October 13, 1999

Meeting of the
Governors Task Force
on Procurement
Assessment
V 1.0

Task Force Ground Rules

Use open, honest, direct,
communication
Manage agreements (time)
Maintain confidentiality
Maintain a supportive environment
Be prepared and stay focused
Maintain a proper attitude for
learning (1% possibility)

Todays Agenda

Opening
Agenda & Work to Date Review
Emerging Recommendations
Current State: Question 3
Procurement Professionals Advisory Group Recommendations Question 3 with Variations from:
Information Technology Professionals
Construction/Capital Outlay Professionals
Group Work to Develop Recommendations - Question 3
Lunch
Procurement Professionals Panel
Group work on recommendations regarding supplemental
requirements
Information Exchange
Closing

Emerging Recommendations
Task for today
Review the table of emerging
recommendations.
Identify questions and/or issues you have
with each recommendation.
Write the question and/or issue on the
green index card - be sure to put the
related recommendation # at the top left
of the card - write none if there is no
relationship.

VA Procurement (nontransportation):
Does What?

Exempt from VPPA

VA Economic Development Partnership
VA Tourism Authority
Medical College of VA Hospital Authority

Who
DTP/DIT approves IT
hardware/software
over $100,000

VA Retirement System
VA Port Authority
Legislative Branch of the COV
(there are other specific
exceptions)

VA Public Procurement ACT

(VPPA)
Services:

Capital
Outlay:
DGS/DEB has full
authority*
DGS/DEB delegates
full authority for
Professional
Services and 110%
of cost for
construction
consistent with DEB
Manual
* VPPA requires
Governors
designee to
approve post
fixed price
award upward
variations of
$10,000 or 25%
whichever is
greater.

Agencies have
full Authority*
except
telecommunicati
ons

Telecommunications:

Goods:
DGS/DPS has full authority*
7 Pilot

DGS/DPS has delegated

Universities
$30,000 to agencies. delegated
full authority

DGS/DPS has delegated

$100,000 (non-printing) to
11 agencies.

DIT has full authority for

services

Capital
Outlay: 6 Pilot
Universities with
full authority.

Exempt from State Oversight

for Capital Outlay, Goods,
Services, IT,
Telecommunications, but
subject to VPPA:
Boards, Commissions, Authorities,
Towns, Cities, Counties, VA Higher
Ed Tuition Trust, Other political
subdivisions

DGS/DPS has delegated

unlimited (non-printing for
6) authority to 12 other
agencies, including IT
mainframe authority to
DIT.

Five Critical Questions

How do we promote access to ensure competition is fair and
more broadly defined?
How do we improve the process, protect openness,
accountability and increase efficiency?

How should we measure outcomes - cost

and performance?
How do we improve communication, education and
outreach for buyers & sellers to gain efficiency? Where
does the procurement process begin and end?
How should we procure technology and how might we
use technology to improve efficiency in procurement?

Current State

Overview of current
Virginia policies and
practices affecting
Question 3 - Measuring
Outcomes

Measuring Outcomes - Current State

Outcomes are measured at

potentially two levels
System-wide (goods & services only) by
DPS Procurement Management Review Once every three years.
At the Agency level based on their own
efforts, if any.

Measuring Outcomes - Current State

Procurement Management Review

Objectives
Compliance: to determine the extent to which
VPPA and DPS policies and procedures are being
followed.
Advice/Consultation
To identify areas of improvement, training needs,
procedures that can be shared with other sate
agencies, etc.
To assess performance to standards of increased
delegated authority if appropriate.

Measuring Outcomes - Current State

Performance Management Review Rating

System
Calculation of
RESPONSE 1
REVI EW
9
8
7
6
5
4
3
2
1

9
8
7
6
5
4
3
2
1

2Score

18
16
24
12
10
8
6
4
2

27
24
21
18
15
12
9
6
3

36
32
28
24
20
16
12
8
4

45
40
35
30
25
20
15
10
5

Raw scores of 40 and above suggest the need to withdraw or reduce the agencys delegated
procurement authority.
Scores between 21 and 36 indicate the need for a follow-up visit within 12 months of
receiving the agencys response.
Scores between 14 and 20 suggest that an annual progress/status contact is needed with
the agency, and an accelerated review may be needed.
Scores below 14 only require reviews under the normal three year schedule.

