purchasing directors’ meeting february 10, 2005 3:00 p.m. state purchasing
TRANSCRIPT
Purchasing Directors’ Meeting
February 10, 20053:00 P.M.
State Purchasing
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Purchasing Directors’ Meeting February 10, 2005 Agenda
• Medium and Heavy Trucks Contract Update
• Faith-Based Initiative Executive Order
• Legislative Update
• Bid Protest Study
• Emergency Purchasing Update
• Cell Phone Contract Update
• Next Meeting Location / Time
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On February 1, 2005, State Purchasing received an
email from Atlantic Truck Sales that there is an
industry wide shortage of Heavy Duty Diesel.
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The engine shortage effects three (3) commodities out of a total of 40. This information was verified with the manufacturers and other dealers.
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At the time of the bid opening Atlantic Truck
Sales had estimated delivery time was 120 -
180 days.
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The three effected Commodities are:
1. 070-700-340 CHASSIS-CAB, TANDEM AXLE,• CLASS 8, 58,000 LBS. GVWR (6x4)
• Engine Brand Estimated time to build• Mercedes Benz 4000 Engine 6-12 months to build Standard
Engine
• Detroit Series 60 8-10 months to build• Option# 1005 $2,475•
• Suggest Caterpillar C-11 engine which is available as Option# 1003 at an additional cost of $2,020.
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• ATLANTIC TRUCK CENTER Contract Vendor • STERLING LT9500 •• With Option #1003 CAT C11 engine in lieu of engine provided in
the base truck. There is no delay if this Option is added
• Western $57,706.00 + $2020.00 = $59,726 CAT C11 • Northern $57,706.00 + $2020.00 = $59,726 CAT C11• Central $57,706.00 + $2020.00 = $59,726 CAT C11• Southern $57,706.00 + $2020.00 = $59,726 CAT C11
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• 2. 070-700-500 TRUCK TRACTOR, TANDEM AXLE,
• CLASS 8, 80,000 LBS. GCWR (6X4)
• Engine Brand Estimated time to build
• Mercedes Benz 4000 Engine 6-12 months to build Standard Engine
• Detroit Series 60 8-10 months to build
• Option# 1003 $1,900
•
• Suggest Caterpillar C-13 engine which is available as Option# 1004 at an additional cost of $2,500.
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• ATLANTIC TRUCK CENTER Contract Vendor • STERLING LT9500
• With Option #1003 CAT C11 engine in lieu of engine provided in the base truck. There is no delay if this Option is added
• Western $57,145 + $2500 = $59,645• Northern $57,145 + $2500 = $59,645• Central $57,145 + $2500 = $59,645• Southern $57,145 +$2500 = $59,645
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• 3. 070-700-510 TRUCK TRACTOR, TANDEM AXLE,
• CLASS 8, 120,000 LBS. GCWR (6X4)
• Engine Brand Estimated time to build
• C15 Caterpillar engine 12 or more months to build
• Option# 1002 $1,170
• Detroit Series 60 Engine 8-10 months to build
• Standard Engine
• There is no other engine option to use.
• State Purchasing & Fleet Management are exploring if there any other options.
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• ATLANTIC TRUCK CENTER Single responsive bid award. No alternate engine available.
• STERLING LT9500
• Western $66144
• Northern $66144
• Central $66144
• Southern $66144
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• The delays in the Medium & Heavy Trucks Contract this year may present a real time problem to State Agencies.
• Purchasing Offices should keep in close touch with contractors for status of the delivery of all their vehicles.
• For purchases of any type of vehicle, the Purchasing Office should always keep a “tickler” file for keeping a close check on deliveries.
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Purchasing Directors’ Meeting February 10, 2005 Agenda
• Medium and Heavy Trucks Contract Update
• Contracting with Faith-Based and Community Organizations
• Legislative Update
• Bid Protest Study
• Emergency Purchasing Update
• Cell Phone Contract Update
• Next Meeting Location / Time
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Contracting with FBCIsTouchstones
• General Principles
– Secular purpose principle – Neutrality/no endorsement principle – Non-entanglement principle– Public aid dichotomy– No coercion principle – Value-for-value contract principle
• Federal and state regulations
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Contracting with FBCIs Secular Purpose Principle
Services the state would procure must have a secular purpose.
