Central Purchasing Division

1. Central Purchasing Division Scott Schlotthauer State Purchasing Director November 8, 2011

2. Today’s agenda • Who We Are / What We Do • State Wide Contracts, Spend & Financials • Recent Success Stories • Recent accomplishments and initatives • The Vision, The Needs, The How…

3. What is the role of State Purchasing? • State Purchasing is responsible for providing fair, efficient, and transparent processes aligned with established rules and laws for acquiring products and services that meet the minimum requirementsneeded to accomplish our state agencies missions.

4. How do we serve? • State Purchasing is focused on maintaining the balance between added value and compliance to ensure satisfaction of State Agency Customers, Suppliers , and Oklahoma Tax payers. • Similar to a referee, much of the work is that in which no one notices

5. some of our best work is noticed…. • Performance Based Studies Research Group at Arizona State University to Central Purchasing: “You are the first State really performing best value on a substantial amount of both construction and other services….Your organization is one of the most educated on Best Value!” Jacob Kashiwagi, PBSRG • A note to the State Purchasing Director: “I just wanted to let you know how impressed I am with the reputation you and your staff have with other states.  I had never really thought about how the purchasing professionals in other states perceived Oklahoma until I heard so many compliments on your staff at the NASPO Southern Region conference.”  Kimberlee D. Williams, DCS legal counsel • Regarding their Visual Image Change Order handled by (CP-CO) Laura Bybee: “Outstanding!  I can’t express how much I appreciate the willingness of Central Purchasing staff to assist agencies with our needs”. Greg Morley, Department of Health • Regarding the processing of an emergency change order during off hours by CP Contracting Officer Kathy Hallum… “I want to send my deepest gratitude on behalf of State Use for her exemplary professionalism and above and beyond service”. Timothy Harvey, State Use

6. some of our best work is noticed…. • Regarding rush order for food services by Central Purchasing Contracting Officer (CP-CO) Theresa Johnson : ….”Anyway I want to let you know as Theresa Johnson’s supervisor that she is amazing.” Bryan Wiewel, Dept. of Mental Health • ODOT - $4,912,000 Port of Entry project: (CP-CO) Hurtisine Franklin negotiated a $147,360 cost avoidance after supplier requested a 3% increase. “Hurtisine did an awesome job with this contract.” Karen Wallis, ODOT • Comments from supplier representative: “Jonathan Taylor spent a significant amount of time helping me through the registration process … He made me feel I was the most important thing Jonathan had to do and it was such a good experience, he wanted to let me know about it”. • For improvements accomplished on SW 817 MRO (maintenance, repair and operation) contract by (CP-CO) Lisa Bradley. “Thanks Lisa! I really appreciate all you’re doing to help us.” Mike Wolfe, DHS “I just prepared an order to Grainger and the prices were greatly reduced.…They must have negotiated some big discounts. Sorry I was so excited I had to tell someone.” Jana Rains, DHS • Regarding assistance provided by CP Branch Chief Florian Giza “I just wanted you all to know that Florian is an asset to the Oklahoma State Department of Health and he is appreciated.” Wanda Drew, Department of Health

7. Recent success stories… • SW771 Short Term Vehicle Rental – recently renegotiated a 9.1% savings projected to be $13,091 annually. • SW171 Multifunctional Copiers • Negotiated savings of 21% • $17 million annual spend - savings projection of $3,570,000. • SW782 Imaging Products and Services – • Negotiated additional discounts on EMC Software historically 10% now 39% • Kofax discounts historically 10% now 15% • 8 ½” x 11” scans from a historical average of $.085per page to $.025 per page • Tax Commission purchase of 3 million envelopes – lowest responsive bid of $75,840; negotiated price of $66,600 for savings of $9,240.

8. Statewide Contracts Mission: Provide leadership and services for innovative, responsive, and accountable public procurement by working in partnership with state agencies, local governments and suppliers to provide quality goods and services, striving to optimize taxpayer dollars while carefully monitoring and improving the use of our time, talent and resources.

9. Statewide contract Review Process

10. Spend Estimates

11. Realized 2010 Fiscal Savings The State of Oklahoma achieved savings in excess of $8 million for Central Purchasing managed contracts for the fiscal of 2010. The spend and savings are summarized below.

