OkAPP 2017 Conference Path to Procurement - Amazon S3 · OkAPP 2017 Conference ‐ Path to Procurement ... It’s Friday at 2pm and you’ve been called into a ... Decision Making

OkAPP 2017 Conference ‐ Path to Procurement

Time CEU's Class Title Presenter

7:00 AM Registration Opens

7:00 am to 8:00 am Breakfast

8:00 am to 9:15 am1

Opening General Session ‐ When Good Ain't Good

Enough Walter Bond

9:15 am to 9:30 am 0.25 Break

9:30 am to 11:30 am 2 Utilizing Metrics Jacob Kashiwagi

11:30 am to 1:30 pm 2 Lunch with Vendors

1:30 pm to 3:30 pm2 Lessons Learned from Professional Services Contracts Jacob Kashiwagi

3:30 pm to 3:45 pm 0.25 Break

3:45 pm to 4:45 pm1

FEMA Public Assistance Procurement Requirements

under 2 C.F.R. PT. 200

Keisha West, Oklahoma Emergency

Management

Time CEU's Class Title Instructor

7:00 am to 8:00 am Breakfast

8:00 am to 10:00 am 2 Contract Administration‐Procurement's Achilles Heel Marcheta Gillespie

10:00 am to 10:15 am 0.25 Break

10:15 am to 12:15 am 2 Project Management for Procurement Professionals Marcheta Gillespie

12:15 am to 1:45 pm 1 Lunch and Learn

What's New with you and Procurement Wendy Clark, OMES Vendor Specialist

1:45 pm to 2:45 pm 1 Specification Development Gerald Elrod

2:45 pm to 3:00 pm 0.25 Break

3:00 pm to 3:30 pm 0 Closing

Thursday September 28, 2017

Friday September 29, 2017

www.walterbond.com

Walter Bond Intro 2015 Today’s speaker is a former NBA athlete & broadcaster playing for the Dallas Mavericks, Detroit Pistons & Utah Jazz and broadcasting for the Minnesota Timberwolves. After achieving such an amazing accomplishment of reaching the pinnacle of basketball, corporate America came to claim Walter's true gift of teaching professionals how to become peak performers in their industry and reach their own personal pinnacle. Walter Bond is founder and CEO of Walter Bond Worldwide and runs one of the most successful and affordable group-coaching programs in the world. He believes everyone needs a coach.

Bond says that he made it to the NBA because he mastered the fundamentals of basketball with the help of his coaches. His company is now committed to developing people into peak performers by mastering the fundamentals of business and being a consummate corporate professional.

His motto and signature program Think! Execute! Dominate! 31 Truths to Boost Peak Performance is a no brainer for professionals of all levels and is the bridge to peak performance. In fact, the company’s mantra is We all think, we would all love to dominate but execution is where the game is won or lost. He has learned the value to execution and teaches his programs worldwide.

As one of the top speakers in the world, with his dynamic, charismatic and entertaining style. He is considered one of the best platform speakers the industry has ever seen. Walter Bond is committed to helping you live your dreams and will share a few of his key truths with you today…

3 6 1 0 G a r d e n s P a r k w a y . S u i t e 3 0 3 A . P a l m B e a c h G a r d e n s , F l o r i d a 3 3 4 1 0

Performance Based Studies Research Group (PBSRG) P.O. Box 873005, Tempe, AZ 85287

Ph: (480) 965‐1252

SPEAKER BIOGRAPHY

Jacob Kashiwagi, PhD Assistant Research Professor Arizona State University School of Sustainable Engineering and the Built Environment Performance Based Studies Research Group Jacob has been working with the leading procurement and risk management research group for over a decade. He is the developer of the no‐influence leadership theory, the theoretical basis for a graduate

procurement management course at ASU. He the lead researcher to assist implementing a risk management and contractor performance tracking system for the US Army Medical Command facilities that resulted to minimizing time delays by 49% and reduced change orders to .046% (less than 1% rate). His work with the State of Oklahoma’s procurement office on 12 projects estimated at $115M budget where costs were reduced by 71% and 100% on‐time in project delivery. Also assisted Schering Plough (pharmaceutical company) on 11 facility service projects which resulted to 50% cost savings. He is currently working with the Arizona Department of Environmental Quality to over haul their vendor selection process and performance measurement system. When he’s not working on facility projects, Jacob teaches both undergraduate and graduate facility management courses where he introduces the best value concepts and leadership approach. It is one of the highest rated classes both in the business and construction schools at ASU. Jacob earned a doctoral degree in Supply Chain at Delft University of Technology in the Netherlands, and is also an accomplished author.


Ph: (480) 965‐1252

9/28/17 9:30 am to 11:30 pm Utilizing Performance Metrics in Procurement Practices Jacob Kashiwagi Performance metrics is a tool for every procurement professional. Metrics create transparency, accountability, and everyone understands it. It’s Friday at 2pm and you’ve been called into a budget meeting with the stakeholders to ask how the new IT service contract is coming along and by showing the performance metrics (on‐time and on‐budget). The meeting ends successfully in 2 minutes. Another scenario: it is yearend review time and by setting up a vendor metrics system all year long tracked by the vendor the numbers show the procurement department saved 35% of the annual budget. The stakeholders are highly satisfied and the vendors are performing well. Why is it so important to use the language of metrics in procurement? It’s simple, dominate, and the numbers don’t lie. In this session learn how to use the language of metrics that will simplify, justify, and become a powerful tool for procurement professionals. Learning Objectives: The credibility of metrics is crucial to ensure buy‐in at all levels of the organization Right combination of metrics to show success and weakness (helps to improve in the

areas needed) Keeping your operation budget on track Measure internal client/stakeholders satisfaction using metrics


Ph: (480) 965‐1252

9/28/17 1:30 pm to 3:30 pm Lessons Learned from Professional Services Contracts Jacob Kashiwagi Why do IT projects end up in disaster? 71% of projects involving strategic vendors in IT, outsourcing, or shared services are delivered at double the budget and timescale. This session will expose the reality of the IT vendor community and how to turn a procurement novice into an expert. Will include the identification of the deliverable in terms of metrics, a methodology to deliver a detailed schedule, cost and plan by a high performance vendor, and the ability of the client (user). Learn the “secrets” of vendors and how they draw the buyer/owner into the trap of collaboration and agile project management to make the buyer accountable for all problems. Learning Objectives: Deliver IT and other complex projects without fear of failure. Learn to make vendors identify that they are not experts, and do not belong in the

competitive pool of alternatives. How to minimize all risk on the IT project. Avoid doing the same mistakes and learn new concepts based on real life case studies.

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www.ksm‐inc.com 1KASHIWAGI SOLUTION MODEL INC

Utilizing Performance Metrics in Procurement Practices

Jacob Kashiwagi, PhDKashiwagi Solution Model Inc.

Leadership Society of Arizona | ChairmanCIB W117 Coordinator

SKEMA Business School

NEVI


Expert Video


What is the problem?

Who is responsible?

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Characters


Complexity

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“The Blind”

1. Confusion2. Surprised3. Thinking4. Decisions5. Rule Based

“The Observant”

1. Understanding2. Sees Future3. Observe/Know4. No Decisions5. No Control

“The Observant”1. Consistency2. More likely3. Differences

LS: ObservantRS: Non‐Observant

“The Blind”

1. Needs all details

2. Inconsistency3. Cannot tell the

difference

Experts are Simple


Characteristics of Complexity• Not logical• Technical information• Miscommunication• Confusion• Increased communication• Everyone in Silos• Management, direction, and control (MDC)• Makes you think and make decisions


How good is your brain at thinking and making decisions?

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“We see the world not as it is, but as it is useful to see”

Faulty PerceptionBeau Lotto, PhD


Are you Paying Attention?

• Daniel Simons, PhD, Cognitive Psychologist

Innatentional Blindness

Failure to notice something unexpected

• Side affect of attention itself

• Our brain can only focus at one thing at a time

Did you see this change?


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“In real life, as well as in experiments, people can come to believe things that never really

happened”

False MemoriesElizabeth Loftus, PhD


“What we remember from the previous situation is not just the facts… but we also remember what we felt”

Were robbedFound $20

Emotions and DecisionsAntonio Damasio, PhD (Neuroscience)


Positive things

Advantages

Compliment

Negative things

Disadvantages

Criticize

Your Choice Other Options

Choice Supportive BiasDaniel Kahneman, PhD

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Optimism BiasTalia Sharot, PhD


Self‐Serving BiasGary Marcus, PhD


Capability of the mind– Our perception is faulty.– Our attention is limited.– Our memory is unreliable.– We put emotions before facts.– We are heavily biased in our

decisions.

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Decision Making Case Study


Professional Decisions• Dutch researchers built a computer

formula designed to minimize decisions• The formula examines data and picks the

best contractor for a job• Researchers tested the computer’s ability

to predict the outcome of actual past projects

• The same test was given to project professionals and college freshmen


Test ResultsTest Group Test Scores (Lower # is better)

Perfect Score 0

Computer 109

Students 189

Professionals 223

Randomly Generated Answers

310

Worst Case Score 650

• Computer is twice as efficient as professionals• Students are 18% more efficient than

professionals

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Conclusion• Professionals rely too heavily on

experience, feeling, and intuition• Predictions are more accurate when facts

are observed instead of opinion• Logic systems (formulas) increase

efficiency, because they decrease the need for decisions

Snijders, C., Tazelaar, F., and Batenburg, R. (2003) Electronic decision support for procurement management: evidence on whether computers can make better procurement decisions. Journal of Purchasing and Supply Management, 9 (2003) 191‐198.http://www.sciencedirect.com/science/article/pii/S1478409203000463


Lesson from Technology


System Created to Increase Value and Performance

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Minimize Risk by Minimizing T&DM


MIT spinout NuTonomy just beat Uber to launch the world’s first self-driving taxi [160826]


Phillips Dutch Plant vs. Foxconn Plant in China

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Robots in China


In Tokyo…• 5M+ vending machines

[VMs] nationwide (highest density worldwide).

• 1 vending machine per every 23 people.

• Annual sales: $60B+.

• Items: Soda, coffee, tea, cigarettes, candy, soup, hot food, sake, beer, fruit, umbrellas, eggs, pet supplies, etc.


https://www.youtube.com/watch?v=iQ_fSP3LGw8

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Paradigm For Observant People: Increase in Quality of Life [“Win-Win”]


Experts [Djokovic, Ali, Curry, Ronaldo]

• Think less• Less Decision

Making• See the future• Game slows down

when you know the future

LS: ObservantRS: Non‐Observant


“I really want to clear my life to make it so that I have to make as few decisions as possible about anything except how to best serve this community,” – Mark Zuckerberg.

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Silos

Planning / Program

ming

Designer

Contracting

Contractors

Users

Manufacturers

Simplicity/Dominant

Inform

ation

Technical Details

30K Foot Level


We need a system to prevent the client from making a decision

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Metrics must be Non-Technical

• Roof material is high performing:

– Tensile strength is 800 PSI– Elongation is 300%– Tear strength is 400 lbs– Xenon testing: 10,000 hrs

• Roof material has been installed and is performing:

– 65 Customer Responses– Average Roof Age: 25 years– Percent Not Leaking: 99%– Customer Satisfaction: 9.8

Non Dominant Dominant


Vendor is responsible for performance information. Buyer should request it.

Performance Info

NO CRITERIA FIRM A

1 Overall customer satisfaction 9.8

2 Percent of roofs that have never leaked 99%

3 Percent of roofs that do not currently leak 100%

4 Average age of roof surveyed (years) 17

5 Total number of roofs evaluated 50

CLIENT

VENDOR


Best Value Approach (Utilizing Metrics in Procurement)

Selection Clarification ExecutionPre ‐

Qualification

Award Contract

All Vendors One Vendor

Differential in capability/expertise[using nontechnical performance metrics]

Technical review of scope and vendor

plan

Weekly tracking of project deviation

by Vendor.

Education of vendors

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Project Requirement/Intent• New laboratory construction.• University campus, fast track project.• Intensive mechanical systems, clean room

environment.• Expected timeframe: 2 years.• Budget: $45,000,000• Full design specifications/drawings

included.


Match performance and Client Requirement

41

RequirementClient

Requirement

# of Projects 1

Type of client University

Type of work Clean Room

Budget $ 45 M

Project Duration 2 years

Cost Deviation ‐

Time Deviation ‐

Client Satisfaction ‐



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RequirementClient

RequirementVendor

Performance

# of Projects 1 7

Type of client University University

Type of work Clean Room Clean Room

Budget $ 45 M $ 50 M

Project Duration 2 years 2.2 years

Cost Deviation ‐ .1%

Time Deviation ‐ 1%

Client Satisfaction ‐ 9.5 / 10

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How Buyer Communicates Project Requirement

• Software package for ERP System• Number of entries per year: 20,000• Number of existing software/platforms

integrated into system: 6• Number of heavy users: 20• Number of organizations using system: 10• Average number of trained personnel: 2


Project Specific Performance

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RequirementClient

Requirement

# of Projects 1

Type ERP

Average budget $ 2.5M

# of employees serviced 1,000

Transactions / month 20,000

Existing interfacing software 6

# of departments 5

Time Deviation ‐

Cost Deviation ‐

Customer Satisfaction ‐


Project Specific Performance

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RequirementClient

RequirementVendor’s Project Performance

# of Projects 1 2

Type ERP ERP

Average budget $ 2.5M $ 3.0M

# of employees serviced 1,000 800

Transactions / month 20,000 22,000

Existing interfacing software 6 5

# of departments 5 5

Time Deviation ‐ .5%

Cost Deviation ‐ 0%

Customer Satisfaction ‐ 9.5 / 10

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Selection PhaseSelection Criteria

1. Level of expertise2. Risk assessment3. Value added4. Interview5. Price

Content– Simple, non-technical.– Project specific.– Centered on

performance metrics.

SelectionPre ‐

Qualification

All Vendors


Submittals and Selection Criteria

• Level of Expertise (LE)• Risk Assessment Plan (RA)• Value Added (VA)• Price• Interview


Project Submittals• Level of Expertise, Risk Assessment, Value

Added– Two pages– Claims and verifiable performance metrics

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Rating System• Two components:

– Claims. – Verifiable performance measurements (VPM)

to substantiate each claim.

• High performance claim with VPM.

• High/Low performance claim with no VPM.• If a decision has to be made.

• Low performance claim with VPM.

6‐10

5

4‐1


Traditional Performance• Company “A” will provide an experienced

project manager, who has delivered many large IT projects with complex systems. In past projects he has received very high client satisfaction with incredible performance.


Traditional Performance• Company “A” will provide an experienced

project manager, who has delivered many large IT projects with complex systems. In past projects he has received very highclient satisfaction with incredibleperformance.

• He has 20 years of experience, is certified in project management, and has participated in over 30 projects.

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Expert Performance MetricsCompany “A” will provide a PM who is:

Experienced with Large Projects– # of projects: 5– Largest project budget: $1.5 Million– Average project budget: $500KHigh Performing– Average Customer Satisfaction: 9.8– Average Cost deviation: 2.5%– Average Schedule deviation: 0%Experience with Complex Projects– Average # of interfacing software packages: 4– Average # of transactions per month: 10,000– Average # of departments/users: 10 departments / 100 users


Traditional Risk Mitigation• Risk: A critical risk in IT projects is the

possibility that the connecting software packages do not integrate properly which can cause enormous delays.

• Solution: Kashiwagi company will do everything possible to discover as soon as possible whether the software packages integrate properly. We have a very successful company risk methodology and refined integration process used in all projects.


Expert Risk MitigationRisk: (Critical/possibility) In 4 of our past 10

projects the client’s connecting software packages were not compatible, (Enormous) the market average is 6 weeks to correct.

Solution: Company “A” mitigation process:– # of projects implemented: 10– (As soon as possible) Discovery within first

month – (Successful) Minimized delay to: 0-1 week– Customer satisfaction of risk process : 9.8/10

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Traditional Value AddedVA Option: Client can upgrade software from

version 2.3 to version 2.5 for an additional $10,000.