– The state may not procure services that have exclusively a religious purpose or have the intent to aid religion.
– Services performed may be secular or religious from the standpoint of the provider (e.g., a soup kitchen has a secular purpose, but volunteers may view their actions as secular or religious).
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Contracting with FBCIs Neutrality/No Endorsement Principle
• The state may neither advance nor inhibit religion.
– The state may not exclude, disadvantage or discriminate against FB providers because they are faith-based.
– The state may not prefer or advantage FB providers because they are faith-based.
– The state may disadvantage or advantage FB providers for reasons unrelated to faith.
• The state may not endorse any particular type of religion nor religion over non-religion.
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Contracting with FBCIsNon-Entanglement Principle
• The state may enforce generally applicable regulations on FBOs linked to state funding (e.g., financial audits), but may not excessively entangle itself in FB operations.
• The state may not condition funding on the degree religiosity or devoutness of a FBCI. – The state may not require FBOs to secularize space (i.e.,
remove religious symbols, where they deliver services).– The state may not require FBOs to remove religious
references from charter documents and publications.
• Under federal and state employment law, the state may not prohibit FBOs from discriminating on the basis of religion or sexual orientation in hiring.
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Contracting with FBCIsPublic Aid Dichotomy
• Direct aid
• Indirect or voucher aid
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Contracting with FBCIsDirect Aid
• Direct aid is public funding flowing directly to FB providers independent of private choice.
• The state may not directly fund “inherently religious” activity or religious worship, instruction, or proselytization.
– FBOs that receive direct governmental funds should take steps to separate, in time or location, their inherently religious activities from the government-funded services that they offer.
– – Such organizations should set up a separate non-profit
organization to receive and administer it, segregate staff time according to project, and carefully account for their use of all government money. State funds received directly may not be spent on religious materials.
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Contracting with FBCIsDirect Aid (cont.)
• FBOs that receive direct aid may not require program participants to attend or take part in any religious activities.
• FBOs that receive direct aid may not discriminate against a person seeking help who is eligible for the service
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Contracting with FBCIsIndirect or Voucher Aid
• Voucher/indirect aid is funding flowing to FB providers as a result of the genuinely independent, voluntary, and private choices of individuals.
• The state is not required to condition indirect funding of FBOs on limiting their religious speech.– FBOs receiving indirect aid are not required to separate
inherently religious activities in time and location from state-funded activities.
– FBOs receiving indirect aid may require participants to engage in religious activities.
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Contracting with FBCIsNo Coercion Principle
• The state may not compel religious belief.
– Compelled religious belief may occur when persons seeking mandated public services can select only a FB provider.
– Compelled religious belief may occur when there is no comparability between services offered by a FB and a CB provider, setting aside differences due to faith.
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Contracting with FBCIsValue-for-Value Contract Principle
• The state must receive value-for-value when contracting with FB providers.
– The state may not provide unrequited aid or donations to FB providers.
– Value-for-value contracts are competitively negotiated or bargained-for and market-based.
• Competitively negotiated contracts are value-for-value contracts.
• Bargained-for single source contracts may be value-for-value contracts if based upon a market rate.
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Contracting with FBCIsFederal and State Regulations
• Independent federal and state programs incorporate unique regulations.
– For a summary of relevant federal regulations, go to http://www.whitehouse.gov/government/fbci/reg-changes.html.
– E.O. 04-245 (2004).
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Contracting with FBCIs More Information
Nathan A. Adams, IV, Ph.D., M.A., Esq.
Deputy General Counsel
Florida Department of Education
(850) 245-0442
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Purchasing Directors’ Meeting February 10, 2005 Agenda
• Medium and Heavy Trucks Contract Update
• Contracting with Faith-Based and Community Organizations
• Legislative Update
• Bid Protest Study
• Emergency Purchasing Update
• Cell Phone Contract Update
• Next Meeting Location / Time
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GAO Report 04-870 September 2004
• Best practices report – “Using Spend Analysis to Help AgenciesTake a More Strategic Approach to Procurement”
• “’Spend analysis’ is a tool that provides knowledge about who are the buyers, who are the suppliers, how much is being spent for what goods and services, and where are the opportunities to leverage buying power. Private sector companies are using spend analysis as a foundation for employing a strategic approach to procurement.”
