Common Agency Operations Offered by the Department of General Services Presented to: Government Reform and Restructuri

1. Common Agency Operations Offered by the Department of General Services Presented to: Government Reform and Restructuring Consolidation of Shared Services Committee Date: July 8, 2010 Presented by: Richard F. Sliwoski, P.E. Director, Department of General Services

2. Consolidation of Shared Services Committee • Scope of Work Review • Mission: • Gain efficiencies of scale and achieve cost reduction through the consolidation of common systems • Contestable pricing of services to maximize great efficiency • Improve quality and productivity • Lower Costs • Action Items: • Identify common operations that all agencies perform • Where can consolidation and adoption of a uniform system save money and improve productivity? • How the market for services should be organized and how the ensuring contractual arrangements would be managed • Shared use of physical facilities and tangible assets • Government-wide negotiations for purchasing goods and services • Benchmarks for Virginia government in the use of various resources compared to other states

3. Common Agency Operations Found in Multiple Agencies at Multiple Levels of Government • Real estate services • Fleet management (passenger type vehicles) • Electronic enterprise procurement solution (eVA) • State and federal surplus property • Graphic communication services • Mail services • Heavy vehicle maintenance • Facility management • Housekeeping services • Construction services • Laboratories

4. Addressed Mission Efficiencies/cost reduction/consolidation Contestable pricing Improve quality/productivity Lower costs Action Items: Common operation Improve productivity Uniform system Shared facilities/assets Government-wide negotiations Benchmark for Virginia  Potential Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Real Estate • Enterprise portfolio management model • Strategic planning • Acquisition • Selling surplus real estate • Leasing (search, negotiations, administration) • Real estate financial analysis • Consolidated services model • State employee real estate professionals • Outsourced brokerage services • Provides lease administration to 475 leases • Processes 350+ real estate transactions annually • Over $63M savings and cost avoidance since January 1, 2006 • Expand services to agencies with real estate staff

5. Addressed Mission Efficiencies/cost reduction/consolidation Contestable pricing Improve quality/productivity Lower costs Action Items: Common operation Improve productivity Uniform system Shared facilities/assets Government-wide negotiations Benchmark for Virginia  Potential Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Fleet Management (passenger type vehicles) • Outsourced Vehicle Management Control Center model • Outsourced average cost per mile FY07–FY09 = .04 • Other agency cost per mile over same period = .1033 • Difference in cost per mile = .0633 • Approximate savings opportunity = survey miles driven 110,000,000 x difference cost per mile .0633 = $6,963,000 • Short-term rental • FY09 4.5M miles traveled in rental vehicles at 41.8 cents • Personal reimbursement for period was 56.8 cents • Savings approximately $900K • Fuel/fuel-card • Statewide bulk and commercial fuel • Vehicle acquisition • Leverage volume • State and local government • Shared services

6. Addressed Mission Efficiencies/cost reduction/consolidation Contestable pricing Improve quality/productivity Lower costs Action Items: Common operation Improve productivity Uniform system Shared facilities/assets Government-wide negotiations Benchmark for Virginia Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Electronic Enterprise Procurement Solution (eVA) • Way we do purchasing across the Enterprise • One System, One Process • Centrally Maintained • Eliminates Redundancy and Duplicated Costs • Provides Transparency and Accountability • Efficient, cost effective solution resulting in real • cost savings in reduced prices and process • efficiency: FY01-FY09 - $345M savings • Future operational and cost efficiencies in progress • Electronic invoicing, W-9 data collection and Agency 1099 reporting, prompt payment facilitation, Staff augmentation/reporting • Planned procurement component of State Future ERP • VITA VEAD approved and supported • Compliant with Code mandated data standards • Ready to be integrated with Cardinal (New State ERP) • Streamlines transition – 13,000 employees & 46,000 vendors already trained

7. Purchasing Inventory Asset Management AccountsReceivable AccountsPayable Order Data Receipt Data General Ledger eVA – Cardinal Integration Model Electronic Order Sourcing VBO – Quick Quote – Bids – RFPs – Auctions - Collaboration Vendor Requisition Approvals Order Receive  Budget Check Chart of Accts Check Inventory Check Pre-encumbrance Inventory Replenish Reqs  Budget Check Chart of Accts Check Relieve Pre-encumbrance Encumber funds  Partial or Full Asset data Orders Requisitions Receipts Cardinal(New State ERP) (Peoplesoft) RequisitionData eVA and VCCS Integration Peoplesoft Fully Integrated January 2009 - Central Office & 23 Colleges