Benefits of Option:– New technical system management

possibilities.– Online patching to reduce downtime.– Most up-to-date virus protection software.– Increased processing speed.


Expert Value AddedVA Option: Client can upgrade software from

version 2.3 to version 2.5 for an additional $10,000.

Benefits of Option: (4 Clients)• Reduced downtime by 40%.• Increased processing speed by 20%, users

surveyed rated impact to processes speed as 9 out of 10.

• Average duration used by clients is 5 years. YTD savings of $25,000. ($5,000 / year)



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RequirementClient

Requirement

# of Projects 1

Type ERP

Average budget $ 2.5 M

# of employees serviced 1,000

Transactions / month 10,000

Existing interfacing software 3

# of departments 6

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RequirementClient

RequirementVendor’s Project Performance

# of Projects 1 2

Type ERP ERP

Average budget $ 2.5 M $ 3.0 M

# of employees serviced 1,000 800

Transactions / month 10,000 12,000

Existing interfacing software 3 5

# of departments 6 5


Interviews• 15 - 30 minutes

• Key Personnel (assigned to project):– Project Manager– Lead technical expert

• Individual interviews

• Non-technical backed by VPM


Looking for an Expert (KSMs)• Simple and dominant.• Understands people.• Uses metrics to communicate.• Is clear and concise. • Can see the project from beginning to end.• Minimal thinking and decision making.• Calm and natural.

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Interview Questions1. How many times has your company (you

personally) provided the scope of services and what were the results?

2. Please explain the difference between this required scope of work and your previous similar projects?

3. What are the risks that you do not control, and how are you going to mitigate the risks?

4. Why were you selected to lead this project? What value do you bring?

5. What is your understanding of the clarification period if you are rated the highest performer?



Dominance Check• Check ratings are dominant and supported

by metrics.• Check if identified best value vendor is

within budget constraints.• Check references and metrics of identified

best value vendor.

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Arizona State University IT Networking Contract


Arizona State University Managed It Services Agreement (MSA)

• ASU IT Networking previously performed in-house

• ASU IT Network Details– 76,000 Students and Faculty– 5 yr. Contract– 6 Different Campuses

• Contract awarded to CenturyLink (Qwest) in 2009


Final ASU IT Networking Contract

• ASU IT Networking previously performed in-house

• ASU IT Network Details– 76,000 Students and Faculty– 5 yr. Contract– 4 Different Campuses

ASU MaintenanceAnnual Cost

Qwest MaintenanceAnnual Cost

Total Annual QwestSavings

Total Qwest AnnualValue Added and Savings

$13,981,934 $12,500,000 1,481,934 2,756,934

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Dominant Information• Dominant Performance Indicators

– Overall cost of network– Top of the line networking– Network Sustainability/Accessibility– Customer Satisfaction

• Documentation of Deviations to financials

Dominant MeasurementsASU

Current Qwest

Value Add

Overall Cost of NetworkAnnual IT Spend Ratio (new vs maintenance) 17/83 48/52

Top-of-the-line Networking% Converged 7% 100%% Mobility 2% 100%% Equipment not out-of-date 58% 95%

Network Sustainability/Accessibility% Equipment not needing replacement (Not at end-of-maintenance) 88% 100%

Customer SatisfactionSpeed/Quickness Available (Wired / Wireless):% 1Gb - Wired Connections 59% 98%% of 300Mb - Wireless Connections 8% 32%

Dev. Cap, Exp. Maint. FOE Costs Total

Year 1 Exp. 4,100,000$ 1,652,000$ 6,818,000$ 12,570,000$

Ex. Risk X 100,000$ 100,000$ -$ -$ 100,000$

Ex. Risk X 100,000$ 100,000$ (25,000)$ -$ 75,000$

Ex. Risk X 50,000$ -$ 50,000$ -$ 50,000$

Ex. Risk X 25,000$ 25,000$ -$ -$ 25,000$

New Year 1 275,000$ 4,325,000$ 1,677,000$ 6,818,000$ 12,820,000$


Dominant Performance Results

• BV PIPS process increased performance, creativity, accountability, professionalism, value to the owner: (4.71 to 8.75, 40% increase)

• BV PIPS process minimized transactions, bureaucratic constraints, decision making, risk, and wasted effort by 30% (5.33 to 8.29)

• Customer satisfaction by top management (5.33 to 9.75, 44% increase)


Achieved the following• BV PIPS process performed the following:

– Moved decisions through the bureaucracy– Minimized difficulty in getting contract

approval– Minimized the decisions made by the client– Identified key information that minimized risk

in the contract

• Top management knew of no other process that could have successfully outsourced the service, while minimizing all risk.

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Statement by ASU IT Visionary• “Am I dreaming? Am I missing something? When do all

the problems begin?”

• “Am I missing something, or have we just made one of the biggest changes with no problems?”

• “This is a unqualified success of the best value PIPS process!”

Adrian Sannier, ASU UTO director


Business Outcomes

Pre MSA MSA (2010) MSA (2013)

MSA Baseline $12.29M $10.81M $11.96M

CL Business Outcomes: Costs

Growth – Out of Scope

N/A N/A $1.15M

Value Add N/A $0.43M/yr $0.98M/yr*see appendix for details

Net MSA $12.29M $10.38M $9.83M


CL Business Outcomes: Reliability & Satisfaction

Business Outcomes

Pre MSA MSA (2010) MSA (2013)

# of Major Outages

N/K 37 11

% Uptime 99.802 99.989 99.998

Customer Satisfaction

3.6 3.71(max 4.0)

3.81(max 4.0)

% of Tickets within SLA

94% 97% 97%

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Business Outcomes: TechnologyBusiness Outcomes Pre MSA MSA (2010) MSA (2013)

% Networksupported

(Not at end‐of‐maintenance)89% 99% 99%

% 1Gb‐Wired Connections

57.0% 71.5% 96.0%

% Wireless(n) 9.0% 8.7% 92.6%

IT Spending Ratio

6/94(New vs. Maintenance)

26/74(New vs. Maintenance)

56/44(New vs. Maintenance)Includes New GrowthIncludes Wireless‐n


Description 2008 2013

KPI DashboardImprove our Capabilities of

Measurement

Manual KPI tracking Online KPI tracking (weekly/monthly)

Change MgmtReduction in Outages

Not Formally Documented

Formal CM ProcessITIL based

Detailed MOPsEngineering Review

Business Outcomes: System/Process

Project TrackingCreate transparency

Manual Project TrackingSharePoint

New Growth and Operations Projects


Description 2008 2013

Engineering and Architecture reviewsDesign meets Industry best

practices

Single level of Engineering review

Multiple levels of Engineering review

Local/UTO/CiscoATAC CCIE

Redundancy TestingReduction in Outages

Not scheduled Bi‐annual Testing Mitigate any issue

Business Outcomes: System/Process

SecurityMeet Audit Requirements

One Network, Allow Everything

NG‐FirewallsSegmentation

Malware ProtectionLogging

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Arizona State University turning into a measured university• ASU has embraced and implemented the research internally

– ASU Research Leaders• Business Services (Ray Jensen)• Procurement (John Riley)

• Major Tests– Dining Services - $420M, 10 yr contract – largest in dining history– Sports Marketing - $80M, 10 yr contract – lower tier to Top 4 in US– Student Recreational Center Equipment - $840k, 5 yr contract – new

outsourced model– Student Recreational Center Services– UTO IT Network – $50M in process – first of its kind– Parking Structure - $50M in process – first CPMG test at ASU ($6M rebate

due to process efficiency)– Furniture – late 2008 – measured, value, meet expectations– Roofing procurement– Document control/copy service– Television Services


US Army Medical Command

Before report:• Did not have a way to

track projects. • Unaware how much

cost or time deviation was occurring.

• Thought the vendors were “cheating” them.

• Could not quantify problem was coming from.

General Overview MEDCOM

Total Number of Projects 619

Total Awarded Cost ($M) $973.94

% Over Awarded Budget 5.50%

Client 4.13%

Designer 0.60%

Contractor 0.00%

Unforeseen 1.31%

% Delayed 41.13%

Client 30.84%

Designer 0.25%

Contractor 1.48%

Unforeseen 8.57%


Overall MEDCOM Performance by NTP 2007-2011

Completed Projects NTP 2007 NTP 2008 NTP 2009 NTP 2010

# of Projects 110.00 129.00 122.00 92.00

Original Awarded Cost ($$) $181.9 M $177.3 M $183.99 M $107.10 M

Total % Over Budget 6.56% 5.96% 4.68% 3.61%

% due to owner 4.58% 5.59% 3.61% 2.36%

% due to Designer 0.00% 0.14% 0.00% 0.21%

% due to contractor 0.11% -0.17% -0.01% 0.08%

% due to unforeseen 1.88% 0.40% 1.09% 0.96%

Total % Delayed 51.56% 48.43% 36.77% 28.53%

% due to owner 41.38% 39.96% 28.51% 16.53%

% due to Designer 0.00% 0.49% 0.00% 1.32%

% due to contractor 1.86% -0.02% 1.29% 0.12%

% due to unforeseen 8.32% 8.01% 6.97% 10.56%

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Contractor Performance Lines


No Project Location Risk # Contractor NTP of Project

1 Provide Emerg Power for Medical Data Sys Ft. Lewis, WA (MAMC) 34.19B 3/16/2010

2 Install Clean Steam Generator Bldg 1425 Ft. Detrick, MD 28.86A 10/14/2009

3 Mod. 11th Flr Inpatient Pysch Ward Ft. Bliss, TX (WBAMC) 23.93A 12/8/2009

4 WP/Construct Expand SE Parking Ft. Gordon, GA (EAMC) 22.99B 9/28/2009

5 Renovate and Expand Polytrauma Center Oklahoma City, OK (VAMC) 16.61C 9/30/2009

6 Repairs/Replacement of Veterinary Finishes WRAIR, Silver Spring, MD 16.33A 10/25/2006

7 Replace Shower Pans Ft. Gordon, GA (EAMC) 16.09D 9/28/2008

8 ER Treatment Room Repairs Ft. Bliss, TX (WBAMC) 15.97B 10/19/2009

9 Repair Buildings 1776 and 521 Ft. Detrick, MD 15.96D 10/22/2010

10 Modernize Utilities & Medical Functions at Health Clinic, Bldg 4 Presidio of Monterey, CA 15.60 A 11/30/2009

Top 10 Risk Projects


Top Risks - $ & Days Impacts

Causes of risk% impact

on schedule

% impact on budget

Main Source entity

Modification in design/specs/scope 24% 52% Facility/COE

Additional scope of work 14% 26% Facility

Not described 11% 12% Unknown

Delay in approval 15% 2% COE

Sub-Contractor issue 4% 5% Facility/Contractor

Unknown Site condition 8% 8% Unforeseen

Change in schedule 17% 0% Facility/COE

Contractor generated 5% 0% Contractor

Material related 4% 0% Contractor/Facility

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Best Value Approach

• 24 years• $17.6M Research Funding• 1,900 tests delivering $6.6B of services• 98% customer satisfaction• Nine countries, 33 states• Minimized 5 - 30% project cost• Increase quality, customer satisfaction and vendor profit• Most licensed technology at ASU [most innovative

university for two straight years] over the last 20 years [49 licenses]


Best Value Approach (BVA)• Created in 1991• Logic: Information Measurement Theory (IMT)• New procurement model BV PIPS• New Project Management Model• New Risk Management Model• Research based program:• Based on “no influence” model

• Only research program in the world that has been audited four times by independent auditors


BestValue World Activities

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Tests in U.S. Over 24 years• State of Hawaii• State of Utah• State of Georgia• United Airlines• Schering Plough• Entergy• Federal Aviation Administration• Harvard University [2005 Corenet Global Innovation of the Year]• U.S. Army Medical Command• State of Oklahoma• University of Minnesota and other states• State of Arizona Department of Environmental Quality• Kamehameha Schools


Traditional Model vs. Best Value

• 5 Different Users, 31 projects, 30 different services

• Cost of services decreased on average by 31%.

• Suppliers were able to offer the buyer 38.5% more value, totaling up to $72.76M.

• Average customer satisfaction of services provided increased by 4.59 points on a 1-10 scale (134% greater than the traditional customer satisfaction rating).

Criteria Traditional PIRMS Factors

# of Outsourced Services

Cost of Services $274,480,342 $189,001,943

Added Value ‐ $72,762,248.60

Average Customer Satisfaction (CS) 3.43 8.02

Overall Comparison

31


1st Government Test in Netherlands $1B Infrastructure Delivery

• Infrastructure repair critically needed [drivers spend 1-2 hours on road going and coming].

• Procurement and execution takes too long [12 years].

• Over-management of vendors• 16 project, 6 awards, $1B test

of best value PIPS.• Goal is to finish 10 projects in 3

years.

87

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30

www.ksm‐inc.com 88KASHIWAGI SOLUTION MODEL INC88

• Program results: 15 projects finished (expectation was 10)

• Delivery time of projects accelerated by 25%

• Transaction costs and time reduced by 50-60% for both vendors and client

• 95% of deviations were caused by Rijkswaterstaat or external [not vendor caused]

• Organizational change was the biggest challenge

• NEVI , Dutch Professional Procurement Group [third largest in the world] adopts Best Value PIPS approach

• Now being used on complex projects and organizational issues

Results


NEVI [3rd largest professional procurement group after ISM and NIGP]: BV is Mainstream Approach

Program Dir. of Training: Jeroen van de Rijt


School District 287 ReportProject Name Value

($M)Percent Complete

Duration (Months)

Schedule Delay %

Change Order

ClientSatisfaction

NEC – General Construction

$25.9 100% 17 0% 2.8% 10.0

NEC – Technology Systems

$1.6 100% 7 32.7% 0.9% 7.6

NEC – Demountable Walls

$2.0 100% 7 0% 0.4% 9.0

TOTAL: $29.5 100% 11 11% 2.9% 8.9

Notes:1. Technology Systems vendor was not selected using BV2. CM done by owner saving client $2.6M3. Tom Shultz won the 2011 IFMA FM of the Year award

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Tests in U.S. Over 25 years• State of Hawaii• State of Utah• State of Georgia• United Airlines• Schering Plough• Entergy• Federal Aviation Administration• Harvard University [2005 CoreNet Global Innovation of the Year]• U.S. Army Medical Command• State of Oklahoma• University of Minnesota and other states• State of Arizona Department of Environmental Quality• Kamehameha Schools


Best Value Approach in Oklahoma

Steve HagarCentral Purchasing Director

Licensed by ASUCertified BV Expert


Longest Sustaining U.S. Effort

State of Oklahoma Central Purchasing Best Value Project Results

# of Awarded Projects 19

# of projects given to lowest bidder 12

# of cancelled projects (not awarded) 6

Estimated $ of BV Projects Procured $ 137.7/$208.7M

Average $ per project $ 6.2M

Estimated $ Cost Avoidance $ 71.8M

Average $ cost avoidance per project $ 3.26M

Customer Satisfaction 9.0

# of customer satisfaction surveys 9

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Different Services Procured

• Commercial Off the Shelf (COTS) Tax Software ($12M savings)• Enhancement of Workforce Job Website• Electronic Document Management for Construction Documents. • Computer to Plate Printer (better system than specified)• State wide light bulb and lighting fixture contract ($100K rebate)• Emergency hazardous Waste Removal contract (no protest)• Construction Commissioning Services• State Mental Health Services ($3M/year less)• Performance Measurement of Federal Grants• New Construction and Renovation• Juvenile Center and Services (overcame protest) (cancelled)


Advancements• Norway and Poland running first tests• India is importing technology• Saudi Arabia is moving ahead with

implementation• State of Utah returning to BVA after 16

years of first implementation• Education programs flourishing in Phoenix

metropolitan area


BVA Requirements

• Make it simple by observation

• Do not make stakeholders think, make decisions

or stress

• Minimize everyone’s work load

• Minimize importance of documentation and

meetings

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Main Take Aways• We use metrics to make things simple so

we don’t have to make decisions.

• Metrics are a way so that we don’t have to be an expert in what we are buying.

• Metrics allows us to know how expert someone is without a lot of work.


