Purchasing Directors’Meeting

February 16, 2012

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• Welcome Comments – Kelley Scott• Introductions – All• FACTS/SCRS Update – Christina Smith and Elwood

McElhaney• Mobile Communication Services Contract – Jonathan

Rakestraw• Office of Supplier Diversity Mentor-Protégé Program –

Thad Fortune• MyFloridaMarketPlace Update – Danielle Kosberg• State Purchasing Analysis Process – Cliff Chroust• Hot topics - All

Agenda

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Department of Financial Services

• Christina Smith, Director of Accounting and Auditing

• Elwood McElhaney, Project Manager

FACTS/SCRS Update

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Jonathan RakestrawOperations Management Consulting ManagerDivision of TelecommunicationsJonathan.Rakestraw@dms.MyFlorida.com

Mobile Communication Services Contract

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• AT&T Mobility (Contract No. DMS-1011-008A)

• Sprint Solutions (Contract No. DMS-1011-008B)

• Verizon Wireless (Contract No. DMS-1011-008C)

Mobile Communication Services Contract

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• State agencies – • Eligible customers –

– Local governments (cities and counties)– Water management districts– Educational institutions (schools, universities, and

community colleges)– Non-profit organizations– Eligible for E-rate funding

DMS DivTel MCS – Customers

Mobile Communication Services Contract

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• Wednesday, February 29, 2012 at 9 a.m., Eastern time• Betty Easley Conference Center, Room 152 • 4075 Esplanade Way, Building 4075, Tallahassee• Seating is limited; please limit the number of people attending

DMS DivTel MCS Kick-Off Meeting for CIOs

Mobile Communication Services Contract

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• The State of Florida's Mentor-Protégé Program is the first state-sponsored program of its type created to pair certified business enterprises with private corporations.

• The purpose of this program is to contribute to Florida's economic growth by increasing opportunities, developing joint ventures and providing Florida's minority, women, and service disabled veteran businesses the necessary tools for success.

Office of Supplier Diversity Mentor Protégé Program

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Office of Supplier Diversity Mentor Protégé Program

• The Mentor-Protégé Program enhances the capability of Florida's certified minority, women, and service disabled veteran businesses participation to compete more successfully for state government contracts.

• The program also provides an avenue for Florida's certified minority, women, service disabled veteran businesses to achieve entrepreneurial success and contribute to the strength and vigor of the economy in Florida.

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Office of Supplier Diversity Mentor-Protégé Program

Brainstorming• Opportunities for mentor businesses

– Mentor and protégé businesses work together to develop new business development approaches based on proven business strategies

• Previous relationships (mentor listed first below): – Office Depot and Magnetic Imaging Supplies Inc. – GTECH and Flamingo Graphics– Deloitte Consulting, LLP, and ISOCORP Inc.– Turner Construction and HZ Construction, Inc.

• Office of Supplier Diversity has many interested protégé businesses– How can agencies help encourage mentor businesses?

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MyFloridaMarketPlace Update

MyFloridaMarketPlace vendor W-9 statistics as of Feb. 6

• 24,194 MyFloridaMarketPlace vendors have a valid W-9 on file• 88 percent of purchase orders created this fiscal year for

vendors with valid W-9s• 92 percent of invoices were paid this fiscal year for vendors

with valid W-9s

DFS W-9 Initiative Vendor Update

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MyFloridaMarketPlace UpdateMFMP Process for W-9• The W-9 status is at the Federal Employee Identification

Number (FEIN) level • MyFloridaMarketPlace receives a nightly batch from DFS

that updates the Vendor Information Portal (VIP)• The next night VIP sends the updates to Buyer• W-9 status in MFMP is for informational purposes only• FLAIR will deny encumbered requisitions if the vendor

does not have a valid W-9 on file– MFMP will display an error message referencing vendor

status in FLAIR• Approved invoices will be returned to the invoice manager

if the invoice fails processing in FLAIR due to a vendors invalid W-9. MFMP will display an error message referencing vendor status in FLAIR.

