Phil Abruzzi

1
Purchasing Update

• Phil Abruzzi
• Chief Procurement Officer
• Tom Delanty
• Director of Purchases, UIUC

2
Strategic Procurement. . .

• System wide collaborative purchasing process
• Designed to maintain or increase customer
  satisfaction
• Easy to use procurement processes, tools and
  highly skilled staff
• Significantly lower total cost of ownership by
  coordinating and leveraging common processes
  and/or commodity spend across the UI system

3
Strategic Procurement Why

• 2004 Accenture Study showed
• Current procurement processes are difficult to
  understand/use and are time consuming
• Procurement staff focused on transactions
• Purchasing spend is segmented
• UI could save 13-28 million per year

4
Strategic Procurement Plan

• Identify and implement an easy to use
  system/application to utilize strategic contracts
• Develop and implement a collaborative procurement
  model to support a strategic procurement process
• Use spend analysis and data metrics to provide
  departments with useful reports to enable better
  management of spend activity
• Realize annual savings of 5-15 in purchases

5
Board of Trustees Authorization Levels Effective
September 8, 2005

• Previous Level New Level
• Contracts for professional
• services requiring payment
• by the University in one
• fiscal year of 200,000 100,000
• Purchases of supplies, equipment
• and non-professional services
• requiring payment by the
• University in one fiscal year of 500,000 200,000
  

6
Board Level Changes (cont.)

• Any change order for professional
• service contracts or purchase
• agreements for supplies or
• equipment that exceeds 50,000
• or construction that exceeds 250,000

7
Board Level Changes (cont.)

• Individual capital
• projects budgets of 10,000,000 2,000,000
• Contracts for professional
• services related to capital
• projects requiring payment
• by the University of 200,000 150,000
• Construction contracts
• requiring payment by
• the University of 2,500,000 500,000

8
Implications of Board Level Changes

• Increase in number of transactions requiring
  Board of Trustees approval.
• Additional planning and enhanced communications
  between departments and Purchasing will be
  required to meet projected time lines
• Earlier schedule for renewal orders.

9
E-Procurement. . .

• Combines the use of web technology with
  procurement best practices to streamline the
  purchasing process and reduce costs. Provides
  for the business-to-business purchase and sale
  of supplies and services via the web.
• Allows users to access negotiated pricing
  resulting from strategic procurement initiatives
  and provides an easy method to place orders and
  pay for them electronically.

10
Expected Outcomes For Strategic Procurement and
E-Procurement

• Increased competitiveness between suppliers
  resulting in improved pricing
• Greater usage of contract vendors
• Increased percentage of electronic ordering
• Integration with Banner for easier procurement
  transaction processing

11
E-Procurement Initiative

• Completed
• Development of RFP and Evaluation Criteria
• In process
• Analysis and selection of final vendors
• Development of Business Case
• Development of Project Plan

12
Sole Source Procurement

• Sole Source Template
• Required to provide information for Procurement
  Policy Board review
• Will be a web interactive form
• Will be required when requesting a Sole Source
  procurement above the bid limit.

13

• Questions?