Lessons Learned from

Professional Services Contract


Outline• House Exercise

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Best Value Approach

• 24 years• $17.6M Research Funding• 1,900 tests delivering $6.6B of services• 98% customer satisfaction• Nine countries, 33 states• Minimized 5 - 30% project cost• Performed two longitudinal studies that identified the

biggest issue in the delivery of services

www.ksm‐inc.com 101KASHIWAGI SOLUTION MODEL INC 101

Biggest Issue: Management of the Expert


Minnesota Tests [6 years]General Overview Overall Group 1 Group 2 Group 3 Group 4

Total Number of Projects 399 8 21 10 355

Total Awarded Cost ($M) $434.88 $37.81 $17.24 $5.07 $332.70

Overall Change Order Rate 8.83% 3.73% 4.04% 1.27% 10.16%

Client 7.61% 2.15% 1.08% 0.33% 8.83%

Designer 0.69% 1.68% 2.07% 0.63% 0.33%

Contractor 0.01% ‐0.21% ‐0.17% 0.00% 0.01%

Unforeseen 0.52% 0.12% 1.06% 0.31% 0.51%

Overall Delay Rate 47.17% 35.31% 1.59% 16.38% 51.68%

Client 21.92% 15.26% 0.00% 7.41% 24.13%

Designer 4.47% 5.69% 1.59% 8.97% 4.48%

Contractor 2.65% 10.93% 0.00% 0.00% 2.42%

Unforeseen 4.54% 3.42% 0.00% 0.00% 5.04%

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US Army Medical Command [5 years]

Before report:• Did not have a way to

track projects. • Unaware how much

cost or time deviation was occurring.

• Thought the vendors were “cheating” them.

• Could not quantify problem was coming from.

General Overview MEDCOM

Total Number of Projects 619

Total Awarded Cost ($M) $973.94

% Over Awarded Budget 5.50%

Client 4.13%

Designer 0.60%

Contractor 0.00%

Unforeseen 1.31%

% Delayed 41.13%

Client 30.84%

Designer 0.25%

Contractor 1.48%

Unforeseen 8.57%


Traditional Procurement Model

• Buyer is the expert• Environment is complex• Vendors are the constraint• More structure and activity is

required• Focus on making vendor change• Results are slow• The situation is identified as

complex or dynamically changing

104

Reactive


• Focus on alignment of expert vendors.

• Identify and utilize expertise.

• People doing the work are the experts.

• Focus is on experts using their expertise.

• Minimize MDC

• Experts can see into the future and minimize their decision making

Proactive

Owners Utilize Expertise

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MDC vs. Utilization of Expertise

High

I. Price Based

II. Value Based

IV. Unstable Market

III. Negotiated‐Bid

Designers and engineers do not know

Procurement system uses Management, direction, and control

No transparency

Buyer selects based on price and performance

Vendor uses schedule, risk management, and quality control to track deviations

Buyer practices quality assurance

Perceived Competition

Perform

ance

Low

High

Minimized competition

Long term

Relationship based

Vendor selected based on performance

Utilize Expertise (No Thinking)

Manage, Direct and Control [MDC] (Influence)


High

Low

Owners

“The lowest possible quality that I want”

Vendors

“The highest possible value that you will get”

Minimum

MDC Systems result in adversarial environment and reactive behavior

High

Low

Maximum


Observation and Deductive Logic• Owner/buyer control lead to the degradation of industry

expertise and quality • Contracts have little value in ensuring success• Management, direction and control used to minimize risk

increases risk• Experts have no risk• Expert vendors should write their own scope of work• The buyer/client causes over 90% of project deviations

and risk• Passing of information should be minimized

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There is something wrong with an inefficient micro-managed system…..

There is too much work….

Everyone has to do everything, and no one has the time to succeed….

Performance will not go up

The only way to survive is through relationships

This is not an efficient or successful environment


And no one quite knows what it is…


1976 (41)

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Change in Approach [BVA]• Problem was me and I didn’t even know it• I put rules on myself• Do not make people “think” or “make decisions”• Talk less• Talk simple• Do not talk unless asked• Do not try to influence or control• You can possibly change yourself, you cannot

change anyone else• Accept everyone for who they are

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Natural Laws

115

Present FuturePast

# ofNatural Laws

# ofNatural Laws

# ofNatural Laws

100% Exist 100% Exist 100% Exist

Natural Laws are discovered and not created

= =


Conditions Always Exist

Conditions are unique

116

Present Future

Unique Conditions

Unique Conditions

Unique Conditions

Past


Unique Conditions are Related

Conditions are unique and change according to natural laws

117

Conditions Conditions Conditions

Past Present Future

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Unique initial conditions

Unique final conditions

Time (dt)

Natural Laws Natural LawsNatural Laws= =

The Event


Unique initial conditions

Unique final conditions

Time (dt)

Natural Laws Natural LawsNatural Laws= =

The Event of Marriage: the Verification and Validation of Natural Laws


EVENT

Time

Only One Outcome

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EnvironmentEnvironment

More Likely to:

1. Believe in luck and chance2. Blame others3. Be surprised4. Be emotional5. Try to control others6. Feel controlled by others7. Be reactive

More Likely to:

1. Plan things in advance2. Be accountable3. Have vision4. Listen to others5. Think of other people6. Be at peace7. Be organized

Influence No Influence

Influence vs. “No Influence”

By Success model, NO control or Influence is reality


EnvironmentEnvironment

More Likely to:

1. Believe in luck and chance2. Blame others3. Be surprised4. Be emotional5. Try to control others6. Feel controlled by others7. Be reactive

More Likely to:

1. Plan things in advance2. Be accountable3. Have vision4. Listen to others5. Think of other people6. Be at peace7. Be organized

Influence No Influence

Which Model Increases Risk?

Risk Test identifies NO control or Influence as accurate model


V BC

Buyer Controls Vendor Through Contract

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V BC

Vendor Manages/Minimizes Risk With Contract


Approaches to Procurement

Know Nothing• Assume that we know nothing• Minimize decision making• Do not manage, direct and

control [MDC]• Utilize expertise • Make experts identify the

future• Simple, metrics and risk that

expert does not control

Know Everything• Know everything• Decision making• Manage, direct, and control

(MDC)• Do not utilize expertise• Buyer tells expert what the

expert will do• Technical details


Traditional Relationship Based MDC vs. Utilization of Expertise [Logic vs. Control]

High

I. Relationship or Price Based

II. Best Value

IV. Unstable Market

III. Negotiated‐Bid

Land of the blind

Land of busybodies

Group therapy

No accountability

Everyone has great value

Transparency

Language of metrics

Identify and utilize expertise

Value of expertise increases

Lower cost and high quality

Perceived Competition

Perform

ance

Low

High

Minimized competition

Long term

Relationship based

Vendor selected based on performance

Utilize Expertise (No Thinking)

Manage, Direct and Control [MDC] (Influence)

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“No control”• Control and influence [form of control to

alter final outcome] causes risk and transactions

• Control is not used in the Best Value approach

• BVA is different because there is no use of control

• Cannot override NL


Mission: Increase quality of environmental engineering servicesTimeline: 1 year

Projects: • Yuma: Air Quality• ASRAC: Water Quality• Brownfields: Waste Management

Executive Team:• Teena Ziegler• Erik Massey


Process [creating a list of experts] Become Simpler and Less Expensive

Criteria % Diff Traditional Best Value

Required time to evaluate

proposals‐ 95% 286 hrs. 13 hrs.

Protests 0% 0 0

Avg. Customer Satisfaction of

process (1‐10) 63% 5 9

ADEQ Administration Cost ‐ 96% $ 98,520.00 $ 3,840.00

ADEQ Admin. Cost Savings $ 94,680.00

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Case Study [Traditional vs. Best Value]

ADEQ PM CriteriaPinal County

(Traditional)

Yuma

(Best Value)

Total Cost of Projects $400K $138K

Overall Client Satisfaction 6/10 10/10

Project Duration (days) 730 352

% Total Schedule Deviation 150% 23%

% Schedule Deviation Due to ADEQ ‐ 23%

% Schedule Deviation Due to Vendor ‐ 0%

% Cost deviation 300% 0.5%*

% of Milestone Deliverables Requiring ADEQ Revisions 100% 0%

% of ADEQ Time Required to Complete Vendor

Milestones50% 15%

*Deviation caused by unforeseen risk (EPA implementing new requirements)


Overall Supply Chain Performance

• .

No. Criteria Traditional Best Value

1 Total # of projects 35 60

2 Total cost of projects $5.5M $5.8M

3 % of projects SOW completed in fiscal year 50% 99%

4 # of ADEQ PMs to manage projects 7 5

5 Customer satisfaction of vendor performance 6.9/10 8.3/10D1 (7) D3 (9)

*Data was adjusted due to project de‐scoping (29 projects, $1.2M (22%), 479 days (4%)

• ADEQ PMs increased work capacity by 140%

• Vendors performed 94% more work in 33% less time

• ADEQ customer satisfaction of vendor work increased by up to 30%


Communication

How much everyone is talking

How satisfied and understanding everyone is

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Measuring our Value

How much we DO How much we save, improve, add value


Judging our worth

How busy we are How much we produce


Don’t let the Vendor Fool You!

An Expert will have a Plan

before the Contract is Signed

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Hiring an Expert Vendor


Clarification Phase

Vendor clarifies their proposed scope (plan): – Deliverables [performance metrics].– Detailed and milestone schedule.– Risk items and risk mitigation.

Selection ClarificationPre ‐

Qualification

All Vendors One Vendor


Simple Expert Plan[Performance and Risk]

Deliverables[metrics]

Milestones [metrics]

Other Stakeholders [Client, 3rd party, etc]

Lack Information

Project Start

Project End

Expert Estimate

Mitigation Plan

• Proposal based on Client RFP [requirement].• Must meet all client requirements [RFP].

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Relationship Between Events

• Transparency• Proactive

behavior• Preplanning• Minimization of

transactions

Initial conditions

Final conditions

Time

Laws Laws

(Control, impact, and influence)

Pre‐Award Meeting

Deviations

Risks

RMP and Measurements

Us

Critics, decision makers who show up at the wrong time

MilestoneSchedule


BV Approach (LS) vs. Traditional (RS)

• Metrics• Minimizes thinking• Uses expertise to create plan

from begin to end• Plan is non-technical• In terms of stakeholders • Less client decision making• More efficient • No influence (accept others)

• Details• Increased thinking• Client creates plan (MDC)• Plan is technical• In terms of technical details• More client decision making• Less Efficient• Influence (do not accept

others)


1935: Boeing develops the 299 prototype for an army long-range bomber contract.

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• The 299 was one of the most advanced planes of the time.

• It possessed greater speed, payload capacity and range than the competition.

• It was openly understood that the contract would go to Boeing, following the formality of final testing.

ContractCompetitors Cruise speed Range and bomb load Service ceiling Armament

Boeing 299 204mph 2040 miles @ 2573 lbs. 24600’ 5 guns

Douglas DB1 167mph 1150 miles @ 2496 lbs. 23900’ 3 guns

Martin 146 183mph 1237 miles @ 2260 lbs. 24000’ 3 guns

Boeing 299 Prototype


However, during a final check flight, the 299 crashed shortly after takeoff, killing the pilot and another crew member.


• Army investigation called the plane’s systems too complicated to fly (The pilot had forgotten to release a new elevator locking system).

• The Army contract for an initial 133 aircraft was given to Douglas for a smaller, less capable airplane.

• Continued testing of the remaining 299 prototypes found no problems with the plane’s design or construction.

Investigation of Plan Crash

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• Suggestions based on conventional wisdom said that 299 pilots needed more training.

• Test Pilots said extra training was not the answer because the pilot (Major Hill) killed in the crash was already highly trained as the Army's chief of flight testing.

• Test pilots said that there needed to be a method of measurement to ensure that each step in the plane’s operation was carried out.

Conclusions of Crash


The solution to the complexity issue was a checklist, which covered step-by-step tasks for takeoff, flight, landing, and taxiing, giving both the pilot and co-pilot responsibilities (accountability).


Results of the List

• The remaining prototypes with the checklist procedure in place flew 1.8 million accident-free miles.

• Since that time, the Checklist has become a universal procedure in all of aviation.

• Let us compare how successful the plane became when the checklist procedure was instituted.

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The competitor that was awarded the original small contract became the B-18 Bolo. 350 total were eventually produced. Not being a very good bomber, most were used as patrol planes.


The Army renamed the 299 as the B-17 Flying Fortressand nearly 13,000 were ordered.It played a pivotal role in the war.


Clarification Documents [Plan]

1. Scope of work2. Project Plan3. Price schedule4. Detailed and milestone schedules5. Performance metrics6. Weekly risk report (WRR)7. Risk management plan (RMP)8. Final Presentation

150

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Scope of Work


Scope of Work: Example Private School (Vendor Perspective)

Workday Service Subscription Description Excluded from Implementation

Benefits - LDP Benefits enables the set-up of

benefit plans, benefit groups,

eligibility rules and benefit rates;

maintenance of enrollment event ….

Custom Reports Exluded (WD

provides delivered reports and

dashboards and has included ….

Absence Management - LDP

Absence Management supports the

management of leave of absences

and time off. …



dashboards and has included ….

Time Tracking - LDP Workday Time Tracking enables the

collection, processing, and

distribution of time data for a global

workforce. …



dashboards and has included 16…

Payroll for United States - LDP

Workday Payroll for US supports the

creation and management of Payroll

for U.S. employees. Configure

earnings, deductions, accumulations,

and …..



dashboards and has included 16

hours of knowledge transfer to assist

..

Cloud Connect for Benefits - LDP

Cloud Connect for Benefits extends

Workday HCM by providing

integration to a ….


provides delivered reports …..

Core Human Capital Management - LDP

Core HCM includes management of

the unified worker system of …



dashboards and …

• No summary

• Complex

• No deliverables


• High Level Summary: upgrade legacy system to ERP capability.

• Major Deliverables– Convert old system to new system– Test new system for functionality– Train 4 stakeholder departments– Change management

• Firm Fixed Price: $250K

Scope of Work: Example Private School (Client Perspective)

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Scope of Work: Example Private School (Client Perspective)

Deliverables Primary Owner DateDesign Analysis —Vendor

Integrations

Integration

Consultant

4/25/2017

Design Analysis — Client

Integrations

Client Technical

Analyst

4/28/2017

Design Analysis – Business

Processes Vendor Value Add

Principal Consultant 5/15/2017

Design Analysis ‐ Reports Client Team 8/2/2017

“What’s In” “What’s Out”


Project Plan


Impact of utilizing expertise to create a simple plan upfront?• Clients understand what they need.

• Know the impact of MDC.

• Minimize MDC.

• More stable.

• If clients do not understand what they need upfront, they will complain later.

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Project Plan: Example Private School (Vendor Perspective)

855Total Line Items


Project Plan: Example Private School (Client Expectations)• Simplify project.

• Main actions items per phase.

• Resources required from client.

• Responsibilities of the client and vendor.

• Anything else client needs to know.


Project Plan: Example Private School (Client Perspective)

imeline (Weeks) Project Plan Architect Configure Test Deploy Post Prod Support Total

Recommended Timeline

4 8 11 21 6 7 57

Estimated Start 12/22/2016 1/19/2017 3/18/2017 6/1/2017 10/26/2017 12/14/2017 12/22/2016

Estimated End 1/19/2017 3/18/2017 6/1/2017 10/26/2017 12/14/2017 1/25/2018 1/25/2018

Stage 1: Planning

Stage 2: Architect

Stage 3: Config & Prototype

Stage 4: Test

Stage 5: Deploy

Each Phase:• Assumptions• Resource Breakout

o Major client departmentso Estimated hours needed (total and FTE)

• Deliverables

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Project Plan: Example Private School (Client Perspective)

General AssumptionsClient

Questions/ConcernsVendor Response

Professional Services in this SOW will be performed ~70% offsite and 30% onsite at a client location.

‐Vendor’s breakout of presence by major activities?

‐How do we know this is the right approach?