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MyFloridaMarketPlace UpdatePossible W-9 Status in MFMP:

1. No W-9 on File 2. Pending IRS TIN Matching3. Failed IRS TIN Matching4. Valid W-9 on File5. B Notice Error6. Passed IRS Tax Identification Number (TIN)

Matching without W-9

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MyFloridaMarketPlace UpdateCreating Requisitions - Check that your selected vendor has a valid W-9 on file with DFS

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MyFloridaMarketPlace UpdateCreating Invoices – check vendor’s W-9 status

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MyFloridaMarketPlace Update

MFMP reports available:• All open orders current fiscal year• All open orders previous fiscal year • All received orders current fiscal year• All received orders previous fiscal year

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MyFloridaMarketPlace UpdateVendor Database Cleanup• Targeted for end of February• Based on four specified criteria (purchase order

activity, FLAIR payment activity, vendor location updates, and state term contract status), MyFloridaMarketPlace will inactivate a vendor's location

• If all the locations associated to a registration are inactivated, the registration also becomes inactive

• MyFloridaMarketPlace processes updates as one set in VIP but will send in batches to downstream applications (MFMP Buyer, Analysis, FLAIR, MarketView)

• Continue this yearly within the first two weeks of the fiscal year

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MyFloridaMarketPlace UpdateRequire State Term Contract Number• Targeted for end of March• Based on selected method of procurement, MFMP

3.0 will require agencies to specify contact number when creating requisitions

• Allows State Purchasing increased visibility of spend on contracts

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State Purchasing Training

• Seminars: Tampa and Orlando– Trainer is Anne Rabon, MyFloridaMarketPlace Finance and

Accounting Process Analyst – Visit our website for details and registration

http://www.dms.myflorida.com/business_operations/state_purchasing/myfloridamarketplace/mfmp_buyers/myflorida_marketplace_toolkit/buyer_training_opportunities/statewide_training_sessions

– Watch for additional MFMP 3.0 training webinars coming in March!

• State term contract webinars– Learn about renewed and/or new contracts– Coming Feb. 21 – Ammunition and Less-Lethal

Training Seminars / Contract Webinars

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State Purchasing Training• Developing a training focus group to look at

certification and recertification– Four members from Procurement Process Improvement

Project– Four members from Florida Professionals for Public

Procurement

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Avis car rentals• Effective Feb. 7, 2012, contract allows unlimited

mileage again• Effective July 1, 2012, State Purchasing authorized

a 4.9 percent increase– When compared to consortia contracts, the July 1, 2012,

rate is:• 8 percent lower on average on the state’s most common

rentals (sub-compact, compact, mid-size) • At least14 percent lower on average on all state rentals

• Department of Financial Services’ policy requires state agencies to rent compact vehicles– DFS requires justification for rental of anything larger

than compact– Agencies can choose not to reimburse employees for

rental of anything other than compact

STC Contract #518-020-10-1 Rental Vehicles

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Introduction to the analysis process• What we have to work with

– Vendors• Vendors are tracked by Federal Employee

Identification Number (FEIN)• Vendors can have multiple FEINs for one name• Vendors can have multiple names on one FEIN

– Total spend• FLAIR Fiscal Year 2011:

$46,610,859,188.00• MyFloridaMarketPlace Fiscal Year 2011: $

1,750,205,060.90– Total mapped spend

• FLAIR Fiscal Year 2011: $ 6,038,560,067.99

State Purchasing Analysis Process

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State Purchasing Analysis ProcessExclusions FLAIR Sum Exclusions (continued) FLAIR Sum Care and Subsistence - Client Benefits and Allowances

$ 17,161,420,442.12 Refunds

$ 113,287,033.22

Aid to Counties - Educational $ 6,608,043,138.63 Other Current Charges and Obligations

$ 62,390,710.47

Other $ 3,560,618,196.44 Other Pensions and Benefits

$ 29,396,929.94

Distributions and Transfers $ 2,486,548,980.00 Building and Construction Materials

$ 26,118,119.70

Other Structures and Improvements

$ 1,921,455,545.41 Care and Subsistence - Transition Services

$ 20,135,118.13

State Financial Assistance $ 1,524,716,212.81 Loans

$ 17,979,431.25

Other Distributions $ 1,491,883,301.49 Expert Witness Fees

$ 17,944,678.72

Care and Subsistence - Other Vendor Services

$ 1,027,274,684.95 Distributions and Transfers (Continued)

