purchasing process to chinese towson 072406
TRANSCRIPT
Overview of the Baltimore County Public Schools
Office of Purchasing
Introduction Program for Chinese Administrators at Towson University
July 24, 2006
Rick Gay, RSBOPurchasing Manager
Governing AuthorizationThe annotated Code of Maryland sections 5-112 and 7-106, and the Maryland State Department of Education Financial Reporting Manual for Maryland Public Schools.
Baltimore County Public Baltimore County Public Schools At a GlanceSchools At a Glance
• 3rd largest school system in Maryland
• 23rd largest school system in the United States
• 164 schools• 107,100 students• 2,514 English
language learners
• 13,808 special education students
• 27,630 free and reduce-priced lunch students
• 17,000 employees• 8,850 teachers
SUPERINTENDENT
BOARD OF EDUCATION
CURRICULUM &
INSTRUCTION
BUSINESS
SERVICESPRINCIPALS
AREA ASSISTANT SUPERINTENDENTS
RESULTS - STUDENT ACHIEVEMENT
SERVICE FOR THE SCHOOLS
SERVICE
SERVICE
BCPS Service ModelBCPS Service Model
04/18/23
BCPS Office of PurchasingOrganization
A nn a B en ne ttS e c re ta ry8 8 7-43 34
e xt 269
K a re n H a llS e c re ta ry8 8 7-43 34
e xt 267
Je a n T a ylorS e c re ta ry8 8 7-43 34
e xt 270
C a ro le Jo hn sonA d m in is tra tive S ec re ta ry
8 8 7-43 34e xt 260
P a tti O n he iserC o n tra c tin g S p ec ia list
8 8 7-43 34e xt 266
C la re n ce C la w sonC o n tra c to r
Ja ck N ich o lsP u rch a sin g A g en t II
8 8 7-43 34e xt 285
M e lv in B u rleyP u rch a sin g A g en t II
8 8 7-43 34e xt 263
P a u l C ra m e r, C .P .M .P u rch a sin g A g en t II
8 8 7-43 34e xt 262
Je ff M ille r, C .P .M .P u rch a sin g A g en t II
8 8 7-43 34e xt 288
M e la n ie W eb s te rM B E O ffice r
8 8 7-43 34e xt
S h a ro n B erz insP u rch a sin g C le rk
8 8 7-43 34e xt 268
P e g H illP u rch a sin g C le rk
8 8 7-43 34e xt 277
B e ttie La n tzP u rch a sin g C le rk
8 8 7-43 34e xt 265
S h irle y M a rtinC le rica l A ss is ta n t
8 8 7-43 34e xt 258
V e ro n ica W a lshL e a d P u rcha s in g C le rk
8 8 7-43 34e xt 298
S u san E lyS ys te m s A n a lyst
8 8 7-43 34e xt 264
R ick G a y, R S B OP u rcha s in g M a na g er
8 8 7-43 34e xt 259
Purchasing Functions
• Administer and Coordinate all agreements for the purchase of supplies, materials, equipment and (contracted services).
• Enter into contracts with vendors to establish a fixed price to be used by all schools and offices for a specified period of time.
• Distribute information on existing state, county and BCPS contracts to schools and offices.
• Process all requisition/purchase order forms and catalog requests in accordance with established contracts to approved vendors.
• Identify purchases which require the use of established quotations and/or bid policies or procedures.
• Select potential award vendor in cooperation with the account manager. Submit the recommendation for award of contract to the Board of Education when appropriate.
Purchasing Functions
• Issue and distribute purchase order documents.• Encourage fair and equal treatment of all prospective
bidders and vendors.• Maintain a list of qualified vendors and their respective
vendor codes.• Observe procedures to identify and prohibit business
transactions with any vendor whose past performance has disqualified their status by BCPS, county, state or federal policies, procedures and statutes.
• Assure that purchases meet appropriate local, state, and federal safety and health standards.
• Facilitate the prompt procurement of goods and services for schools and offices.
2006-2007 Goals
• Expand the use of eCommerce and online purchasing.• Expand the number of catalogs on our eCommerce system • Establish internet access to announce and issue solicitations and
expand vendor publishing.• Expand Vendor Self Service (VSS) to include the issuing of bids• Develop and execute an implementation plan for AMS Financial 3.6
procurement (web based)• Develop and implement purchasing database and prepare reports that
enable the scheduling of renewals, track bids and contracts, etc. • Evaluate terms & conditions for bid specifications to support
performance standards and enhance quality of goods and services.• Standardize contracts• Complete review and update of Board policies and Superintendent
Rules to include vendor performance appraisal process
The Bid Process
• Bids must be advertised for two weeks.
• The Purchasing Agents:
- Assists schools and offices in developing bid specifications.
