DEVELOPMENTS IN CONTRACT MANAGEMENT IN FLORIDA

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DEVELOPMENTS IN CONTRACT MANAGEMENT IN FLORIDA

• NASPO in Tallahassee
• May 18, 2006
• Russ Rothman, Interim Director of State Purchasing

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DEVELOPMENTS IN CONTRACT MANAGEMENT IN FLORIDA

• BACKGROUND ROADMAP TO EXCELLENCE IN CONTRACTING
• TRAINING CONTRACT MANAGERS
• DEVELOPING PERFORMANCE MEASURES FOR CONTRACTS
• SURVEYING STATE CONTRACT USERS
• COMPLAINTS TO VENDORS
• VENDOR PERFORMANCE TRACKING
• DEVELOPMENT OF SOFTWARE REQUIREMENTS WITH
  CUSTOMERS
• QUARTERLY STATE CONTRACT MANAGEMENT TOOL
• NEXT STEPS

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ROADMAP TO EXCELLENCE IN CONTRACTING

• INSPECTOR GENERAL OF FLORIDA, DERRY HARPER,
  ISSUED SUBJECT REPORT, JUNE, 2003
• INDICATED MOST FAILURES OF STATE PURCHASING WERE
  NOT IN THE SOURCING PROCESS, BUT IN CONTRACT
  MANAGEMENT
• HIGHLIGHTED DMS SHORTCOMINGS DUE TO ABDICATION
  LEADERSHIP

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Historical Audit Findings by Core Contracting
Activity

• Performance monitoring 45
• procurement methodology 20
• contract writing 17
• Payment 10
• needs assessment 7
• contract closure 1

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FAILURES IN PERFORMANCE MONITORING

• Risks included
• Financial losses to the state,
• Failure to obtain desired performance by the
  contractor,
• Payment for defective deliverables,
• Fraud and
• Loss of funding sources.

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TRAINING CONTRACT MANAGERS

• THE ROADMAP TO EXCELLENCE IN CONTRACTING CALLED
  FOR DMS TO ACCEPT THE STATUTORY MANTLE OF
  LEADERSHIP, IMPROVE GUIDANCE THROUGH STATUTES AND
  RULES, AND IMPLEMENT A TRAINING PROGRAM.

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TRAINING CONTRACT MANAGERS

• IN JANUARY 2004 DMS LAUNCHED A TRAINING AND
  CERTIFICATION INITIATIVE WITH NIGP
• TRAINING INCLUDES 6 NIGP COURSES AND 3
  FLORIDA-SPECIFIC COURSES
• CERTIFICATIONS ATTAINABLE INCLUDE TWO UPPCC, AND
  FOUR FLORIDA CERTIFICATIONS

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NIGP COURSES

• SOURCING IN THE PUBLIC SECTOR
• PLANNING, SCHEDULING AND REQUIREMENTS ANALYSIS
• DEVELOPING MANAGING RFPs IN THE PUBLIC SECTOR
• THE LEGAL ASPECTS OF PURCHASING
• CONTRACT ADMINISTRATION
• NEGOTIATION STRATEGIES

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FLORIDA SPECIFIC COURSES

• PUBLIC PURCHASING IN FLORIDA
• NEGOTIATIONS IN FLORIDA
• CONTRACT MANAGEMENT IN FLORIDA

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CONTRACT MANAGEMENT IN FLORIDA

• FLORIDA STATUTES RULES GOVERNING CONTRACTS
• PLANNING TO CONTRACT
• ETHICS
• STATEMENT OF WORK, STATEMENT OF OBJECTIVES
• PERFORMANCE BASED CONTRACTING
• MANAGING THE CONTRACT
• PROBLEM RESOLUTION
• OVERSIGHT AGENCIES

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SOME RESULTS

• TO DATE WEVE ISSUED 342 CERTIFICATIONS TO 114
  INDIVIDUALS
• 205 TO STATE PERSONNEL, 137 TO POLITICAL
  SUBDIVISION PERSONNEL
• 93 ARE CONTRACT MANAGEMENT CERTIFICATIONS