$ 16,876,852.24

Aid to Counties - Other $ 971,437,954.81 Building and Fixed Equipment

$ 14,884,333.10

Engineering $ 695,702,926.36 Payments for Information and Evidence

$ 12,169,619.81

Educational Aids $ 452,249,176.12 Architectural

$ 6,106,231.76

Principal $ 433,771,741.80 Relief Acts

$ 4,610,000.00

Construction $ 281,892,327.17 Rental from Other Governmental Units

$ 4,378,693.63

Interest $ 264,019,143.70

Operating Distributions and Transfers Required by Law

$ 3,163,483.09

Aid to Municipalities $ 258,032,300.32 Royalties

$ 3,071,827.98

Care and Subsistence - Medical Services

$ 254,790,038.42 Jurors and Witnesses Fees

$ 2,420,873.48

Employer Contributions - Optional Retirement/Annuity Plan

$ 219,861,578.25 Training – In State Travel

$ 1,525,409.61

Land $ 182,243,666.69 Mileage – In State Travel

$ 1,054,571.04

Rental from Non-Government Entities

$ 156,590,798.82 23 Excluded items under 1 Million

$ 4,430,910.36

Worker's Compensation Benefits $ 122,679,963.54 Grand Total

$ 40,437,176,945.38

From $46 billion to $6 billion

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State Purchasing Analysis Process

SOURCEABLE

GOODS

Facilities

MRO

Office Expense

Office Furniture

Office Supplies

Paper & Packaging Materials

Office Equipment

Courier Services

Supplies

Chemicals

Emergency Services

Drugs & Medical/Lab Equipment

Food & Food Supplies

PRIDE & RESPECT

Miscellaneous

Energy & Utilities

Fuels

Utilities

Fleet & Law

Vehicles

Fleet Maintenance

Fleet Parts

Heavy Equipment

Outdoor Power Equipment

Law Enforcement Supplies

IT

Hardware

Hardware Consulting

IT Hardware

Specialized Hardware

Telecom Hardware

Software & Services

Computer Software

IT Services

Software Consulting

Telecom Services

SERVICES

Commercial Services

Financial Services

Miscellaneous Services

Mail & Print Services

Facilities & Ground

Maintenance

Travel

Safety & Security

Professional Services

Human Services

Communications & Media Related

Services

Consulting

Educational

Management

Professional

Travel Services

Class Group Family Category SubCategory

Key

Organization Chart – DMS Purchasing

FLAIR Object Codes Mapped to Spend Cube - $6 Billion in Spend

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Consortia Contracts• Available sources

– National Association of State Procurement Officials– Multi State Contracting Alliance– Minnesota Alliance for Pharmacy– Novation– Educational Institute Coop– US Communities– Houston Area Council Coop Purchasing– National Joint Powers Alliance– National Intergovernmental Purchasing Alliance

State Purchasing Analysis Process

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Pipeline• 40 current contract actions• 20 new opportunities

– Eight possible co-op / consortia opportunities– ITN comprise a majority of the remainder– Multiple roll-up opportunities

State Purchasing Analysis Process

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Pipeline – Goods: New ActivityState Purchasing Analysis Process

Contract Name

Est AnnualSpend Method Notes

Auto parts $25,000,000.00 ITN

Consortia available: Western States Contracting Alliance (WSCA), U.S. Communities, National Joint Powers Alliance (NJPA), National Intergovernmental Purchasing Alliance(National IPA); Option to source and be lead for a consortium contract.DOT interested in parts contract. Second most requested contract by Other Eligible Users

Chemicals: Agricultural and Herbicides (e.g., fertilizer) $75,000,000.00 ITN

Consortia search yielded no viable results. Option to source and be lead for a consortium contract. Number one request from Other Eligible Users. Possible Single Source issues.

Equipment Rental (Heavy) $25,000,000.00 ITNConsortia available: National Joint Powers Alliance (NJPA), U.S. Communities, National Intergovernmental Purchasing Alliance(National IPA); Option to source and be lead for a consortium contract.

Medical Equipment $10,000,000.00 ITN

Existing State Term Contract - Identified possible maverick spend or need to add line items; conducting research; Consortia available: Western States Contracting Alliance (WSCA), National Intergovernmental Purchasing Alliance(National IPA), National Joint Powers Alliance (NJPA), Educational and Institutional Cooperative Purchasing (E&I).

Park and Playground Equipment 22,000,000.00 ITN Consortia available: National Joint Powers Alliance (NJPA), U.S. Communities; Option

to source and be lead for a consortium contract.Restaurant and Kitchen

Equipment $1,000,000.00 ACS Consortia available: National Joint Powers Alliance (NJPA), U.S. Communities; research will be conducted to determine which contract to utilize.

