N Y S OUNCIL STRATEGIC PLAN - ogs.state.ny.us · STRATEGIC PLAN GEORGE E. PATAKI GOVERNOR. ... and...

June 2002

NEW YORK STATE PROCUREMENT COUNCIL

STRATEGIC PLAN

GEORGE E. PATAKIGOVERNOR

Lawrence Barker, Jr.NYS Industries for the Disabled, Inc.

Lester CorneliusOptical Technologies Corp.

Steven Ennis Industries for the Blind of NYS, Inc.

Robert AttmoreOffice of the State Comptroller

Margaret BeckerDepartment of Agriculture and Markets

Jeffrey A. Boyce Empire State Development

Joanne FazioliState University of New York

Thomas DuffyOffice for Technology

Al Kaplan Office of Mental Retardation andDevelopmental Disabilities

Stewart KidderDepartment of Correctional Services

Kelly Lopez/Deirdre TaylorDivision of the Budget

Michael McCormackOffice of General Services

Barbara MillerOffice of Mental Health

Robert ReedDepartment of Health

Legislative Appointees

New York State Agency Delegates

NEW YORK STATE PROCUREMENT COUNCIL

Gregory Benson, Executive Director, New York State Forum for Information ResourceManagement, the New York State Business Council, and local government organizations providedinput. The Procurement Council also acknowledges the valuable contributions of Maureen Nyilisof the Governor's Office of Employee Relations and Rebecca Meyers, Director of OrganizationalEffectiveness, Office of General Services without whose capable facilitation the Strategic Plan thatfollows would not have been possible.

OTHER CONTRIBUTORS

Leon AronowitzOffice of Mental Health

Frank DiDomenicoOffice of Mental Retardation andDevelopmental Disabilities

Virginia MillerDivision of the Budget

Paula MoskowitzOffice of General Services

Anne PhillipsOffice of General Services

Lucy RobersonDepartment of Agriculture and Markets

Joan SullivanOffice of the State Comptroller

Ruth WaltersOffice of the State Comptroller

Susan ZerondaOffice for Technology

New York State Agency Alternates

(Membership as of June 2002)

Joseph GirvenPutnam County Industrial Development Agency

Robert E. LeeNassau County Health System

Robert LeonettiYonkers Contracting Company

Dear Colleagues:

As Chair of the New York State Procurement Council, I am pleased to present theCouncil's Strategic Plan for the improvement of State procurement. Consistentwith its responsibilities set forth in New York State Finance Law Section 161.2, theCouncil selected as its primary focus for calendar year 2002, the “identification ofissues and improvement opportunities in the State's procurement process.” Iwould like to congratulate the Council members on their vision and diligence inpreparing this Strategic Plan.

During the plan’s development, the Council sought input from Senate andAssembly committees, State and local government agencies, and the business com-munity. I believe that implementation of this plan will create a more responsive,streamlined, and innovative procurement process that will better serve all NewYorkers.

I invite everyone involved in public procurement activities to join with theProcurement Council and my office in committing to help accomplish the objec-tives and strategies set forth in this document.

Sincerely,

Kenneth J. Ringler, Jr.

KENNETH J. RINGLER, JR.COMMISSIONER

STATE OF NEW YORK

EXECUTIVE DEPARTMENTOFFICE OF GENERAL SERVICES

MAYOR ERASTUS CORNING 2ND TOWERTHE GOVERNOR NELSON A. ROCKEFELLER EMPIRE STATE PLAZA

ALBANY, NEW YORK 12242

GEORGE E. PATAKIGOVERNOR

In December 2001, the New York StateProcurement Council undertook an assess-ment of Council responsibilities under

Section 161 of the State Finance Law in order toidentify the most significant opportunities to con-tribute to the enhancement of State procurementover the next several years. As a result of thatreview, the Council determined that the primaryfocus of its activities in 2002 would be "thedevelopment of a strategic plan for the improve-ment of State procurement” (§161.2).Recognizing staffing and time constraints, theCouncil subsequently adopted an acceleratedprocess and schedule for plan development. Keysteps in this process included:

Identification of Issues and Opportunities forChange Council members developed a list of issues andproblems in the State's procurement processes.Additional input was provided by the NYSForum for Information Resource Management(NYSFIRM) which was conducting a concurrentstudy on issues relating specifically to the pro-curement of technology.

