Nuppnau
• [phone]
• E-mail GNuppnau_at_state.pa.us

17
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 19.5 million
• FY 05-06 25.9 million
• FY 06-07 38.0 million
• FY 07-08 44.7 million
• Daily price changes cause frequent invoice
  payment problems

18
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.

19
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 POs, 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.

20
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
  dont.

21
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.

22
Contract Update
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
23
Contract Update
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
24
Contract Update
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
25
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

26
Shared Services - Roles Responsibilities
Denied Delegations Roles Responsibilities
27
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

28
IT Procurements

• Primary Functions of IT Contracting Office
• Providing guidance related to the proper
  procurement method for IT Services.
• Establish training programs for DCIOs, the CIOs
  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 RFQs and RFPs 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.

29
IT Procurements

• DGS will assist agencys 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
  Administrations and the Agencys 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.

30
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.

31
IT ITQ

• IT ITQ Expires June 2009
• OCT 2009 Finalize TCs 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

32
IT

• WSCA Cell Phone Contract
• Implemented
• Met with TMOs on details
• Moving to shared minutes
• Suppliers gave TMOs presentation of
  implementation
• What procedures will be available?
• 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
• 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

33
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

34
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
  POs or multiple year POs 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 POs to be created for every year
  of the contract immediately upon award.
• Question/issue Why create the contract if all
  POs have to be created at same time? Defeats
  purpose of contractextra work.

35
Agency PO/Contracts Responses

• Contacted several agencies to see how they
  processed ongoing services contracts.
• LI 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 dont
  want to create a contract, then cut a PO every
  year. They would rather cut one PO for the full
  term so they dont have to remember to create a
  new PO in each consecutive year.

36
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 POs at time of
  service
• Agency cannot commit the future year funds or are
  not ready to commit the funds.
• then create a PO at the time you are ready and
  another one thereafter
• Requirements (materials or services) quantity and
  timing unknown or uncertain over future years
• A multiple year PO was to be created when
• The agency wanted to commit all funds at time of
  the award

37
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.
• 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 - 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.
• 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 everyones
  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 mid-FY cycle so as not to risk the
  break in services at year end.

38
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

IFB Contract Attachments (Multi Award Hierarchy Contract) Electronic Bid utilizing doc builder eMarketplace Internal File IFB Contract/Purchase Order Attachments Electronic Bid utilizing doc builder eMarketplace Internal File
RFP Contract Attachments (paper submittal not using doc builder) SRM eMarketplace Internal File RFP Contract Attachments (using doc builder) SRM eMarketplace Internal File
Contract Attachments Location Contract
Attachment Documents
39
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

40
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.
41
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

42
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.

43
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
44
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
45
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
46
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
• 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.

47
Bidding Guide

• To create 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

• To complete your bid
• 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
• 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

• Support Options
• Live Support exists for suppliers available via
  the Customer Support Center
• Email ra-srmhelp_at_state.pa.us
• Phone [phone] (local)
• Phone [phone](outside Harrisburg)
• www.pasupplierportal.state.pa.us

Document can be found Bidders Guide - Checklist
for Creating, Responding and Deleting a Bid
48
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
49
Live Auction Decision Tool
The Decision Tool is utilized to determine the
viability of performing a Live Auction.
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Why conduct an Auction?

• 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

51
Three Auction Profiles used by DGS
52
Material Requirements Planning Overview

• Purpose of todays 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
53
MRP Transactions in R3
54
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 -
55
Process Flow - Inventory via MRP
56
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 POs
  were not generated through MRP
• No need to maintain contract in both places
  should be SRM only
• R3 Document type NNB New Standard PO

57
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
58
High Level Process Flow - Inventory Non-MRP
59
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

60
Current CSC Flow
61
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

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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

63
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 cant find a vendor.
• How do I create a shopping cart?
• What is a product category?
• How do I reference a contract?

64
Current Agency Inquiries
65
Agency Assistance

• Agencies can reduce the number of inquiries to
  the CSC by
• Limiting inquiries to only those related to CSCs
  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 FAQs, AIT Library, Resource Guide
• eNews
• Encourage associates to take advantage of the
  various Procurement Training Programs offered by
  BOP

66
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_at_state.pa.us. (Recommend checking
  SPAM settings.)

67
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

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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 500
  PM thru Monday, November 3rd 600 AM
• MyCommonwealthWorkplace Friday, October 31st 
  400 AM thru Monday, November 3rd 600 AM
• .xml Supplier Transmittal of Invoices Thursday,
  October 30th 500 PM thru Monday, November 3rd
  600 AM
• Screen change document
• Handout
• Sent via eNews on 10/22/08

69
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

70
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

71
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

72
Assignment of Payments in SRM

• Method for assigning payment on invoices related
  to SRM-generated POs to an Assignee rather than
  the Assignors 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 Assignors letterhead
• Multiple Assignees require separate request forms
  for each
• Submit documents to CVMU Resource Mailbox at
  ra-co-bfm-cvmu_at_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

73
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_at_state.pa.us

74
eMarketplace Updates

• Procedure for Simplifying Contract Search in
  eMarketplace
• Has been added to Tips Tricks under the
  Help section on eMarketplace

75
eMarketplace Updates
76
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.
77
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.

78
eMarketplace Updates

• This will take you back into eMarketplace and
  display a list of contracts that belong to the
  Parent contract you selected.

79
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

80
eMarketplace Updates
Solicitation Tabulations Required information
for input
81
eMarketplace Updates
Awards Required information for input
82
eMarketplace Updates

• Sole/Single Source Section
• Secretarys 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

83
eMarketplace Updates
Procurement Description will appear for public
viewing
84
eMarketplace Updates
85
eMarketplace Updates
86
eMarketplace Updates
87
eMarketplace Updates
88
Quality AssuranceProcurement 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
89
Background
Background
Future State with Quality Assurance
Procurement Review
BOPsQuality Assurance Procurement Review
90
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
91
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.

92
Process Cycle
BOP Conducts Procurement Review
Agency Develops Implements Corrective Actions
BOP Agency Review Findings
Identify Opportunities for ImprovementPolicies,
Procedures, Systems Training Requirements
93
Quality Assurance Review Process
PRE-VISIT PREPARATION
POST-VISIT EVALUATION

• Document Site Visit
• Record Rankings
• Finalize Summary Package
• Identify Corrective Actions Opportunities for
  Improvement

• Identify Candidate
• Perform Electronic Review
• Create Agency Outreach Package
• Set Up Site Visit

RECALIBRATE AS REQUIRED
SITE VISIT

• Implement Changes
• Stay Current on Changes, Additions, Deletions,
  Modifications to Policy Procedures

• Review Reports Documentation
• Evaluate Compliance
• Complete Review Documents

94
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
  agencys 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
95
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
96
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

97
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

98
Procurement Policy ProcessPurchasing
Certification

• Purpose
• As business owner BOP has developed formal,
  4-day, ILT to give new and less experienced PAs
  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 PAs, 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 gt20
  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 PAs (ex. AAs and
  AOs) will be able to attend this course.

99
Procurement Policy ProcessPurchasing Agents
Training

• Future Training Schedule Location-
• Conducted on quarterly basis in new BOP Learning
  Center.
• 1st sched