Procurement Transformation State of North Carolina

1. Procurement Transformation State of North Carolina Jocelyn Thornton, C.P.M. Transformation Project Manager April 24-25, 2012

2. Background • On January 12, 2009, Governor Perdue issued Executive Order No. 5, which created the Budget Reform and Accountability Commission (BRAC). • At approximately the same time, the Office of State Budget and Management (OSBM) initiated a review of statewide procurement as a result of Executive Order No. 4, NC Open Book • The State has a complex set of procurement processes and systems • Decentralized structures exist, with little collaboration among the agencies to identify what improvements are needed • Lack of Central Compliance Resources, Stringent Training Standards

3. “Create a customer-focused enterprise to achieve increased procurement effectiveness, efficiency, and compliance resulting in significant financial benefit for taxpayers by reducing the costs of acquiring goods and services.” Project Vision

4. Expected Benefits • Streamline procurement functions across state government by increasing efficiencies, leveraging buying power and reducing overlap of key functions. • Better value and more effective use of tax dollars • More consistency across the enterprise to leverage buying power • More efficient processes and systems to provide customers with what they need—when they need it • Employees working together to better serve their customers and the taxpayers

5. Guiding Principles • Best Value - Procure at the lowest total cost of ownership • Customer Focus - Address all stakeholders’ business needs • Delivery Excellence - Develop, maintain, and execute standardized, repeatable procurement processes and procedures • Compliance and Accountability - Enforce compliance with statutes, administrative codes, executive orders, and policies • Operational Efficiency - Align people, processes, and technology • Workforce Excellence – Build and maintain the right knowledge and skills • Strategic Planning - Strategically plan procurement activities

6. Six Cross-functional Teams • Change Management and Communications • eight members representing six agencies • Contract Management and Compliance • nine Members representing seven agencies • Policies and Procedures • nine members representing seven agencies • Staff Organization and Training • sixteen members representing ten agencies • Strategic Sourcing • eleven Members representing six agencies • Governance • eight Members representing five agencies

7. Contract Management and Compliance • Establish a standard contract management process • Create standard contract templates such as: • Contract close-out checklist • Contract file checklist • Contractor performance checklist • Develop and deploy a revised contract administration/monitoring guide • Finalize contract monitoring requirements, per SB 1213

8. Change Management and Communications • Consider communications best practices • Create standard communications vehicles • Ensure timely information sharing • Conduct readiness survey to gauge the effectiveness of initiatives, and identify issues • Closely align the change management effort with program leadership • Leverage Change Agents as a way of formalizing peer-to-peer information sharing • Leverage various forums to share successes and leading practices

9. Policies and Procedures • Responsible for recommending improvements to North Carolina procurement related statues and administrative codes to improve • consistency, streamline processes, and encourage best value • procurement • Consolidate and streamline relevant statutes and administrative codes • Clarify rules and exemptions to statutes • Review and modify IFB/RFP/RFQ templates where appropriate

10. Staff Organization and Training • Charged with assessing current procurement training, organizational structure, job profiles, titles and existing career paths • Establish a Strategic Sourcing Group within State Procurement • Establish an Open Market Group within State Procurement • Establish an Operations group within State Procurement • Deploy standardized job titles and job profiles • Create a single purchasing manual for use by all state procurement organizations • Deploy a comprehensive procurement training program

11. Strategic Sourcing • Responsible for implementing a statewide strategic sourcing methodology • Focus on the initial commodity and service groups which will be sourced • Assess opportunities and prioritize Wave I, II and III categories • Solicit input from end users • Develop category strategy • Negotiate and develop sourcing recommendations • Implement agreements • Monitor and manage agreements proactively

12. Governance • Charged with recommending a structure, processes, and • measurements to govern the procurement function after transformation • Recommend a Procurement Governance Team with representatives from State agencies, community colleges, universities, LEAs, and local governments • Develop a set of key procurement performance metrics • Continue oversight and guidance through use of a diversified steering committee

13. Technology Upgrade • Online catalog Improvement • Initiative began in October 2011 and had three primary objectives • Improve catalog content • Refine the processes utilized to develop new catalogs • Establish a continuous improvement program

14. Summary: Current Priorities: • Develop standard contract administration/monitoring guide • Develop standard procurement manual • Develop standard templates and memo’s • Deploy training and update websites for refresher training and reference • Establish tools for continual communication among agencies • Identify and recommend procurement related changes to General Statues, Administrative Code and Operating Procedures • Develop key performance indicators • Prioritize categories for sourcing; statewide contracts (goods & services) • Methodology to save dollars and improve processed for tax payer • Develop modernized job classifications for purchasing positions • Outline purchasing professional career path

15. Conclusion • Long term process 2 – 3 years to implement numerous initiatives • No longer a project – Just how we conduct procurement

16. QUESTIONS ???