‐What other off‐site tools [besides emails and phone] will be used to communicate?

Vendor will provide presence by major activities for each stage/roles.

Typical approach for commercial side is 80% offsite and 20% onsite.

Additional offsite tools: WebEx, Skype, internal collaboration tool.


Project Plan: Example Private School (Better Client Perspective)

Team/GroupPlanning Stage Estimated

Hours

Estimated Full Time

Equivalent (FTE @ 40 hours a

week)

PMO Resources 472 3.0

HCM Resources 440 2.75

Finance/Payroll Resources 440 2.75

IT Resources 360 2.25

Totals 1712 10.75


Price Schedule

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Price Schedule: Example Private School (Vendor Perspective)

Fee SummaryProject

PlanArchitect

Configure/

Prototype

Test (E2E

and ParallelDeploy

Post

ProdTotal

Professional

Services Hours276 1044 1578 1629 505 84 5116

Delivery Assurance

Checkpoints150

T&M Fees $71,160 $228,140 $333,610 $349,130 $112,575 19,980 $1,154,490

• Unclear format• Costs are unclear• No monthly schedule


Price Schedule: Example Private School (Client Perspective)

Price Schedule

Invoice Month

Task/ActivityInitial Invoice

AmountInvoiced Date

Date Payment Received

Jul Data Analysis $2,500.00 1/29/2016 7/29/2016

Aug Draft Report $50,000.00 1/29/2016 8/15/2016

Sep … … … …

Oct … … … …

Nov … … … …

Dec Final Report $3,500.00 1/29/2016 12/15/2016

• Monthly schedule• Major tasks• Invoiced date and receipt


Detailed & Milestone Schedules

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Milestone Schedule Example

Major StagesStage 1: PlanningStage 2: ArchitectStage 3: Config & PrototypeStage 4: TestStage 5: Deploy

Task Name Start Finish

BUSINESS READINESS AND EDUCATION

PLAN STAGE Thur 12/22/16 Thu 1/19/17

CHANGE AMBASSADOR NETWORK Thur 12/22/16 Thu 1/19/17

Recruit members Thur 12/22/16 Thu 1/19/17

Change Ambassador Kickoff Meeting Thur 12/22/16 Thu 1/19/17

ARCHITECT STAGE Thur 1/19/17 Mon 3/20/17

TRAINING STRATEGY Thur 1/19/17 Mon 3/20/17

Develop high level training strategy with KS Thur 1/19/17 Mon 3/20/17

Review/share draft with PMO and project team Thur 1/19/17 Mon 3/20/17

Finalize training strategy Thur 1/19/17 Mon 3/20/17

CONFIGURE & PROTOTYPE STAGE Sat 3/18/17 Thu 6/1/17

CHANGE READINESS ASSESSMENT Sat 3/18/17 Thu 6/1/17

Change Readiness Workshop (review/refine initial maps/questions) Sat 3/18/17 Thu 6/1/17

Deploy 2nd Change Readiness Assessment Sat 3/18/17 Thu 6/1/17

Compile survey results and prepare presentation of results Sat 3/18/17 Thu 6/1/17

Review survey results with project team and Change Ambassadors Sat 3/18/17 Thu 6/1/17

TEST STAGE Thur 6/01/17 Thu 10/26/17

COMMUNICATION PLAN Thur 6/01/17 Thu 10/26/17

Continue deployment of communication and user adoption events Thur 6/01/17 Thu 10/26/17

DEPLOY STAGE Thur 10/26/17 Thu 12/14/17

CHANGE READINESS ASSESSMENT Thur 10/26/17 Thu 12/14/17

Change Readiness Workshop (review/refine initial maps/questions) Thur 10/26/17 Thu 12/14/17

Deploy 3rd Change Readiness Assessment Thur 10/26/17 Thu 12/14/17

Compile survey results and prepare presentation of results Thur 10/26/17 Thu 12/14/17

Review survey results with project team and Change Ambassadors Thur 10/26/17 Thu 12/14/17

Vendor Perspective

Client Perspective


Performance Metrics


Performance Metrics: Example Private School (Vendor Perspective)

• Project metrics will be measured in two ways:o Detailed weekly project status report

Summary dash board (status, schedule budget) Key accomplishments by functional area, upcoming activities Key

Issues, Risks and Milestones)o Monthly summary dash board for Steering Committee, Management

reporting • Post Implementation metrics

o Rolling Adoption; Onboarding, Vendor updates, Talent etc.o Open enrollment, Quarterly Payrollo Brainstorms - Identify requirements that may not be met or fully met

by Vendor

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Key MilestonesLast

PeriodThis

Period

Baseline Start Date

Scheduled

Complete

ActualDate

Planning :* Project Planning.• Training•Provision Tenant• Complete A&C Workbooks – HCM. Benefits, Absence

12/12/16 01/6/17 1/6/17

Architect :• Requirements gathering –• Initial Prototype Tennent P0 transition• Integration & Conversion session • Reporting session• Workbooks for payroll & Time tracking• Integration DA Overview

Not started

1/9/17 2/10/17 2/10/17

Configure & Prototype• Build out P0• Requirements gathering ‐ behind schedule• Integrations & Conversion• Prototype Configuration DA Review

2/13/17 4/21/17 4/21/17

Testing• Test Scripts• Parallel & System Testing

4/24/17 9/1/17 9/1/17

Status Summary

Budget:$ xxx hours of x,xxx hours (xx%)

Project Notes • Summary Notes:• E.g. Planning Complete• Workbook sessions conducted

Accomplishments • Completed Project Planning• Weekly follow up with each Functional Area for issues

etc.• Support for Absence and Time Tracking

Upcoming Activities(next 2 weeks)

• Discuss Scope for On‐ Boarding• Confirm next steps for Payroll to GL Integration• Approval of Requirements gathering from client

functional Areas

Engagement/Project Manager: Joe Schmoe

Target Go‐Live: October 2017

Status as of: 12/12/2016 Overall Status:

Budget Status:

Completed

On Track

At Risk

Behind

Performance Metrics: Example Private School (Vendor Perspective)


Performance Metrics: Example Private School (Client Perspective)

• Customer Satisfaction – This will be measured at three levels (End Users, Project Team, Executives/Sponsors)

• # of Users Trained – This will be measured with the Change Management Lead

• % of Training Completed by Client Project Team – This will be measured in the LMS solution provided by Vendor.

• Average Number of Days to Review Documents – This will be measured in the Project Management Tool (Sharepoint or Central Desktop)

• # of Support Tickets Logged to Vendor Support Regarding the Software – This will be measured by the Premium Customer Success Manager using the Vendor Support System

• # of Test Scenarios tested in each functional area – This will be measured with the Client Test Lead and captured in the Project Management Tool


Risk Management Plan

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RMP: Standard• Simple• Steps• Metrics


RMP: Example Private School (Vendor Perspective)

Risk Risk Mitigation ApproachRisk

ImpactPlan of Action

Ineffective approval, sign‐off and decision making

A strong commitment to decision making and sign‐off is imperative to meet the established project timeline.

• Vendor will outline the deliverables and milestones that require sign‐off and decision making.

• All client decisions will be documented by vendor.

Probability: High

Impact: High

Client and vendor will meet about this issue.

Vendor will track this in the weekly risk report.

• No clear plan• No metrics


RMP: Example Private School (Client)• Step by step plan• Clearer plan of action• Use of metrics

Risk Risk Mitigation Approach Risk Impact Plan of Action

Ineffective approval, sign‐off and decision making

• Vendor will outline the deliverables and milestones that require sign‐off and decision making.

• All client decisions will be documented by vendor.

• Vendors will review the outstanding tasks, actions, decisions, and sign‐offs online via Central Desktop with client and will include this information in the WRR.

Client Assumptions: o Will ensure management understand the impact of making

decisions.o Will identify decision makers for each areas of the project.o Will publish, in advance, month‐by‐month assignments as appropriate (roles, commitment levels, and names of assigned individuals).

Probability: HighImpact: High

Schedule: 1 week of additional work.

Cost: 40 hours ($ 10,600).

1. Vendor will document impact in WRR.

2. Vendor will provide dominant information to client.

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ASU Dining Service

PBSRGGLOBAL



Traditional Contracting Process

• Same supplier won the contract for 42 years. • Specifications were 36 pages and Solicitation was 178

pages long.• Award made based on best marketing and most

promises. • It took over 9 months to finalize contract.• No performance measurements throughout contract. • University had their own management group to direct

the supplier.


Best Value Contracting Process

• RFP focus on expectations• Allow the vendor to differentiate themselves

through proven capability (metrics).• Supplier required to identify plan and performance

measurements before contract award.• 60 page RFP (compared to 178 pages)

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VendorNo Summary Criteria Out of A B C1 RAVA Plan 10 5.9 7.1 6.32 Transition Milestone Schedule 10 5.2 7.0 6.33 Interview 25 15.8 16.8 13.54 Past Performance Information - Survey 10 9.8 10.0 9.85 Past Performance Information - #/Clients Raw # 5.7 3.0 4.46 Past Performance Information - Financial 10 7.0 8.7 6.97 Financial Rating 10 4.0 8.0 8.08 Financial Return - Commissions Raw $ 30,254,170$ 60,137,588$ 64,000,000$ 9 Capital Investment Plan Raw $ 14,750,000$ 20,525,000$ 12,340,000$ 10 Equipment Replacement Reserve Raw $ 7,213,342$ 4,100,001$ 8,171,811$

Finanical Totals 52,217,512$ 84,762,589$ 84,511,811$

VendorNo Summary Criteria Weight/Out of A B C1 RAVA Plan 28 16.5 19.9 17.72 Transition Milestone Schedule 2 1.0 1.4 1.33 Interview 25 15.8 16.8 13.54 Past Performance Information - Survey 9 8.8 9.0 8.85 Past Performance Information - #/Clients 1 1.0 0.5 0.86 Past Performance Information - Financial 15 10.5 13.0 10.47 Financial Rating 5 2.0 4.0 4.08 Financial Return - Commissions 7 3.3 6.6 7.09 Capital Investment Plan 6 4.3 6.0 3.610 Equipment Replacement Reserve 2 1.8 1.0 2.0

100 65.1 78.1 69.0

Selection Phase Results

A financial difference of 62.3%


Paradigm Shift(Vendor Role Change)

• Becomes the leader/driver of the process

• Generates the “baseline plan” – sets optimal scope and schedule

• Optimal for both the client and the vendor (win-win)

• Identifies, prioritizes, and minimizes all foreseeable risks

• Begins holding the client accountable for their impacts due to performance and risk measurement


• Must release control to the expert

• Becomes the facilitator – Identifies constraints– Provides needed data to the vendor

• Provides any concerns/risks – to be addressed by the vendor

• Reviews Performance Measurement (do not trust!)

Paradigm Shift(Client Role Change)

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Memorial Union (MU) Fire


Friday Morning – 11‐2‐07

• MU closed

• Investigation switches from Tempe and ASU authorities to ATF

• Treated as a criminal investigation

• Rumors abound…


Saturday Morning – 11‐3‐07

• MU employees allowed to get items left behind in building

• Gym begins being prepared for MU

• Contractors brought in

• Protective floor installed

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Work takes place around the clock


Sunday Afternoon 11‐4‐2007

• Arranging gym

• Stocking


Monday morning 11‐5‐07

• Open for business at 9:00 am

• Radio station was brought in

• Serving “grab and go” plus full convenience store

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MU Fire Summary

• Aramark had very fast response and resolution

• Did not cease operation and look for direction (no contract directives)

• Utilized their RMP and proactively mitigated the risk, which was planned for before their service began.

• Weekly report and performance measurements creates the documentation of how the risk is resolved– Shows value added and vendor performance


Other issues• Client wants to unilaterally change the

requirements of the contract

• Client wants to continue to direct the vendor

• Bureaucracy is having a difficult time with transparency


Year One Results: Information Environment

– 2008 results were generated despite…• Memorial Union Fire – 80% of Tempe campus dining• Unrealized Meal Plan Counts – Keystone to financial proposal• Extreme difficulty in “finding” prior numbers

FY 06-07 Year 1No Category Incumbent Aramark Difference % Difference1 Total Revenue ($M) 27.02$ 30.83$ 3.81$ 14%2 Total Return & Commissions ($M) 2.17$ 2.67$ 0.50$ 23%3 Captial Investment Contract ($M) 14.75$ 30.83$ 16.08$ 109%4 Capital Investment 2006 v 2007 ($M) 0.26$ 5.70$ 5.44$ 2092%5 ASU Administration (# of People) 7 1.5 -5.5 -79%6 Customer (Student) Satisfaction (1-10) 5.2 7.3 2.1 40%7 Mystery Shopper Satisfaction (1-10) NA 9.6 -- --

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ASU Dining Performance Summary

CriteriaYear 1(From

Incumbent)

Year 2(From Year 1)

Year 3(From Year 2)

Year 4(From Year 3)

Sales 14% Increase 11% Increase 24% Increase 13.5% Increase

Commission 23% Increase 6% Increase 20% Increase 22% Increase

ASU Management Requirement

Reduced 79% ‐‐ ‐‐ ‐‐

Student Satisfaction 37% Increase 1% Decrease 9% Increase 3% Increase


Vendor Performance• Food Services Vendor has performed beyond

ASU expectations

• Leader in making ASU a financial winner

• ASU using best value PIPS to revolutionize the new American University

• Food services and other procurements have brought the university $100M in the next ten years


State of Idaho Student Health Insurance Project

PBSRGGLOBAL


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Overview• Create a statewide Student Health Insurance Plan (SHIP)

consortium – Boise State University (BSU)– Idaho State University (ISU)– Lewis-Clark State College (LCSC)

• 3-Year Contract | $36 Million

• Measurements of Success1. Reduce internal University program administration costs2. Maintain or increase Customer Satisfaction (University & Students)3. Maintain or increase cost-effectiveness of program to students


Analysis of Proposals

Total Score: 923 916 886 831 840

NO CRITERIA FIRM A FIRM C FIRM D FIRM E FIRM F

1 Cost ‐ Average Student Premium $1,422 $1,327 $1,365 $1,561 $1,596

2 Cost ‐ Average Spouse & Dependent Premium $1,698 $2,668 $2,343 $2,559 $2,762

3 Average Interview Rating 6.4 6.6 5.2 6.3 6.9

4 RAVA Plan Rating 7.4 6.3 7.4 5.6 5.2

5 Work Plan Rating 6.7 7.2 6.3 5.5 5.6

6 PPI ‐ 1‐10 Rating 9.9 9.7 9.9 10.0 10.0

7 PPI ‐ Number of projects and clients 10 17 9 10 10


Overall Best-Value Results

• Best-Value Results:– Student Premium has decreased by 2% (-$26)– Spouse & Dependent Premium has decreased by 19% (-

$519)– In general, Benefits/Coverage have been increased

School Premiums 2006‐2007 2007‐2008 2008‐2009 2009‐2010

Average

Increase Per

Year ($)

Average

Increase Per

Year (%)Student $1,012 $1,182 $1,263 $1,385 $124 11%

Spouse & Dependent $1,843 $2,022 $2,104 $2,220 $126 6%

• Previous Program:

– Student Premiums increased $124/year (past 4 years)

– Spouse & Dependent Premiums increased $126/year

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Georgia Institute of Technology

PBSRGGLOBAL



Georgia Institute of Technology (Environmental Science and Technology Building)

• Construct a research laboratory (approximately 287,000 SF) with facilities that included laboratories, classrooms, lecture theaters, offices, and administrative areas.

• Estimated Budget: $45M

State of Georgia tested the PIPS process to identify and select a high performing contractor


Bid Proposals• Past Performance Information was collected on:

– 3 general contractors– 5 mechanical subcontractors– 7 electrical subcontractors

• Three bid proposals were submitted ($45M budget). The prices were:– $52.6M– $54.9M– $56.2M

• The architect and the GT BOR claimed that the contractors had inflated their costs due to the Best Value PIPS process.

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Analysis of the Design and Budget

• Design Analysis: – Georgia State Financing and Investment Commission (GSFIC)

performed an analysis of the contractor bids against the cost estimate of the architect. There was a difference of $6M in the mechanical section.