12. Central Purchasing Financials

13. State Use Program SW022 - Staples - Office Supplies/Supply Portal negotiation Increased the number of sources that may be used for comparison increasing competitiveness of pricing. Adopted a more rigorous policy for vendor cost analysis when open market comparisons cannot be made. All product additions, contract renewals, etc. require vendors to submit a statement of client labor hours to supply product to the state. Result: More competitive pricing and greater efficiency of products offered. Important project: State Use Benefit study to demonstrate the economic benefit to the state. Policy changes over the last 12 months • Increased the market basket from 277 to 500 items • Changed 1,500 products from formulary pricing to net pricing. • Increased reporting requirements. • Result: 12% overall savings to the state on products purchased and greater leverage for future negotiation.

14. The Vision………… • The state’s entire spend for all public entities is identified and leveraged to optimize value for state agencies, cities, counties, public schools and higher education by utilizing state of the art technology and strategic practices to achieve the best value for all of the Oklahoma’s tax dollars.

15. Enhancing Communication • Customer Relationship Management (CRM) LIVE - November 1, 2011 • Automated receipt and on-going project status to agencies • Provide details regarding Contracting Officer performance • Will assist in the management of workload • New exception process for State Wide contracts now in place • Single page appeal process • Documentation of pricing exceptions for future leverage • Encourages agency input for contract management • Common Solicitation posting site available • Standard solicitation format in place now for 4 years • Standard solicitation format required to post • Provides consistency and centralization for suppliers

16. The Needs……….. • Complete visibility over all state spend • Annual reporting on spend under management, cost savings, and cost avoidance. • Purchase to pay process is optimized, efficient, maximizes value and minimizes cost.

17. The How………. • Convene an executive procurement council consisting of the largest customer entities. The council will act as a steering committee to provide input and support to purchasing priorities . • Online marketplace where all goods and services under contract can be purchased.

18. Resources • Procurement Modernization Report • http://www.ok.gov/DCS/documents/DCS-Procurement-Modernization-Report.pdf • FY2010 Cost Savings Report • http://www.ok.gov/DCS/documents/Cost%20Savings%20Report%20final.pdf • Central Purchasing History • External report – provided upon request • Scott_schlotthauer@dcs.state.ok.us • Top 20 Savings Categories • External report – provided upon request • Scott_schlotthauer@dcs.state.ok.us • Kudos from the field • Pg 20-23 attached

19. Questions?

20. Kudos from the field Charlie Babb, General Counsel with Regional University System of Oklahoma, sent this thank you to Hurtisine Franklin, Contracting Officer with Central Purchasing, “Hurtisine: thank you for your help with our WestLaw renewal.  After all is said and done, because of the rates with the state contract we have been able to increase our services with a net decrease for our agency of $1,309 for the year.  Should you have any questions or need additional information feel free to give me a call.  Thanks again … Charlie” Florian Giza, CPO with Central Purchasing: David Shipman, Director of Minerals Mgt. Division of the Land Office, commended the excellent work of Florian who processed the bid for their natural gas supply contract. Mr. Shipman said this is an important program that saved participants 3 million dollars last fiscal year, and he wanted to thank Florian for a job well done. Gai Hunter, CPO with Central Purchasing: Rita Kottke of Department of Environmental Quality and Jeff Pearl of Department of Transportation sent “many thanks” to Gai for taking the extra time and effort to provide a best value/performance based contracting process in the awarding of the Haz Mat awards.   Hurtisine Franklin, CPO with Central Purchasing: Toni Halferty of the Department of Corrections sent “thanks” to Hurtisine for her wonderful customer service. Director Richard reported that DMHSAS officials as well as Commissioner White gave two Central Purchasing employees, Lee Johnson, Contract Manager, and Gai Hunter, Contracting and Procurement Officer, favorable reports for the work they did on the Bill Willis Mental Health contract. Lee and Gai were credited for holding to a disciplined process while working on a very compressed timeline which produced a high quality contract for DMHSAS.   Susan Gilley, Administrator, Oklahoma Department of Libraries, sent this thank you to the Purchasing Division, regarding the negotiation done by Hurtisine Franklin, Hi-Tech Contracting Office, “Due to the excellent prices negotiated by DCS under the statewide contract for Westlaw, our total cost per month will be less than it currently is--even after adding public access. Thanks again for the new statewide contract!”  Joe Fleckinger, OSF-State of OK, sent this thank you to the Team who worked on the CORE Item Maintenance Content Tool that went LIVE in Production.  The team has loaded 1,942 items to date. “Team, Congratulations.  I appreciate your commitment and hard work.  Thank you.” Elton Milton, Strategic Sourcing Manager, and Peggy Beaty, Lead Auditor, both served on the project team. Director Richard agreed with congratulations to Elton and Peggy for their hard work and dedication to the CORE project.