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DEVELOPING PERFORMANCE MEASURES FOR CONTRACTS

• DECIDED TO IMPLEMENT TOWARD FOUR MEASURES ON
  CONTRACT PERFORMANCE
• PERFORMANCE TO SPECIFICATIONS/SOW
• MEETING BILLING BUDGET REQUIREMENTS
• SCHEDULE DELIVERY REQUIREMENTS
• CUSTOMER SERVICE LEVEL

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IMPLEMENTING THE FOUR MEASURES

• SURVEYING STATE TERM CONTRACT USERS
• COMPLAINTS TO VENDORS
• VENDOR PERFORMANCE TRACKING
• DEVELOPMENT OF SOFTWARE REQUIREMENTS WITH
  CUSTOMERS
• QUARTERLY STATE CONTRACT MANAGEMENT TOOL

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SURVEYING STATE CONTRACT USERS

• FIRST IMPLEMENTATION OF THE 4 MEASURES
• RATING OPPORTUNITY RATING SUMMARY AVAILABLE ON
  STC WEBSITES

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COMPLAINTS TO VENDORS

• SECOND IMPLEMENTATION OF THE FOUR MEASURES
• REVISED COMPLAINT TO VENDOR FORM
• PUT UP WEBSITE TO LIST AND VIEW COMPLAINTS, AND
  HOW THEY WERE RESOLVED

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PART I - NATURE OF COMPLAINT
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COMPLAINT TO VENDOR

• The fact(s) and/or unmet contract term(s) giving
  rise to this complaint is/are
• ___________________________
• The corrective action required is
• __________________________

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VENDOR PERFORMANCE TRACKING

• THIRD IMPLEMENTATION OF THE FOUR MEASURES
• CUSTOM APPLICATION WRITTEN BY OUR CONSULTANT
• EMAILS VENDOR PERFORMANCE RATING OPPORTUNITY TO
  CUSTOMER RECORDED ON EACH PURCHASE ORDER
• COMPILES RESULTS, WHICH ARE ACCESSIBLE IN VARYING
  DEGREES TO BUYERS, VENDORS, PUBLIC

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VENDOR PERFORMANCE TRACKING

• To focus the attention of those charged with
  monitoring vendor performance and reviewing
  vendor invoices on benchmarking performance to
  purchase order/contract requirements, and
  verifying appropriateness of amounts billed
• To provide customer feedback to contract
  managers assigned to multi-user contracts, such
  as state term contracts and agency term
  contracts, for managing vendor performance to
  contract requirements and customer expectations
• To provide useful information on vendor
  performance history to others charged with
  negotiating agreements and selecting vendors, to
  better inform the decisions they must make.

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PERFORMANCE SCORING

• Four criteria are scored
•   i. "Performance to Specifications", meaning
  conformance of the commodities/service to the
  requirements of the order
• ii. "Delivery", comparing commodity delivery or
  service performance dates to the order schedule
• iii. "Invoicing", meaning comparing the pricing
  or budget, and invoice accuracy and detail, to
  order requirements
• iv. "Customer Service", rating the vendor's
  service, in areas such as communication and
  problem solving, to the customer's expectations.

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PERFORMANCE SCORING

• Five scoring levels are provided for each
  performance criterion
• 1 means failed to meet most requirements/expectati
  ons.
• 2 means failed to meet some requirements/expectati
  ons.
• 3 means met requirements/expectations.
• 4 means exceeded some requirements/expectations.
• 5 means exceeded most requirements/expectations.
• In cases of multiple factors affecting one of
  the four criteria, with mixed results, the rater
  will consider the relative importance of factors
  and the essence of the contract.

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DEVELOPMENT OF SOFTWARE REQUIREMENTS WITH
CUSTOMERS

• PURCHASED AN EFORMS APPLICATION TO DESIGN
  CONTRACT MANAGEMENT FORMS
• PULLED TOGETHER A CONTRACT MANAGEMENT WORKGROUP
  OF AGENCY CONTRACT ADMINISTRATORS AND PURCHASING
  DIRECTORS
• AGREED UPON FUNCTIONAL REQUIREMENTS.