• Budget Analysis:– A similar, less complicated building was built right next to the

current site two years prior to this project. Analyzing the final cost per square foot of the first building showed that the cost of the new facility should be a minimum of $52M.


Redesign and Re-bid• After identifying that the project was over-designed, GSFIC gained

approval of the value engineering ideas (generated in the “PIPS” procurement) and redesigned the project. They removed approximately $4.5M of construction from the project.

• However, the State decided to award the project under the low-bid process.

• The project was re-bid under the low-bid process, and the new proposals came in at:– $46.6M– $47.0M– $47.2M– $47.5M– $48.0M


Analysis of Awarded Contractor

• Even though all the proposals were still over budget, the project was awarded to the lowest bidder, which was still 3% over budget ($46.6M).

– The general contractor who was awarded the project had the lowest past performance ratings (when compared to the generals from the first round).

– The general contractor selected the lowest rated mechanical subcontractor (average performance rating was 8.2 in comparison to 9.1 of the other contractors)

– The general contractor selected an electrical that had no documented past performance information.

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Final Results

The final cost of the building was $48.8M ($2.2M change orders), and the project was extended over 300 days.

If the State of Georgia had awarded to the lowest PIPS contractor ($52.6M), with the $4.5M reduction in scope, the award price would have been $48.1M for a performance‐based contractor with the best‐qualified subcontractors.

Criteria Low-Bid PIPSBid Proposal 46.6$ 52.6$

(V/E Items) -$ 4.5$ Awarded Cost 46.6$ 48.1$ Change Orders 2.2$ -$ Final First Cost 48.8$ 48.1$


The Rest of the Story• General contractor kicked off the project

• Modification contractor (mechanical systems) was hired to make corrections to the new building so the user could move into the building

• It was to no one’s best interest to document the results

• The State of Georgia representative gave a poor reference on PIPS


Leadership Society of AZ using BV Approach to educate HS Students

• Summer Programs

• After-School Seminars

• Success Coaching

• Life Coaching

• Community Workshops

• Teacher Training

• Motivational Speaking

• On-Line Programs

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Reported Student Impact

58%Are Less Stressed

36%Feel Happier

43%Are More Confident

94%Feel More Accountable


Motivating Student Heroes

“[The program] was so enjoyable. I wish all school was like this”

• 1 week after course• Friend contacted her while standing on a

ledge ready to jump• Saved his life using IMT concepts• Parents were amazed!!!


Strengthening Families

207

• Senior High School Quarterback

• Struggling in school

• Left home, sleeping on couches for a month

• Returned home after 2 class periods

• Repaired relationship with his mother

• Mother attended LSA parent conference

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Father discovers his son after IMT experience

• Father reports that student has behavioral issues in school

• Parents were going to send student to military school

• Father [engineer] wants him to be an engineer

• After attending LSA program, father is amazed, and decided to not send him to military school, but to support student in his efforts.


Parent-Teacher FeedbackParent Feedback• 9.8 / 10 overall rating• 91% saw a significant

change after the summer program

• 99% would recommend LSA programs

Teacher Feedback• 10 / 10 overall rating by

School Administrators

“[My son] had a phenomenal learningexperience. We could see a real changein his attitude, confidence and how heconducts himself.”– Parent

“I have been thoroughly impressed by the Logic and Leadership program hosted at our school. I would recommend it to every high school who wants their students to accomplish more in their studies and wants what is best for their students.” – Principal Juan Nunez, North HS


Parents are amazed at impact of IMTThis program has been life changing for [my daughter] and I'm so glad we found LSA! –Parent

My son was not looking forward to spending a week in class and went because I "made" him. After the first day when I asked him how it went he tried to hide his smile as he said it was "pretty good" which meant that it was very good. Several days after camp he is still calling out situations that he relates to what he learned. –Parent

An unbelievable growing experience for my teenage son. His view point has completely changed and he has a new confidence in himself. –Parent

Most summer camps are just a way for kids to build there resume but this was a truly life altering experience. Facts and Logic created the perfect platform for me to not only learn the concepts but to buy into them. Instructors are genuine people who care about students lives. The greatest leadership program available for young adults and my favorite experience in the summer time by far. –Student

The best money we have spent on any activity for him yet! –Parent

This is the best summer program that I've ever been a part of. –Student

This class changed my entire perspective on success and leading others. Overall the best and most beneficial program/class I have ever attended! –Student

A sample of 49 online reviews (4.9 out of 5.0 rating)

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Online Programs• Student programs• Teacher development• Employee development• Over 60 hours of material• Coming Spring 2017• Open to partnerships to

host young students

CONTACT:Jake Gunnoe

Program Manager(928)710‐8915

[email protected]

LeadAZ.org


Impact of New Paradigm• Minimize thinking and decision making• Minimize stress• Reduce activities• Identify and utilize expertise• Use metrics


Lessons Learned• Simplicity is the key. If you give someone the opportunity they will

make a decision.

• The less the buyer talks the better!

• The buyer doesn’t need to be an expert in the service they are purchasing.

• The more the buyer utilizes the vendor’s expertise the more efficient a service is delivered

• Don’t let the vendor fool you. An expert will have a plan before the contract is signed.

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• The concept was here the entire time

• No one knew how to transfer the logic and common sense into something so “complex”


Q&A [email protected] [Kashiwagi Best Value]

Jan 15-19, 2018 (Tempe, AZ)2018 Best Value Certification, Education and Training

Keisha West currently serves as Deputy Public Assistance Officer for the Oklahoma Department of Emergency Management (OEM). Currently the OEM is managing 33 active disasters with an annual budget of 88 million dollars. Keisha has also served as Public Assistance Funding Analyst with several private companies in Louisiana and New Jersey. In this capacity she has experience in grants management, compliance and audit. She is a graduate of Southern University & A & M College with a degree in Architecture. She loves to travel and has enjoyed painting.

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Oklahoma Department of Emergency Management

Public Assistance Recipientand Subrecipient Procurement

Requirements Under 2 C.F.R. PT. 200

Contents

Introduction

Uniform Rules Applicability & Terms

The Key Players

Procurement Issues

Summary of Procurement Standards

Overview of Standards

Procurement Methods

Socioeconomic Contracting Requirements

Price or Cost Analysis

Bonding Requirements

Procurement of Recovered Materials

Suspension and Debarment

Required Contract Provisions

Appendix (Checklist for Reviewing Procurements Under Grants by Non-Federal Entities)

Introduction

1. PurposeThis Quick Reference Guide explains the mandatory requirements for Public Assistance recipients and subrecipients when using Public Assistance funding to finance their disaster-related procurements. We developed this Quick Reference Guide to support Federal Emergency Management Agency (FEMA) employees in assisting recipients and subrecipients to comply with the procurement requirements and to increase consistency in FEMA’s application of these standards across the agency.

This guide is intended to provide general guidance only and is not intended to serve as legal advice, nor replace the advice of FEMA attorneys. Furthermore, FEMA makes no guarantee that adherence to this guide will result in full reimbursement of otherwise eligible expenses.

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Introduction

2. Backgrounda) Robert T. Stafford Disaster Relief and Emergency

Assistance Act. The Robert T. Stafford Relief and Emergency Assistance Act (“Stafford Act”) authorizes FEMA, among other things, to provide financial assistance to non-Federal entities (NFEs) including States, local government, Indian tribal governments and certain private nonprofit (PNP) organizations for debris removal, emergency protective measures and permanent restoration of infrastructure following a Presidential declaration of an emergency or major disaster.

b) Public Assistance Program. FEMA has administratively combined these Stafford Act authorities under the umbrella of its Public Assistance program, under which FEMA provides financial assistance through grants to a State or Indian tribal government (recipients), which in turn carry out work directly and/or process subgrants to other eligible Public Assistance applicants (subrecipients).

Introduction

c) Use of Third-Party Contractors by Recipients and Subrecipients. Recipients and subrecipients may use contractors to assist them in carrying out these Public Assistance awards, and such contractor costs are attributable to billions of dollars in grant funding each years. As a condition of receiving financial assistance for these contractor costs, recipients and subrecipients must comply with, among other things, the Federal procurement requirements set forth at 2 C.F.R. §§ 200.317-326.

d) 2 C.F.R. pt. 200. On December 26, 2014, a new set of regulations at 2 C.F.R. pt. 200, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Rules”), took effect. The Uniform Rules, where applicable, supersede and replace the regulations at 2 C.F.R. §§ 215.40-48 (which applied to institutions of higher education, hospitals and other PNP organizations) and 44 C.F.R. §13.36 (which applied to States, local and Indian tribal governments). FEMA will, however, continue to apply 44 C.F.R. pt. 13 and 2 C.F.R. pt. 215 for declarations occurring before December 26, 2014, and will continue to provide guidance to FEMA employees for those declarations.

Introduction

3. Legal effect of this Quick Reference Guide

This Quick Reference Guide is an internal guidance document and does not have the force and effect of law, regulation or FEMA policy. Although it does not have such force and effect, in clarifying the content of the regulations and describing recommended best practices, it does contain information about how FEMA interprets and applies Federal procurement requirements and how an NFE can comply with these requirements.

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Introduction

4. ScopeThis Quick Reference Guide describes the procurement requirements to applicable recipients and subrecipients when procuring property and services for debris removal (Category A), emergency protective measures (Category B), and restoration of damaged facilities (Categories C-G) under the Public Assistance Program. This includes, among other things, the procurement of property and services for the construction, repair and alteration of buildings, structures or appurtenances. This guide does not address other requirements imposed by Federal law, executive orders and other regulations on NFE procurements.

5. DisseminationThis Quick Reference Guide is intended for use by FEMA personnel when applying the procurement standards under the Federal regulations. The Field Manual may be made available to recipients and subrecipients to increase their understanding as to how FEMA interprets procurement requirements under the Federal regulations.

Introduction

6. Procurement Disaster Assistance Team (PDAT)The PDAT is a team of attorneys within OCC that trains and advises Public Assistance staff; works with Public Assistance staff to provide training and guidance to recipients and subrecipients; reviews grantee and subgrantee procurement policies and procedures; and provides general guidance regarding concerns with a proposed grantee or subgrantee procurement action. This includes the PDAT providing various tools to FEMA staff, such as this Quick Reference Guide.

7. WebsitePlease visit our website for the latest updates and many other useful procurement tools: www.fema.gov/procurement-disaster-assistance-team


Applicability The Department adopted the Uniform Rules on December 19, 2014, in an Interim

Rule (79 Fed. Reg. 75871).

The Uniform Rules apply to all new grant awards under emergencies and major disasters declared on or after December 26, 2014 (2 C.F.R. §200.110).

There is a grace period for the procurement rules. The Uniform Rules at 2 C.F.R. § 200.110) provide that:

For the procurement standards in §§ 200.317-200.326, NFEs may continue to comply with the procurement standards in previous OMB guidance (superseded by this part as described in § 200.104) for two additional fiscal years after this part goes into effect.

The first additional fiscal year begins on the start date of the first fiscal year beginning after December 26, 2014. If a NFE chooses to use the previous procurement standards for two additional fiscal years before adopting the procurement standards in this part, the NFE must document this decision in their internal procurement policies.

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TermsNon-Federal Entity (NFE) - A State, local government, Indian tribe, institution of higher education or nonprofit organization that carries out a Public Assistance award as a recipient or subrecipient (2 C.F.R. § 200.69).

Federal Award - The Federal financial assistance that a NFE receives directly from a FEMA or indirectly through a pass-through entity (2 C.F.R. §200.38); also, the instrument setting forth the terms and conditions.

Recipient - A NFE that receives a Public Assistance award directly from FEMA to carry out an activity under a Federal program (2 C.F.R. § 200.86).

Pass-Through Entity - A NFE that provides a subaward to a subrecipient to carry out part of the Public Assistance program (2 C.F.R. § 200.74).

Subaward - An award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Public Assistance award received by the pass-through entity; it does not include payments to a contractor (2 C.F.R. § 200.92).

Subrecipient - A NFE that receives a subaward from a pass-through entity to carry out part of the Public Assistance program, but does not include an individual that is a beneficiary of such program (2 C.F.R. § 200.93).

The Key Players

Non-Federal Entities The recipient is the Federal award administrator for all funds provided under the Public

Assistance Program and responsible for ensuring compliance with all applicable Federal laws, regulations, executive orders, FEMA policies, the FEMA-State Agreement and other terms.

The recipient must comply with the applicable procurement standards for all recipient procurements.

The recipient is responsible for:

Ensuring that every subaward includes all requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, executive orders, FEMA policies and the terms and conditions of the Public Assistance award (2 C.F.R. § 200.331(a)(2)).

Monitoring the activities of the subrecipient.

The terms or conditions of Federal awards flow down to subawards/subrecipients, unless a particular section of 2 C.F.R. pt. 200 or the terms and conditions of the Federal award specifically indicate otherwise (2 C.F.R. § 200.101(b)(1)).

NFEs must comply with requirements of 2 C.F.R. pt. 200 regardless of whether they are a recipient or subrecipient of a Federal award.

The subrecipient must adhere to the Federal procurement standards at 2 C.F.R. pt. 200 applicable to that organization.

The subrecipient is responsible for complying with all requirements of the Federal award (2 C.F.R. §§ 200.330(b) and 303).

The Key Players

FEMA FEMA is the Federal awarding agency and always remains responsible

for ensuring prior performance of a Federal award.

FEMA must manage and administer the Federal award in a manner that ensures Federal funding is expended and associate programs are implemented in full accordance with U.S. statutory and policy requirements (2 C.F.R. § 200.300(a)).

FEMA must comply with 2 C.F.R. pt. 200 in administering Federal awards:

Monitoring recipients’ agreement execution to ensure compliance with applicable requirements, including incurring costs, reporting, procurement, property management, closeout, etc.

Recovering funding for improper expenditures.

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Procurement Issues

Hypothetical

Hurricane Katie impacts the State of Z in August 2016 and causes significant damage to School District facilities. The School District noncompetitively awards a prime contractor a cost-plus-percentage-of-cost (CPPC) contract totaling $17.3 million for 13 projects. The contract includes work necessary to open schools for the 2016-2017 school year. Under the contract, the primary contractor added markups of 10% for profit on time-and-materials billings for its own employees and on pass-through costs of its subcontractors. The School District does not conduct a price or cost analysis.

What potential issues are there with the procurement?

The Office of Inspector General (OIG) stated the emergency requirement to get schools opened quickly after the disaster justified the use of a noncompetitive contract.

OIG did not question the entire contract amount, but did recommend disallowing $2.9 million because:

Federal regulations prohibit a CPPC contract.

FEMA has no assurance that the School district paid a reasonable price for the contract work.

There were other problems with the contract, that OIG did not question because of the exigent circumstances:

Applicant did not solicit competitive bids.

Applicant did not take affirmative steps to ensure the use of minority firms, women’s business enterprises and labor surplus firms.

OIG Report No. OIG-14-44-D, FEMA Should Recovery $5.3 Million of the $52.1 Million of Public Assistance Grant Funds Awarded to the Bay St. Louis Waveland School District in Mississippi-Hurricane Katrina (Feb. 2014)


State Other

State Other Non-Federal Entities(local governments, tribal governments, institutions of higher education, hospitals and other nonprofit organizations)

2 C.F.R. § 200.317 2 C.F.R. 200.318 §§ through 326

Synopsis:

Must follow the same policies and procedures used for procurements from non-Federal funds, comply with 200.322 (procurement of recovered materials), and ensure that every purchase order or other contract includes any clauses requirement by 200.326 (contract provisions).

Synopsis:

Must follow its own documented procurement procedures that reflect applicable State, local and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in 2 C.F.R. §§ 200.318 through 326.

Note: The recipient and subrecipient must comply with all applicable Federal laws, regulations and executive orders.