Measuring Outcomes - Current State

Agency Ratings
Results include 126 Agencies
90
80
70
60
50
40
30
20
10
0

21-36

14-20

<14

Procurement Professionals
Advisory Group Recommendations

Recommendations relating to
Question 3, Measuring
Outcomes, ranked by PPAC
Decision Criteria, with
current state analysis.

PPAC Decision Criteria

Highly customer focused.
Dynamic, open, ethical and
organizationally positioned to
anticipate and adapt to a changing
environment.

Top 5 Recommendations

Define procedures
for tracking and
measuring
vendor/contractor
performance.

Current State

Complaint information
provided to buyers on a
requested basis.
Contract compliance
monitors for poor
performance trends.

Top 5 Recommendations

Invoke Contract
Administration

Current State

All continuous or term contracts

required to have an
administrator appointed in
writing.
VCO training includes 1 1/2
days of contract administration
training. This 135 people were
trained. In place 9+ years.
1 day Contract Administration
class. 85 people trained this
year. Taught at DPS and in
field at agency request. Offered
last 3 year.

Top 5 Recommendations

Increase Contract
Administration
training and
develop report
mechanisms.

Current State

In addition to training,
the contract compliance
officer is available to
consult with agencies
on administration
issues.

Top 5 recommendations

Establish statewide vendor

performance
tracking
procedures

Current State

The complaint system

provides performance
tracking.
Vendors are requested to
respond to the complaints.
Also, vendors may file
complaints against agencies
when they have an issue
needing resolution.

Top 5 Recommendations

Provide
appropriately
trained, analytical
staff, mgmt., and
MIS to track and
analyze data.

Current State

Training programs are

available but not
mandatory.

All PPAC Recommendations for Question 3,

Performance Measures (Ranked by their Criteria 335/275/215)
Define procedures for tracking and measuring vendor/contractor performance.
335
Invoke Contract Administration 321
Increase Contract Administration training and develop report mechanism. 315
Establish state-wide vendor performance tracking procedures. 315
Provide appropriately trained, analytical staff, mgmt., and MIS to track and analyze data. 314
Customer satisfaction: end user timing, cost/value, quality, vendor performance. 310
Staffing analysis. 308
Use life cycle cost program performance incentives. 305
Develop contract administration certification program for all public entities (include non purchasing folks). 300
Buying vehicles through VDOT contract why have to file LP.15 and other forms 297
Cycle/response time. 297
Establish classification/compensation series for contract administration. 294
Evaluate vendor satisfaction by proactive solicitation. 294
Define and develop formula for cost savings determination and analysis. 292
Consider staffing and cost benchmarks with other states and others that are similar. 290
Performance measure guidelines be recommended , not mandated. 288
Track contractor defaults. 287
Schedule compliance reviews. 286
Compliance reviews 282
Analyze reasons for unsuccessful procurements. 281
Conduct transactional benchmark study. 274
Monitor actual cost vs. budget.
274
Conduct peer reviews. 273
ROI considering procurement ops. costs. 263
Measure cost over several years. 261
Measure success of vendor outreach. 259
Track upheld vendor protest, etc. 258
Use compete program to measure cost ref. competition council. 215

Information Technology

Unique recommendations
relating to Question 3,
Measuring Outcomes, related
to PPAC Decision Criteria, with
Current State analysis.

Preliminary
Recommendation

Define procedures
for tracking and
measuring
vendor/contractor
performance.

Current State

As previously mentioned,
DPS operates a tracking
system that records
unsatisfactory
performance, i.e., vendor
complaints. Information is
available upon request.

Preliminary
Recommendations

Establish contract
administration
program that
includes a
certification
program for all
public entities.

Current State

The VCO program and

contract administration
training previously
referenced already
exists.

Preliminary
Recommendations

Provide for
appropriately
trained, analytical
staff, mgmt, and
MIS to track and
analyze data on IT
procurement.

Current State

DPS has been moving

toward establishing an
IT Procurement
Advisory Group to
evaluate major statewide contracts.

Preliminary
Recommendations

Continuously
improve customer
satisfaction by
concentrating on
end user -- timing,
cost/value, quality,
vendor
performance.

Current State

Nothing currently
prohibits this. The
degree to which these
principles are
considered varies from
procurement to
procurement.

Preliminary
Recommendations

Conduct state-wide
staffing analysis of
"procurement
services" to ensure
appropriate
resource
commitments.
Consider staffing
and cost
benchmarks with
other states and

Current State

Nothing like this is

currently underway.
(note Task Force
Emerging
Recommendations)

Construction/Capital Outlay

Unique recommendations
relating to Question 3, related
to PPAC Decision Criteria, with
Current State analysis.