Development of Objectives for ImprovementThrough facilitated discussion, the Council devel-oped a series of specific objectives to address oneor more of the issues or problems previouslyidentified. Throughout this process, Councilmembers emphasized the need to obtain input onissues and problems from all stakeholders in theState procurement process. The initial list ofobjectives for improvement was subsequentlyprovided to a broad range of organizations forcomment, such as Senate and Assembly commit-tees, the New York State Business Council,

Association of Towns, and other associations rep-resenting local government and educational enti-ties.

Development of Recommendations For selected procurement areas, the Council des-ignated committees to research issues, identifybest practices, and develop strategies and recom-mendations to meet defined objectives forCouncil review. The Council also used theresults of NYSFIRM's ongoing review process indeveloping recommendations specific to the pro-curement of technology and related services.

Together, these objectives and strategies form theProcurement Council's Strategic Plan, as adoptedat the Council's meeting in June 2002 and reflect-ed within this document. In general, this strate-gic plan reflects the Council's view that signifi-cant improvements in procurement statutes,processes, technology and innovation can resultin a more responsive and streamlined procure-ment system which will benefit taxpayers, Stateagencies, the business community, and contractusers at all levels of government.

The core of the Strategic Plan are five priorityobjectives aimed at improving the State's pro-curement system. The balance of the planincludes several short- and long-term strategiesaimed at implementing each of these objectives.This plan is not intended to be a static document;rather, it is intended to form the locus of theProcurement Council's activities over the nextfew years as the Council works to improve pro-curement within the public sector in New YorkState.

Strategic Plan Executive Summary

NYS Procurement Council STRATEGIC PLAN - June 2002 1

Shorten the time from need identification to contract and deliveryof actual product.

Progress the State's procurement process overall from a traditionalpaper-based system to a technology-driven system.

Improve the procurement system's responsiveness with respect toservice contracting, especially technology contracting.

Further enable the use of alternative procurement methods such asconsortia, strategic partnerships and piggybacking.

Improve training and communication.

A. Better match procurement staff structures with complexities of procure-ment functions and tasks.

B. Increase the knowledge base of staff involved in procurement activities.

C. Facilitate interagency communication surrounding procurements and pro-curement methodologies.

OBJECTIVES FOR IMPROVING STATE PROCUREMENT

I.

II.

III.

IV.

V.

2NYS Procurement Council STRATEGIC PLAN - June 2002

OBJECTIVE IShorten the time from need identification to contract and delivery of actual product.

STRATEGY (1) Raise monetary thresholds for discretionarypurchasing.

Rationale: Discretionary purchasing requires lesstime and staff resources to complete. There are dualbenefits -- expediting lower value procurements andfreeing staff to concentrate on higher value require-ments.

Implementation: Identify the lowest risk areas of pur-chasing and remove or lessen the controls that addtime unnecessarily. Legislation is needed to imple-ment this strategy.

STRATEGY (2) Promote procurement card use.

Rationale: Use of the procurement card reducespaperwork and total processing time because the totalnumber of individual invoices to be separatelyprocessed is fewer.

Implementation: Determine why agencies are makingonly limited use of the procurement card and work toeliminate those barriers.

STRATEGY (3)Establish thresholds to apply uniformly across allagencies.

Rationale: Currently, different thresholds apply tocertain agencies. Also, thresholds differ for type ofpurchase, which is confusing and complicates the useof guidelines. Lack of consistency leads to mistakesand excessive time spent researching appropriate rulesthat must be followed, delaying procurements.

Implementation: Legislation is needed to implementthis strategy.

