Measuring Performance in Government Procurement Phase 2

1. Movement Towards a Standard Presented by Michael Bevis, CPPO, CPSM, PMP bevism@naperville.il.us Measuring Performance in Government ProcurementPhase 2

2. Phase 1 NIGP Membership 2009 Phase 2 GFOA Membership 2010 The Surveys

3. NIGP: • 453 Responses • >100 Cities • 60 Counties • 43 State Agencies • The rest were Schools, Universities, Special Districts, etc . . • GFOA • 80 Responses • 40 Cities • 13 Counties • 6 State Agencies • 21 Schools, Universities, Special Districts, etc . . The Survey Results

4. There is no generally accepted standard for procurement performance measurement • Is performance reporting important • NIGP = 92% said YES • GFOA = 85% said YES • Is a standard needed • NIGP = 90% said YES • GFOA = 84% said YES The Issue

5. Build Consensus • Actual Practice • Supporting Theory and Analysis • Stakeholder Input The Plan

6. Actual Practice • Survey 1 Public Procurement Practitioners • Survey 2 Senior Management The Process

7. Supporting Theory and Analysis • Public Administration and Economic Underpinnings • Academic Research and Practitioner case Studies The Process

8. Stakeholder Input • Focus Groups • Open Forums • WELCOME to this session The Process

9. Efficiency measures • Time in Process • Resources Used • Service Level Comparisons • Level of Delegation Efficiency and Effectiveness

10. Efficiency measures • Time in Process • Resources Used • Service Level Comparisons • Level of Delegation Efficiency and Effectiveness

11. Effectiveness • Cost Savings/Cost Avoidance • Customer/Client Satisfaction • PASS Efficiency and Effectiveness

12. The survey information on the following performance measurement areas • Cost savings/avoidance on bids • Cost savings/avoidance on competitive negotiations • Cost saving/avoidance in other activities • Cost savings/avoidance for revenue contracts • Other performance indicators The Survey

13. How do you eat an Elephant?

14. Cost Savings/Cost Avoidance derived from competitive bids. A first bite:

15. Senior management 77%/85% • The Public 49.5%/62% • Procurement Management 40%/47% Who is the Audience

16. Communicate the value of procurement (63%/80%) Evaluate/manage Performance (48%/85%) Justify Budget Requests (38%/35%) Why?

17. 91% /89% of survey say an important indicator Only 53% actually measure savings/avoidance Over a dozen different methods in use Cost Savings/Cost Avoidance

18. No clear preferred method for NIGP respondents • A majority of GFOA respondents (65%) preferred Awarded Price v. Average of all Responsive Bids • The top three • Award Price v. Budget (16.3%/40%) • Award Price v. Highest Bid (18.7%/45%) • Award Price v. Average of all Responsive Bids (16.3%/65%) The Most Often Used Measures

19. Award price v. previous price plus inflation adjuster (9.1%/43%) Award price v. retail price (3.3%/29%) Award price v. wholesale price (1.4%/15%) Award price v. GSA or other established price (7.9%/40%) Other (12.9%/9%) The other choices

20. Supporting Theory and Analysis • Public Administration and Economic Underpinnings • Academic Research and Practitioner case Studies • A statement and comment period What’s Next for Cost Savings/Avoidance for Bids

21. The survey information on the following performance measurement areas • Cost savings/avoidance on bids • Cost savings/avoidance on competitive negotiations • Cost saving/avoidance in other activities • Cost savings/avoidance for revenue contracts • Other performance indicators After Cost Savings/Avoidance for Bids

22. Movement Towards a Standard Presented by Michael Bevis, CPPO, CPSM, PMP bevism@naperville.il.us Measuring Performance in Government ProcurementPart 2