Procurement Policy Council Meeting - February 23, 2011

1. PROCUREMENT POLICY COUNCIL Meeting February 23, 2011

2. Agenda • Introduction of Ken Rapp • BMWBO – Beth Nonemaker • Materials Updates – Walt Quade, Greg Knerr, Del Border • Services Updates – Roxana Dietz • OAIT – IT GL Spending Categories - Richard Cardamone • Systems – Scott Cross • RFP Updates - Roxana Dietz • Other Procurement Updates – Cheryl Kleeman, Ed Myslewicz, Pam Shady • EPO & Sole Source Website – Janice Pistor • EPO & Sole Source Approval Process - Jeff Mandel • Training Updates – Joan Kraft Appendix: EUP for Capturing PA Preferred Products

3. BMWBO Contract Compliance Program Procurement Handbook Part1 Chapter 3 Responsibilities, B. Purchasing Agency • Contract Compliance Program. The purchasing agency must ensure that all non-construction contractors contracts $50,000 and above and all construction contractors that are awarded contracts $100,000 and above, receive the InitialContract Compliance Data Form, STD-21.

4. BMWBO Each state agency should identify and train Initiators Select and train people with access to contract data as contracts are awarded ELMS web based DGS WBT Contract Compliance Initiator Responsibilities training (keyword: Initiator) is at https://lms.state.pa.us/lms-lmm/studentCatalog.do Use “Save Progress and Close” button in 2-hour ELMS course as needed

5. BMWBO State agency Initiator enters Preliminary Input in CC system This generates the STD-21 to the contractor using the contractor’s email address from the Preliminary Input If undeliverable, Initiator obtains good email address and uses Resend-STD-21 link

6. BMWBO • Contact BMWBO to obtain new initiator permissions to the CC system • State agency enters Preliminary Input in CC system upon award • CC system generates an email with the online STD-21 to the contractor • Contractor submits STD-21 to agency CC staff within 10 business days • CC staff generates letter to contractor and follows up to ensure compliance with nondiscrimination clause in state contract • DGS Quality Assurance Team and BMWBO monitor state agencies’ effectiveness

7. BMWBO • For More Information • www.dgs.state.pa.us • Doing Business w/ Commonwealth • Contract Compliance • https://lms.state.pa.us/lms-lmm/studentCatalog.do • (Keyword: Initiator) • Contact: • DGS BMWBO CC Officer @ 717-346-8104 • CC staff @ 717-783-5034

8. New Solicitations next 60 Days

9. New Solicitations next 60 Days

10. Contracts-Last 30 Days

11. Truck Transport Fuel Contracts • For bulk deliveries of 5000 gallons or more of: • Diesel Fuel • B2, B5, B10, B20 Biodiesel • 80% / 20% Biodiesel blend with Ultra-Low Sulfur Kerosene (for cold weather operability) • Heating Oil • #2 Heating Oil • B5 Bio-Heating Oil • Unleaded Gasoline • Anti-gel additives available for diesel and heating oil via separate line item, priced as a per gallon up-charge. • Ordering 7500 gal of fuel and need anti-gel? Add separate line for 7500 gal. of the anti-gel additive contract line item to order. • Market Price Contracts • Price adjusted Tuesday based on Oil Price Information Service (OPIS) weekly averages. • Actual price based on GR date

12. Tank Wagon Fuel Contract • Invitation to Qualify (ITQ) contract structure • For deliveries of 4999 gal. or less of: • Diesel Fuelproducts, including biodiesel and ultra-low sulfur kerosene blends • Heating oil and bio-heating oil • Unleaded gasoline and E85 Ethanol • Suppliers qualified by county and by fuel type. • Current supplier listing and fuel types by county can be found in the Contract Overview on E-Marketplace • ITQ has open enrollment, supplier listing is updated whenever a new supplier is added to the contract

13. Tank Wagon Fuels Contract (Cont.) • Ordering process • Follow procurement guidelines for ordering based on anticipated $ value of the order • DGS recommends soliciting quotes from multiple suppliers regardless of $. • Mandatory use of P-Card for all orders < $5K, unless given written waiver by DGS • Most common ordering process: • Conduct informal e-mail RFQ to suppliers qualified for the needed fuel type in your county • Order fuel from supplier with lowest price. • Pay for delivery with P-Card • Users with larger tanks may elect to solicit quotes to cover a series of expected deliveries over a defined time period, i.e. several weeks. • Larger volume TW users may be able to obtain a utility p-card, which has no limit for petroleum purchases

