Breakout Session #708 David P. Gragan, CPPO Chief Procurement Officer

2. Change Leadership and Procurement Transformation Breakout Session #708 David P. Gragan, CPPOChief Procurement Officer City of the District of Columbia April 16, 2008 9:40 am – 10:40 pm

3. Overview • Themes of Professional Public Procurement • Continuous Procurement Reform – A Leader’s Responsibility • Procurement Transformation – From Vision to Reality

4. Themes of Professional Public Procurement • Procurement is not an administrative function • It can and should contribute to the operational effectiveness of your organization • Public procurement faces a dilemma… • Make it easy for requisitioners to get the goods and services they need to do their jobs • Exercise control over expenditures on goods and services • Process review and improvement are always in order

5. Public Procurement Dilemma • Facilitation • Making it simple, painless, and efficient for requisitioners to acquire goods and services • Control • The higher calling • Required by the special trust and confidence that the taxpayer or the shareholder has placed in the procurement executive

6. Continuous Procurement Reform • What is the vision of your procurement process? • Do you have executive support for that vision? • Do you have agency or departmental support? • Do you have staff support? • Do you have an outreach or communications plan? • Do you have the right resources? • Where is your procurement process and organization today?

7. Procurement Reform • Procurement process evaluation and improvement • Conduct a comprehensive review of directives • Insert process automation, where appropriate • Gain support from Human Resources • Develop a good communications and outreach plan • Establish and manage delegation levels properly • Seek reporting enhancements • Implement sourcing improvements • Pursue training program enhancements • Improve supplier management

8. Process Evaluation and Improvement • Process evaluation (business process review must precede business process reengineering) • Should include a comprehensive review of the procurement process • Elimination of non-value added steps or procedures • Reengineer remaining parts to increase efficiency and visibility • Business process review can best be conducted by operators within the system (not outsiders) • Requires dedicated resources • Treat it like a program, with appropriate assignments and support • This is an investment fundamental to the success of procurement reform

9. Comprehensive Review of Directives • Review the regulatory environment with an eye toward moving as much as possible to administrative code where it is more flexible • Eliminate non-value added requirements • Develop supporting policy with input from customers • Publish ongoing reports (in your procurement newsletter) to all organizations you serve • Make this a finite project (e.g., a 12 month effort; including an annual review)

10. Process Automation • Don’t automate the old process (streamline, then automate) • Don’t ‘pave the cow path’ • Must follow a process review of the procurement function • Automate only steps that are substantively improved by automation • Likely automation targets: • External: Solicitation and Offer • Enterprise: eForms (requisition, change request, etc.) • Internal: Workflow, logging and assignment functions

11. Human Resources Support • Carefully review position descriptions • Establish baseline requirements • Certifications, degrees, experience, etc. • Work with your personnel office • A strong alliance must be formed

12. Communications and Outreach • Know your customers • Remember quasi-governmental organizations (they can help at little or no cost) • Procurement Technical Assistance Centers • Chambers of Commerce • Small and Minority Business Development Centers • Business incubators • Television and Radio • PSAs • Community-based broadcasts • Supplier Advisory Panel • Diverse, Objective, Representative, Appointed • Requisitioner Advisory Panel • Diverse, Objective, Representative, Appointed

13. Delegation Levels Delegation levels can safely be increased if: • Each authority for delegation is based on sound understanding of risks • Training and testing of the recipient is made part of the delegation protocol • Rescinding such authority is done in cases where needed • An audit program must be part of delegation program

14. Reporting Enhancements • Allow for ad hoc query and reply • Databases and reporting tools should offer controlled access for use by: • Agencies and departments • Subdivisions of your organization or political subdivisions • Suppliers • Appropriate reporting tools support audit and delegation goals • Make your reports meaningful

15. Sourcing Improvements • Sourcing is the core responsibility of the procurement process • Know the seller’s environment • Use acquisition planning • Turn personnel to highest value tasks • Encourage innovation • Sourcing protocol should be clearly articulated • Inventory • Directed or mandatory sources (state use, correctional industries) • Term contracts • Open market, using an approved procurement method • Automated tools should support the sourcing routine without burdening the requisitioner

16. Training Program Enhancements • Should be available to all interested parties • Mandatory requirement prior to granting authority to commit funds • Coherent, responsive, and dynamic training programs require dedicated resources • Rely on existing and “industry standard” curricula • NIGP and other professional organizations • Be innovative • Required customer visits as part of annual training • Problem resolution at customer level rather than central purchasing

17. Supplier Management • Sound supplier relationships encourage competition • Recognize your status as the customer • Communicate with the seller community • Be open to new ideas • Offer supplier training • Do not fail to correct bad supplier performance

18. Questions?