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DE State Contracts

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DE State Contracts

  1. 1. STATE OF DELAWARE INFORMATION ON CONTRACTS & PURCHASING <ul><li>PRESENTED BY: </li></ul><ul><li>SANDRA L. DAVID & </li></ul><ul><li>JANET SCHUKOSKE </li></ul><ul><li>DIVISION OF SUPPORT SERVICES </li></ul><ul><li>OCTOBER 27, 2004 </li></ul>
  2. 2. OVERVIEW FOR TODAY <ul><li>SMALL PURCHASE PROCEDURES/ THRESHOLD CHANGES </li></ul><ul><li>USER COMMITTEES </li></ul><ul><li>CONTRACTING’S NEW ROLE </li></ul><ul><li>RFP PROCESS & PROCESS CHECKLIST </li></ul><ul><li>ANSWER/QUESTION TIME </li></ul>
  3. 3. Division of Support Services Contract Services Food Services Surplus Property Delaware Helpline Fleet Services Printing & Publishing Messenger Services Fleet link Commercial Printing Copy Management Department of Administrative Services
  4. 4. THRESHOLD DEFINITIONS <ul><li>FORMAL BID: </li></ul><ul><li>Work must be performed under a contract entered into according to Delaware Law. (Formal Sealed ITB/RFP, public advertising in public newspaper in all three counties). </li></ul>
  5. 5. PURCHASING THRESHOLD DEFINITIONS <ul><li>MATERIEL & NON-PROFESSIONAL SERVICES: </li></ul><ul><li>Any material or work of a nonprofessional nature required by a State Agency. </li></ul>
  6. 6. THRESHOLD DEFINITIONS <ul><li>OPEN MARKET: </li></ul><ul><li>If it’s not on the contract, go buy it. </li></ul><ul><li>WRITTEN QUOTES: </li></ul><ul><li>Must obtain three written quotes from three sources/vendors as to the prices (Can be faxed, electronic mail, and U.S. mail). </li></ul>
  7. 7. THRESHOLD DEFINITIONS <ul><li>PROFESSIONAL SERVICES: </li></ul><ul><li>Any contract for services of a professional nature required by a State Agency, (Generally requires specialized education, training or knowledge, i e. Consultant, Engineers). </li></ul>
  8. 8. THRESHOLD DEFINITIONS <ul><li>PUBLIC WORKS: </li></ul><ul><li>Any contract for the construction, reconstruction, alteration or repair of any public building, road street, etc. (Paid by public funds) </li></ul>
  9. 9. THRESHOLD DOLLAR AMOUNTS OF CONTRACTS <ul><li>MATERIEL & NON-PROFESSIONAL SERVICES: </li></ul><ul><li>Less than $ 10,000.00 Open Market </li></ul><ul><li>$10,000.00 - 24,999.00 Written Quotes </li></ul><ul><li>More than $25,000.00 - Formal Bid </li></ul>
  10. 10. DOLLAR AMOUNTS CON’T <ul><li>PROFESSIONAL SERVICES: </li></ul><ul><li>Less than $50,000.00 Open Market </li></ul><ul><li>Over $50,000.00 Formal Bid </li></ul><ul><li>*ALL CONTRACTS ISSUED BY THE DIVISION OF SUPPORT SERVICES ARE MANDATORY FOR AGENCIES. Title 29, Section 6902 (f) </li></ul>
  11. 11. DOLLAR AMOUNTS CON’T <ul><li>PUBLIC WORKS: </li></ul><ul><li>Less than $25,000.00 Open Market </li></ul><ul><li>$25,000.00 – 49,999.00 Letter Bid </li></ul><ul><li>(letter sent for pricing) </li></ul><ul><li>Over $50,000.00 Formal Bid </li></ul>
  12. 12. <ul><li>SILVER OAKS PARTNER CONSULTANTS’ SOURCING LIST SPEND AND SAVINGS </li></ul>
  13. 13. SOURCING CATEGORIES <ul><li>Uniforms </li></ul><ul><li>Defibulators </li></ul><ul><li>Network Services </li></ul><ul><li>Janitorial Services </li></ul><ul><li>Paper (computer) </li></ul>
  14. 14. SOURCING CATEGORIES CONTINUED <ul><li>Cellular </li></ul><ul><li>Computer Hardware </li></ul><ul><li>Copiers </li></ul><ul><li>Electrical Supplies </li></ul><ul><li>Furniture </li></ul>
  15. 15. SOURCING CATEGORIES CONTINUED <ul><li>Lab Supplies </li></ul><ul><li>Long Distance </li></ul><ul><li>Office Supplies </li></ul><ul><li>Software </li></ul>
  16. 16. SILVER OAKS SOURCING SPEND <ul><li>DELAWARE SPEND: </li></ul><ul><li>TOTAL FOR FISCAL YEAR 2004 $ 85,424,108 </li></ul>
  17. 17. Silver Oaks ( P2) Cumulative Savings Breakout
  18. 18. P 2 SAVINGS <ul><li>TOTAL SAVINGS FOR FISCAL YEAR 2004 </li></ul><ul><li>$ 9,550,230 </li></ul>
