SRP Multi Functional Printers RFP NO. FF320058FLC

1. SRP Multi Functional PrintersRFP NO. FF320058FLC Kenneth T. Sullivan PhD, MBA Brian Stone MBA Performance Based Studies Research Group School of Sustainable Engineering and the Built Environment Arizona State University www.pbsrg.com

2. This presentation is for educational purposes only.Please refer to the solicitation/RFP for specific instructions

3. What If You Are Going In For Brain Surgery… Would you? • Find the cheapest surgeon? • After you found the surgeon you wanted to hire, then ask that surgeon if he/she could lower their price a little? • Would you tell them that they should do it faster? • Would you tell them how to perform the surgery / what tools they can use? • Would you tell them that you have a better way of doing the surgery? • Would you tell them which nurses/doctors they can use? • Would you hire other individuals to tell/direct the surgeon how to do the surgery? • Would you be nervous if? • The surgeon asked you how you would like him/her to do the surgery? • The surgeon asked how long you would like the surgery to take? • If the surgeon knew you had asked for the wrong procedure, but did it any way, because hey, the customer is always right?

4. What If You Are Going In For Brain Surgery… Wouldn’t you rather? • Find the best surgeon available? • Let the surgeon ask you the right questions so he/she can gather the right info? • Let the surgeon tell you how long it should take to perform the surgery? • The surgeon let you know what the potential risks are and what he/she is going to do about them, but what could happen even if he/she does everything they can…and all this before he/she starts? • The surgeon pick out the best nurses/doctors to assist him/her? • Let the surgeon tell you what to do after the surgery so it all works out like it is supposed to? • Let the surgeon let you know of some possible alternatives that could be better in the long term? • Wouldn’t you feel better if? • The surgeon found something different during the operation that he/she used their expertise and took the best course of action? • The surgeon would just sedate you and then wake you up when it was over?

5. Scenario 1 Scenario 2 What are we trying to accomplish? Question: If Purchasing wants to buy a “green circle”, in which scenario is hiring the right “green circle” easiest to justify?

6. What makes our research message unusual….. • Simplistic • Uses logic • Efficiency: less decision making, less management, and better results (best value and high profits) • It is more important for the vendor who does the work to know what to do than it is for client’s representative to know what the vendor should do • Measurement

7. Industry Structure High III. Negotiated-Bid II. Value Based Best Value (Performance and price measurements) Quality control by Vendor Vendor minimizes risk Performance I. Traditional/Price-Based IV. Unstable Market Specifications, standards and qualification based Management & Inspection Vendor reactive to Owner Client minimizes risk Low High Perceived Competition

8. Impact of Minimum Requirements & Expectations High Low High Low Vendor 1 Vendor 2 Risk Risk Performance Performance Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 3 Vendor 4 Low High Low High

9. Problem with Traditional Systems High High Performance Performance Low Low Owners “The lowest possible quality that I want” Vendors “The highest possible value that you will get” Maximum Minimum

10. Industry Structure High III. Negotiated-Bid II. Value Based Qualified vendors invited Owner selects vendor Negotiates with vendor Vendor performs Win-win Efficient/Performance-Based Quality control/preplanning Information environment Vendor minimizes risk Performance I. Traditional IV. Unstable Market Inefficient Relationship-based Allows nonperformance Maximized management Technical data Confusion Client minimizes risk Low High Competition

11. PIPS Objectives • Outsource to experts (not just transfer risk...but minimize risk) • Minimize risk of non-performance • Complete on time • Complete with no cost change orders • Customer satisfaction / No complaints • No Finger pointing • Minimize client management, direction, and decision making. • In return, the vendors can maximize profit by being more efficient WIN WIN

12. The Performance Information Procurement System (PIPS)

13. PIPS is Not Just a Selection Tool…But a Program to Increase Accountability and Efficiency.

14. The Performance Information Risk Management System (PIRMS)

15. Best Value System: PIPS & PIRMS PHASE 1 PHASE 2 PHASE 3 Measurement of Deviation from the Expectation Pre Planning and Risk Management Identification of Potential Best-Value PIRMS PIPS Performance Information Risk Management System Performance Information Procurement System 15

