Purchasing Directors’ Meeting November 9, 2004 3:00 P.M.

State Purchasing Purchasing Directors’ Meeting November 9, 2004 3:00 P.M.

Purchasing Directors’ Meeting November 9, 2004 Agenda • Welcome / Meeting Overview • Roadmap to Excellence in Contracting Follow Up • MyFloridaMarketPlace Update • Strategic Sourcing Update • Electronics Recycling Contract • DMS/State Purchasing Mission • Next Meeting Location / Time

Roadmap to Excellence in ContractingDistribution of the 494 Findings • Performance monitoring (45%) • Procurement methodology (20%) • Contract writing (17%) • Payment (10%) • Needs assessment (7%) • Contract closure (1%)

Roadmap to Excellence in ContractingFactor Contributing to Current Deficiencies The state’s corporate culture does not foster the sharing of best contracting practices among agencies. We recommend that DMS create and foster user groups of professional procurement staff that meet on a regular basis to share best practices and common problems. Output from this group could be used to spearhead changes in legislation and policy direction.

Roadmap to Excellence in ContractingFactor Contributing to Current Deficiencies Agencies’ use of different processes and procedures in awarding and managing contracts causes the contract documents to vary considerably in format and content. We recommend DMS, with the assistance of other agencies, develop standard contract formats for use by all state agencies.

Roadmap to Excellence in ContractingFactor Contributing to Current Deficiencies There is no statewide system to train or certify agency contracting personnel, nor are there incentives to encourage professional development. We recommend a statewide training initiative led by DMS be undertaken using the foundation developed in some agencies. In addition, we recommend incentives to encourage professionalism and certification for contract administrators, negotiators, monitors and managers.

New Training Program- Pilot ClassAdditional Certifications (see 8/19/04) Purchasing Agent Richard A. Young – Bay District Schools Negotiator Staten W. Corbett – Bay County District School Board Contract Manager Maureen A. Livings – DMS Paul R. Nobles – Escambia Bd. of County Comm’rs Diana K. Trahan – DOC Purchasing Manager David A. Bennett – DMS Edward G. McEachron – DOH Ellen R. Potts – DMS

Roadmap to Excellence in ContractingFactor Contributing to Current Deficiencies Inadequate systems exist for monitoring and rating vendor performance. We recommend a uniform vendor monitoring and rating system be created which incorporates links to contract monitoring reports, vendor websites, closeout evaluations, and a method for other agencies to access performance evaluations.

Roadmap to Excellence in ContractingMonitoring and Rating Vendor Performance • No uniform requirement in Florida law for an agency to monitor the performance of its contractual service providers or prepare a closeout document to rate vendors' performance. • No requirement for prospective procurers to consider other agencies' prior experience with a vendor. Consequently, vendors with inadequate performance may receive additional contracts because there is no system to capture performance results and incorporate these results into the selection process. • A system of rating contractors on previous contract performance would ensure that the contractor's performance history is known and is considered during the bid evaluation process

Monitoring and Rating Vendor PerformanceWhat is DMS Doing in Response? • State term contract customer survey and rating: Active. • Ratings of vendors at the transaction level within MFMP: in development (details on later slides). • Contract management solutions: Exploring existing agency systems, looking for best practices, opportunities to scale, and gaps that need filling. • Contractor performance rating and database: Exploring existing agency systems, looking for best practices, opportunities to scale, and gaps that need filling.

