Establishing and Streamlining Your Purchasing/Contracting Process

1. Establishing and Streamlining Your Purchasing/Contracting Process NRECA TechAdvantage 2004 Conference and Expo New Orleans, Louisiana Carla S. Lallatin, C.P.M., CPPO CarlaL1@prodigy.net

2. Discussion Overview • Basic considerations • Acquisition strategy • Bids • Negotiations • Contracting methods • Blanket purchase orders • Term contracts • Scheduled deliveries • Relationships • Customer • Supplier

3. Spend analysis How much For what Spend categories Cost elements TCO models Supplier’s performance Supply strategy Market knowledge Documented strategy End-user involvement Fully integrated/ recognized value Basic Considerations

4. More Basic Considerations • Sourcing and ordering • Link to strategies • Understanding of benefits • Structuring contracts • Monitoring and improvement • Single evaluation system • Visible to all • Departments unified

5. Acquisition Strategy • Considerations • Dollar value • Term • Risk • Cost elements • Market • Contractual requirements

6. Present Dollar value Specifications Suppliers Competition Time Absent Uncertain cost estimates Not just price Spec changes High up-front costs Bids

7. The Bidding Process • Solicitation • Content • Specifications • Prospective suppliers • Identification • Qualification • Notification • Evaluation and award

8. Negotiations • Definition • When to use • Pre-Negotiation • Solicitation • Prospective suppliers

9. The Negotiation Process • Preparation • The players • Cost analysis • Points of movement • Strategy • Time and place • Reaching agreement • Documentation

10. Contracting Methods • Considerations • Requirements • Short-term, immediate need • Continuous supply • Long-term agreement • Undefined needs or technology • Low usage • Spend • Market • Administrative costs

11. Various Methods • Purchase orders • Contracts • Fixed price • Cost reimbursement • Time and materials • Labor hour • Also term, blanket, standing • Consignment buying • Systems contract • Procurement card

12. Impact of Buying Strategies • Hand-to-mouth • Hedging • Integrated supply • Leveraged buying • Spot buying

13. Customer Relations • Acquisition • Early purchasing involvement • Team sourcing • Specification development • Solicitation/contract • Administration, settlement and close out • Roles and responsibilities • Supplier evaluation, monitoring, improvement • Communication

14. Supplier Relations • Ethical considerations • Qualifications • Preferred suppliers • Early supplier involvement • Performance and feedback • Alliances • Communication

15. Summary and Conclusion • Basic considerations • Spend categories • Market knowledge • Sourcing and ordering • Monitoring and improving • Acquisition strategies • Bids • Negotiations

16. Summary and Conclusion • Contracting methods • Considerations • Various methods • Buying strategies • Relationships • Customers • Suppliers • Ethical considerations

17. Establishing and Streamlining Your Purchasing/Contracting Process NRECA TechAdvantage 2004 Conference and Expo New Orleans, Louisiana Carla S. Lallatin, C.P.M., CPPO CarlaL1@prodigy.net

18. Contact Information Carla S. Lallatin, C.P.M., CPPO Lallatin & Associates 61-15 97th Street, Suite 7A Rego Park, NY 11374-1212 Telephone: 718.271.7323 Facsimile: 718.271.3320 Cell: 917.566.1248 Email: CarlaL1@prodigy.net