  19. 19. CONTRACTING’S ROLE <ul><li>The Contracting Section within the Division of Support Services, manages all statewide contracts for goods and non-professional services. </li></ul><ul><li>Manage Agency Contracts </li></ul><ul><li>Consult and Assist other Agencies with their contract needs. </li></ul>
  20. 20. CONTRACTING ROLE CONTINUED <ul><li>Clearinghouse for information on central purchasing by two or more organizations </li></ul><ul><li>Agent for common purchases of supplies or contractual services </li></ul><ul><li>Collector and furnisher of information on market prices and other data useful in making purchasing decisions </li></ul>
  21. 21. CONTRACTING ROLE CONTINUED <ul><li>Clearinghouse for information on bid for supplies, material or contractual services </li></ul><ul><li>Perform other services and/or duties necessary to encourage economical and cost effective methods of purchasing by participating organizations </li></ul>
  22. 22. CONTRACTING ROLE CONTINUED <ul><li>Utilize Agency input into the structure of contracts by way of User Committees </li></ul><ul><li>Contract specifications and or Consultations </li></ul><ul><li>Periodic review of Contract Vendor </li></ul><ul><li>Life Cycle Costing(SB 307)* </li></ul><ul><li>Energy Star * </li></ul><ul><li>Cost Savings – Negotiations* </li></ul><ul><li>Cost Avoidance Technique* </li></ul>
  23. 23. USER COMMITTEES <ul><li>MANDATED BY DELAWARE LAW </li></ul><ul><li>VITAL AND IMPORTANT ASPECT OF OUR QUALITY CONTROL </li></ul><ul><li>AND OUR CUSTOMER SERVICE </li></ul>
  24. 24. USER COMMITTEES DEVELOPMENT <ul><li>Develop by Spend </li></ul><ul><li>Top Spend Agencies participation required </li></ul><ul><li>Procedures initiated by Contracting Officers </li></ul>
  25. 25. USER COMMITTEES <ul><li>Agency input into the structure of contracts by way of User Committees </li></ul><ul><li>Contract specifications </li></ul><ul><li>Agency review of Award </li></ul><ul><li>Periodic review of Contract Vendor </li></ul>
  26. 26. NEW CONTRACTING PROCESS <ul><li>Contracting New Enhancements </li></ul><ul><ul><li>Analyzing the commodity </li></ul></ul><ul><ul><li>Selecting a Bidding Approach (only RFPs) </li></ul></ul><ul><ul><li>Initial Bid Analysis </li></ul></ul><ul><ul><li>Negotiation Strategy </li></ul></ul>
  27. 27. Industry and Supplier Analysis <ul><li>Objective: Determine how current trends in a given industry. </li></ul><ul><li>i. Conduct Industry Analysis </li></ul><ul><li>ii. Conduct Supplier Analysis </li></ul>
  28. 28. PRIMARY GOALS <ul><li>To understand implications of industry trends for sourcing process </li></ul><ul><li>To identify key suppliers </li></ul>
  29. 29. How Benefit is Achieved <ul><li>Improved Quality/Service Levels </li></ul><ul><li>Detailed specification of service levels required </li></ul><ul><li>Willingness of suppliers to meet requirements to win high-volume business </li></ul>
  30. 30. How Benefit is Achieved Continued <ul><li>Purchasing of the Right&quot; Products/Services </li></ul><ul><li>Development of new product/service specifications aligned with user needs </li></ul>
  31. 31. How Benefit is Achieved Continued <ul><li>Cost Reduction </li></ul><ul><li>Purchasing the correct product or service at the best price </li></ul><ul><li>Delivering the best total cost solution to the state </li></ul>
  32. 32. How Benefit is Achieved Continued <ul><li>Better Management of Spending and Budgeting </li></ul><ul><li>Better understanding of internal sources of demand, and ability to forecast and control spending going forward </li></ul>
  33. 33. Researching Industry and Suppliers <ul><li>POTENTIAL RESEARCH RESOURCES </li></ul><ul><li>Reports: </li></ul><ul><ul><li>-Industry reports </li></ul></ul><ul><ul><li>-Analyst reports </li></ul></ul><ul><ul><li>-Regulatory/government reports </li></ul></ul>