STRATEGY (4) Review opportunities to reduce, eliminate or modi-fy the pre-audit requirement in selected circum-stances.

Rationale: Pre-audits add time to the procurementprocess. If fewer pre-audits are undertaken, theresources supporting pre-audit will be able to movework faster.

Implementation: Identify the lowest risk areas of pur-chasing and remove or lessen the controls that addtime unnecessarily. Legislation is needed to imple-ment this strategy.

STRATEGY (5) Modify the Contract Reporter notice requirement.

Rationale: This is one of the control points seen asadding time to the process. There is value to begained by aligning Contract Reporter thresholds withother purchasing thresholds.

Implementation: Legislation is needed to implementthis strategy.

STRATEGY (6) Explore ways for purchasers to better understandpurchasing options, especially when utilizing cata-log contracts.

Rationale: Failure to address this issue penalizes pre-ferred sources, as well as small, minority and women-owned businesses.

Implementation: Legislation is needed to implementthis strategy. An electronic solution may be consid-ered.


STRATEGY (7) Examine steps in RFP methodology for streamlin-ing opportunities

Rationale: The RFP process is extremely long.Procurements made using the RFP methodology maytake one year or more to complete.

Implementation: Diagram the RFP process. Createmultiple models to reflect differences among agenciesuse of RFPs.

STRATEGY (8)Explore ways to better clarify criteria used by theOffice of the State Comptroller in its evaluations.

Rationale: Clarification of OSC evaluation criteriawould better equip agency procurement staff. Suchclarification will allow for preparation and submissionof more complete contract documentation to OSC.Clarification of OSC evaluation criteria would alsobenefit the business community.

Implementation: A procurement guideline sectionmay be needed to clarify OSC evaluation criteria.


OBJECTIVE IIProgress the State's procurement process overall from a traditional paper-based systemto a technology-driven system.

STRATEGY (1)Pursue a New York State enterprise approach(i.e., coordinated across the government) in thedevelopment of e-procurement solutions.

Rationale: The enterprise approach makes devel-opment more efficient and will ultimately pro-duce a common look for those entities interactingwith New York for more than one purpose.Customers of New York State governmentshould be able to view the State as a single pro-curer of goods and services. This includes not-for-profit agency services participating throughgrant programs.

Implementation: Apply lessons learned from thee-grants model to development of e-procurementelements, and then continue the development ofe-grants and e-procurement on parallel tracks, ifnot the same track. Develop e-procurement ande-grants to be complementary.

STRATEGY (2) Approach e-procurement as an incrementaleffort wherein portions of an automated systemare realized separately but are ultimately link-able as a total process. Elements or "chunks" ofa total system which may be enhanced by tech-nology may include, but are not limited to:

-- Procurement Opportunities Notification (see Project A below)o Establishment of bidder listso Bidder notificationo Contract Reporter advertising

-- Response to Solicitationso e-biddingo Reverse auctions (see Project B below)o Receipt of proposals

-- EvaluationNegotiation-- Facilitation of Internal Approvals, Pre-audit

and Other Contract Reviews-- Award Notification

o Purchaser notificationo Contract award announcement

-- Procurement Transactions / e-Ordering / Receipt Verification

-- Paymentso Procurement card systemo Paymentso EVT

Rationale: This approach recognizes fiscal reali-ties as well as the experiences of others whohave attempted a total e-procurement solution.This approach also reflects the need and willing-ness to coordinate the independent efforts thatare currently ongoing.

Implementation: The requirements for these ele-ments were documented by OFT a year ago.That documentation will require updating. An important early action step would be todevelop a long-term picture of how a total e-pro-curement solution could look and map the earlyand subsequent initiatives against the completepicture.

In order to make substantial progress toward e-procurement, significant and sustained fundingis required. It will be necessary to determinefunding requirements for e-procurement proj-ects, develop justifications for funding and per-haps utilize advocates from the business andnot-for-profit community to lobby for the finan-cial investment in e-procurement. As any of theelements are realized, a systematic training com-ponent will also be necessary in order to ensuresuccess.