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DEVELOPMENT OF SOFTWARE REQUIREMENTS WITH
CUSTOMERS

• FUNCTIONAL REQUIREMENTS
• CONTRACT MANAGEMENT
• Primary purposes
• A. A database for all or some contracts within an
  agency, as determined by each using agency.
• B. A single electronic file for all documents
  related to a contract.
• C. Report capability.
• D. Document retrieval capability.
• E. A tool for managing contracts, measuring
  performance and recording results.
• Web based, Graphical User Interface.
• Use of the system will be optional, available to
  contract managers but not required.
• The basic record of the system will be the
  contract file. Record Data Fields will be of
  three types Vendor, Contract Manager/Administrato
  r, Contract data.

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DEVELOPMENT OF SOFTWARE REQUIREMENTS WITH
CUSTOMERS

• Report capability Database sortable on all
  fields, output by any fields. In addition,
  design templates for standard reports requested
  by the Division of State Purchasing or two or
  more user agencies.
• Security/password protected
• Workflow programmable
• Pre-populate from MyFloridaMarketPlace
  eprocurement system vendor file and link to the
  PeopleSoft accounting system (Aspire), as well as
  to/from the MFMP vendor file. DCF uses FLAIR
  contract information file (Foxpro?) to
  pre-populate some header information for some
  contact management processes.
• All relevant documents and other references will
  be attached Contract, amendments/change orders,
  solicitation, posting of intended award, email,
  letters, faxes, forms, web links, complaints,
  commendations, contractor reports, contract
  manager reports, corrective action plans

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DEVELOPMENT OF SOFTWARE REQUIREMENTS WITH
CUSTOMERS

• Risk rating and rating periods, e.g. high,
  medium, low, 30, 60, 90 days.
• Examples
• High risk Contract failure would markedly impact
  delivery of public services, and represents a
  threat to public health, safety or welfare, or
  cost to the state, and/or, recovery would be
  complicated and lengthy.
• Medium risk Contract failure would entail low to
  moderate disruption to state operations, and/or
  might include some negative but tolerable impact
  on delivery of service to the public, and.or
  recovery would be possible with a moderate level
  of effort and within an acceptable time frame.
• Low risk Low to moderate disruption to state
  operations, no impact on public, recovery
  relatively quick and uncomplicated.
• Periodic notification of action pending
• Provide for vendor ratings by 4 categories
• ETC

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QUARTERLY STATE CONTRACT MANAGEMENT TOOL

• FOURTH IMPLEMENTATION OF MEASURES
• AVERAGE RATING FROM STC WEBSITE SINCE INCEPTION
  (ratings count __)
• Requirements/Specifications
• Schedule/Delivery
• Budget/Financial/Invoicing
• Customer Service
• Overall
• Trend _______________
• AVERAGE RATING FROM VPT SINCE INCEPTION (ratings
  count __ )
• Requirements/SpecificationsSchedule/DeliveryBudget
  /Financial/InvoicingCustomer ServiceOverall
• Trend _______________

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QUARTERLY STATE CONTRACT MANAGEMENT TOOL

• Formal complaints posted since inception ___
  This Quarter ___
• Contractor reporting status, e.g. spend
  reporting, CMBE participation, meetings, other
  __________________________________________________
  _______________
• __________________________________________________
  _______________________
• Other relevant performance information
  _________________________________
• __________________________________________________
  _______________

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QUARTERLY STATE CONTRACT MANAGEMENT TOOL

• Contract Managers Rating of this Vendor
• Requirements/Specifications
• Schedule/Delivery
• Budget/Financial/Invoicing
• Customer ServiceOverall
• Trend ___________________
• Corrective Action Plan if indicated
  ____________________________________________

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QUARTERLY STATE CONTRACT MANAGEMENT TOOL

• FINANCIAL IMPACT
• Contract spend since inception State agencies
  _____
• Estimated OEU spend ________________
• Discount _____ savings _____________________
• Percent of agency spend for this
  commodity/service accomplished through this STC
  ___ .
• For commodity/service spend not accomplished
  through this STC, what procurement methods are
  used and what vendors, for significant non-STC
  spend?
• __________________________________________________
  ____
• Percent of agency spend for this STC accomplished
  through this vendor ___
• Customer adoption trends __ downward __
  stable __ upward

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NEXT STEPS

• TRAIN TRAIN TRAIN
• DEVELOP EFORMS
• TRAIN TRAIN TRAIN
• TRACK IMPACT ON STATE TERM CONTRACTS