School Buses, Small Buses, Specialty Vans $75,000,000.00 ITN Consortia available: National Joint Powers Alliance (NJPA); State Term Contract

existed in past - need to research reason for not pursuing since.

Walk-up Building Supplies $3,000,000.00 ACS Consortia available: Western States Contracting Alliance (WSCA), U.S. Communities, National Joint Powers Alliance (NJPA), National Intergovernmental Purchasing Alliance(National IPA), The Cooperative Purchasing Network (TCPN)

Weight Calibration $4,000,000.00 ITN Consortia search yielded no results. Further research is required to determine if State Term Contract would add value.

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Pipeline – Services: New ActivityState Purchasing Analysis Process

Contract Name

Est AnnualSpend

Est State Spend

Est State Spend Method

Notes

Janitorial Services / Property Management

$58,700,000.00 30% $17,600,000.00 ITN

Aggregating spend; increased transparency; economies of scale. RESPECT has contract for Janitorial Services. Potential contractual limitations of outsourced services (Dept. of Transportation rest areas is an example). Large variation in agency needs; fragmented market which may require regional awards. By way of example, the decision for sourcing is made at the county level for Dept. of Health county health depts. Decisions are also made on a park by park basis for Dept. of Environmental Protection

Vehicle / Fleet Maintenance Services

$15,000,000.00 30% $5,000,000.00 ITN

NY has an estimated $5 million state and $104K non-state spend in fleet vehicle maintenance. Each state agency manages maintenance on their own 

Staffing Management $330,000,000.00 30% $100,000,000.0

0 ITNPossible roll-up of temp labor and additional labor related services. (Currently Temp Labor and IT contracts exist)

Nursing / Medical Services (Staffing)

$33,000,000.00 30% $10,000,000.00 ITN

Economies of scale, aggregating spend, transparency in spend, agency demand Previous state term contract did not allow enough flexibility to adjust rates as demand for nurses increased. Some medical services are exempt from competitive bid requirements in Ch. 287, F.S.

Call Centers $62,000,000.00 30% $18,700,000.00 ITN

Visibility and transparency into actual costs; economies of scale (keeps the state from paying for and maintaining duplicate call centers); aggregating spend. Agency reluctance to combine call centers; existing contractual limitations

Landscaping services / mowing services

$12,300,000.00 30% $3,700,000.00 ITN

Aggregating spend; increased transparency; economies of scale. Large variation in agency needs; fragmented market which may require regional awards. By way of example, the decision for sourcing is made at the county level for Dept. of Health county health depts. Decisions are also made on a park by park basis for Dept. of Environmental Protection

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Pipeline – Information Technology: New Activity

State Purchasing Analysis Process

Contract Name

Est AnnualSpen

d

Est State Spend

Est State Spend

Method

Notes

eLearning $12,000,000.00 33% 4,000,000.

00ITN

There may be another contract we could leverage. Because of travel restrictions and limited budgets, entities have a greater need for eLearning. Need flexibility to deal with changing industry

Oracle Software & Services

$6,000,000.00 33% $2,000,000

.00ITN

This would be used across many agencies. A GSA contract exists for this category.

Document Management Solutions

$11,424,000.00 33% $3,808,000

.00ITN

This uses emerging technology. The state is looking to reduce occupancy. Indexing should make it easier to find information. There may be other agencies that have develop these systems already.

Voting System Devices

$50,000,000.00 0%

0.00

ACS

NY spends an estimated $71 million annually on voting machines. They indicate that NY state specs are very unique in what the contractors have to provide, so they don't know if their specs based on NYS law would meet FL's needs. Bulk of spend my have already occurredDo any State Agencies purchase voting machines?

Cloud Computing Services

$4,200,000.00 33% $1,400,000

.00ITN

This utilizes emerging technology. There are already sunk costs associated and could be high cots associated with transition. Security may be an issue. Additional research Required.

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State Purchasing Analysis Process• Reach out to other agencies

– Regarding spend and to better understand needs– Possible alternate contract sources

• Use consortia as alternate contract sources• Address maverick spend

– Increased marketing of existing state term contracts• Survey other eligible users, e.g., Florida local

governments• Survey identified vendors

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Hot Topics

Open Discussion