14. Update on 50% Recycled Paper • COPA purchases 2,478 tons of paper per year.  • By switching from 30% recycled content paper to • 50% recycled content, would use 495.6 tons less • virgin paper. • Savings - 1,903 trees, or 16 acres. • Same price as 30%. • PA manufacturer. • 7 Agencies included in sample test–no issues: BOP, Revenue, PennDOT, Health, DPW, DOC and LCB • 70 cartons used in test • Testing complete and approved by all. • Available for ordering sometime in May, 2011. Note: Will still be supplied through Staples contract. Reference: www.is.depaul.edu/computers/labs/ei.asp

15. Services Team Upcoming Solicitations

16. Services Team Upcoming Solicitations

17. Services Team Current Solicitations

18. Services Team Current Solicitations

19. Consulting ITQ Contract • DGS finalizedrevised contract T&C’s for Consulting (non IT) ITQ  based on supplier base feedback. • Solicitation is now available to accept submissions.   • Contract administration documents, including instructions to agencies & solicitation requirements, will be uploaded to ITQ document library prior to contract implementation.  • Current suppliers should go to www.emarketplace.state.pa.us and search “solicitations “ under solicitation number:  4400007410. • Directions provided within advertisement for them to follow to submit electronic proposal. (List of Consulting Categories provided under this contract are listed on next slide.) • Form approval pending so each initial contract requires OGC & AG approval. If you have any questions, please feel free to contact Kay Whitsel at: 717-787-7675 or kwhitsel@state.pa.us

20. Consulting Categories Actuarial Services - Actuarial Consultant Healthcare/Medical Actuarial Services - Actuarial Consultant Pensions/Investment Actuarial Services - Actuarial Consultant Financial Accounting Services - General Accounting Services - Tax accounting and Auditing – federal Accounting Services - Tax accounting and Auditing – state and local Accounting Services - Decision analytics and predictive modeling Accounting Services - (Tax) Technical forms and instruction writing Accounting Services - Accounting and auditing functions of Gaming systems and operations . Accounting Services - Cost accounting Auditing Services - General Auditing Services - Financial and Financial Related Audit Services Auditing Services - Performance Audits (Internal Control / Audit Services) Auditing Services - Operational and Claims Audits Auditing Services - Compliance Audits Investigative Audits, Academic Audits Financial Services - Financial Management General Government Operations - Best Practice Analysis Management - Business Case Development and Modeling Management General Government Operations - Data Mining Management General Government Operations - Operations Analysis Management General Government Operations - Program Evaluation and Benchmarking Management General Government Operations - Measuring Process Performance/Improvement Outcomes Management General Government Operations - Strategic Planning                                                         Healthcare Services - Chronic Care Public Safety Services - Emergency Preparedness Exercises Public Safety Services -  Emergency Preparedness Writer Public Safety Services – Emergency Preparedness Logistics Public Safety Services – Emergency Preparedness Training

21. OA / OIT – IT GL Expenditures and Spending Categories Background • On January 11, 2011, the Governor’s Office published Administrative Circular 11-01, “Transitioning Information Technology Procurements and Expenditures to Restructured Categories and Accounting Codes” • Current Commonwealth IT accounting codes and definitions are outdated and difficult to use. • Accurate IT spend data is very difficult to extract and use for IT planning and reporting because of these outdated definitions. • Restructuring IT expenditure codes and definitions is critical to appropriately budget for future IT initiatives, particularly given the current fiscal climate facing the Commonwealth.

22. IT Expenditures and Spending Categories Codes that will Expire

23. IT Expenditures and Spending Categories New Categories • The new categories will more accurately categorize COPA IT expenditures: * Additional categories will be added to this list in order to accurately track capitalized assets that meet established thresholds. • Hardware* • Servers • Server Maintenance • Network • Network Maintenance • Storage • Storage Maintenance • Peripherals • Peripherals Maintenance • Desktop • Desktop Maintenance • Software Licensing* • Maintenance • Procurement – Non-recurring • Procurement – Recurring • IT Consulting Services • Managed Services (Infrastructure) • Managed Services (Software and Applications) • Managed Services (Software as a Service) • IT Help Desk • Applications Development • Applications Maintenance & Support • Security • Project Management • General • Telecommunications Services* • Voice • Data • Security