PROJECT (A)Work to integrate existing systems of biddernotification (ESD's Contract Reporter, OGS'Bidder Notification System and individualagency homegrown systems) through creationof a new single electronic approach, with link-age to e-grants notifications, as feasible.

Rationale: This is a front-end piece of the processthat will benefit from coordination and is per-ceived as doable.

Implementation: There are legislative implicationsfor implementation of this strategy. A demonstration project should be pursued toaccompany the legislative proposal. Consider apossible demonstration project within the nextsix months to accommodate legislative concepts. Developing and maintaining such a system willrequire staff resources. Additional funding mustbe identified in order to implement.

PROJECT (B) Explore and experiment in the use of technolo-gy to conduct reverse auctions as a means forsecuring lowest prices on commodities andtechnology.

Rationale: There is high state and local govern-ment interest and some experimentation hasalready occurred. Further advancement of thisproject in a coordinated manner would will helpto identify the benefits and ensure that an effec-tive program emerges.

Implementation: A funding model would need tobe identified. The Procurement Council shoulddevelop guidelines for use when conductingreverse auctions. Agencies could report back toa clearinghouse to capture information aboutsuccesses and to identify technical failures.

There are legislative implications for implement-ing this strategy.

STRATEGY (3) Study the experiences of other procurers (stateand local government and private sector procur-ers) during the development of technologybased procurement systems and their financingand use the knowledge gained to guide thedevelopment decisions for New York State.

Rationale: This approach will provide a startingpoint and input for business case developmentand will enable New York to take advantage oflessons learned.

Implementation: Explore the possibility of assis-tance through some type of academic researchproject.

STRATEGY (4)Engage targeted private sector entities as cham-pions and helpers in the design and testing ofe-procurement mechanisms prior to broaddeployment. Private sector entities include:bidders; e-procurement solution providers; andvendors/contractors who have already institut-ed e-commerce solutions (e-ordering).

Rationale: As a practical consideration, users willbe needed to test systems as they are implement-ed.

Implementation: Private sector involvement andadvocacy will be essential for legislative support.Engaging these interest groups in New York's e-procurement solutions will garner support of thebusiness community and optimize compatibilitywith existing major systems.


OBJECTIVE IIIImprove the procurement system's responsiveness with respect to servicecontracting, especially technology contracting.

The following strategies were developed by the NYSForum for Information Resource Management'sCommittee to Streamline Information TechnologyProcurement in New York State. They are derivedfrom numerous suggestions made by the Forum'sExecutive Committee membership and are offered forinclusion in the Procurement Council's StrategicPlan in accordance with the Committee's role as aProcurement Council work group.

STRATEGY (1) Streamline/consolidate IT non-service contractguidelines to build consistency across the vari-ety of existing contracts.

Implementation: This is a current effort. Recently,OGS and OSC successfully developed greaterconsistency and uniformity in the guidelines forpurchasing from OGS IT contracts, whereby 12different guidelines have been reduced to six.The guidelines for PC, printer, systems andperipherals, networking hardware and software,IVR and video conferencing systems contractshave now been consolidated and are modeledafter the OGS PC contract guidelines. The newguidelines for state agencies require a procure-ment record documenting the agency's choice forpurchases over $50,000 and involve a post-audit,rather than pre-audit, of purchases by the Officeof the State Comptroller. The other six IT con-tract areas remain unchanged at this time, butwill continued to be reviewed for improvementopportunities. It is anticipated that this strategywill be complete in June 2002.

STRATEGY (2) Expand the features and simplify the use ofbackdrop (standby) contracts.

Another ongoing effort is to create a unique sub-set of the backdrop contracts which reduces thenumber of contractors that must be solicited forspecific tasks. We will seek to streamline thebackdrop process overall, create the ability to tai-lor contracts to specific customer needs, and extend the effective timeframe to three years. Also under discussion are: scope of applicableservices; evaluation guidelines or criteria; appro-priate assignment of work tasks; process ofadding new contractors; and the role of OSCregarding pre-audit and AC 340 issues.