- Evaluate bids received and submit recommendations to the Board for contract approval
The Bid Process
• The Office of Purchasing coordinates all BCPS bids and vendor contract negotiations
• State law and Board policy require public bidding procedures to be followed for certain purchases.
• The threshold for requiring bids is $25,000 – single item or system-wide annual needs
• Curriculum and books are chosen through an evaluation process administered by the Department of Curriculum & Instruction
The Bid Process
• Other alternatives to bidding include: - “Piggybacking” on contracts awarded by other public entities that follow public bidding procedures. - “Sole Source” if proprietary or only available from one source. A sole source
determination is made by the Office of Purchasing – and still must be submitted to the Board for approval. - Purchasing consortiums/cooperatives
Purchasing Procedures
• Notify the Office of Purchasing of any item that may need to be bid
• Plan in advance! - From start to finish the process of preparing, advertising, issuing, evaluating and Board approval can take 2 months or more!
• If No Current Approved Contract Exists for the Item:
• get two written quotes from vendors If a purchase is > $15,000 and < $25,000
• If a purchase is < $15,000 get one written quote
• Use on-line catalogs for available items• If less than $1,000 use a P-card• Contact Office of Purchasing if any assistance is
needed
Vital Statistics
FY 2001 Processed 245 bids valued at $145,808,709 Million
FY 2002 Processed 214 bids valued at $198,452,730 Million
FY 2003 Processed 236 bids valued at $174,878,485 Million
FY 2004 Processed 200 bids valued at $178,644,677 Million
FY 2005 Processed 223 bids valued at $214,775,000 Million
FY 2006 Processed 227 bids valued at $300,196,226 Million
Procurement Cards
• Having a Visa card is a privilege!
• The card comes with responsibilities
• Make necessary small (< $1,000) purchases
• Ensure available budget $ prior to purchase
• Not to be used for contracted services
• Training is required for cardholders & Approvers
• Retain receipts, logs, statements for 5 years
• Procedures are on Office of Purchasing website
https://intranet.bcps.org/offices/purchasing/pcard_procedures/
Procure – Procurement Card Management SoftwareThe Office of Accounting:• Regularly monitors Visa card purchases and
requests documentation from school/offices• Monitors compliance with reconciling
requirements – Over 50,000 transactions annually!!
• Sends memo’s to cardholder/principal when billed items are not reconciled timely
• If necessary, sends second notice to Area Assistant Superintendent
• CONTINUED FAILURE TO LOG AND RECONCILE TIMELY WILL RESULT IN FORFEITURE OF VISA CARD!
Procure – Procurement Card Management Software
Cardholders must:• Log all purchases when
made• Select proper budget
account to charge• Reconcile billed charge to
logged purchase - Reconciled charges are posted to Advantage Financial daily
• Prior month charges must be reconciled by 20th of the month
• Print logs and forward with statement and receipts to principal for approval
• Principal is accountable for all Visa purchases at the school
Common issues:• Purchases not logged• Billed charges not
reconciled• Items charged to incorrect
budget account (e.g. toner charged to “textbooks”)
• Inadequate descriptions• Food/restaurant/catering
charges – the description should include the purpose of the meeting and the attendees
Total Dollar Amount Spent With BCPS Procurement Cards Per Year FY 97 – FY 05
$282,672
$3,530,392
$5,334,293
$6,600,288$7,354,187
$8,491,321$8,608,212
$10,127,513$10,518,422
$14,972,617
02000000400000060000008000000
10000000120000001400000016000000
Total Number of BCPS Procurement Card Transactions Per YearFY 97 – FY 05
2,159
31,986
41,571
47,657 48,632
52,138 53,488
57,977 57,953
62,024
0
10000
20000
30000
40000
50000
60000
70000
FY 1997
FY 1998
FY 199
9
FY 2000
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
eProcurement
Electronic Purchasing From the Workstation to the Classroom
at the Click of a Mouse….
Rick Gay, RSBO
Purchasing Manager
Baltimore County Public Schools
BCPS Online Curriculum Catalogs
• Web-based system to order necessary curriculum and instructional materials.
• Includes textbooks and other frequently used instructional items.
• Access to office/classroom supplies• through Office Depot, Corporate
Express, and Rudolph’s – 80,000+ items
BCPS Online Curriculum Catalogs
• Over 25,000 curriculum items included in the catalogs
• Searchable by title, item name, ISBN #
• Catalogs may be printed for copying and distributing
BCPS Online Curriculum Catalogs
• Must attend training to get a user ID & password
• Register for training through the PDC website• Know your budget account to charge before
beginning• Orders are routed to principal for electronic
approval – before they are sent to the vendor!• Vendor ships and charges your budget through
Visa
BCPS Online Curriculum Catalogs
• Print copies of approved orders for delivery identification, verifying Visa charges, follow up off backorders
• Training materials available on the Office of Purchasing web site:
https://intranet.bcps.org/offices/purchasing/pdf/BCPS-Online-Ordering-Training-Manual.pdf
What is Online Procurement?