State Procurement Standards The regulation at 2 C.F.R. § 200.317 sets forth the

procurement standard applicable to a State:

Must follow the same policies and procedures it uses for procurements from its non-Federal funds

Will comply with 2 C.F.R. § 200.322 (Procurement of Recovered Materials)

Must ensure that every purchase order or other contract includes any clauses required by 2 C.F.R. § 200.326 (Contract Provisions)

The Uniform Rules do not define an Indian tribe as a state, such that an Indian tribe must follow the procurement standards at 2 C.F.R. §§ 200.318-326 irrespective of whether it is a recipient or subrecipient.

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Hypothetical

The Federal procurement standard at 2 C.F.R. § 200.320(b) allows small purchase procedures for the acquisition of supplies or services below the simplified acquisition threshold (which is $150,000 as of 2016). The State of X has a threshold of $175,000 in its own version of small purchase procedures. It uses its own threshold and uses small purchase procedures to procure $170,000 in supplies.

Is there an issue with the State’s procurement?

There is no issue with the State’s procurement – this is permissible. The state must follow the same policies and procedures it uses for procurements from its non-Federal funds; it is not subject to the requirements of 2 C.F.R. § 200.320(b).


Other Non-Federal Entities

All other NFEs, to include Indian tribes (whether a recipient or subrecipient), follow their own documented procurement procedures which reflect applicable State, local and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in 2 C.F.R. § 200.318 through 326.

A NFE’s procurement may meet the requirements of applicable State, local and tribal procurement laws and regulations, but not meet the Federal procurement standards set forth in 2 C.F.R. §§200.318 through 326. Such a procurement would not be compliant with the Uniform Rules.


The procurement standards can be broken down into the following categories:

General procurement standards (2 C.F.R. § 200.318)

Competition (2 C.F.R. § 200.319)

Methods of procurement (2 C.F.R. § 200.320)

Contracting with small and minority businesses, women’s business enterprises and labor surplus area firms (2 C.F.R. § 200.321)

Procurement of recovered materials (2 C.F.R. § 200.322)

Contract cost and price (2 C.F.R. § 200.323)

Awarding agency and pass-through entity review (2 C.F.R. §200.324)

Bonding requirements (2 C.F.R. § 200.325)

Contract provisions (2 C.F.R. § 200.326 and Appendix II)

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General Procurement StandardsThe regulation at 2 C.F.R. § 200.318 identifies general procurement standards, some of which are mandatory and others that are encouraged.

Contractor Oversight. A NFE must maintain oversight to ensure that contractors perform in accordance with the terms, conditions and specifications of their contracts or purchase orders (2 C.F.R. § 200.318(b)).

Necessity. A NFE must have procedures that avoid acquisition of unnecessary or duplicative supplies or services, and should consider breaking out procurements to obtain a more economical purchase (2 C.F.R. § 200.318(d)).

Standards of Conduct. Must maintain written standards of conflict covering conflicts of interest and governing the performance of employees engaged in the selection, award and administration of contracts (2 C.F.R 200.318(c)).

These standards must provide for disciplinary actions.

These standards must cover organizational conflicts of interest if the NFE has a non-governmental parent, subsidiary or affiliate.

Conflict of Interest. No employee, officer or agent may participate in the selection, award or administration of a contract supported by a Federal award or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest.

Gifts. The officers, employees and agents of the NFE must neither solicit nor accept gratuities, favors or anything else of monetary value from contractors/subcontractors.

Overview of Standards Awards to Responsible Contractors. A NFE must award contracts only to responsible

contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement, and will give consideration to such matters as: (2 C.F.R. § 200.318(h))

Contractor integrity.

Compliance with public policy.

Record of past performance.

Financial and technical resources.

Records. A NFE must maintain records sufficient to detail the history of the procurement, which must include, but is not limited to, rationale for the method of procurement, selection of contract type, contractor selection and the basis for the contract price (2 C.F.R. § 200.318(i)).

Time and Materials Contract (2 C.F.R. § 200.318(j)).

A NFE may use time and materials contracts only for a reasonable period of time after a determination that no other contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own risk.

A time and materials contract means a contract whose cost to a NFE is the sum of: (1) the actual cost of materials and (2) direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses, and profit.

Settlement of Issues. A NFE alone must be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual issues (2 C.F.R. § 200.318(k)).

The Uniform Rules also encourage various standards (use of Federal excess property, intergovernmental agreements and value engineering) (2 C.F.R. § 200.318(e), (f) and (g)).


Hypothetical

A local government is procuring construction services for the repair of its town hall, which was damaged in a major disaster. Using procurement through sealed bids, the local government receives 12 bids. The head of the contracting board, who makes the final award decision, is the brother of the president of the company that submitted the lowest bid.

Should the head of the contracting board participate in the award decision?

No, the head of the contracting board should not participate. The question is whether a brother is considered to be immediate family under 2 C.F.R. § 200.318(c)(1). The regulation does not define the phrase “immediate family.” At the very least, however, there is the appearance of a conflict of interest, which would also preclude the head of the contracting board from participating per 2 C.F.R. § 200.318(c)(1).

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Competition A NFE must conduct procurement transactions in a manner providing

“full and open competition” consistent with the standards of 2 C.F.R. §200.319.

Contractors that develop or draft specifications, requirements, statements of work or invitations for bids or proposals must be excluded from participating in such procurements.

A NFE must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed State, local or tribal geographical preferences in the evaluation of bids or proposals, except where Federal law expressly mandates or encourages geographic preference.

A NFE may use prequalified lists of persons, firms or products subject to certain conditions. These are not contracts, however, and a sufficient number of contractors is required to be on the list for full and open competition. When the time comes for contract solicitation and award, any interested contractors are allowed to submit their qualifications and, if deemed qualified, may submit a bid or proposal and be considered for contract award despite not being on the original prequalified list.

Overview of Standards The regulation identifies seven situations considered to be restrictive of competition (2 C.F.R. §

200.319(a)(1)-(7)), including the following:

Noncompetitive pricing practices

Noncompetitive contracts to consultants on retainer

Organizational conflict of interest

A NFE must have written procedures for procurement transactions, which must ensure the solicitations provide for at least the following (2 C.F.R. § 200.319(c)):

A clear and accurate description of the technical requirements for the material product or service procured

Identification of all requirements the offerors must fulfill and all other factors to be used in evaluating bids or proposals

Hypothetical

City, after publicly advertising a request for qualifications, prequalifies three debris removal contractors for potential use during a future event. Later that same year, a category 5 hurricane impacts the State of Z, causing widespread damage and debris. Knowing debris removal will continue for approximately six months, City uses the Procurement by Sealed Bids method among the three contractors to meet the debris removal requirement. Contractor, who is not among the list of three, contacts City during the solicitation period and wants to submit a request for qualification and a subsequent bid, and City denies this request during the solicitation period.

Does such a denial comport with 2 C.F.R. § 200.319(d)?

No, this does not comport with 2 C.F.R. § 200.319(d). This regulation requires the NFE not to preclude potential bidders from qualifying during the solicitation period.

Procurement Methods

Micro-Purchase Procedures (2 C.F.R. § 200.320(A))

Acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (which is $3,500 except as otherwise discussed in the Federal Acquisition Regulations subpart 2.1).

To the extent practicable, micro-purchases must be distributed equitably among qualified suppliers.

Micro-purchases may be awarded without soliciting competitive quotations if the NFE considers the price to be reasonable.

Small Purchase Procedures (2 C.F.R. § 200.320(B))

Relatively simple and informal procurement methods for securing services, supplies or other property that does not cost more than the simplified acquisition threshold (currently $150,000).

Price or rate quotations are obtained from an adequate number of qualified sources.

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Procurement Methods

Sealed Bidding (2 C.F.R. § 200.320(C))

Award is made to the lowest priced, responsive, responsible bidder.

Bids are publicly solicited and a firm fixed price contract is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids (IFB), is the lowest in price.

Bids must be solicited from an adequate number of known suppliers, providing them sufficient response time before the date for the opening of bids.

Local and tribal governments must publicly advertise the invitation for bids.

All bids will be opened at the time and place prescribed in the invitation for bids. For local and tribal governments, the bids must be opened publicly.

This method is preferred for construction when sealed bidding is feasible, which is when certain conditions are present.

Procurement Methods

Competitive Proposals (2 C.F.R. § 200.320(D))

Award can be made to a higher priced, higher quality good or service – if publicly stated by the evaluation/award criteria.

Competitive proposals are generally used when conditions are not appropriate for the use of sealed bids.

These are appropriate method when more than one source is expected to submit an offer and either a fixed-price or cost-reimbursement type contract is awarded.

Requests for proposals must be publicized and must identify all evaluation factors and their relative importance.

Noncompetitive Proposals (2 C.F.R. § 200.320(F))

Procurement through the solicitation of one source or a limited number of sources may be used only when one or more of the following circumstances apply:

One Source: The item is available only from a single source.

Exigency/Emergency: An exigency (not an emergency but requires immediate action) or emergency (threats to health, life, or safety) will not permit a delay resulting from competitive solicitation. Once the documented exigency or emergency period ends, NFEs must transition to a full and openly awarded contract.

Procurement Methods

Awarding Agency Approval: The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the NFE.

Inadequate Competition: After the solicitation of a number of sources, competition is determined inadequate.

The award of a contract no longer has to be “infeasible” under one of the competitive methods of procurement (which was another condition precedent under 44 C.F.R. § 13.36(d)(4)).

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A NFE must take all necessary affirmative steps to assure that minority businesses, women’s business enterprises and labor surplus area firms are used when possible (2 C.F.R 200.321). This is not a set-aside requirement or a requirement to award a contract to these type of firms where they do not otherwise meet the NFE’s award criteria.

The affirmative steps must include at least the following:

1. Placing qualified small and minority businesses and women’s business enterprises on solicitation lists

2. Assuring that small and minority businesses and women’s business enterprises are solicited whenever they are potential sources


3. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses and women’s business enterprises

4. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses and women’s business enterprises

5. Using the services and assistance, as appropriate, of such organizations as the Small Business Administration (SBA) and the Minority Business Development Agency of the Department of Commerce (DOC)

6. Requiring the prime contractor, if subcontracts are to be let, to take the five previous affirmative steps

Noncompliance with the former equivalent procurement standard has been a very common finding in Office of Inspector General audits.


Hypothetical

Situation 1. Severe storms and flooding impact the State of Y, and waters cause a dam breach and flood city. With most of City underwater, City needs to conduct a rescue of most of its 30,000 citizens, who are stuck in their homes with floodwaters rising. City, however, lacks the needed boats and takes an hour to call 10 companies in nearby towns to meet the requirement. It awards three time and materials contracts to companies able to meet the requirement immediately. City does not take the six affirmative steps.

Is this a violation of 2 C.F.R. § 200.321?

Technically, yes, it is a violation. However, as exigent or emergency circumstances likely exist, FEMA and OIG are unlikely to challenge reasonable associated costs.

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Hypothetical

Situation 2. City conducts a procurement for construction services needed to repair a damaged school. The procurement meets almost every requirement of 2 C.F.R. pt. 200, with the only shortfall being it did not take the fifth affirmative steps under 2 C.F.R. § 200.321(b)(5) (contacting the SBA and DOC).

Is this a violation of 2 C.F.R 200.321?

Technically, yes, it is a violation. However, as exigent or emergency circumstances likely exist, FEMA and OIG are unlikely to challenge reasonable associated costs.


A NFE must perform a price or cost analysis in connection with every procurement action above the simplified acquisition thresho0ld, including contract modifications (2 C.F.R. § 200.323).

The method and degree of analysis is dependent on the facts and circumstances surrounding the particular procurement but, as a starting point, the NFE must make independent estimates before receiving bids or proposals.

A NFE shall negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed.

Hypothetical

City conducts a procurement through competitive proposals for consulting services, resulting in a cost reimbursement contract with anticipated costs of $100,000 at the time of the contract. City has made an independent estimate of the contract cost of $110,000 during acquisition planning.

Is city required to conduct a price or cost analysis?

No, City is not required to conduct a cost or price analysis. The acquisition is below the simplified acquisition threshold of $150,000.


Cost Plus Percentage of Cost

A NFE must not use a cost-plus-percentage-of-cost (CPPC) or cost-plus-percentage-of-construction-cost method of contracting (2 C.F.R. § 200.323(d)).

Criteria evidencing this type of contract includes the following:

Payment is on a predetermined percentage rate.

The predetermined percentage rate is applied to actual performance costs.

The contractor’s entitlement is uncertain at the time of contracting.

The contractor’s entitlement increases commensurately with increased performance costs.

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Hypothetical

City conducts procurement through competitive proposals for the construction of a new City Hall. Following the selection of the contract, City negotiates fair and reasonable compensation. City ultimately awards a cost reimbursement contract, under which (1) the contractor is paid actual costs for the salaries of its employees through reimbursement of hourly rates for services performed; (2) actual costs for supplies and other materials; and (3) a fixed fee. The fixed fee is calculated at the time of contract by estimating the total construction cost of the building and applying a percentage rate of 4%, bringing the fixed fee to $40,000.

Is this a permissible contract pricing structure?

Yes, this is not a CPPC contract. The percentage was applied to the total estimate costs and fixed at the time of the original contract.

Pre-Procurement Document Review

Review of Specifications: A NFE must make available the technical specifications for a proposed procurement upon request by FEMA or the pass-through entity where FEMA or the pass-through entity believes such review is necessary to ensure that the item or service specified is the one being proposed for acquisition (2 C.F.R. § 200.324(a).

Pre-Procurement Review of Other Procurement Documents:

A NFE must make available upon request for FEMA or pass-through entity a pre-procurement review of other procurement documents (such as requests for proposals, invitations for bid, independent cost estimates) in certain circumstances (2 C.F.R. § 200.324(b)).

A NFE is exempt from the pre-procurement review if FEMA or the pass-through entity determines that its procurement systems comply with the standards under 2 C.F.R. pt. 200.

Bonding Requirements

A NFE must follow its own bonding requirements for construction or facility improvement projects beneath the simplified acquisition threshold (2 C.F.R. § 200.325).

A NFE must meet certain bonding requirements for construction or facility improvement projects above the simplified acquisition threshold (2 C.F.R 200.325(a)-(c)).

A NFE may use its own bonding policy and requirements provided that FEMA or the pass-through entity has made a determination that the Federal interest is adequately protected.

If no such determination has been made, the bonding requirements are:

• A bid guarantee from each bidder equivalent to 5% of the bid price.

• A performance and payment bond on the part of the contractor for 100% of the contract price.

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a. Applicability: This requirement applies to all FEMA grant and cooperative agreement programs.

b. A NFE that is a state agency or agency of a political subdivision of a state and its contractors must comply with Section 6002 of the Solid Waste Disposal Act, Pub. L. No. 89-272 (1965) codified as amended by the resource Conservation and Recovery Act at 42 U.S.C. 6962). See 2 C.F.R. Part 200, Appendix II, ¶ K; 2 C.F.R. § 200.322; Chapter V, ¶ 7.

c. The requirements of Section 6002 include procuring only items designated in guidelines of the EPA at 40 C.F.R. Part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired by the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.


d) The following provides the clause that a state agency or agency of a political subdivision of a State and its contractors can include in contracts meeting the above contract thresholds:

1. In the performance of this contract, the contractor shall make maximum use of products containing recovered materials that are EPA-designated items unless the product cannot be acquired:

i. Competitively within a time frame providing for compliance with the contract performance schedule.

ii. Meeting contract performance requirements.

iii. At a reasonable price.

2. Information about this requirement is available at EPA’s Comprehensive Procurement Guidelines website: www.epa.gov/cpg. The list of EPA-designated items is available at: www.epa.gov/cpg/products.htm


a. Applicability: This requirement applies to all FEMA grant and cooperative agreement programs.

b. NFEs and contractors are subject to the debarment and suspension regulations implementing Executive Order 12549, Debarment and Suspension (1986) and Executive Order 12689, Debarment and Suspension (1989) at 2 C.F.R. Part 180 and the Department of Homeland Security’s (DHS’s) regulations at 2 C.F.R. Part 3000 (NonprocurementDebarment and Suspension).

c. These regulations restrict awards, subawards and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs and activities. See 2 C.F.R. Part 200, Appendix II, ¶ I; and Chapter IV, ¶ 6.d and Appendix C, ¶ 2. A contract award must not be made to parties listed in the System for Award Management (SAM) Exclusions. SAM Exclusions is the list maintained by the General Services Administration that contains the names of parties debarred, suspended or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. SAM exclusions can be accessed at www.sam.gov. See 2 C.F.R. § 180.530; Chapter IV, ¶ 6.d and Appendix C, ¶ 2.

