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ITS Finance Team Penn State University Purchasing Services

ITS Finance Team Penn State University Purchasing Services. Joyce Haney Meg Harpster Steve Blazer May 31, 2007. Topics. Purchasing Overview Competitive bidding Justifications – Price and Source Sole source justifications (the good and the bad) Contracts and Computer Bulk Buy

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ITS Finance Team Penn State University Purchasing Services

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  1. ITS Finance TeamPenn State UniversityPurchasing Services Joyce Haney Meg Harpster Steve Blazer May 31, 2007

  2. Topics • Purchasing Overview • Competitive bidding • Justifications – Price and Source • Sole source justifications (the good and the bad) • Contracts and Computer Bulk Buy • Purchasing Card • eBuy • Agreements • Reverse Auctions • ITS add-ons

  3. Purchasing Methods • Purchase order / Standing order • Purchasing card • e-procurement system • Limited order  • Subcontract

  4. Purchase order justification • Justify the source • Competitive bidding • Contracts • Single/Sole source • Justify the price • Competitive price • Comparable pricing • Price lists • Contract pricing • Price analysis

  5. Threshold Requirement 0 - $9 ,999 Determination of price reasonableness $9 ,999 - $24,999 Evidence of competition $25,000 – and up Formal bidding Bidding Requirements

  6. Single/Sole Source Procurements • Justification required in writing • Purchasing has final decision as to SSJ acceptability • Purchasing must still justify the price

  7. Sole Source Justifications • Acceptable • Technical reasons • Compatibility reasons • Unacceptable • No time to bid • Supplier gave the lowest price • We like this supplier • We used this supplier before • Supplier is local or close • Supplier already put in time and effort

  8. SSJ Do’s and Don’ts • Don’t just rave about the source you want • If technical comparisons were done… • What other brands did you look at? • What was wrong with other sources? • Are the bells and whistles needed? • Do provide factual information • Do identify research that was done • Internet searches, trade shows, conferences, demos, colleagues, etc. • Don’t do your own bidding.

  9. Contracts • Established Contract pricing is considered competitive and provides best value • PSU Master Contracts • State Contracts • GSA Contracts • E&I and/or Big 10 Contracts

  10. Computer Bulk Buy • 3rd formal year • Improvements year to year • Lessons learned (i.e. configurations) • Cooperative effort • ITS and Purchasing initiate activity • Invitations to participate via IT-Purchasing and Network of People listserves • Good representation (including c. campuses) • Pricing good for 3 months • covers both fiscal year end and new fiscal year

  11. Feedback and Input • Bulk Buy Team • ITS • Jonathon Holman • Kevin Morgan • Janda Hankinson • Purchasing Services • Meg Harpster • John Ake

  12. Bulk Buy 2006Dell Desktop Summary • Base Units do not include monitors

  13. Bulk Buy 2006Dell Laptop Summary • Base Units included the following: • Complete Care – Accidental Damage Protection • 3 Year NBD Parts and On-site Labor

  14. Purchasing Card • Make good choices • Protect your card, your account number and always review your statements. • Know your suppliers • Report any suspected misuse immediately • Don’t answer any inquiries (phone or email) about your credit cards unless you confirm they are legitimate. • Purchasing card website: • http://guru.psu.edu/p-card/ • Lisa Steinbugl, Purchasing Card Coordinator

  15. On-line shopping • Tools • Search • Compare • Favorites • History • Electronic order placement • Electronic settlement • On-line information

  16. Incentives Over the P-Card and PO • More purchasing power • Access to multiple catalogs • Better, more competitive Penn State pricing • Higher pre-approved limits than the purchasing card • Faster • Order direct from the supplier • Order 24X7, anytime, anywhere • Electronic submittal of your order directly to the supplier • Pre-approvals eliminate the multi-step approval process • Less paperwork • No receipts to turn in • No receiving reports • Purchase order history on-line with line item detail • More information at your finger tips • Detailed product information • Search capabilities by key word, part #, category & supplier

  17. Active Suppliers • Computer: PSU Computer Store, Dell, Apple & Lenovo • Office Supplies & Janitorial: PSU General Stores • Furniture: Supply Source (Herman Miller) & Corbett (KI) • Electrical: Hite • Electronics: Newark in One • Industrial: Grainger • Scientific: VWR, Fisher, Sigma & EMSCO

  18. Agreements - Contractual agreement between 2 parties.- It’s important to get it right. • Various types of agreements: • Purchasing Agreements • Software License Agreements • Beta Test Site • Leases or rentals • Maintenance Agreements – • Hardware and software • Professional Services • Consulting

  19. Signing authority • Purchasing • Joyce and Meg get nervous • Department and end-users’ compliance • Understand • Agree (and can comply) • May require disposition of information • Consult with Legal, Risk Management and Privacy Office as required • Controller’s Office • VP of Finance and Business

  20. Agreements ……. Who, what, when, where, why, how and how well? • Defines each party’s responsibilities • Each party has responsibilities, rights, protections, and risks. • Terms & Conditions • Written word takes precedent over all verbal agreements • Schedule • Term – (time period, extensions, cancellation, price escalation, price protection) • Payment • Security and privacy issues • Disputes and Non-performance (dispute resolution, default, cancellation, arbitration, legal system, laws, penalties, etc.)

  21. Agreements – Who, what, when where, how, and why? • Terms and conditions of use • Faculty? Students? Guests? Locations? Security? • Specific location, college, department or unit? • Educational? / Commercial? / Government? • Instruction? Research? Profit/nonprofit? • Updates and upgrades • How often? Price? Price increases/caps? Support? • Warranty, liability, infringement & protection • Safety and security • Insurance coverage • Maximum liability caps - Personal injury & property damage • Third party lawsuits? • Damages?

  22. Develop a good specification or “Scope of Work” • Clearly define who, what, when & where • What are the deliverables? • Clearly identify criteria to identify if the product is acceptable • Clearly identify criteria to determining if services were completed to our satisfaction • Define what is acceptable

  23. Reverse Auctions/Online Competitive Bidding • PSU specifications available online for competitive bidding for X minutes. • Multiple suppliers bid their price on line • View low bid price and/or rank • Suppliers adjust their price accordingly if desired

  24. Reverse Auction Success at PSU • Over 20 auctions since 2003 • Over $2 million saved • Average savings 19 – 22% • Commodities: Audio visual, janitorial, paper, residence hall furniture, micro-fridges, paint, vehicles, business forms, etc. • Looking for opportunities in computer area

  25. Sample Reverse Auction Results

  26. Additional Resources • Purchasing • Financial Officer • GURU • http://guru.sp.psu.edu/ • Purchasing Card • http://guru.psu.edu/p-card/ • Purchasing • http://www.purchasing.psu.edu/ • eBuy • http://www.ebuy.psu.edu/

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