8. Addressed Mission Efficiencies/cost reduction/consolidation Contestable pricing Improve quality/productivity Lower costs Action Items: Common operation Improve productivity Uniform system Shared facilities/assets Government-wide negotiations Benchmark for Virginia Potential  Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations State and Federal Surplus Property • Consolidated surplus coordination/logistics/planning • Public-private service model • Outsourced web-based auctions • Outsourced Live auctions • Public sector facilities/staff • Outsourced and public sector transportation assets • Core mission of state surplus property office • Public body surplus property management: • Considered an additional duty by some agencies • Potential savings by purchasing used vs. new • New revenue stream • Redirect resources to core mission • Services available to state and local government • Pilot program with Region 3 (Northern Neck) Public Schools

9. Addressed Mission Efficiencies/cost reduction/consolidation Contestable pricing Improve quality/productivity Lower costs Action Items: Common operation Improve productivity Uniform system Shared facilities/assets Government-wide negotiations Benchmark for Virginia Potential  Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Graphic Communication Services • Consolidated project management, design and production • Expertise in marketing strategies, creative writing, graphic design, desktop publishing, web graphics, photography • Products include promotional, informational, and public educational campaigns, logos, internet sites, annual reports, magazines and newsletters • $75 per hour vs. $100 to $150 from private sector • Services available to state and local governments

10. Addressed Mission Efficiencies/cost reduction/consolidation Contestable pricing Improve quality/productivity Lower costs Action Items: Common operation Improve productivity Uniform system Shared facilities/assets Government-wide negotiations Benchmark for Virginia Potential  Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Mail Services • Consolidated state agency mailrooms in and around Capitol Square: • Postage cost savings through outsourced presort contractor: • 1st class letter postage .44; presort .382 • 1st class flat postage .88; presort .68 • $1,120,000 avoidance through interoffice mail use • $945,000 reducing mail meters from 53 to 26 • $130,968 reducing P.O. Boxes from 125 to 29 • Agencies decreased use of contracted couriers • Standardized mail training, processes, procedures and performance measures across agencies • Opportunities • Increase pre-sort volume by adding state and local government entities • Additional reduction of mail meters

11. Addressed Mission Efficiencies/cost reduction/consolidation Potential Contestable pricing Potential Improve quality/productivity Potential Lower costs Potential Action Items: Common operation Potential Improve productivity Potential Uniform system Potential  Shared facilities/assets Potential  Government-wide negotiations Potential  Benchmark for Virginia  no Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Heavy Vehicle Maintenance • Passenger vehicle maintenance service model ? (public/commercial shops) • Acquisition of similar vehicles • aggregate purchase volume state and local government need

12. Addressed Mission Efficiencies/cost reduction/consolidation Potential Contestable pricing Potential Improve quality/productivity Potential Lower costs Potential Action Items: Common operation Potential Improve productivity Potential Uniform system Potential  Shared facilities/assets Potential  Government-wide negotiations Potential  Benchmark for Virginia  no Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Facility Management and Housekeeping Services • State government • Approximately 12,000 buildings • Approximately 117 million square feet of space • Local government • Number of owned buildings and square feet unknown • If consolidated statewide services were available to state and local government entities; could cost and operational efficiencies be achieved?

13. Addressed Mission Efficiencies/cost reduction/consolidation Potential Contestable pricing Potential Improve quality/productivity Potential Lower costs Potential Action Items: Common operation Potential Improve productivity Potential Uniform system Potential  Shared facilities/assets Potential  Government-wide negotiations Potential  Benchmark for Virginia  no Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Construction Services • Some public entities have in-house construction procurement and project management staff • Can operational and cost efficiencies be achieved by consolidating construction procurement and project management services? • Is there expertise at the state and local level that can be shared among the two levels of government to achieve operational and cost efficiencies?

14. Addressed Mission Efficiencies/cost reduction/consolidation Potential Contestable pricing Potential Improve quality/productivity Potential Lower costs Potential Action Items: Common operation Potential Improve productivity Potential Uniform system Potential  Shared facilities/assets Potential  Government-wide negotiations Potential  Benchmark for Virginia  no Key: Proven/positioned for expansion Potential/Additional development needed Common Agency Operations Laboratories • Department of General Services, • Division of Consolidated Laboratory Services (DCLS) • Public Health/environmental/chemical and bio-terrorism • Virginia Department of Agriculture and Consumer Services • Animal health/Weights and measures • Virginia Department of Behavioral Health and Development Services • Facility patient care services • Virginia Department of Health • Close local health labs – September 2010 • Workload to be sent to DCLS and private sector • Outsourced laboratory services