using data to promote the public procurement profession david davis – washington state dot, wa...
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Using Data to Promote the Public Procurement Profession
David Davis – Washington State DOT, WABrian Smith – Multnomah County, OR
Nelson Park – Seattle City Light, ORJonathan White – Spikes Cavell, VA
David Davis – overall reasons for procurement teams to record and report their valueBrian Smith - example processes to record your valueNelson Park – using analytics to support the value of public procurement narrativeJonathan White – calculating an ROI for procurement and procurement projects
How is your department measured by your bosses today?
For most, it’s how much you cost…
It’s time to change that measurement to “What value did you add?”
Categories of Savings and Efficiencies
• Contract savings or discounts• P-card rebates• Settlements
Spend Management
• Duplex printing as default• Digitizing records vs printing reports• Reusing serviceable materials
Demand Management
• Property redistribution• Investment recovery – disposal• Supply chain management - VMI
Supply Management
• P-card payments• Online ordering• Early influence on decision cycles
Process Management
Measured Savings and Efficiencies
From Small Beginnings
Create a process for recording savings
Low Hanging
Fruit
Low Hanging
Fruit
$344,031 Non-Cash Releasing $60,469 Cash Releasing $40,000 Approximate
Implementation Cost
113,548 Lbs. Processed 33% Internal Reallocation 44% External Reallocation 20% Recycled 3% Landfill
Surplus Program – Our First Year
Percent of cost covered by value delivered
Switching Perspectives – Procurement Saves your Agency Money
FY 14 29%FY 15 63%FY 16 ?
More from Multnomah County Procurement
http://www.spikescavell.com/learning-about-spend-analysis/
https://multco.us/purchasing/news/multnomah-county-presented-workshop-nigp-forum-2014
How are we doing?How do we “meaningfully” report results upwards?
Um,…. Well…. I don’t know,
but….
Low Hanging
Fruit
If you can’t measure it – it didn’t happen• Who did it?
• What did we do?
• When did we do it?
• Why did we do it?
• How long did it take?
• Did we do it on time?
• What were the costs
• What were gains?
How do we prove it?
How do we measure it?
Low Hanging
Fruit
Metrics is the answer
Steps: ( Be patient, this took us 2 years +)1) Define what is important to the Stakeholders2) Define success3) Determine how success is measured4) Measure and report the results5) Revise as necessary
Ask: Did we accurately answer the question that was asked?
Low Hanging
Fruit
Low Hanging
Fruit
Was Procurement
involved?
Is it consistent and will it stand up to
review?
What would have
happened otherwise?
Average of all responsible responsive bids
Bid accepted
Simple and Endorsed RFP Savings Calculation
Alternative RFP Savings Calculations
Budget – Bid AcceptedPrevious Price – Bid AcceptedMarket Rate – Bid AcceptedBid Accepted – Negotiated BAFO
Net revenue generated from sale of surplus
Simple Surplus Savings Calculation
Alternative Surplus Savings Calculations
Net Revenue – Staff TimeNet Revenue – Staff & Scrap ValueNet Revenue + Cost of Disposal – Staff
Efficiency Calculations
(Cost to process invoice manually – cost of pCard/eProcurement transactions) * number of transactions avoided
Get As Complicated As You Like
(Award value to local vendor * corporate/city/land tax rate) = Revenue10 * Revenue = Cost of local support services avoided
Gains
Procurement Team Cost
Simple Cost of Procurement Calculation
$100,000
$500,000
0.2 or 20%
Simple Cost of Procurement Calculation
For every $1 budgeted for the procurement team, we actually only
cost the agency $0.80 so…
Simple Cost of Procurement Calculation
Savings – Procurement Team Cost
Procurement Team Cost
Simple ROI Calculation
$300,000 – $200,000
$200,000
0.5 ROI
Simple ROI Calculation
For every $1 you spend on procurement, we make the agency
$0.50 in savings and efficiencies so…
Simple ROI Calculation
Low Hanging
Fruit
Low Hanging
Fruit
Recorded webinars http://
www.spikescavell.com/learning-about-spend-analysis/
Savings Recording Support Documents https://
multco.us/purchasing/news/multnomah-county-presented-workshop-nigp-forum-2014
Measure Registration http://www.nigp.org/measure
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