Procurement TransformationState of North Carolina

Jocelyn Thornton, C.P.M. Transformation Project Manager

April 24-25, 2012

Background

On January 12, 2009, Governor Perdue issued Executive Order No. 5, which created the Budget Reform and Accountability Commission (BRAC).

At approximately the same time, the Office of State Budget and Management (OSBM) initiated a review of statewide procurement as a result of Executive Order No. 4, NC Open Book

The State has a complex set of procurement processes and systems

Decentralized structures exist, with little collaboration among the agencies to identify what improvements are needed

Lack of Central Compliance Resources, Stringent Training Standards

Project Vision

“Create a customer-focused enterprise to achieve increased procurement effectiveness, efficiency, and compliance resulting in significant financial benefit for taxpayers by reducing the costs of acquiring goods and services.”

Expected Benefits

Streamline procurement functions across state government by increasing efficiencies, leveraging buying power and reducing overlap of key functions.

Better value and more effective use of tax dollars

More consistency across the enterprise to leverage buying power

More efficient processes and systems to provide customers with what they need—when they need it

Employees working together to better serve their customers and the taxpayers

Guiding Principles

Best Value - Procure at the lowest total cost of ownership

Customer Focus - Address all stakeholders’ business needs

Delivery Excellence - Develop, maintain, and execute standardized, repeatable procurement processes and procedures

Compliance and Accountability - Enforce compliance with statutes, administrative codes, executive orders, and policies

Operational Efficiency - Align people, processes, and technology

Workforce Excellence – Build and maintain the right knowledge and skills

Strategic Planning - Strategically plan procurement activities

Six Cross-functional Teams

Change Management and Communications eight members representing six agencies

Contract Management and Compliance nine Members representing seven agencies

Policies and Procedures nine members representing seven agencies

Staff Organization and Training sixteen members representing ten agencies

Strategic Sourcing eleven Members representing six agencies

Governance eight Members representing five agencies

Contract Management and Compliance

Establish a standard contract management process

Create standard contract templates such as:• Contract close-out checklist• Contract file checklist• Contractor performance checklist

Develop and deploy a revised contract administration/monitoring guide

Finalize contract monitoring requirements, per SB 1213

Change Management and Communications

Consider communications best practices

Create standard communications vehicles

Ensure timely information sharing

Conduct readiness survey to gauge the effectiveness of initiatives, and identify issues

Closely align the change management effort with program leadership

Leverage Change Agents as a way of formalizing peer-to-peer information sharing

Leverage various forums to share successes and leading practices

Policies and Procedures

Responsible for recommending improvements to North Carolina procurement related statues and administrative codes to improve

consistency, streamline processes, and encourage best value procurement

Consolidate and streamline relevant statutes and administrative codes

Clarify rules and exemptions to statutes

Review and modify IFB/RFP/RFQ templates where appropriate

Staff Organization and Training

Charged with assessing current procurement training, organizational structure, job profiles, titles and existing career paths

Establish a Strategic Sourcing Group within State Procurement

Establish an Open Market Group within State Procurement

Establish an Operations group within State Procurement

Deploy standardized job titles and job profiles

Create a single purchasing manual for use by all state procurement organizations

Deploy a comprehensive procurement training program

Strategic Sourcing

Responsible for implementing a statewide strategic sourcing methodology

Focus on the initial commodity and service groups which will be sourced

Assess opportunities and prioritize Wave I, II and III categories

Solicit input from end users

Develop category strategy

Negotiate and develop sourcing recommendations

Implement agreements

Monitor and manage agreements proactively

Governance

Charged with recommending a structure, processes, and measurements to govern the procurement function after transformation

Recommend a Procurement Governance Team with representatives from State agencies, community colleges, universities, LEAs, and local governments

Develop a set of key procurement performance metrics

Continue oversight and guidance through use of a diversified steering committee

Technology Upgrade

Online catalog Improvement

Initiative began in October 2011 and had three primary objectives

Improve catalog content

Refine the processes utilized to develop new catalogs

Establish a continuous improvement program

Summary: Current Priorities:

Develop standard contract administration/monitoring guide

Develop standard procurement manual

Develop standard templates and memo’s

Deploy training and update websites for refresher training and reference

Establish tools for continual communication among agencies

Identify and recommend procurement related changes to General Statues,

Administrative Code and Operating Procedures

Develop key performance indicators

Prioritize categories for sourcing; statewide contracts (goods & services)

Methodology to save dollars and improve processed for tax payer

Develop modernized job classifications for purchasing positions

Outline purchasing professional career path

Conclusion

Long term process 2 – 3 years to implement numerous initiatives

No longer a project – Just how we conduct procurement

QUESTIONS

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