STRATEGY (3)Develop alternative models to the current"design/build" approach for large systemsacquisition.

Rationale: As "stovepipe" IT applications con-verge to reflect overall agency business manage-ment and service delivery, the acquisition oflarge IT systems design, implementation andmaintenance services has become more common.A more comprehensive approach to these largesystems is warranted. This approach should"vision" the entire process and feasible optionsand should include provision for ongoing quali-ty assurance.

Implementation: There are legislative implicationsfor implementation of this strategy. (Section163A of the State Finance Law prohibits down-stream involvement by design contractors.)


STRATEGY (4)Create a directory of existing agency-specific ITcontracts.

Rationale: Shared IT contract information wouldfacilitate the procurement process for all agen-cies. This strategy has broader implications thanjust IT and could facilitate procurement activitiesin other areas.

Implementation: Directory of IT contracts couldbe taken on as a pilot for a larger project.Emerging electronic capabilities should beexplored as a means of implementation.

STRATEGY (5)Explore more creative ways to include addition-al items and services on state contract.

Rationale: More comprehensive IT items andservices on state contract would contribute toefficiency and ease of procurement, and wouldmake it easier to achieve the benefits of aggre-gated purchasing.

Implementation: The Forum may facilitate surveywork to determine unmet needs.

STRATEGY (6)Establish comprehensive solution-type contractstrategies and models with guidelines that helpagencies proceed through a procurement deci-sion.

Rationale: Business problems often require asolution that is now governed by multiple con-tracts and procedures. IT procurements can bemade more efficient and brought into betteralignment with business goals if full "solutions"can be more easily procured.

Implementation: Develop guidelines.


OBJECTIVE IVFurther enable use of alternative procurement methods such as consortia,strategic partnerships and piggybacking.

STRATEGY (1)Pursue a new approach for utilization of hospi-tal group purchasing programs (GPO's/consor-tia) that provides an administratively efficientprocurement process.

Rationale: SUNY proposes that each hospitalwould be required to review/approve the selec-tion process (contract award) used by the consor-tium of their choice. The agency would docu-ment the process for OSC. The agency wouldissue purchase orders (which include New YorkState standard contract clauses) referencing theconsortium and contract number. At time ofpayment, OSC could review and audit the con-tract and associated price list via website access.On a regular basis OSC would request a selectednumber of consortium contracts to review theaward process: analysis of vendors solicited; bidsreceived; pricing; and review of award matrix toconfirm awards have been made in the bestinterests/best value of the member hospitals.

In addition to significant administrative savings,this strategy will reduce inventories held forproduct preference and encourage standardiza-tion of product lines, resulting in more savings.

Implementation: SUNY will justify to OSCCounsel the legal basis for the above proposaland gain concurrence from OSC Bureau ofContracts and OSC Bureau of Expenditures withthe proposed review/audit of the consortia con-tract award process as providing an equivalentsubstitution for the open competitive NYS con-tract award process. The University will preparea business case to document that GPOs adminis-ter an objective and open competitive bid

process that results in the selection of high quali-ty/low cost products. Such GPO bid processeswould be deemed an acceptable substitution forNYS procurement requirements/regulations.

It is recognized that Objective IV included otheralternative procurement methods beyond hospi-tal consortia. The committee concentrated onconsortia due to SUNY's critical need to advancethis strategy.


STRATEGY (1)Offer classroom training on a regular scheduleand use existing training alliances betweenagencies within regions to increase timelinessand coverage.

STRATEGY (2)Develop interactive e-learning modules throughwhich to disseminate straightforward informa-tion that can be accessed by agency purchasingstaff to train or re-train on demand.