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d. In general, an excluded party cannot receive a Federal grant award or a contract within the meaning of a ”covered transaction,” to include subawards and subcontracts. This includes parties that receive Federal funding indirectly, such as contractors to recipients and subrecipients. The key to the exclusion is whether there is a covered transaction, which is any nonprocurement transaction (unless excepted) at either a primary or secondary tier. Although covered transactions do not include contracts awarded by the Federal Government for purposes of the nonprocurementcommon rule and DHS’s implementing regulations, it does include some contracts awarded by recipients and subrecipients.

e. Specifically, a covered transaction includes the following contracts for goods or services:

1. The contract is awarded by a recipient or subrecipient in the amount of at least $25,000.

2. The contract requires the approval of FEMA, regardless of amount.

3. The contract is for Federally-required audit services.

4. A subcontract is also a covered transaction if it is awarded by the contractor of a recipient or subrecipient and requires either the approval of FEMA or is in excess of $25,000.

Required Contract Provisions

The Federal procurement standards require applicants to include certain mandatory contract clauses (where applicable). These clauses can be found at 2 C.F.R. § 200.326 and at www.fema.gov/procurement-disaster-assistance-team

AppendixChecklist for Reviewing Procurements Under Grants by Non-Federal Entities

This checklist was created to assist FEMA recipients and subrecipients comply with the Federal requirements that procurements must meet for FEMA to reimburse eligible expenses.

Note: This checklist is intended to provide general guidance only and does not provide a detailed explanation of the Federal procurements. To understand the requirements fully, review the provisions of 2 C.F.R. §200.317-326.

Instructions: Each standard below is followed by a “Yes,” or “No” or, in some cases, “Not Applicable.” Each red response indicates the contract does not comply with Federal requirements.

The term “non-Federal entity” (NFE) refers to the entity that is conducting the procurement action.

1. Does the procurement comply with the State’s own procurement laws, rules and procedures? §200.317 __Yes __No

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2. Does the procurement comply with the requirement to make maximum use of recovered/recycled materials? §200.317, §200.322 __ Yes __No __N/A – Work does not involve the use of materials (e.g., debris removal or other services)

3. Does the contract include the following clauses?

a) If the contract amount exceeds $150,000, does it address administrative, contractual or legal remedies in instances where contractors violate or breach contract terms, and provide for sanctions and penalties? __Yes __No __N/A

b) If the contract amount exceeds $10,000, does it address termination for cause and for convenience, including the manner by which it will be effected and the basis for settlement? __Yes __No __N/A

c) If the contract is for construction, does it include the required Equal Employment Opportunity clause? __Yes __No __N/A

d) For construction contracts exceeding $2,000 awarded under a Federal grant, does the contract include a Davis-Bacon Act clause and Copeland “Anti-Kick back” Act clause addressing prevailing wage rates? [Note that Public Assistance and Hazard Mitigation Grant Program contracts do not require these clauses.] __Yes __No __N/A


e) If the contract amount exceeds $100,000 and involves the employment of mechanics or laborers, does the contract include a Contract Work Hours and Safety Standards clause? __Yes __No __N/A

f) Rights to Inventions Made Under a Contract or Agreement. __N/A

g) If the contract or subgrant amount exceeds $150,000, does the contract include clauses addressing the Clean Air Act and the Federal Water Pollution Control Act? __Yes __No __N/A

h) Does the contract include a Suspension and Debarment clause? __Yes __No __N/A

i) For contracts exceeding $100,000, have bidders submitted an Anti-Lobbying Certification? __Yes __No __N/A

If a State agency is awarding the contract, stop here. If the contract is being awarded by a local or tribal government or private nonprofit entity, continue with the checklist.


4. General Requirements

a) Does the procurement comply with the NFE’s own procurement laws, rules and procedures? §200.318(a) __Yes __No __N/A

b) Does the NFE maintain contract oversight to ensure that contractors perform in accordance with the terms, conditions and specifications of their contracts or purchase orders? §200.318(b) __Yes __No __N/A

c) Does the NFE have - §200.318(c)(1):

i. Written standards of conduct covering conflict of interest and governing the actions of its employees? __Yes __No __N/A

ii. Any employee, officer or agent participating in the selection, award or administration of a contract supported by a Federal award that has a conflict of interest? __Yes __No __N/A

iii. Any employee, officer or agent that has solicited and/or accepted gratuities, favors or anything of monetary value from contractors or parties to subcontracts? __Yes __No __N/A

iv. Written standards of conduct that provide for disciplinary actions to be applied for violations of such standards by officers, employees or agents of the NFE. __Yes __No __ N/A

d) If the NFE has a parent, affiliate or subsidiary organization that is not a State, local government or Indian tribe, does the NFE have written standards of conduct covering conflicts of interest? §200.318(c)(2) __Yes __No __N/A

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e) Has the NFE considered consolidating or breaking out procurements to obtain a more economical purchase? Where appropriate, has the NFE considered lease verses purchase alternatives? §200.318(d) __Yes __No

f) Is the contract being awarded to a responsible contractor who can perform successfully under the terms and conditions of the proposed procurement, giving consideration to such matters as contractor integrity, compliance with public policy, record of past performance, and finance and technical resources? §200.318(h) __Yes __No

g) Is the NFE keeping records sufficient to detail the history of the procurement, including records documenting the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? - §200.318(i): __Yes __No

h) Is the contract a time-and-materials contract? §200.318(j) __Yes __No

i. If so, has the NFE documented why no other contract is suitable? __Yes __No

ii. Does the contract include a ceiling price that the contractor exceeds at its own risk? __Yes __No


i) Is the NFE alone responsible for the settlement of all contractual and administrative issues arising out of procurements? §200.318(k) __Yes __No

j) Encouraged, but not required standards at §200.318(e), (f) and (g).

5. Competition

a) All procurement transactions must provide full and open competition and be consistent with the standards of this section. Does the procurement involve any of the following §200.319(a):

i. Placing unreasonable requirements on firms for them to qualify to do business? __Yes __No

ii. Requiring unnecessary experience and excessive bonding? __Yes __No

iii. Noncompetitive pricing practices between firms or between affiliated companies? __Yes __No

iv. Noncompetitive contracts to consultants that are on retainer contracts? __Yes __No

v. Organizational conflicts of interest? __Yes __No

vi. Specifying only a brand name product instead of allowing an equal product to be offered and describing the performance or other relevant requirements of the procurement? __Yes __No

vii. Any arbitrary action in the procurement process? __Yes __No


b) Was the contractor also involved with developing or drafting the specifications, requirements, statement of work, invitation for bids or request for proposals? (If so, that contractor must be excluded from competing for such procurements) §200.319(a) __Yes __No __N/A

c) Does the contract include a State or local geographic preference for local contractors? 25 §200.319(b) __Yes __No

d) Do the NFE’s written procurement procedures ensure that all solicitations comply with the following: §200.319(c)

i. Incorporate a clear and accurate description of the technical requirements for the material, product or service to be procured? §200.319(c)(1) __Yes __No

ii. Identify all requirements the offerors must fulfill and all other factors to be used in evaluating bids or proposals? §200.319(c)(2) __Yes __No

e) If the NFE is using a prequalified list of persons, firms or products that are used in acquiring goods and services: §200.319(d)

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i. Is the list current? __Yes __No

ii. Does the list include enough qualified sources to ensure maximum open and free competition? __Yes __No

iii. Were any potential bidders precluded from qualifying during the solicitation period? __Yes __No

6. Method of Procurement

a) Is the NFE using one of the following acceptable methods of procurement? §200.32

i. Micro-purchase (i.e., purchases below $3,500). §200.320(a) __Yes __No

Is the NFE distributing micro-purchases equitably among qualified suppliers? __Yes __No __N/A (not practical)

ii. Small purchase procedures §200.320(b) __Yes __No

Did the NFE obtain price quotations (i.e., purchases below $150,000) from an adequate number of qualified sources (FEMA defines this as no less than 3)? __Yes __No


iii. Sealed bids §200.320(c) __Yes __No

Are all of the following conditions present? §200.320(c)(1) __Yes __No

A complete, adequate and realistic specification or purchase description is available __Yes __No

Two or more responsible bidders are able to compete effectively for the business __Yes __No

The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price __Yes __No

b) If sealed bids are used, the following requirements apply: §200.320(c)(2)

i. Did the NFE solicit bids from an adequate number of known suppliers, providing them sufficient response time? __Yes __No __

ii. If the NFE is a local or tribal government, was the invitation for bids publically advertised? __Yes __No __N/A


c) Did the invitation for bids include any specifications and pertinent attachments, and define the items or series for the bidder to properly respond? __Yes __No

d) Did the NFE open all bids at the time and place prescribed in the invitation for bids? __Yes __No

e) For local and tribal governments, were the bids opened publicly? __Yes __No

f) Did the NFE award a firm fixed price contract award in writing to the lowest responsive and responsible bidder? __Yes __No

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g) If any bids were rejected, was there a sound documented reason supporting the rejection? __Yes __No __N/A

i. Procurement by competitive proposals §200.320(d) __Yes __No

Did the NFE publicize the Requests for Proposals (RFPs) and identify all evaluation factors and their relative importance? __Yes __No

Did the NFE solicit proposals from an adequate number of qualified sources? __Yes __No

Did the NFE have a written method for conducting technical evaluations of the proposals received and for selecting recipients? __Yes __No

Did the NFE award the contract to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered? __Yes __No

ii. Noncompetitive proposals §200.320(f) __Yes __No

Do one or more of the following circumstances apply? __Yes __No

The item is available only from a single source __Yes __No

The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation __Yes __No

The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the NFE. __Yes __No

After solicitation of a number of sources, competition is determined inadequate. __Yes __No


7. Contracting with Small and Minority Businesses, Women’s Business Enterprises and Labor Surplus Area Firms

a) Has the NFE taken the following affirmative steps to assure that minority businesses, women’s business enterprises and labor surplus area firms are used when possible? §200.321 __Yes __No

i. Placing qualified small and minority businesses and women’s business enterprises on solicitation lists? __Yes __No

ii. Assuring that small and minority businesses and women’s business enterprises are solicited whenever they are potential sources? __Yes __No

iii. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses and women’s business enterprises? __Yes __No __N/A – Not economically feasible (document)

iv. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses and women’s business enterprises? __Yes __No __N/A – The requirement does not permit (document)

v. Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce. __Yes __No

vi. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed above? __Yes __No __N/A – No subcontracts will be let (document)


8. Contract Cost and Price

a) Did the NFE negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed? §200.323(b) __Yes __No __N/A

b) Is the contract a cost-plus-percentage-of-cost or percentage-of-construction-cost contract? __Yes __No __N/A

9. Bonding Requirements for Construction or Facility Improvement Contracts Exceeding $150,000

a) If such a determination (see above) has not been made, does the procurement include the following? __Yes __No __N/A

i. A bid guarantee from each bidder equivalent to 5% of the bid price?__Yes __No __N/A

ii. A performance bond on the part of the contractor for 100% of the contract price? __Yes __No __N/A

iii. A payment bond on the part of the contractor for 100% of the contract price. __Yes __No __N/A

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QUESTIONS?

Public Assistance Section

E-mail: [email protected]

Oklahoma Emergency Management

Public Assistance(405) 521-2481

www.oem.ok.gov

Marcheta E. Gillespie, CPPO, C.P.M., CPPB, CPM Director of Procurement - City of Tucson

UPPCC Chair of the Governing Board; Past President of NIGP Marcheta E. Gillespie, CPPO, CPPB, C.P.M., CPM, is the Director for the City of Tucson's Department of Procurement. With over 26 years of experience in public procurement, Marcheta is a passionate advocate for her profession. Her areas of expertise include organizational leadership, strategic planning, public sector contracting, project management, program development, marketing, cooperative procurement, training and public speaking. Marcheta currently serves as the Chair of the UPPCC Governing Board. She was the 2013-2014 President of NIGP - The Institute for Public Procurement, and served on the Board of Directors for 10 years. She was the first Chair of the NIGP Talent Council and Chair of the NIGP 2.0 Task Force, an historic project of governance model transformation. She has also chaired the NIGP Task Force for the Values & Guiding Principles Initiative and numerous NIGP committees over the past 26 years. Marcheta has spoken and trained at hundreds of international, national, regional and local conferences and events. She is an NIGP Master Certified Instructor and has developed numerous training programs as well as written for national procurement publications. Marcheta owns MG Procurement Consulting, LLC, serving as a professional consultant on numerous agency projects. Marcheta was also presented with the Distinguished Service Award at the 2017 NIGP Forum which was held in Salt Lake City, Utah.

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PROCUREMENT’S ACHILLES HEEL

Contract Administration:

Marcheta E. Gillespie, CPPO, CPPB, C.P.M., CPMDirector of Procurement – City of TucsonUniversal Public Procurement Certification Council ChairNIGP Past President

Definition

Contract Administration: Following the award of a contract, the management

actions that must be taken to assure full compliance with all of the terms and conditions contained within the contract document, including price. Action steps that assure that the contractor is in full compliance with the entire contract. Contract administration activities include payment, monitoring of progress, inspection and acceptance, quality assurance, monitoring and surveillance, modifications, negotiations, contract closeout and other activities.

• NIGP Dictionary of Terms, Revision 2008

Look familiar?

Procurement

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Do you only hear from customers when things go wrong?

How do you address problems AFTER they happen?

And what does that cost us?

The Two Roles of Procurement

Contract Management

Contract Formation

ContractAdministration

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It’s About the Full Cycle

Performance M

onitoring

Select

Contract

Type

& C

lauses

Specify Need

Performance M

onitoring

Select

Contract

Type

& C

lauses

Specify Need

A Layered Approach

Contract Administration

Contract

Solicitation

Building a Partnership for Success

Customer

PROCSupplier

CONTRACT

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So Where Does It All Begin?

We Begin With the End in Mind

Scenario A

FLEET SERVICES SHOP REQUIRES DIFFERENT SIZES AND TYPES OF TIRES TO MAINTAIN VARIOUS TYPES OF VEHICLES

Scenario B

TRANSPORTATION REQUIRES MEDIAN MAINTENANCE SERVICES FOR LOCATIONS THROUGHOUT CITY

Group Discussion

Understanding & Addressing Risk

Contract Formation: • Proposal Risk

• Liability Risk

• Contractual Risk

• Schedule Risk

• Performance Risk

• Price Risk

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Building a High Performing Contract

• Defining your customer’s needs• Understanding the goal• Selecting the best sourcing approach• Developing a clear plan of action• Engaging your suppliers partners• Drafting your solicitation

Back to Our Scenarios

How would you approach this scenario?

How would you ensure you meet your customer’s goal?

What would be critical to address in the solicitation?

Developing the Contract Administration Plan

• Description of Project• Roles and responsibilities• Period of Performance/Delivery Dates• Data and Deliverables• Testing, Inspection, Acceptance• Warranty Provisions

• Personnel Requirements

• Special Terms and Conditions

• Watch List Items

• Critical Milestones

• Schedules and Meetings

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Building Your Contract Admin Team

Choosing the right players

Establishing roles & authority

Separation of duties

Ethics

Communication

Documentation

Creating a Performance Assessment Plan

Questions to be addressed in PAP:

What tasks will be inspected?

When will tasks be inspected?

What are the standards of performance?

How will evaluation and assessment be done?

Starting Off on the Right Foot

• Conducting the Kick Off Meeting• Delineating Roles & Responsibilities• Defining Communication Plan• Documenting Progress Meetings• Closing Out the Contract • Auditing the Contract

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Change Orders & Amendments

Approvals

Process

In Field vs. In Office

Value Added (Analyze)

In Scope vs. Outside Original Intent

Tracking contract changes

Performance Monitoring

Points to consider:

Data

Contractor Performance

Budget and Payment

Risk of Failure

Subcontractors

Quality

Schedules

Acceptance

Changes

Conflicts

What is Your Current CA Structure?