• Online Procurement involves purchasing systems using software or applications that are "Web" or Internet-based connecting employees and suppliers making it possible to streamline and automate purchasing.
• An Online Procurement network typically uses sophisticated technology that provides a secure marketplace, sales platform and transaction tracking system available only to selected buyers and suppliers.
26
The benefits are real….
• In a recent study of early adopters of eProcurement systems, the Aberdeen Group reported the following key benefits:– Improved data gathering and reporting
on fiscal year expenditures– Tighter control over off-contract or
“maverick” buying– Lower procurement administration costs– Shorter requisition and order fulfillment
cycles
eProcurement Solution Benefits
• Expands sourcing and purchasing process to more buyers
• Maintain control over process and approvals• Bring approvals and accounting codes
forward• Integrates seamlessly with existing
purchasing card process and tools • Reduces supplier costs to serve• Streamlines procure-to-pay, business
processes
Benefits for Employees• A well-designed eProcurement system provides
employees with:– ready access to catalog information – the ability to requisition a product or service
from their workstation computers– the ability to browse the product/service list– The ability to create a requisition/purchase
order, without expending time and effort searching for missing information or tracking down specific people.
Benefits for Purchasing Personnel
• eProcurement frees purchasing personnel from:– clerical, order processing activities
that are time-consuming and non-strategic
– Allows them to focus on strategic activities, such as negotiating contracts with suppliers and analyzing purchasing behavior.
eCommerce Suite On-Line Orders Summary ReportNumber of Orders Per YearFY 00 – FY 07
32
863
1951
2550
4846
71546774
1604
0
1000
2000
3000
4000
5000
6000
7000
8000
# eCommercesuite Orders
eCommerce Suite On-Line Orders Summary ReportTotal Dollar Value of Orders Per YearFY 00 – FY 07
$9,088.69$322,540.04
$668,173.41$831,336.50
$1,696,329.40
$2,328,846.88$2,561,204.83
$544,648.91
$0.00
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
eCommerce Suite Purchases
Number of Suppliers Per YearFY 01 – FY 06
1430
74
154
195212
225
0
50
100
150
200
250
FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06
04/18/23 Total Numbers include all funds
34
Number of Purchase Orders Processed Each Fiscal Year
31,189
28,228
20,603
16,818
11,887 11,334 10,815
0
5000
10000
15000
20000
25000
30000
35000
BCPS Goals
•Improved data gathering and reporting on fiscal year expenditures
•Tighter control over off-contract or “maverick” buying
•Lower procurement administration costs
•Shorter requisition and order fulfillment cycles
eProcurement Results
• Order Submission
• Delivery of Goods• Shipping Costs• Vendor Payment
• Sourcing Consolidation
• Real-time Notification to Vendors
• 24-48 hours of Order Placement
• 10-15% Reduction
• 24-48 hours from Shipment
• 33% Reduction of Catalog
Surplus
Overview of BCPS’s On-Line Program• Shoppers
• Approvers
• Administrators
• Suppliers/Contracted
Vendors
• Unique Contracts
• Line Items
• 1202 Teachers• 577 Principals
• 5 Purchasing Agents
• 225
• 299
• 425,000
BCPS Catalogs• Art Supplies / Photo
• Athletic Equipment &
Supplies
• Audio Visual
• Family Studies
• Handwriting Materials
• Library Media
• Math Supplies
• Media
• Medications and First Aid
• Music
• Periodicals
• Physical Education
• Science Supplies
• Technology Education
• Textbooks
• Unique Office Supplies
BCPS Future Goals
•Expand Catalog Offering
•Add Tier 1 Suppliers
Grainger, Office Depot, Corporate Express, Rudolph’s
•Expand and offer program to the surrounding counties
•Leverage spending with local and national consortiums to negotiate improved pricing
•Bid new contracts for the 2005-2006 FY
BCPS eProcurement Implementation Plan
• Develop and Deploy on-line catalogs• Deploy Vendor Self Service and on-
line bidding• Offer additional on-line access to
employees to vendors electronic catalogs
• Integrate into a global ERP system
eProcurement Process• Phase I (2000-2001)
– began pilot operation with US Bank Pcard
– 20 Schools, 5 Catalogs
• Phase II (2001-2002)
– All Schools using the same five Catalogs
• Art Supplies
• Science
• Physical Education
• Library Media
• Audio Visual Supplies
– 1951 transactions, 33 Vendors,valued at over $668K
eProcurement Process• Phase III (2002-2003)• Increase to 13 catalogs with potentially 150 additional
suppliers– Instrumental Music– Vocal Music– Technology Education– Medical & First Aide Supplies– Unique Office Supplies– Secondary Math– Family Studies– Art Photography
• Incorporate lessons learned from FY 01• Implemented continuous product improvement
methodology• enhance software to support the competitive
procurement process and awards of bid
eProcurement Process• Phase IV (2003-2004)• Increase to 23 catalogs with orders valued at $2.5 million with
potentially 200 additional suppliers– Textbooks – Senior– Textbooks – Middle– Textbooks – Elementary– Textbooks – Special Education– Instructional Media _ Secondary– Instructional Media – Elementary– Instructional Media – Special Education– Football Equipment– Athletics– Instructional Software and Periodicals
• Continuous ability of Curricular Offices to edit their Instructional Materials Catalogs
• Incorporate lessons learned from FY 02• Continue to enhance software to support the competitive
procurement process and awards of bid on-line
eProcurement Process• Phase V (2004-2005)
– Incorporate supplemental textbook and media catalogs into original online catalogs
– Increased from 23 catalogs to 29 catalogs– Incorporate Office Depot/Corporate Express/BSN
Sports/Grainger into eCommerce Suite Platform (Spending went from $129K in 2002 to $900K+ in 2003 – an increase of 856%!)