Rationale: The quality and timeli-ness of agency level procurementtraining represents a wide spec-trum and redundant expenditures.A more centralized approach to thedevelopment of basic procurementmaterials in multiple formatswould reduce development costs,increase client access, and stillallow for modification to reflectunique agency procedures.

Topics for development of class-room training modules include:-- Contract Timeliness-- Pitfalls of Contracting and

Purchasing-- Using RFPs and the

Evaluation & Selection Process-- Sole and Single Source

Procurements-- OGS Contracts - Mini-Bids-- Using Piggybacking-- Using Purchase Authorization-- Legal Issues

Topics for the development of e-learning modules include:-- Basic Purchasing-- State Finance Law-- Procurement Instruments-- OSC Contract Approval Process-- ESDC Requirements-- OGS Contracts - Computer

Consulting-- OGS Contracts - Non-technology

Services-- Using IFBs-- Consortia Purchases-- Discretionary Purchases-- Preferred Sources-- Central Accounting System

STRATEGY (1)Work with the NYS Personnel Council andDepartment of Civil Service, Staffing Services toensure continuity in titles and appropriate com-pensation to demonstrate the professionalism ofthe function.

A. Better match procurement staff struc-tures with complexities of procurementfunctions and tasks.

B. Increase the knowledge base of staffinvolved in procurement activities.

C. Facilitate increased interagency com-munication surrounding procurementsand procurement methodologies.

STRATEGY (1)Increase the scope of discussion within andbetween agency contracting offices.

Rationale: Increased communication can facilitatesharing of both best practice procurements andproblems encountered and how they were dealtwith. It would reduce "reinventing the wheel,”contributing to the efficiency and success of theprocurement process.

Implementation: Use the classroom training pro-posed above to advance this strategy.

STRATEGY (2)Create opportunities for informal informationsharing on broad fiscal matters.

Implementation: Use the classroom training pro-posed above to advance this strategy.

OBJECTIVE VImprove training and communication.


Next Steps

As the Procurement Council moves forward to implement its plan, furtherdevelopment of specific strategies is required. Several workgroups havebeen established to address these issues. Council members and agency

representatives are providing their time and talents to participate in the work-groups.

In addition to those listed, other workgroups will be established as priority needsare identified. Procurement Council meetings and the Council's support and pro-motion of special events will facilitate multi-agency efforts to accomplish theobjectives of the strategic plan.

-- A legislative workgroup will explore recommendations including: raisingpurchasing thresholds; establishing consistency among purchasing thresh-olds for all types of purchases; modifying the Contract Reporter noticerequirement; and enabling the use of reverse auctions.

-- Another workgroup is exploring improvements to the bidder registrationand notification system.

-- The NYS Forum for Information Resource Management is leading a work-group to streamline methods of IT procurement.

-- The workgroup formed to work on Objective IV began with a focus onadvancing the utilization of hospital group purchasing programs (GPOs).This group will also explore recommendations for other alternative procure-ment methods including strategic partnerships and piggybacking.

-- A workgroup will seek to collaborate with the NYS Personnel Council andDepartment of Civil Service to ensure continuity in purchasing titles andappropriate compensation to reflect the professionalism of the function.

-- A workgroup has been established to explore procurement training opportu-nities.


The Office of General Services coordinates the New York StateProcurement Council. For more information about this plan, contact:

Paula Moskowitz, DirectorProcurement Services Group

New York State Office of General ServicesCorning Tower

Empire State PlazaAlbany, New York 12242

PSG Customer Services: (518) [email protected]

Visit our website at ogs.state.ny.us/

KENNETH J. RINGLER, JR. COMMISSIONER

NYS OFFICE OF GENERAL SERVICES

Serving New York

N Y S OUNCIL STRATEGIC PLAN - ogs.state.ny.us · STRATEGIC PLAN GEORGE E. PATAKI GOVERNOR. ... and...

Documents

Transcript of N Y S OUNCIL STRATEGIC PLAN - ogs.state.ny.us · STRATEGIC PLAN GEORGE E. PATAKI GOVERNOR. ... and...