24. IT Expenditures and Spending Categories Approach: Agency Guidance • A document has been created to provide guidance to agency staff to identify the appropriate coding when entering procurements this document is available for download through the following link: http://www.portal.state.pa.us/portal/server.pt/document/1040494/itspending_proposedcategories_v2_agencyguidance_final_pdf

25. IT Expenditures and Spending Categories Approach • In order to implement this new coding strategy beginning with FY 11/12, several tasks must be accomplished:

26. IT Expenditures and Spending Categories Next Steps: Agency Roles and Responsibilities for Transitions * Note – Agencies will not be required to use the new commitment items for the 2011-12 SEM Rebudget submission; agencies can use commitment items from the initial budget submission and input SAP adjustments after the Rebudget is retracted to move budget items to the new commitment items.

27. IT Expenditures and Spending Categories Questions? The entire agency presentation is available at: http://www.portal.state.pa.us/portal/server.pt/document/1041921/itspending_agencybriefings_v4_final_pdf Richard Cardamone Director of Accounting, Office of the Budget rcardamone@state.pa.us Kathryn HartzellProject Manager, Office for Information Technology khartzell@state.pa.us

28. eMarketplace Enhancements • Functionality • Automation of: • Notice of Forthcoming Procurements ( NFP) • Request for Delegation (RFD ) • Functionality & Benefits • Added automated date field that records date & time when the Approver approved the form. The date changes if there is a modification to the form • ID# added to the top of the NFP, RFD, & Award forms • Award renewal e-mail reworded to read “The Award Form Renewal, 0000, is accepted. • Added link to NFP in the Agency Lead e-mail to enable direct access • Eliminated the duplicate e-mails in the “Add additional e-mails” section of NFP form • Added new buttons in the “Upload documents” section of Award form to enable agencies to post updated supplier/contract list when new suppliers are added • Created auto archive functionality moving forms from public view once solicitation is posted. • Option enhanced to enable NA selection in response to question on previous efforts taken (see below) • Award Form • Upcoming Procurements If a similar effort was previously undertaken, have the results of the prior effort been evaluated to determine Why it was not successful and why the effort is to be duplicated either partially or wholly? * Yes / NA No

29. eMarketplace Enhancements • For solicitations < Materials/Services threshold; NFP not required • For Materials solicitations > threshold; use shopping cart unless it is large procurement discussed with BOP or agency desires to lead procurement. (Submit NFP) • For Services & IT solicitations > threshold; must submit NFP

30. Playbook • “RFP-RFQ Playbook” has been updated. • The Playbook is available on the Agency Dashboard under the Resource Toolbox section.

31. Playbook RFP APPENDIX RFQ APPENDIX

32. Playbook IT / ITQ Document Library: • Template • Recommendation for Selection Letter for >$250,000 • Award posting procedures The direct link to the RFQ Template from Document Library is below. http://www.itqrp.state.pa.us/ITQ/ITQ/ITQLibrary/Documents/6.2%20-%20RFQ%20Summary%20Scoring%20for%20Projects%20Greater%20Than%20$250,000%20(Rev%202.15.11).xlsx

33. Playbook MASTER Scoring Sheet

34. Supplier Enablement Update Upcoming Punch-out Catalogs: • Medical Supplies & Equipment - McKesson Medical Surgical Minnesota Supply Inc • Latex Paint – The Sherwin Williams Co • Dental Supplies & Equipment – Henry Schein Inc • All will be XML, Auto-PO, P-card New ERS Supplier • Laird Plastics No anticipated go live dates at this time. As more information becomes available we will provide updates.

35. SRM System Updates: XML Order Acknowledgement • XML Order Acknowledgements • SRM POs only (at this time) • Via email • Goods Recipient • Tentative go-live: February 25, 2011

36. SRM System Updates: XML Order Acknowledgement

37. Digital Ink MSCC Contract Catalog Issue: MDM is auto rounding to adjust to mandatory 2 decimal places on shopping carts Resolution: • Temporarily pulling MSCC catalog until a permanent solution can be found • MSCC catalog items will be added to SAP R3 Contract • Agencies will continue to use SRM contract for ordering Describe Requirement items as outlined in the contract Corrections to existing POs: • MSCC prices that rounded up • Invoices will not block, comptrollers will pay correct invoiced lower amount • MSCC prices that rounded down • Invoices will block • PO pricing must be corrected • Contract pricing sheets will be posted on eMarketplace