21. Kudos from the field Mark Norman, Deputy Director, OETA, sent this thank you to Laura Bybee, High-Tech Contracting Officer with Central Purchasing, regarding the award documents for OETA Encoder REQ: “Thanks a million.  You are a big help to OETA.  I do not know what we would do without your assistance. Mark  Director received this compliment from Kimberlee Williams, General Counsel Office: “I want to tell you once again what an excellent job Gai Hunter, Central Purchasing, did on SW092A. I’m a little disappointed that I didn’t get to try the case because I would have been proud to show the excellent work that Gai did on this solicitation, and Gai would have made a superb witness as she had well-reasoned explanations for every aspect of the solicitation process.  The evaluation team she put together could not have been more qualified and would have made excellent witnesses as well.” Marcia Matthews, Senior Vice President with Chase, sent this thank you to the Central Purchasing staff: Gai Hunter, Contracting & Procurement Officer, Lisa Martin, Contracts Manager, and Lee Johnson, Contracts Manager, “I wanted to thank you for the time you spent with the Chase team educating us on how we might succeed in responding to future RFP opportunities and our short comings on our response to the purchasing card RFP.  You obviously spent a great deal of time preparing for the meeting and your comments were very thoughtful.  Thank you. “ John Richard, Director, sent a thank you to Lisa Bradley, Contracting & Procurement Officer, for going the extra mile in the OJA facility solicitation. The OJA solicitation is using a new process called "performance improvement procurement system" from Arizona State University. It came at the busiest time of the year, with year-end close and the resulting change order workload, issuing agency contracts, with the added activity of item maintenance and resulting statewide contract conversion. Lisa worked overtime to get this project out on time and went above the call working until the last minute to gather needed information to get it published. Richard Gilbertson with OESC sent this Kudos to Randy Ross, Deputy Director regarding Jan Hall, Contracting Officer with Central Purchasing, “OESC had an RFP concerning training.  In my 40 years at OESC, I had never been involved in such a thing.  I and 3 other staff had the pleasure of meeting and being instructed in the process by Jan Hall.  That was our lucky day; we did not know how to start to evaluate a bid.  Ms. Hall was very caring and sharing with us.   She met with us twice, yes Randy, we are a little slow, and one time with our General Counsel.  She was patient, nice, thorough and mainly when all was said and done…SHE WAS RIGHT!  It was our pleasure to get to work with her.   She is a real credit to all State Employees.”  Tom Ferguson, Risk Manager with Mental Health, sent this thank you to Steve Hagar, Central Purchasing Assistant Director, regarding the negotiation of a workers compensation insurance contract with a private vendor: “Thanks for all the extra effort you put into this one, it is greatly appreciated.”