• “Recognizing the potential in government purchasing, GAO examined if [selected agencies] are using spend analysis to take a strategic approach. GAO assessed (1) if agencies use spend analysis to obtain knowledge to improve procurement of goods and services and (2) how agencies’ practices compare to leading companies best practices.”
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GAO ReportSpend Analysis – Key Processes
• Automation: Data automatically compiled.
• Extraction: Essential data culled from accounts payable and other internal systems.
• Supplemental information: Additional data sought from other internal and external sources.
• Analysis and strategic goals: Using standard reporting and analytical tools, data analyzed on a continual basis to support decisions on strategic-sourcing and procurement management in areas such as cost cutting, streamlining operations, and reducing the number of suppliers. Scope generally covers an organization's entire spending.
• Organization: Review data to ensure accuracy and completeness; organize data into logical, comprehensive commodity and supplier categories.
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Legislative UpdateToday’s Newspaper Report of “It’s Broke” Comment
• “Ariba's recent merger with FreeMarkets has created the industry's most comprehensive spend management company by bringing together the leading spend management technology and the industry's most complete sourcing and services expertise.”
• Ariba currently serves more than 300 sourcing customers who have collectively sourced more than $225 billion globally
Forbes’ Business Wire (2/3/05)
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Magic Quadrant for Strategic Sourcing Applications, 2004Gartner, Inc. (Jan 31, 2005)
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Magic Quadrant for Strategic Sourcing Applications, 2004Gartner, Inc. (Jan 31, 2005)
“Before the merger, Ariba had a firm vision of the functional requirements needed to support procurement professionals. It has a strong applications suite, including sourcing, contracts, spend analytics, supplier ratings, category management and contract management. Although they are not all functionally mature, they are better and more integrated with every release.”
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Legislative UpdateObjectives
• This is a brief outline of current bills that are circulating prior to the 2005 Legislative Session.
• Much more on the horizon, as we get deeper into the “season.”
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Legislative UpdateHot Topics
Certain topics are already showing up in multiple bills.
• Defining “outsourcing” and “privatization”
• Codifying the Center for Efficient Gov’t (CFEG)
• Requiring legislative approval for outsourced or privatized contracts; proscribing the business case and contract requirements of same
• Codifying DMS training initiatives
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Legislative UpdateSB 278
• Sen. Campbell
• Creates an entity of political appointees to study outsourcing
• Two pages
• Already withdrawn, but we are still monitoring.
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Legislative Update SB 322 – HB 429
• Sen. Campbell; Rep. Seiler
• Defines “outsourcing;” requires DMS reporting on contractors, subcontractors, place of performance, etc.
• One page
• First legislation with a companion in other chamber
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Legislative UpdateSB 464
• Sen. Campbell
• Creates the "Pharmaceutical Availability and Affordability Act.“
• Twenty-three pages
• DMS has not yet formally analyzed; we may rely on DOH to review.
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Legislative UpdateSB 578
• Sen. Wise
• Creates the "Performance Contract Management Act“
• Three pages
• Defines a “performance contract” and details requirements similar to other bills’ “outsourcing” requirements
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Legislative UpdateSB 1142
• Sen. Argenziano
• Exempts trade secret information from Public Records and Public Meetings laws
• Three pages
• DMS has favorably reviewed this bill in a comprehensive analysis of the broader issues involved.
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Legislative UpdateSB 1146
• Sen. Argenziano
• Creates and details the functions of the Center for Efficient Government
• Twelve pages
• We have submitted a detailed analysis of this legislation. Unresolved issues over interplay between CFEG and agency duties.
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Legislative UpdateHB 601
• Rep. Kottkamp
• Amends the CCNA to clarify negotiations and compensation issues.
• Two pages
• Very brief, but may have significant impact. Your comments appreciated.