Proposed SolutionNew Constellation of Integrated Systems Contractor Performance Rating (?) 4 1 2 State Term Contract User Survey (Active) MFMP Vendor Performance Tracking (In Development) Contract Management Software (?) 3

Monitoring and Rating Vendor Performance (1) STC Customer Survey and Ratings

Proposed Solution New Constellation of Integrated Systems Contractor Performance Rating (?) 4 1 2 State Term Contract User Survey (Active) MFMP Vendor Performance Tracking (In Development) Contract Management Software (?) 3

Proposed VPT SystemFits within Vendor Management System (VMS) Proposed Interfaces Map Vendor Management System VendorRegistration MyFlorida- MarketPlace Buyer Transaction Fee Reporting Vendor Performance Tracking Buyers Vendors Public Read / Write Read Only Vendor Performance Metric (if available) would be visible in Buyer Summary of Scores by Vendor (updated quarterly) Read Only Report Only Contract Managers

Monitoring and Rating Vendor Performance (2) Proposed MFMP/VPT System - Features • Survey email would be sent to requestors or MA contact for paid invoices completed in MyFloridaMarketPlace • Email would contain a link directing requestor or MA contact to go to VPT to complete survey • Survey would be pre-populated with transaction-specific information

Monitoring and Rating Vendor Performance (2) Proposed MFMP/VPT System - Features • Survey would ask requestors to rate vendor across four categories with 1-5 scoring range; requestors would have ability to record optional comments • Requestors would not be obligated to complete survey • Requestors would have access to VPT to drill into detail of survey responses; requestors could search by vendor name, FEIN, State Term Contract or State Purchasing Agreement number, Agency, requestor name or email address • Vendors’ performance would be tracked and displayed in Buyer for requestors to see at time of vendor selection (by location) for non-catalog purchases

Monitoring and Rating Vendor Performance (2) Proposed MFMP/VPT System - Features • Vendors would have access to VPT to drill into detail of survey responses submitted for their company only • Public would be provided with quarterly updated listing of vendors and their performance scores across 4 criteria and overall; requestors’ names and comments would not be provided to public • Survey scores would be discarded after 5 years (consistent with record retention requirements)

Monitoring and Rating Vendor Performance (2) Proposed MFMP/VPT System - Survey Fails to Meet Some Requirements (2 Points)

(2) Proposed MFMP/VPT SystemWhat Threshold for Generating Survey? • All transactions against STCs, SPAs, and Agency Term Contracts • For remaining transactions, only on transactions over $2,500? • Surveys transactions with vendors flagged as a governmental entity? Number of Paid MyFloridaMarketPlace Transactions in August and September 2004

(2) Proposed MFMP/VPT SystemSurvey Generation Process? Is payment to government- flagged vendor? VPT System generates email to requestor with link to survey Requestor completes transaction in MFMP STOP? YES NO Is transaction against a STC, SPA or Agency Term Contract? Requestor completes optional survey with pre-populated header YES NO Is payment made over $2,500 threshold? VPT System receives completed survey and updates vendor’s scores NO STOP? YES NO

(2) Proposed MFMP/VPT SystemDisplay of Vendor Performance Score? Display overall score and number of completed surveys. Click on overall score for window displaying detailed scores: performance to specification; delivery; invoicing; and customer service.

Monitoring and Rating Vendor Performance (3) Contract Management – See FGC Materials Meeting at DMS, Rm 101, 11-noon on Monday, Nov 22, to discuss DCF’s SMORES solution

Monitoring and Rating Vendor Performance (4) Contractor Performance Rating • What do you have currently? • How can DMS help? • Do you need (4), given (2)? What’s the difference? • Some PO vendors (2) may never have a rated contract (4). • Contract manager, e.g. of a term contract, could use customer PO performance ratings as data in arriving at a contractor rating, but there can be more to it, e.g., type 1 ratings from STC surveys, type 2 ratings from PO users, and other info from management of the contract, problem resolution, change negotiation, knowledge of the market, etc.