– Add catalogs for AV Equipment,Computers, Douron & Glover Furniture, and Advance Business Systems & Imagistics Copiers
– Conduct extensive feedback meetings with faculty & staff, and vendors regarding improvements for FY 2006
SourcingSourcingSourcingSourcing OrderOrder PlacementPlacement
OrderOrder PlacementPlacement
PaymentPayment &&
SettlementSettlement
PaymentPayment &&
SettlementSettlement
Recon-Recon- ciliationciliation Recon-Recon- ciliationciliation
AuditAudit &&
ControlControl
AuditAudit &&
ControlControl ReportingReporting ReportingReporting
Procure-to-Pay Process Management
• RFQ • Catalogs/Contracts• Ordering Placement• Order Approval• Order History
• Order Notification• Order Processing• Payment Processing• Payment Settlement
• Automatic account code allocation• Order-transaction reconciliation & audit• General Ledger integration
• Management reporting
SourcingSourcingSourcingSourcing OrderOrder PlacementPlacement
OrderOrder PlacementPlacement
PaymentPayment &&
SettlementSettlement
PaymentPayment &&
SettlementSettlement
Recon-Recon- ciliationciliation Recon-Recon- ciliationciliation
AuditAudit &&
ControlControl
AuditAudit &&
ControlControl ReportingReporting ReportingReporting
Procure-to-Pay Process Tools
eCommerce SuiteeCommerce SuiteeCommerce SuiteeCommerce Suite PurchasingPurchasingCardCard
PurchasingPurchasingCardCard AccessOnlineAccessOnlineAccessOnlineAccessOnline
• eCS Shopper • eCS Buyer• eCS Supplier
• Purchasing Card• eCS Supplier
• Order Management• Transaction Management• Financial Extracts• Data Exchange
• Reporting
SourcingSourcingSourcingSourcing OrderOrder PlacementPlacement
OrderOrder PlacementPlacement
PaymentPayment &&
SettlementSettlement
PaymentPayment &&
SettlementSettlement
Recon-Recon- ciliationciliation Recon-Recon- ciliationciliation
AuditAudit &&
ControlControl
AuditAudit &&
ControlControl ReportingReporting ReportingReporting
Management Reporting
Supplier ManagementSupplier ManagementSupplier ManagementSupplier Management
Financial ManagementFinancial ManagementFinancial ManagementFinancial Management
Tax & ComplianceTax & ComplianceManagementManagement
Tax & ComplianceTax & ComplianceManagementManagement
Program ManagementProgram ManagementProgram ManagementProgram Management
BuyerPlacesOrder
eCSApplication
OrderProcessed
bySupplier
OrderProcessed
bySupplier
SupplierShips
Completeor
PartialOrder
SupplierShips
Completeor
PartialOrder
SupplierProcesses
VisaTransaction
SupplierProcesses
VisaTransaction
TransactionPostsfromVisa
TransactionPostsfromVisa
TransactionManagement
foreProcurement
TransactionManagement
foreProcurement
eProcurementOrder Input
File
eProcurementOrder Input
File
OrderMatching &
Reconciliation
OrderMatching &
Reconciliation
BuyerPerforms
TM Functions
BuyerPerforms
TM Functions
ReportingReporting TrackingAnalysis
&Reference
TrackingAnalysis
&Reference
StandardTM
OutputFile
StandardTM
OutputFile
Map Datato
InternalSystems
Map Datato
InternalSystems
U.S. Bank U.S. Bank eCS SuppliereCS Supplier
U.S. Bank P-Card U.S. Bank P-Card Management SystemManagement System
BuyerBuyerFinancialFinancialSystemSystem
U.S. Bank eCS ShopperU.S. Bank eCS Shopper
eProcurement Transaction Flow