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Legislative UpdateHB 711
• Rep. Ryan
• Limits agency authority to outsource without Legislative approval; does NOT mention CFEG
• Seven pages
• Contains comprehensive definitions of “outsource” and “privatize”
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Legislative UpdateHB ##
• Rep. Anderson
• Amends Chapter 287
• Sent to bill-drafting, should appear soon
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Legislative UpdateComments and Questions
DMS is always interested in receiving your feedback on these issues. Please call or email Rich Brown to discuss your concerns:
(850) 488-3049 (Rich’s desk)
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Purchasing Directors’ Meeting February 10, 2005 Agenda
• Medium and Heavy Trucks Contract Update
• Contracting with Faith-Based and Community Organizations
• Legislative Update
• Bid Protest Study
• Emergency Purchasing Update
• Cell Phone Contract Update
• Next Meeting Location / Time
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Bid Protest StudyPat Dore Admin. Law Conference, Nov 19 Presentation
• Defining the Universe
• What Kind Get Challenged?
• How Many, and Whose, Get Challenged?
• Who Wins?
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SPURS Spend by Solicitation Type
$0
$20
$40
$60
$80
$100
$120
1997 1998 1999 2000 2001 2002 2003 2004
So
licit
ati
on
Typ
e S
pen
d (
$M
il)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
To
tal P
os (
$M
il)
itbrfpneg prchTotal POs
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Original Ads Posted on VBS
0
1000
2000
3000
4000
5000
1998 1999 2000 2001 2002 2003 2004
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DOAH Decisions by Solicitation TypeReported CY 99-02 (n=90)
ITB
RFP
ITN
Other
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BID Cases at DOAH
0
10
20
30
40
50
60
70
80
90
100
110
120
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Total order
Total cases
2 per. Mov. Avg. (Total cases )
2 per. Mov. Avg. (Total order)
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Distribution of Reported Orders
0
5
10
15
20
25
30
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
DOT
Other State
Other
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Distribution of VictoriesReported Orders in DOAH BID Cases
0
5
10
15
20
25
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Pet.
Res.
??
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Petitioners’ Victories
0
10
20
30
40
50
60
70
80
90
100
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Vic
tory
Per
cent
age
% of Orders
% of Total Cases
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Purchasing Directors’ Meeting February 10, 2005 Agenda
• Medium and Heavy Trucks Contract Update
• Faith-Based Initiative Executive Order
• Legislative Update
• Bid Protest Study
• Emergency Purchasing Update
• Cell Phone Contract Update
• Next Meeting Location / Time
54
Purchasing Directors’ Meeting February 10, 2005 Agenda
• Medium and Heavy Trucks Contract Update
• Contracting with Faith-Based and Community Organizations
• Legislative Update
• Bid Protest Study
• Emergency Purchasing Update
• Cell Phone Contract Update
• Next Meeting Location / Time
55
Cell Phone Contract UpdateExisting Contract
• Currently (4) State Term Wireless Voice Providers.
• Unmanageable array of bucket plans, pooling plans, with variety of terms and conditions.
• Agencies have difficulty tracking spend, usage, fees, and terms of various plans.
• Technology Industry research firms are advocating a single cost per minute approach which includes roaming, long distance, and has no overage or underage charges.
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Cell Phone Contract UpdateApproach to New Contract
• State’s objectives were to leverage the spend and drive to a cost per minute approach with no recurring fees, no termination fees, no minimum term agreements, no minimum or maximum minutes which eliminates overage and underage charges and no charge caller id, voice mail, call waiting and base phone.
• With this approach to service plan consistency, standardize service costs and simplify billing reconciliation and validation
• We reviewed coverage area and technical capability before we allowed suppliers to offer a pricing proposal.
• The difference in overall coverage between the major players does not justify multiple awards and fragmented spend and leverage.
• Exceptions to using the state term contract are provided as they have always been (Rule 60A-1.044(3)).
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New Wireless ContractPotential Savings
Average Monthly Minutes Used Per Subscriber
Estimated Savings
100 70%
150 65%
200 61%
250 56%
300 51%
350 46%
392 41%
400 41%
450 36%
500 31%
550 26%
569 24%
600 21%
650 16%
700 11%
750 6%
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Purchasing Directors’ Meeting February 10, 2005 Agenda
• Medium and Heavy Trucks Contract Update
• Contracting with Faith-Based and Community Organizations
• Legislative Update
• Bid Protest Study
• Emergency Purchasing Update
• Cell Phone Contract Update
• Next Meeting Location / Time
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Purchasing Directors’ MeetingNext Meeting
Time: 3:00 pm to 5:00 pm
(2:00 to 3:00 for contract administrators)
Date: Thursday, March 10, 2005
Location: Betty Easley Center, Room 152