  34. 34. Researching Industry and Suppliers Continued <ul><li>Internet: </li></ul><ul><li>-Hoovers, S&P reports </li></ul><ul><li>-Lexis-Nexis, Dow Jones </li></ul><ul><li>-Dun & Bradstreet </li></ul><ul><li>-Trade publications, Purchasing magazine </li></ul>
  35. 35. Suppliers Researching Industry Continued <ul><li>Interviews: </li></ul><ul><li>-End-users </li></ul><ul><li>-Purchasing organization members </li></ul><ul><li>-Suppliers </li></ul><ul><li>-Trade organizations </li></ul>
  36. 36. Conducting the Initial Bid (RFP and/or Auctions) <ul><li>COMMUNICATION IS THE KEY </li></ul><ul><ul><li>Communication to the User Groups: In all things, keep the user group informed of developments with the process, the supplier, etc. The more they are informed, the less they are surprised by changes (and there are always changes). </li></ul></ul>
  37. 37. Conducting the Initial Bid (RFP and/or Auctions) <ul><ul><li>Communication to Suppliers: It is vital that you speak with one, unified voice to suppliers during the process. </li></ul></ul><ul><ul><li>Communicate these points in both written and verbal correspondence, and make sure it is documented – Suppliers can and will claim that they weren’t informed, and it reflects badly on the state if you can’t prove otherwise! </li></ul></ul>
  38. 38. Negotiation and Techniques <ul><li>Negotiation is “the art of letting them have your way” ~Daniele Vare </li></ul>
  39. 39. Negotiation and Techniques <ul><ul><li>OBJECTIVE </li></ul></ul><ul><ul><li>Provide a framework for approaching/conducting a negotiation </li></ul></ul><ul><ul><li>Discuss common negotiations tactics </li></ul></ul><ul><ul><li>To be successful, a process requiring analysis, empathy and game theory </li></ul></ul><ul><ul><li>Discuss basic methodologies to estimate supplier economics </li></ul></ul><ul><ul><li>Review basic negotiations skills </li></ul></ul>
  40. 40. PROCESS CHECK LIST <ul><li>Determine Source able Baseline </li></ul><ul><ul><li>Incumbent data/past bidders </li></ul></ul><ul><ul><li>Prism Report </li></ul></ul><ul><ul><li>Review past Usage Report </li></ul></ul><ul><ul><li>Speak to current vendor to discuss concerns </li></ul></ul>
  41. 41. PROCESS CHECK LIST CONTINUED <ul><ul><li>Benchmark Pricing to Assess Opportunity </li></ul></ul><ul><ul><ul><li>-Compare pricing using the internet </li></ul></ul></ul><ul><ul><ul><li>-Compare pricing using the trade magazines </li></ul></ul></ul>
  42. 42. PROCESS CHECK LIST CONTINUED <ul><ul><ul><li>INDUSTRY AND MARKET ANALYSIS </li></ul></ul></ul><ul><ul><ul><li>-Used the Internet </li></ul></ul></ul><ul><ul><ul><li>-Use the Trade magazines & Newspapers </li></ul></ul></ul><ul><ul><ul><li>-Spoke with Vendors </li></ul></ul></ul><ul><ul><ul><li>-Spoke with other purchasing entities. </li></ul></ul></ul>
  43. 43. PROCESS CHECK LIST CONTINUED <ul><ul><ul><li>Reviewed potential sourcing categories </li></ul></ul></ul><ul><ul><ul><li>Establish comparative ranking </li></ul></ul></ul><ul><ul><ul><li>Select initial categories to source </li></ul></ul></ul><ul><ul><ul><li>Meet/coordinate with User Group to discuss negotiations </li></ul></ul></ul>
  44. 44. PROCESS CHECK LIST CONTINUED <ul><ul><ul><li>Conduct Best and Final rounds and Negotiate* </li></ul></ul></ul><ul><ul><ul><li>Conduct additional best and final rounds* </li></ul></ul></ul><ul><ul><ul><li>Determine Savings* </li></ul></ul></ul><ul><ul><ul><li>Cost Avoidance for Extending for Re-bidding* </li></ul></ul></ul>
  45. 45. QUESTIONS AND REVIEW
  46. 46. DELAWARE ON LINE ADDRESS <ul><li>WWW.STATE.DE.US / PURCHASE </li></ul><ul><li>(Contracts) </li></ul><ul><li>[email_address] </li></ul><ul><li>302-739-1635 </li></ul><ul><li>[email_address] </li></ul><ul><li>302-739-5569 </li></ul>
  47. 47. STATE OF DELAWARE CONTRACTING <ul><li>THANK YOU </li></ul>

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