38. SRM System Updates • Agency Contract Alerts • Go-live February 28, 2011 • Do not anticipate any issues during testing • Could push go-live back 1 or 2 weeks • Alerts sent via • Outlook email • Alerts tab in the Universal Work List (UWL) • Daily alerts will repeat until action is taken by recipient

39. SRM System Updates: Agency Contract Alerts • View from Universal Work list Alerts Tab: • The alert must be “Completed” by the recipient (right click the item and choose Complete) for the item to be removed from the alerts tab. • View from outlook email:

40. SRM System Updates: Records Management • RM PO/Contract Snapshot Issue:  When attempting to view PO and Contract snapshots in RM users are getting an Internet Explorer error message • Status: IES is working with SAP on resolving this issue • 2/8/11: SAP escalated to their next level of support • Interim action: View PO/contract change versions in SRM directly

41. SRM System Updates: Describe Requirement Shopping Carts • Change to the Describe Requirement shopping cart functionality in SRM • Allows requisitioners to change a vendor (source of supply) or price on a describe requirement shopping cart after they’ve selected the data • Email communication sent February 4, 2011 • Change effective February 7, 2011 • End User Procedure (EUP) available on DGS Training website • Resource Toolbox > End User Procedures > Shopping Cart > Changing Price or Vendor on Describe Requirement Shopping Carts • Please refer to the website for updates and other helpful EUPs

42. PA Preferred Agricultural Products Executive Order 2010-03, Pennsylvania-Produced Agricultural Products Program (PAPAP) • Agencies under the Governor’s jurisdiction that purchase agricultural products (as defined by the executive Order) shall, to the extent permitted by the laws and agreements and so as not to trigger the reciprocal preference laws of other states, purchase PA-produced agricultural products when available at competitive prices. • Agencies are required annually to provide a report to the Department of Agriculture describing the types, quantities and costs of each agricultural product purchased and each PA-produced agricultural product purchased. • Process has been developed to capture this information on SRM Pos • http://www.dgsweb.state.pa.us/comod/Training/PAPreferredEUP.doc • Will be revised to capture PAPAP information at time of solicitation • Bid Attributes being developed • Refer to Appendix for additional info

43. Dell Punch-out Procurement Process • Orders against contracts should be created using the SRM punch-out catalog: • 4400002819, IT Hardware (PCs, Laptops / Notebooks, Monitors) – Lot 1 • 4400002801, IT hardware (Rugged Notebooks) – Lot 2 • 4400002806, IT Hardware (Thin Client Laptops) – Lot 3 • Agencies are not required to obtain quotes from Dell • All pertinent data is pulled from the punch-out catalog into the SRM shopping • End User Procedure (EUP) Creating Shopping Carts from Catalogs using P-card • Items not available through the punch-out • Require a quote • Have special ordering requirements • EUP: Creating Orders Referencing Dell Quote Numbers. Questions: • Contract questions: • Ray Jaime, Commodity Specialist, rjaime@state.pa.us or (717) 346-3827 • End User Procedures: • Business Process Improvement & Training for a complete list of names and contact information

44. Procurement Handbook Progress Report: Completed Version November 2010 – Revised January 4, 2011 Revision Summary Document

45. Procurement Handbook Progress Report: In Progress

46. Procurement Handbook Progress Report: Completed

47. Procurement Handbook Progress Report: Completed

48. P-Card Expansion OB/OA/DGS Partnering on Project to Expand Use of P-Card While Maintaining Proper Controls Goals Actions Under Review Increasing number of P-Card Enabled contracts Increasing number of suppliers who accept P-Card Exploring opportunities to expand P-Card threshold Expanding SW contract opportunities Examining off contract P-Card spend Reconciling P-Card designation in eMarketplace • Increase COPA revenue thru higher rebates • Decrease administrative costs • Make shopping experience easier for agencies • Increase reporting/tracking ability via Business Intelligence • Provide prompt payments to suppliers

49. P-Card Expansion • Big Picture Potential P-Card Rebate • PO Spend from July 2009 – June 2010 < $5K where a P-Card was not used: $86,035,238 • Potential $1,247,511 additional rebate

50. P-Card Expansion • Progress Since Last PPC Meeting • Role Changes – OA automatically assigning all SRM requisitioners with P-Card role • Communications • Ensure requisitioners physically obtain P-Cards • Confirm that P-Card master data in SRM is current • List of P-Card Enabled Suppliers to be sent to agency requisitioners • Goal -- Begin using P-Card enabled suppliers for all purchases up to $5K