MyFloridaMarketPlace Update • RFQ responses due Nov 9-12 • Mediation scheduled Dec 1-2 • Roll-out continues with eye on Aspire • New ASN fee (see http://www.ariba.com/suppliermembership)

Strategic SourcingRecent Accomplishments

Electronics Recycling Contract • In order for us to manage the equipment sent to the vendor and payments due the State, please ask your staff to e-mail Kaye Cunningham (cunnink@dms.state.fl.us) a copy of what Electronics the vendor picks up from your agency. Also, please have them indicate if the equipment was in working order or broken at the time of pick up. • All payments from the vendor for the equipment picked up will be sent to DMS for deposit into the State’s General Revenue Account. If a member of your staff inadvertently receives a check please have them forward it to: Kay C. Cunningham State Electronics Recycling Program DMS, Facilities Management Suite 315.6Z, Building 4050 4050 Esplanade Way Tallahassee, Fl. 32399 Phone: (850) 487-8060 • This contract can be accessed at: http://www.myflorida.com/st_contracts/991705051/

DMS Mission FY 03-04 To become a customer focused agency providing effective and efficient services in order to better enable state agencies and employees to deliver the Governor’s priorities to the people of Florida. FY 04-05 To deliver resource saving solutions to our customers in order to enable them to better serve the people of Florida.

State Purchasing Mission Operations Mission To provide effective program support to all state agencies in order to deliver resource saving solutions to our customers. State Purchasing Mission To gladly deliver useful and innovative purchasing services in order to provide effective program support to all state agencies.

State Purchasing Mission Tasks • Deliver state term contracts that provide the right commodities and services at lower cost • Improve quality of state term contract presentation • Support completion of MFMP roll-out • Retire legacy systems • Assist CFEG procurements • Implement centralized vendor performance rating system • Implement centralized contract management system • Implement internal processes and procedures (paperless) • Complete next waves of training and certification

State Purchasing MissionFred’s Part in the Plan I commit to lead State Purchasing in fulfilling the Secretary’s mission and executing his key initiatives. I will ensure that division employees have the vision, resources, and desire necessary to achieve our goals. Last year we drew a wealth of purchasing talent to our division; this year I will ensure that collectively it is put to its highest and best use to drive quality improvements in all we do. I will tirelessly resist surrendering gains to date. In all my interactions with our constituents and with employees, I will exercise the highest degree of fairness, respect, and integrity.

State Purchasing MissionCharles’ Part in the Plan I commit to developing high performance teams that will define, create and implement excellent State Term Contracts for executive agencies and other customers. I will take responsibility for ensuring these contracts provide best value for the State, are easy to use and are enthusiastically embraced by our customers. I will support/provide training and development activities for individuals and teams. I will take a visible and active leadership role in supporting MFMP and strategic sourcing.

State Purchasing MissionSteve’s Part in the Plan I commit to coach, mentor and manage my direct reports to ensure their continued professional development and understanding of the strategic sourcing and MFMP methodologies. I will ensure that each new state contract awarded will increase value to the customers and reduce overall cost to the State. I will ensure that the value to the customer is achieved at the highest level possible with each agreement put in place. I commit to take the time to involve myself with my teams, the individuals on those teams, and the customers we support. I will strive to build trust, support and credibility with my direct reports and my customer base.

State Purchasing MissionRuss’s Part in the Plan I will provide effective leadership in state purchasing operations, providing staff with the tools, insight and information necessary to enable them and myself to accomplish the mission. I will personally play a hands-on role in delivering appropriate parts of the mission. I will enthusiastically support other program areas in carrying out their missions.

State Purchasing Mission Goals (Measures) • Achieve 5% cost savings over last price paid on all contracts awarded this year for similar products and services. Achieve an average 28% savings over MSRP for all contracts. • Increase customer satisfaction by 20% (compared to SP survey FY 03-04) • Facilitate three CFEG initiatives through Gate 2 (procurement) and into Stage 3 • Deliver two new innovations • eForms solution • centralized vendor performance rating system

Purchasing Directors’ MeetingNext Meeting Time: 3:00 pm to 5:00 pm Date: Thursday, December 9,2004 Location: Betty Easley Center, Room 152

Purchasing Directors’ Meeting November 9, 2004 3:00 P.M.