And How Is That Working?

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Selling the Value

• Defining the value of a CM program

• Securing a program champion (Sponsor)

• Involving stakeholders

• Conducting research

• Garnering agency-wide support

• Connecting to the culture

Building Your Structure

• Authority

• Reporting

• Accountability

• Delivery of Service

• Funding

• Flexibility

Building Your Team

• Right players• Development &

Succession• Communication• Training & Certification• Engagement

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Defining Roles & Responsibilities

• Positions and Roles• Internal & External Stakeholders• Expectations• Accountability• Documentation

Establishing Standards

• Process Improvements• Transformation• Efficiencies (time and money)• Training• Documentation• Tools• Communication

Implementing Change

• Create the Change Culture• Establish a Leadership Team• Build an Implementation Team• Define a Transformation Plan• Develop Change Agents• Communicate!• Assess, Adapt & Move Forward!

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Demonstrating Results

• Define Metrics• Staff Efficiencies• Hard Dollar Savings, Increased

Revenues• Reduced Contract Mgnmt Costs

• Track, Capture Data; Report Results• Share & Celebrate Improvements• Keep Stakeholders Engaged

Thank You!

Marcheta E. Gillespie, CPPO, CPPB, C.P.M., CPM

Director of Procurement – City of Tucson

UPPCC Board Chair

NIGP Past President

(520)940-7194

[email protected]

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Project Management for the Procurement Professional

Project Management for the Procurement Professional

Marcheta Gillespie, CPPO, CPPB, C.P.M., CPMCity of Tucson –Director of Procurement

UPPCC Board Chair, NIGP Past President (2013-14)

Marcheta Gillespie, CPPO, CPPB, C.P.M., CPMCity of Tucson –Director of Procurement

UPPCC Board Chair, NIGP Past President (2013-14)

Session Agenda

• Why is PM important to Procurement?• Why is PM important to Procurement?

• How do we get started?• How do we get started?

• What are some tips for success?• What are some tips for success?

• What are some lessons learned?

• What are some lessons learned?

• What is the role of Procurement in PM?• What is the role of Procurement in PM?

• What is Project Management (PM)?• What is Project Management (PM)?

What is Project Management?

The process of planning, organizing, staffing, directing and controlling activities for a specific term to meet specific goals and objectives.

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We Wear Two Hats

Department Agency

WHAT ARE GOVERNMENTS’ PROJECTS?

What Are Our “Projects”?

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WHY DO PROJECTS FAIL?

Why Do Projects Fail?

Wrong Team MembersWrong Team MembersWrong Project ManagerWrong Project Manager

Over budget/timeOver budget/time

Lack of PlanningLack of Planning

Lack of Support& Oversight

Lack of Support& Oversight

Unclear Goals & ObjectivesUnclear Goals & Objectives

Lack of ResourcesLack of Resources

Wrong Project/Wrong Time

Wrong Project/Wrong Time

WHY IS PROJECT MANAGEMENT IMPORTANT?

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Why is Project Management Important?

Promotes collaboration and dialogue Promotes collaboration and dialogue

Lends credibility to the project Lends credibility to the project

Solicits stakeholder involvement & support Solicits stakeholder involvement & support

Documents the process and the project Documents the process and the project

Ensures a higher degree of project success Ensures a higher degree of project success

Provides a measurement against a plan Provides a measurement against a plan

Provides a strategic method for managing Provides a strategic method for managing

WHY IS PM IMPORTANT TO PROCUREMENT?

Why is PM Important to Procurement?

Protector of Agency Interest Protector of Agency Interest

Risk & Liability Risk & Liability

“Go To” Department “Go To” Department

Mediator (Contractor-Dept-Management) Mediator (Contractor-Dept-Management)

Project Management Void Project Management Void

Contract Administrator Contract Administrator

Sourcing Agent for Good/Service Sourcing Agent for Good/Service

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Elements of a Project

• Scope: Specific objectives

• Money: Budget

• Resources: Capacity

• Time: Specific start/end date

ProcurementProjects

Project Constraints

Performance/QualityPerformance/Quality

Cost/ScopeCost/ScopeSchedule/TimeSchedule/Time

“Good”“Good”

“Cheap’“Cheap’“Fast”“Fast”

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How Do We Get Started?

Understand Your Goal Understand Your Goal

Determine Your Priorities Determine Your Priorities

Create a Strategic Plan Create a Strategic Plan

Selecting the “Right” Project Selecting the “Right” Project

Establish the “Right” PM Establish the “Right” PM

Choose the “Right” Team Choose the “Right” Team

Building a Strategic Plan

Mission Statement Mission Statement

Key Result Areas (KRA) Key Result Areas (KRA)

Objectives Objectives

Action Plan w/Resource Allocation Action Plan w/Resource Allocation

Evaluation Evaluation

Vision Statement Vision Statement

Creating the Team

Size Skills Skills

Meaningful Purpose Meaningful Purpose

Specific Goals & RolesSpecific Goals & Roles

Clear Approach Clear Approach

Accountability Accountability

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AgencyProjects

Contract Administration

CitizenryCitizenry

AgencyAgencyContractorContractor

“Value/Quality”“Value/Quality”

“Budget/Schedule”“Budget/Schedule”“Profit”“Profit”

What is the Role of Procurement?

• Protect the Agency

• Notifications/Updates

• Advisor

• Protect the Agency

• Notifications/Updates

• Advisor

• Manage the Contract

• Scope/Budget/Schedule

• Contract Amendments

• Change Orders

• Claims/Disputes

• Critical Path

• Tools

• Manage the Contract

• Scope/Budget/Schedule

• Contract Amendments

• Change Orders

• Claims/Disputes

• Critical Path

• Tools

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Procurement as Project Manager

Organized/Disciplined Confident/Ambitious Creative/Initiative Flexible/Adaptable Committed Enthusiastic

Procurement as Team Member

Team Building Conflict Resolution Negotiation Planning Technical Communication

Management Expectations

Accountability Resolve Conflict Recommendations Communicate/Report Minimum Disruption Manage Budget/Staff

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In Practice……

Engage early in the project discussion Ensure the contract matches the project plan Encourage a project management discipline Monitor the progress/remain engaged Inform leaders of status and challenges Be realistic, be honest Practice good contract administration

What Are Some Tips for Success?

• Know Your Project Sponsor/Keep them informed

• Know Your Project Sponsor/Keep them informed

• Critical Path/ Keep float in reserve

• Critical Path/ Keep float in reserve

• Watch critical tasks• Watch critical tasks

• Consistent messaging• Consistent messaging

• Communication!• Communication!

• Estimate based on reality• Estimate based on reality

• Know Your Schedule & Monitor

• Know Your Schedule & Monitor

What are Some Lessons Learned?

• Know Your Environment• Know Your Environment

• Know Your Contract• Know Your Contract

• Engage the RIGHT players• Engage the RIGHT players

• Budget & Schedule• Budget & Schedule

• Know Your Value & Role• Know Your Value & Role

• Politics, politics, politics• Politics, politics, politics

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Contact Information

Marcheta E. Gillespie, CPPO, C.P.M., CPM, CPPBDirector of Procurement - City of TucsonUPPCC Board Chair; NIGP Past PresidentP.O. Box 27210Tucson, AZ 85726-7210(520)[email protected]

Marcheta E. Gillespie, CPPO, C.P.M., CPM, CPPBDirector of Procurement - City of TucsonUPPCC Board Chair; NIGP Past PresidentP.O. Box 27210Tucson, AZ 85726-7210(520)[email protected]

Wendy L. Clark, Vendor Specialist/Certified Procurement Officer/OMES Wendy L. Clark is the Vendor Specialist and a Certified Procurement Officer for Central Purchasing (OMES) with the State of Oklahoma. Her responsibilities are to provide customer service to Vendors, State Agencies, Political Subdivisions and Affiliates (i.e., school districts, higher education and tribal governments). Wendy coaches Vendors on registering to do business in the State of Oklahoma and provides to all customers on site training on how to navigate the Statewide website and Statewide Contracts. As Vendor Specialist, Wendy’s job is to walk customers through the purchasing processes and procedures. She has a Bachelor of Arts degree in Political Science and is a Certified Mediator/Conflict Resolution through the Oklahoma Supreme Court. Wendy’s experience in the private sector includes; management, business development, contract writing and negotiations. She has served as a mentor and trainer, hiring and motivating staff in all positions she has held. She’s worked with fleet and equipment in management as well as writing bids for state contracts receiving substantial awards. Wendy is a dynamic communicator who serves as a team builder that focuses on providing exemplary customer service. She uses her expertise to present at seminars and to educate clients and suppliers bringing out the best in individuals.

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What’s New With You and Procurement?Wendy Clark, CPOVendor Specialist405‐568‐7439

Learner Outcomes

Students will learn how to:• Locate and navigate the Central Purchasing website.

• Identify RFP/ITB (Request for Proposal, Invitation to Bid).

Students will learn how to:• Locate Statewide Contracts.

• Apply the Vendor Registration Process.

Learner Outcomes

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Students will learn how to:• Apply Central Purchasing processes, rules and statutes.

• Review CP contacts and library forms.

Learner Outcomes

Students will learn how to:• Review UNSPSC codes (United Nations Standard Product Services Code), aka commodity codes.

Learner Outcomes

This is the Central Purchasing home page. It contains the Purchasing Mission Statement, Goals, General Information (including Overseeing the State Use Program) and the Purchasing Code of Ethics.

OMES Website

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The second link on the left side of the home page is for RFP/ITB (Request for Proposals/Invitations to Bid).

OMES Website

This link takes you to the solicitations page where you can search open or awarded solicitations. It is also a second place to find some of the other links (such as Statewide Contracts).

OMES Website

And it takes you to all the open or pending solicitations. You can scroll down the list or search by keyword.

OMES Website

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You will get a page showing items that match your search criteria. You can click on the Solicitation Number and it will take you into the documents related to that solicitation.

OMES Website

The next section allows you to search for existing Statewide Contracts.

OMES Website

On this slide, we are looking at the Statewide Contracts. Again, you have the option of searching by number or keyword.

OMES Website

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Information about the Vendor Registration program can be found at the next link.

OMES Website

This page has links for announcements, online registration and registration FAQs. It also has a link to contact the office for information.

OMES Website

The Certified Procurement Officer (CPO) program page can be found at the next link.

OMES Website

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This is a useful page where you can look at requirements, find forms and locate classes approved for continuing credits.

OMES Website

The Vendor Verification page is very important for file documentation purposes. It contains the links for sales tax verification and the Secretary of State registration. It also provides information on other required file documentation.

OMES Website

The Vendor Performance link provides some guidelines and gives you a shortcut to finding supplier performance reports needed for files.

OMES Website

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The Vendor Performance page also provides contact information for when you have questions about a supplier’s performance.

OMES Website

The Purchasing Processes, Rules & Statutes page is a quick place for you to find purchasing‐related statutes and rules.

OMES Website

The next area is our Contract Information link.

OMES Website

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On the CP Contact Information page are phone numbers and email links for all Central Purchasing staff, managers and assistants.

OMES Website

The Library: forms, PIMs, memos, etc. link takes you to a search screen for those documents.

OMES Website

CP Announcements includes announcements from Central Purchasing, State Use, the CPO Training Group and PIMs.

OMES Website

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A new tool to help you identify category codes is under the tab UNSPSC Codes.

OMES Website

Gerald Elrod is a Senior Contract Coordinator with the Oklahoma Healthcare Authority. Prior to taking a position with the Oklahoma Healthcare Authority, Gerald worked as a CPO with the Office of Management and Enterprise Services, the Oklahoma Department of Human Services and the Oklahoma Department of Central Services.

Gerald attended the University of Oklahoma for degrees in Political Science and History and went on to attend graduate school at the University of Central Oklahoma for a Master’s degree in Public Administration.

In addition to his work with the State of Oklahoma, Gerald currently serves as a board member with the Deer Creek Schools Foundation endowment and works with various charities to promote youth education and literacy within the State of Oklahoma.

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Specification Development: Know How to Ask

Gerald Elrod II

Oklahoma Healthcare Authority

Introduction

What will we be talking about and why is it important?

Objectives

• Define “specifications” and how they differ from other aspects of an RFP.

• Discuss the ways in which a clear set of specifications can improve the quality of responses received and the resulting contract.

• Learn how to write specifications with the reader in mind.

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Objectives <cont.>

• Learn how to identify what should and should not be included in your specifications.

• Identify common mistakes that can lead to confusing or incomplete specifications.

• Review examples of specifications and apply what we have learned.

Defining Specifications

• What are specifications?

• “Who, What, Where and When”

• “Why and How”

• Specifications, Instructions and Terms & Conditions

Start with the Goal in Mind

• Know what you’re asking for.

• “Need” versus “Want”

• Evaluations should never be an after thought.

• Know what to prioritize.

– Product

– Experience

– Cost

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Organizing Your Specs

• Build from an outline.

• Lead with a summary.

• Grouping specs together.

• Only include what’s necessary.

• Using attachments.

• Triple check your references.

• Review your work.

The Right Tool for the Job

• Requests for Proposal

• Invitations to Bid

• PIPS (“Best Value”)

• Sole Source (and other non‐competitive procurement vehicles)

• Plagiarize isn’t always a bad word.

Targeting the Right Audience

• Always remember who you’re asking.

• Do your research.

• Using industry standards.

• Don’t assume a vendor will be familiar with your organization’s policies and terminology.

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Read From a Vendor’s Point of View

• Review your specifications from the point of view of a prospective vendor.

• Get outside input.

• Avoid assuming something is “common knowledge.”

• Look for competition limiting requirements.

• If you’re having a hard time, it will be worse for your vendors.

Keeping Your Specs Clear

• Keep it short.

– Avoid unnecessary complexity.

• Keep it interesting.

– Set the right tone.

• Keep it simple.

– Aim for a fifth grade reading level.

• Keep it accurate.

– Avoid using industry terminology incorrectly.

The Benefits of Good Specifications

• Avoid unnecessary questions during the Q&A period.

• More Responses.

• Better Responses.

• Better Pricing.

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The Benefits of Good Specifications <cont.>

• Avoid Rebids.

• Avoid complicated evaluations.

• Avoid protests.

• Avoid change orders due to misunderstandings.

Work with a Team

• Don’t go solo.

• Find the experts within your organization.

• Utilize the experience of your team to identify your agency’s needs.

• Know how to ask the right questions to get the information you need out of your team.

• Remember, your team isn’t as familiar with the RFP process. Be encouraging and helpful.

• Legal review protects everyone.

Identifying Hidden Specs

• Keep an eye out for specifications that are out of place.

• If it’s required of the vendor after award, it’s probably a spec.

• Keeping specifications together ensures clarity and accuracy.

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Removing “Fake” Specifications

• Don’t let other aspects of the RFP creep into your specifications.

• If it’s required of the vendor prior to award, it’s probably a bidders’ instruction.

• Keeping bidders instructions out of your specifications prevents confusion and avoids protests.

Avoiding Pitfalls

• “Shall and Must” vs. “Should and May”

• Garbage in, Garbage Out

• Making Assumptions

• “Too much” collaboration.

• Watch the page count.

• Gold‐Plating

Wrapping Up

• Specifications tell the vendor what we need, not how to bid.

• A clear set of specifications will make evaluations easier and increase the chances of getting exactly what you need.

• Writing specifications with the reader in mind avoids questions, amendments and promotes partnership.

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Wrapping Up <cont.>

• Specifications should always answer the questions “who, what, where and when?”

• Know when to avoid “why and how?”

• Little mistakes can cause big problems. Don’t be vague but don’t include unnecessary detail. Remove conflicts and remember the difference between specifications and instructions.

• Don’t be afraid to reuse good material.

QUESTIONS?

Gerald Elrod II

Senior Contract Coordinator

Oklahoma Healthcare Authority

[email protected]

405/522‐5850