Technology Procurement Structure,

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  • Technology Procurement Structure,

    1. 1. Technology Procurement Structure, Process & A Look Forward Presented by: Office of Administration/Office for Information Technology & Department of General Services December 7, 2004
    2. 2. John M. Troxel, C.P.M. Curt Topper Chief Procurement Officer Director, Strategic Development DGS Bureau of Procurement DGS Bureau of Procurement Strategic Sourcing & Reorganization
    3. 3. Why Strategic Sourcing and Reorganization? <ul><li>De-centralized approach to purchasing results in inconsistent buying practices </li></ul><ul><ul><li>Agencies are delegated most “services” procurements </li></ul></ul><ul><ul><li>Sourcing decisions occur at the requisition level causing over-specification </li></ul></ul><ul><li>Commonwealth does not take full advantage of its buying power in the marketplace </li></ul><ul><ul><li>Minimal spend leverage and coordination across agencies </li></ul></ul><ul><ul><li>Suppliers treat each agency as a small customer </li></ul></ul><ul><ul><li>Multiple-award contracts dilute leverage due to a “Share the Wealth” philosophy </li></ul></ul><ul><li>Current contracting process does not support “best value” </li></ul><ul><ul><li>Majority of contracts are renewed each year </li></ul></ul><ul><ul><li>Minimal use of tender vehicles (RFP) that support further negotiation opportunity </li></ul></ul><ul><ul><li>Suppliers take advantage of loose pricing guidelines </li></ul></ul><ul><li>Purchasing decisions are made with minimal analytics and lack of understanding of Total Cost of Ownership (TCO) </li></ul><ul><ul><li>Current structure inhibits the development and application of industry expertise </li></ul></ul><ul><ul><li>Available data and reporting tools are not leveraged to make sound sourcing decisions </li></ul></ul><ul><ul><li>In some cases buyers are unfamiliar with the products they are actually buying </li></ul></ul>
    4. 4. Payments To Suppliers Classified Suppliers Spend Sourceable Cycle 2 & Future Cycle 1 Transfers $3.1B Unclassified $408MM $2.6B Not Sourceable $1.1B $1.5B $820MM $1.1B Total Spend $3.9B $428MM $408MM Unclassified Spend Analysis to Determine Sourceable Spend
    5. 5. Cycle 1 Strategic Sourcing Savings Summary (in $M) WS Lee $4.9 $13.8 (21%) $65.2 Complete Food Apple Ford/Phillips Ford $0.0 $0.2 (4%) $4.6 Complete Fleet (Med. Duty Trucks) Northeast Auto, Hertrich $0.0 $2.4 (15%) $16.0 Complete Fleet ½ (Pass Vehicles) XPEDX, Sanolite, Ecolab $2.4 $3.5 (32%) $11.1 Complete Cleaning Supplies (4 lots) Multiple (7); Supply Source best value $7.9 $7.0 (39%) $18.1 Complete Office Furniture Multiple (9); IBM, Pierson, best value awards $7.3 $13.4 (34%) $40.0 Complete IT Hardware – Servers ePlus $4.6 $8.5 (36%) $23.5 Complete IT Hardware – Peripherals Dell $1.4 $19.1 (34%) $56.6 Complete IT Hardware – PCs Imagistics $0.2 $11.0 (58%) $ 18.9 Complete Copiers Boise Office Products $5.8 $9.6 (43%) $22.5 Complete Office Supplies Pomeroy $0.3 $4.2 (59%) $7.1 Complete IT Hardware Maintenance Multiple (53) $0.0 $0.0 (0%) $11.8 Complete Highway Mat’l (Aggregate) Multiple (13) Multiple (73) ASAP Awarded Supplier $0.0 $0.4 (14%) $13.8 Complete Highway Mat’l (Liquid Bit.) $0.0 $2.4 (5%) $45.1 Complete Highway Mat’l (Plant Mix) $0.0 $4.0 (9%) $43.7 Complete Software M/WBE Spend Annual Savings Previous Annual Spend Status (Time to Completion) Commodity
    6. 6. Cycle 2 Strategic Sourcing Savings Summary (in $M) TBD TBD TBD $24.3 November Heavy Duty Dump Trucks TBD TBD TBD $10.5 November Advertising – Creative TBD TBD TBD $20.5 November Advertising – Media TBD TBD TBD $87.0 November Medical Services TBD TBD TBD $25.2 November Print TBD TBD TBD $18.3 November MRO Supplies TBD TBD TBD $9.5 November Fleet Outside Shops TBD TBD CAI Awarded Supplier TBD TBD $7.0 November Fleet Auto Parts TBD TBD $2.9 November Fleet Tires $22.3 $19.8 $65.0 Complete IT Contracted Services M/WBE Spend Annual Savings Previous Annual Spend Status (Time to Completion) Commodity/ Service
    7. 7. Economic & Business Development <ul><li>Minority-owned and Women-owned Business participation increased from less than 2% to 27.7% for sourced contracts </li></ul><ul><li>$78.2M to PA Minority-owned and Women-owned Businesses as prime or sub-contractors </li></ul><ul><li>PA-based primes were awarded the food ($51.4M), staff augmentation ($45.2M), furniture ($11.1M) and media ($19.6M) contracts </li></ul><ul><li>Non-PA primes have made significant investments in PA: </li></ul><ul><ul><li>Boise (office supplies) adding 100 jobs </li></ul></ul><ul><ul><li>Imagistics (copiers) adding 60 jobs </li></ul></ul><ul><ul><li>Pomeroy (computer maintenance) adding 50 jobs </li></ul></ul>
