Doing Business with Michigan Commodities Sean L. Carlson, Director of Acquisition Services

1. Doing Business with Michigan Commodities Sean L. Carlson, Director of Acquisition Services Tony Des Chenes, Commodities Division Director

2. Acquisition Services • Great time to work with state government • Reforming the way we do business is exciting • Headlines are even starting to reflect the changes • Detroit News – March 9, 2005 Editorial “Ending No Bid Contracts Will Save Taxpayer Dollars” • Governing Magazine – February, 2005 Grading the States Issue cited Michigan’s contracting and purchasing as a strength for the state. The study, by the Government Performance Project, states “A distinctive feature of Michigan’s procurement and contracting procedures is its emphasis on ethics…”

3. Acquisition Services • Handle Solicitations for Goods and Services on Behalf of State Agencies • General Rule • Contracts valued at $25,000 or more are handled through Acquisition Services • Contracts valued at less than $25,000 are handled by agency buyers • www.michigan.gov/doingbusiness

4. Acquisition Services • Manage and Oversee a Portfolio of $11.6 Billion Each Year • Solicitations in a Diverse Range of Opportunities • Ethics and Integrity • Competition • Inclusion and Openness

5. Commodities Categories Food Freight Pharmaceuticals Clothing Furniture Office Supplies (Boise) Lab Equipment Gas/Diesel Medical Supplies Janitorial Supplies Homeland Security Aggregate/Sand and Gravel Energy Steel Salt/Ice Control Carpet/Tile Fleet/Vehicles Michigan State Industries Printing (Xerox and IKON) Alarm Systems

6. 1Food$ 187,315,472.61 • 2Pharmaceuticals$ 138,045,532.00 • 3Prisoner/Commissary$ 133,186,416.04 • 4Furniture/Files/Chairs$ 113,635,727.00 • 5Copiers$ 98,591,931.59 • 6Office Supplies$ 75,110,000.00 • 7Medical/Surgical$ 68,853,587.86 • 8MSI Products$ 64,377,660.16 • 9Gasoline & Fuel Oil$ 23,172,484.60 • 10Road Salt/Ice Control$ 21,768,506.67 • 11Busses$ 11,686,004.65 • 12Clothing$ 11,004,736.04 • 13Carpet Tile/Installation$ 10,146,069.00 • 14Uniforms/Rentals$ 8,121,198.44 • Paper$ 7,326,857.70 • Janitorial Supplies$ 6,880,512.00 • Laboratory Equipment$ 5,705,892.91 • 18Mailing Equipment$ 2,038,064.00 Top Commodities Total of Top Commodities $ 986,966,653.27 Total Value of Contracts $1,030,397,486.81 Total number of Contracts: 275

7. Commodities Buyers Tony Des Chenes, Division Director Joan Bosheff Darlene Burnham Sue Cieciwa Laurie Gyorkos Terry Harris Jennifer Hundt Rebecca Nevai Seleana Samuel Bill Walsh Jeff White

8. Innovative Commodities Projects • Homeland Security • Food • Will be discussed at length today as an example • Pharmaceuticals • Medical Supplies • Fleet • Energy • Emerald Ash Borer • State Fair

9. Getting Started • Become a Registered State of Michigan Vendor • www.michigan.gov/doingbusiness • Select “Becoming a Business Partner” • Check Bid Website regularly • www.michigan.gov/doingbusiness • Contact Acquisition Services with Questions • 517.335.0230 • DMB-Outreach@michigan.gov • Additional Resource • Procurement Technical Assistance Centers (PTACs) www.michigantac.org

10. Upcoming Invitations to Bid • Vehicles: Compact to medium to heavy trucks. This will be a two-year contract. Due out in Mid-August. • Clothing: This is a contract for various types of clothing used by multiple agencies. Due out in October. • Personal Hygiene: This contract is for items such as shampoo, soap, toothpaste, etc. Due out in September.

11. Upcoming Invitations to Bid • Homeland Security Services: Planning, Training and Exercises. Due out in the Fall of 2005. • Patrol Vehicles: This includes the Dodge Magnum, Dodge Charger, Chevy Impala, Ford Crown Victoria, and Tahoe.

12. Example – Food Contracts • Purchasing Strategy for Food Contracts • Department of Corrections • FY04 Expenditures totaled $43.5 Million for Corrections, which does not include Prisoner Stores or Food Service Contracts • Value of Current Contracts = $98.3 Million, with 41 Contracts and 11 Contractors

13. Original Program • Process steeped in formal review required extensive travel, staff time & resources, and vendor time & resources • Three Acquisition Services Food Buyers • Bids solicited by Food Commodity

14. Original Program • Formal Joint Evaluation Committee • Method of Award = Best Value • Obtain State Administration Board Approval for Each • New Contract • Contract Period Extension • Contract Value Increase

15. New Program • Goal to eliminate or decrease administrative burdens for both agencies and vendors • Pre-Qualify Contractors • Pass/Fail Selection Criteria • Ensure Product Quality (HACCP, QA, Recall, Sanitation) • Obtain Service Capabilities (Customer Service, Distribution/Warehousing, Order Processing, Staffing, Reporting) • Single State Administrative Board Submission • Total Program Value over Three Year Period • Specify Pre-Qualified Vendors

16. New Program Vendor Benefits • Pre-Qualification process adds credibility for vendors who are approved for the pre-qualification list • Change in Submission and Award processes decreases time and resources for both vendor and agencies • Opportunities with agency level buyers still exist for orders of less than $25,000 • 50+ Regional Facilities, each with buyers who have delegated purchasing authority for orders of less than $25,000 • Produce, Shortening, Oils, Etc.

17. Delegated Purchasing Authority • To get a list of Corrections Buyers – or any other agency buyer • Go to www.michigan.gov/doingbusiness • Select “Becoming a Business Partner” from the left side • Select “Agency Procurement Staff” from the right side

18. Delegated Purchasing Authority

19. Final Notes • Visit the DMB table for a general flowchart that shows the steps from registration to award • Visit www.michigan.gov/doingbusiness • To download a copy of today’s presentation • To link to vendor registration • To review current Invitations to Bid

20. Q & A