PUBLIC PURCHASING IN FLORIDA

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PUBLIC PURCHASING IN FLORIDA

• COST CONTROL IN PUBLIC PURCHASING
• (REV. 05/08)

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COST CONTROL MISSION

• SPECIFIC MISSIONS OF GOVERNMENT PROCUREMENT VARY
  WITH
• ADMINISTRATIONS,
• CIRCUMSTANCES,
• NEAR-TERM OBJECTIVES

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COST CONTROL MISSION

• The underlying mission of governmental purchasing
  is, to provide the customers what they need, when
  and where they need it, at the lowest overall
  cost, considering both prices and program
  administration within the scope of the law.

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COST CONTROL MECHANISMS

• HOW IS COST CONTROLLED?

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COST CONTROL

• Is the answer competition?
• What is the relationship between low bid and
  lowest overall cost?
• What affects the costs?

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COST CONTROL

• Cost control is impacted by four mechanisms
• 1. PURCHASING CYCLE (6 steps)
• 2. PURCHASING INSTRUMENTS (3 types)
• 3. PURCHASING METHODS (8 methods)
• 4. PURCHASING ORGANIZATION (2 types)

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1. Purchasing Cycle

• Contains Six Component Units
• BUY/DONT BUY
• SPECIFICATIONS
• SOURCING STRATEGIES
• TERMS AND CONDITIONS
• COMPETITION
• ADMINISTRATION

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1A. Buy/Dont Buy

• What Factors Influence this Decision?
• NEEDS/WANTS
• RESOURCE AVAILABILITY
• COST AND BUDGET
• QUALITY
• SCHEDULE
• RISK
• FLEXIBILITY
• ACCOUNTING RULES
• FEDERAL SPENDING REQUIREMENTS
• POLITICS

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1B. SPECIFICATIONS

• Do Cost Considerations Affect
• Specifications?
• Do Specifications Affect Costs?

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1B. SPECIFICATIONS

• Factors That Influence Cost
• TOO RESTRICTIVE
• UNCLEAR
• TOO BROAD
• AWARD CRITERIA
• NEGOTIATION STRATEGIES
• UNNECESSARY REQUIREMENTS

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1C. SOURCING STRATEGY

• SPEND ANALYSIS
• INTERNAL PROFILE
• EXTERNAL PROFILE
• ITEMS OF BID
• PROCUREMENT METHOD
• TERM
• AWARD FORMULA

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1D. Terms and Conditions

• GENERAL CONDITIONS
• SPECIAL CONDITIONS
• MUTUAL OBLIGATIONS
• RISK (Whats this got to do with purchasing?)

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1E. COMPETITION

• How does competition lower prices and costs?
• How much?
• How does it compare to the other factors
  (buy/dont buy, specs, strategy, terms
  conditions, administration)?

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1F. ADMINISTRATION

• CONTRACT MANAGEMENT
• DISPUTE RESOLUTION (Is there one right answer?)
• RENEGOTIATION
• LESSONS LEARNED
• PLANNING FOR THE FUTURE

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2. PURCHASING INSTRUMENTS

• Which Instrument is Best?
• PURCHASING CARDS
• PURCHASE ORDERS
• CONTRACTS

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Pcards/POs/Contracts

• Considerations
• BUY/DONT BUY
• SPECIFICATIONS
• SOURCING STRATEGY
• TERMS CONDITIONS
• PRICE COMPETITION
• ADMINISTRATION

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3. PURCHASING METHODS

• SMALL DISCRETIONARY PURCHASE
• INFORMAL BID (RFQs)
• FORMAL ITB, RFP AND ITNS
• SINGLE SOURCE
• EMERGENCY PURCHASE
• OTHER (Exempt, required by Statute, etc.)

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3. PURCHASING METHODS

• FOR ALL METHODS CONDISER
• BUY/DONT BUY
• SPECIFICATIONS
• SOURCING STRATEGY
• TERMS CONDITIONS
• PRICE COMPETITION
• ADMINISTRATION

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5. PURCHASNG ORGAINZATION

• CENTRALIZATION VS DECENTRALIZATION
• MEASURE YOUR EFFECTIVENESS

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5. PURCHASING ORGANIZATION

• CENTRALIZATION VS DECENTRALIZATION
• Can the office utilize
• P Cards?
• Purchase Orders/Contracts?
• Local Purchase Orders?
• Cost of qualified staff?
• Do they measure their effectiveness?

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5. PURCHASING ORGANIZATION

• WAYS OF MEASURING PERFORMANCE
• Do your customers get what they need when where
  they need it?
• Do they get it at the lowest overall cost?
• Did the vendor perform?
• Did your agency perform?

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THE CONCEPT OF BEST VALUE

• VQ/P