16. Evaluation Criteria • Past Performance Information • Vendor Generated Solution • Technical Risk Plan • Risk Assessment & Value Added Plan • Transition Milestone Schedule • Comparison Financial Submittal • Cost Proposal for the Vendor Generated Solution • Interviews

17. PIPS Process Filter 2 Current Project Requirements Filter 3 Interview Key Personnel Filter 1 Past Performance Information Filter 4 Prioritization (Identify Best Value) Filter 5 Pre-Planning Phase Filter 6 Weekly Report & Post-Rating High Quality of Vendors Award Low Time

18. Filter 1 – Past Performance Information Filter 6 Weekly Report & Post-Rating Filter 1 Past Performance Information Filter 4 Identify Potential Best Value Filter 5 Pre-Award Phase Filter 2 Current Project Information Filter 3 Interview High Quality of Vendors Award Low Time

19. Past Performance Information (PPI) • PPI will be collected on all vendors and their critical team components. • Once the PPI is collected, it is stored in a database. • The data collection is a one-time process (the vendor can reuse the PPI on future projects).

20. Critical Individuals Past Performance Information will be collected on all critical team components, which includes: 3 Components • The Vendor (Firm) • Regional or Area Representative (Individual) • “On-Site” Operations Manger (Individual)

21. Vendor Vendor Prepare Reference List Reference List • MS Excel Spreadsheet • Each Critical Team Component will create • Contains a list of the vendors past projects that will be surveyed • The maximum number of surveys that Vendors will receive credit for is 10 for each firm and 5 for each individual • A template is available online to download 21

22. Each Critical Team Component will create a “Reference List” (which identifies all projects being surveyed) Past Project Information 22

23. References • The reference list must contain different projects • You may submit multiple jobs for the same past client

24. ABC Company Reference List Joe Smith Reference List Sue Parker Reference List Vendor / Individual Reference List • All individuals and firms must have separate reference lists. • Each individual will be treated as a separate entity. • If the individual leaves a firm, their PPI will follow them to the next firm. • Vendor must keep track of who their individuals are.

25. PPI / Data Collection Process The vendor is responsible for sending out a survey questionnaire to each of their past clients (on the Reference List). The vendor should contact each reference to make sure that they complete and return the survey by the due date. Vendor Vendor Setup and Fax Survey Forms Past Client Vendor 25

26. Survey Form

27. Survey Must Match Reference List

28. Don’t Forget to Add Your Fax #

29. All Surveys MUST Be Signed

30. PPI / Data Collection Process The vendor is responsible for collecting all surveys The survey must be faxed back to the vendor The vendor will submit all surveys with their submittal. Vendor Vendor Setup and Fax Survey Forms Past Client Vendor Client Evaluates and Faxes Back

31. Vendor Past Client Past Client Vendor Example Survey (Firm and Individuals)

32. Surveys Returned to Vendor Vendor Vendor Setup and Fax Survey Forms Prepare Reference List Compiles Data Past Client Current Client Vendor Vendor Client Evaluates and Faxes Back

33. Lead Program Designer Firm Project Manager Reference List & Analysis Table Surveys Surveys Surveys What To Submit Reference List & Analysis Table Reference List & Analysis Table

34. PPI Analysis Tables Vendor / Firm Region Manager Operations Manager

35. Calculating the Overall Score

36. PPI Summary PPI is a one time step. The vendor and individual do not need to repeat on every project. Critical individuals may also be evaluated along with the vendor. The vendor and individual must create a “Reference List” and prepare and send out survey forms. The vendor should pick their own references The vendor should collect all surveys The PPI database can be updated at any time by submitting additional projects and surveys. 36

37. Filter 2 – Current Information Filter 6 Weekly Report & Post-Rating Filter 1 Past Performance Information Filter 4 Identify Potential Best Value Filter 5 Pre-Award Phase Filter 2 Current Project Information Filter 3 Interview High Quality of Vendors Award Low Time