    8. 8. Commodity Director - Goods Commodity Teams Commodities Commodity Executives Commodity Director - Services Print IT Consulting Consulting – Non-IT IT Programming Police & Fire Highway Metals Future Bureau of Procurement = Commodity = Service Temporary Labor Professional Legal Medical Professional Development Marketing Advertising Travel Building Maintenance & Services Custodial Services Equipment & Operation Services Equipment Rental & Repair HVAC Landscaping Freight Operational Road Maintenance Vehicles Construction Vehicles Fleet Maintenance Equipment & Fleet Highway Safety Materials Appliances Roadway Equipment Machinery Furniture & Fixtures Raw Materials Anti-Skid Road Patch/ Aggregate Fuel Heating Fuel Natural Gas Electricity IT & Communications Hardware & Peripherals Software IT Services Telecom Network Equipment Office Equipment Supplies & Consumables MRO Supplies Cleaning Supplies Lab/Medical Supplies Wearing Apparel Office Supplies Food Pharma
    9. 9. House Bill 1996 <ul><li>Requires the Commonwealth to establish parallel, multi-award contracts when: </li></ul><ul><ul><li>A newly sourced Commonwealth-wide contract reduces the current number of suppliers on contract by more than 50% </li></ul></ul><ul><ul><li>A newly sourced Commonwealth-wide contract is single sourced </li></ul></ul><ul><li>New contracts to be put in place that only benefit the COSTARS participants </li></ul>COSTARS Contracts
    10. 10. Paul Bluhm Division Chief Invitation to Qualify (ITQ) Program Office OA/OIT/Bureau of IT Planning & Administration New Master IT Services ITQ Contract ME # 481350
    11. 11. <ul><li>Effective - 7/01/04 </li></ul><ul><li>Expires 6/30/09 </li></ul><ul><li>No renewal periods </li></ul><ul><li>$5 million project cap </li></ul>ITQ Contract ME # 481350
    12. 12. <ul><li>No hardware or software products </li></ul><ul><li>Work limited to projects – start/end dates and work based on deliverables </li></ul><ul><li>Fixed-price projects only </li></ul><ul><li>No cost items on web site </li></ul><ul><li>No separate reimbursement for travel </li></ul>ITQ Contract ME # 481350
    13. 13. <ul><li>Initial maintenance required for software development projects </li></ul><ul><li>$25,000 competition threshold </li></ul><ul><li>Minimum of 5 solicitations; 1 MBE and 1 WBE </li></ul><ul><li>Agencies must receive a minimum of 2 proposals to have a competitive procurement </li></ul>ITQ Contract ME # 481350
    14. 14. <ul><li>Multiple consulting service categories consolidated under 1 contract </li></ul><ul><li>10 original service categories under the contract </li></ul><ul><li>On-going (operational) types of service categories are no longer covered </li></ul><ul><li>Several new service categories/subcategories are now on the ITQ contract </li></ul>ITQ Contract ME # 481350 Service Categories
    15. 15. <ul><li>Consulting Services – CRM, EDMS, eGov’t, Fin., Ops., Org., Planning, and Research </li></ul><ul><li>Biometrics Services – no change </li></ul><ul><li>Consulting Services – LANs/WANs (includes LAN wireless) - no cabling installation or purchasing of materials </li></ul><ul><li>Consulting Services - Wireless Networking – Radio only </li></ul>ITQ Contract ME # 481350 Service Categories
    16. 16. <ul><li>Continuity of Government (Consulting Services) – New (facilitating development of plans or specific elements such as: evacuation plans, leadership succession, assessment of risks/vulnerabilities, etc.) </li></ul><ul><li>GIS Services (Consulting/Programming) </li></ul><ul><li>Independent Verification & Validation (Consulting Services) – New (3 rd - party quality assurance, defect investigation, requirements validation and tracing, vendor analysis and selection, defect investigation, etc.) </li></ul>ITQ Contract ME # 481350 Service Categories
    17. 17. <ul><li>IT Training – Classroom – On-site, off-site instructor led commercially available IT courses </li></ul><ul><li>IT Training – Non-Classroom – distance learning, instruction on client developed systems, CBT, etc. </li></ul><ul><li>Software Development Services – Programming/Systems Analysis (i.e., EDMS, eGovernment [web-based], SAP programming) </li></ul>ITQ Contract ME # 481350 Service Categories
    18. 18. <ul><li>COTS Software Services – Planning, workflow analysis, data migration, systems and integration testing, installation, configuration, performance tuning, quality assurance, customization and documentation, etc. </li></ul>New Service Category for ITQ Contract ME # 481350