22. Kudos from the field Jason Doss, Finance Unit, sent this kudo to Scott Schlotthauer, Central Purchasing Director: “ I just wanted to let you know how much I appreciate Vickie Rivas and everything she does for our Finance Division.  I have called on her numerous times to help resolve vendor ID issues for our Accounts Payable area.  She always delivers and always gets things done quickly and accurately.  She goes out of her way to assist with items that normally could cause delays in the payables cycle, and she makes my job a lot easier.  She is a great asset to DCS and a great representative of the Central Purchasing division.” Larry Campbell with Comp Source sent this thank you to Tim Harvey, Contracting & Procurement Officer, “Thanks so much for your help and quick response!! You provided great customer service!!! Natalie McNabb from OETA sent this thank you to Laura Bybee, Hi-Tech Contracting & Procurement Officer, “Thank you so much, Laura.  If you don’t hear it very often you are the best!” Jon Tugade, Project Lead with Maximus, sent a letter of appreciation to Scott Schlotthauer, Central Purchasing Director, regarding Peggy Beaty’s work on the Integrated Item Maintenance Project. Mr. Tugade stated in part that: “Peggy was critical to the successful completion of the project. She was reliable, hard-working, self-motivated, energetic, effective and efficient. She displayed good interpersonal relations with the project team and with CORE.”  Teresa Terry, DOC Contracts and Acquisitions Agent, sent this thank you to Laura Bybee, Hi-Tech Contracting & Procurement Officer, “I just wanted to thank you for all your help with the pagers.  This was my first project when I started in purchasing.  Your help and guidance has taught me a lot and your patience has been greatly appreciated.” Wanda Drew, CPO, Contracting & Acquisition Agent, Procurement Division, Oklahoma State Department of Health, sent this thank you to the Central Purchasing Division regarding Florian Giza, Contracting & Procurement Officer, “I would like to thank Florian for all of his help this past year.  With all of the changes that have taken place in procurement this year, it has been very challenging and time consuming. Whenever I came up against an issue that I could not solve, I would call or e-mail him and he has always been available to assist me.  He has a way of dealing with issues without making you feel like you are bothering him or wasting his time.  I feel he is a very valuable asset to the Procurement profession. I just wanted you all to know that Florian is an asset to the Oklahoma State Department of Health and he is appreciated.

23. Kudos from the field Phil Ross, APO with Tourism, thanking Laura Lovell, APO, Lisa Bradley, CPO, and Joy Allen, CPO. “I just wanted to thank you all for helping get that change order done so quickly!!  Your efforts to provide great customer service helped to avoid a major problem with a vendor who badly needed his money. Good job!!! Thanks for all the things you do to help us!!!!” Kim Heaton, DCS General Counsel, sent this thank you to Hurtisine Franklin, Contracting Officer, “THANK YOU HURTISINE!!!  DCS Legal Division just saved $346.00 per month (over half of our current monthly payment) on our new Westlaw contract…. We ended up with more services than we had under the more expensive plan we have been using. ..  Thank you for all of your efforts.  I know that it was a challenge, but it will pay off.” Jan Hall, Contracting Officer for the Department of Central Services was awarded the Buyer of the Year on April 16, 2010 at OkAPP Conference in Oklahoma City.  Jan has worked for the State of Oklahoma for 12 years.   She served as OkAPP Vice President in 2006, President in 2007, and served on the Board as Past President in 2008.  Richard Clark, Operations and Applications Manager with OSF, sent this thank you to Theresa Johnson, Hi-Tech Contracting Officer, regarding her work on a furniture bid for their new building: “Theresa, it looks good. Thanks again for all of your great assistance on this.” Kathy Hallum, Contracting and Procurement Officer with Central Purchasing, received an award from Heartline for her superior call center practices.  Kathy has volunteered and worked at Heartline for 6 years.  She was recognized for her commitment and dedication to HeartLine and her team spirit and willingness to help fellow staff volunteers. Pam Jennings, Programs Coordinator with the OKDHS Contracts & Purchasing Unit, sent this thank you to Central Purchasing Division regarding Jan Hall, Contracting Officer: “Just wanted to let you know how much we appreciate Jan Hall’s service.  She called from home yesterday to assist with a pending Change Order.  Such great customer service is really going above and beyond the call of duty.  Certainly not expected but definitely doesn’t go unnoticed!  Thanks!!” Ed Simpson, with OKDHS Contracts & Purchasing, “I would just like to take a moment and let you know about a person who has been a tremendous help and provided very good service when it comes to acquiring a new Item ID# or assistance in trying to find  a new Item ID# or anything pertaining to this new endeavor since switching over to the new UNSPSC codes and Item ID’s and this would be Peggy Beaty (Strategic Sourcing Analyst). She is very quick to respond and very helpful in providing assistance every time I need it. Ms Beaty is definitely an asset to your team and my hat is off to her for all of her support! Thank you for her service!” Gai Hunter with Central Purchasing received a Kudo from the Director of Procurement at the Department of Commerce in processing the SW200 Solicitation: “Congratulations Gai.  You have done an outstanding job.  Items  commented or suggested revision were minor.  You have been very thorough.”