Recommendation

Current State

COST Measures
Compare total state
project costs to private
sector project costs for
Construction of similar
facilities
Design costs for similar Currently done during the
budget development by the
facilities
DPB and the DEB.
Adjust for Life
cycle/operating costs in
state projects

Recommendation

Current State

End user satisfaction

with finished
product.
No centrally managed survey
of end user satisfaction
conducted since design and
construction is managed at the
agency level.

Recommendation

Contractor performance:
Time of completion Vs. scheduled
completion
Project management coordination of
work, trades, etc & interface with Owner
Quality of workmanship (especially
finishes and exposed work)
Warranty - responsiveness to
malfunctions on warranty items
Project closeout - completion of punch-list
work within 30 days per contract.

A/E performance.
Errors/omissions which lead to change
orders
Timeliness in meeting design schedule
Timeliness in performing Construction
Administration activities
Design of project within construction
budget

Bonding company
performance.

These factors can be used in

Current
State
the
existing pre-qualification
process to determine
contractor qualification.
Instances of contract noncompliance must be supported
by written evidence in the
project record.
Agencies evaluate A/E at
design & construction phases.
BCOM maintains forms for
future agency review.
No central collection of data.

Recommendation
There is currently no remedy for,
or way to deal with, a bad
building contractor who wishes to
bid on future projects. Need a
procedure in place to allow
debarment of a building
contractor and/or subcontractor
who fails to perform as required
by the Contract. Procedure should
be through the Contractor
Licensing Board of the DPOR.
There is no way to share info
regarding contractor performance
between agencies. Need to
formalize a process to use
information to act on a nonperforming contractor/consultant.

Current State

Agency may use prequalification as tool to

exclude poor performers
from bidding future
projects. No debarment
procedure is place for
building construction
contractors.
Contractor evaluations
are completed by
agency but not centrally
collected & analyzed.

Task Force Group Work

Develop recommendations
to address Question 3.

Measuring Outcomes Using Task Force

Decision Criteria as Questions
Were there sufficient process options to be
able to obtain the best result?
Was there the right balance between cost
and value for the end user?
Was the process open?
Were the results measurable by feedback?
Was the process it fast and timely?
Was the process ethical and accountable?

Divide Into Four Groups

Cost verses value for the end user

Open process
Fast and timely
Ethical and accountable
The Task...
1. Review all PPAC and other recommendations.
1. Develop recommendations for your category,
then...
2. Consider variations for Technology and Capital
Outlay projects and Local Government.

Lunch Time

Review PPAC Data on

Supplemental
Requirements

Panel Discussion

Procurement Officials

Supplemental Requirements and other

topics

Guest Panel
Mike Bacile - VA
Lottery
Erma Baker - Mary
Washington College
Bill Clark - George
Mason University
Bob Fothergill
Teddy Martin - VA
Dept. of Agriculture

Jack Pitzer - City of

Alexandria
Steve Styron Chesapeake Public
Schools
Ed Gibbs - VCU

Supplemental Requirements

The Law

General
Assembly &
Executive
Branch

State
Manuals

DGS DPS
& DEB

Agency
Instruction
s

Agency
Leadership

Procurement Panel Topics

The efficiency and effectiveness
challenges in my organization are
created by xx % the VPPA, xx % DGS
Manuals (as applicable), xx % my
organization.
Briefly, the types of challenges I face
are
There is/is not an effort currently
underway in my organization to address
these challenges.

Group Work

What recommendations
would you make - if any - to
address supplemental
requirements?

Information Exchange

Visitor
Comment?

Information Exchange
Future Meetings - Agenda Outline
November 9: How do we improve communication, education
and outreach for buyers & sellers to gain efficiency?

Where does the procurement process

begin and end? How should we procure technology
and how might we use technology to improve efficiency in
procurement?
Presentation - Where the Procurement Process Begins and Ends?
Group Work - Recommendations on the Beginning/End of the
Procurement Process
Lunch (score previous recommendations)
Presentation - Modified IFB Process - Strawman
Presentation - DPT Classification Issues
Group Work - Refine Recommendations To Date
Homework: Read, Privatization, Contracting, and the States: Lessons Learned, Competitive Tendering and
Contracting Out: Rhetoric or Reality? Modeling and Planning: the procurement process

When Does Procurement Begin and End?

Management Concepts

Management by
principle
Management by
process

Information Exchange
Future Meetings - Agenda Outline
November 18: Refine Recommendations to
date.