    19. 19. <ul><li>Internal Premise Voice Wiring – Planned DGS cabling contract </li></ul><ul><li>Internal Premise Residential Voice and Data Wiring Services – Planned DGS cabling contract </li></ul><ul><li>Telecommunications Consulting Services – Not covered under new contract </li></ul><ul><ul><li>Action underway to add service category to the contract. </li></ul></ul><ul><ul><li>Will likely cover CRM, Financial, Operational, Organizational, Planning and Research services </li></ul></ul>Prior Service Categories Not on New ITQ Contract
    20. 20. <ul><li>Data Capture Services – DGS IT Staff Augmentation Contract </li></ul><ul><li>Temporary IT Staffing – DGS IT Staff Augmentation contract </li></ul><ul><li>DGS IT Staff Augmentation contract questions can be addressed to Mike Richart at 717-783-8578, or via email at: [email_address] </li></ul>Prior Service Categories Not on New ITQ Contract
    21. 21. <ul><li>Help Desk – Planned DGS contract </li></ul><ul><li>Wireless Antenna Support Services – No longer needed </li></ul>Prior Service Categories Not on New ITQ Contract
    22. 22. Contract ME # 481350 Qualified Service Provider Statistics Software Development Services 91/26 IT Training – Non-Classroom 18/6 IT Training – Classroom 21/3 IV & V 13/5 GIS Services 30/3 Continuity of Government 7/1 Consulting Services 78/15 Wireless Networking 13/1 LANs/WANs 38/9 Biometrics 2/1 Service Category Qualified/SDB
    23. 23. For more Information regarding the ITQ process, visit the ITQ Web site at: www.itq.state.pa.us
    24. 24. Brenda Bobb Enterprise IT Strategic Planning Chief OA/OIT/Bureau of IT Planning & Administration IT Procurement Review Process
    25. 25. Procurement <ul><li>Executive Order 2004-8 broadens the role of the Office of Administration/Office for Information Technology (OA/OIT) by requiring agencies to receive approval from the OA/OIT prior to the issuance of all IT procurement documents (e.g., Requests for Quote (RFQ), Request for Proposal (RFP), Sole Source, HW/SW purchases, Change Orders and Invitations to Bid, etc.) totaling more than $100,000. </li></ul><ul><li>ITB A.7 provides direction to agencies for IT procurements in excess of $100,000 and for IT procurements for non-standard purchases under $100,000. </li></ul>
    26. 26. The Agency CIO/IT Manager must e-mail the documentation specified below to the Agency’s OA/OIT Community of Practice (CoP) Planner at least twenty (20) business days prior to issuance to a vendor(s): RFP – Request for Proposal (RFP) RFQ – Request for Quote (RFQ), incl. Statement of Work (SOW) Sole Source – Continue to send Sole Source requests to Department of General Services (DGS).  DGS provides the OA/OIT with an opportunity to review/provide feedback.  The authority to grant a Sole Source approval continues to reside with DGS. Software /Software Maintenance Procurement – A copy of the ASAP quote and a business case, and/or other documentation for software not marketed by ASAP. Hardware/Hardware Maintenance Procurement – A copy of the vendor quote and a business case.
    27. 27. <ul><li>Non-standard Procurement - Agencies must request a waiver from the OA/OIT, regardless of the $ amount for the procurement for any IT purchases that deviate from standards issued by OA/OIT Information Technology Bulletins (ITBs), OIT memorandum to the agencies, and/or Management Directives. </li></ul><ul><ul><li>If a hardware procurement request is for a server/storage solution other than IBM, the “IBM Server/Storage Best Value Product/Solution Waiver” must be included.  </li></ul></ul><ul><ul><li>If a hardware maintenance request is for a solution other than the Pomeroy Hardware Maintenance Contract, the Pomeroy Hardware Maintenance Waiver request form must be included. </li></ul></ul><ul><li>Change Order Against an Existing Contract  -- If this involves a change order for the Data PowerHouse (DPH) Contract, the DPH Agency Account Manager (AAM) within the OA/OIT’s Bureau of Solutions & Services will work with the DPH Contractor on behalf of the agency and no review by an OIT Planner is required. </li></ul><ul><li>ITB – The Invitation to Bid document and a business case. </li></ul>
    28. 28. <ul><li>Granting of Funds to Local Governments   </li></ul><ul><li>When agencies plan to grant funds (e.g., to a local government), if the funding is for an IT project that impacts state government, then the OA/OIT will review the grant application package prior to issuance .  For example, if an agency plans to grant funding to local governments for data development/systems/equipment that will interface with, connect to, or communicate with, systems operated by a Commonwealth agency(ies), the OA/OIT will review the grant instructions to ensure that Commonwealth technology standards are defined within the document. </li></ul>
    29. 30. Questions?

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