38. The Vendor Generated Solution (Scope Plan) The objective of the Vendor Generated Solution is to explain the vendor’s proposed optimal solution based upon what they know about the client’s expectations and constraints What is the solution/program and what does it look like? # of devices, breakout of types of devices, locations, sustainable, cost effectiveness, etc. Why is it the best solution? Any assumptions? Describe what would be the optimal financial arrangement Describe what would be the best length of a contract in terms of years. Describe the optimal transition strategy for changing from SRP current environment into your new proposed environment or model. 38

39. The Vendor Generated Solution (Scope Plan) The Plan must: Do not exceed 2 page limit Contains no names (be anonymous) Contain no marketing (be kept succinct and objective) Be created using an unaltered version of the template provided 39

40. Vendor Generated Solution: (Scope Plan Template) 40

41. Transition Milestone Schedule (For the Vendor Generated Solution) • 1-page Milestone schedule for all phases needed • Anonymous • No template – follow your own preference

42. Technical Risk Plan Outlined in section 1.15.2.2 & Attachment C The Technical Risk Plan must prioritize the major technical risks that exist within the service, its delivery, and the client expectation and how those risk are minimized through the vendor’s expertise. Identify major Technical risks Explain why the risk is a risk How it is minimized with the vendor’s expertise Should be a risk that is specific to the current project An as example, a technical risks to consider may include integration with SRP’s IT platform and IT Network. No names, two pages, no marketing, part of final contract

43. Technical Risk Plan Outlined in section 1.15.2.2 & Attachment C (2-Page Limit)

44. Inexperienced Vendor Experienced Vendor Time Time RAVA PlanRisk Assessment & Value Added Plan (RAVA) • The Risk Assessment Plan (RA) is to identify risks, plans to minimize risk • The Value Added (VA) options (changes in scope). The RAVA Plan provides the vendor with an opportunity to prove their level of expertise differentiate themselves from their competitors .

45. Risk Assessment & Value Added (RAVA) Risk Assessment Section (RA) Identify major Non-Technical risks Explain why the risk is a risk May cause cost increases, transition delays, change orders, or cause dissatisfaction to SRP Should be non-techinical Should be a unique risk to the current project Identify solution to avoid / minimize the risk Non-technical explanation Must explain how risk is avoided or minimized from occuring

46. Risk Assessment & Value Added (RAVA) Value Added Section (VA) Propose any options that could increase the value (expectation, cost, delivery, satisfaction) of the work.

47. RAVA Plan Template

48. Format of the Plans In order to minimize any bias, the Plans must NOT contain any names that can be used to identify who the vendor is (such as vendor name, personnel names, project names, etc). A template is provided and must be used. Vendors are NOT allowed to re-create, re-format, or modify the template. The plans should not contain marketing material. The Vendor Generated Solution must NOT exceed 2 pages. The Technical Risk Plan must NOT exceed 2 pages. The RAVA Plan must NOT exceed 2 pages. 48

49. Things to Avoid • Marketing data: • Our company is known worldwide as a leader in online education. • We will use our long history to make sure the project is a success. • We will use state-of-the-art process to make it a success. • Overly Technical data: • The system we propose has 200% increase in PRX bandwidth modularity. • Transferring risk back to client: • We will work with the owner to resolve issues • We will have team meetings / partnering meeting with the owner • General risks and/or general solutions: • We will plan ahead to coordinate activities • We will plan ahead to get classes scheduled and created

50. Example of Solutions Risk: Concrete EscalationType: Non-Technical (RAVA) • Plan 1 • The owner can be assured all risks associated with material escalations will be eliminated because we offer the benefit of an experienced project team that includes the most detailed, prequalified and extensive list of subcontractors and suppliers, from around the world. • Plan 2 • The cost of concrete has been rising drastically. Since this project requires a substantial amount of concrete, cost is a risk. To minimize this risk, we have secured and signed a contract with a local concrete manufacturer to prevent any increase in cost during the duration of this project. MARKETING INFORMATION