1 purchasing and procurement processes module four revision date: 2/06/2015

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Purchasing and Procurement Processes

Module FourRevision Date: 2/06/2015

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COURSE INTRODUCTION

Course Overview & Learning Objectives

Course Expectations

Training Approach & Participation Protocol

3© WA Department of Enterprise Services

Mutual Respect

General guidelines for online meetings:

Interact

Engage

Participate

4© WA Department of Enterprise Services

Training Credit

To complete the module and receive credit, you will be expected to achieve a 80% on

the module assessment . Employees should log into LMS to complete each module

assessment. Use of the participant workbook is encouraged in the assessment!

5© WA Department of Enterprise Services

Course Overview

Course will be delivered in four modules: Module 1: Purchasing & Procurement

Overview Module 2: Choosing a Route for Purchases of

Goods and Procurement of Services Module 3: Competitive Procurements,

Amendments, and Exemptions Module 4: Purchasing & Procurement

Processes

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Module Overview

Section One

The Planning Process

Section Two

Solicitation and Selection

Section Three

Post-Procurement

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Learning Objectives

As a result of this training participants will be able to:

Identify purchasing and procurement needs and outcomes

Describe the importance of communicating need within the agency

Identify scope, timeline, requirements and vendors as part of the planning process

Discuss how to evaluate and select a vendor Apply the purchasing and procurement planning phases

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THE PLANNING PROCESS

Identify the Need and Outcomes

Communicate Need Within Agency

Identify Scope, Timeline and Requirements

Identify Vendors

Define Scope and/or Statement of Work

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Procurement Steps1. Identify the Need and Outcomes

2. Communicate Need Within Agency

3. Identify Scope, Timeline and Requirements

4. Identify Vendors

5. Define Scope and/or Statement of Work

6. Communicate Formal Need With Vendors

7. Evaluate Vendors

8. Select Vendor

9. Negotiate Contract

10. Contract Execution and Management

Pla

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Collaboration and Planning

Collaboration is important – Work with Business Owners, Subject Matter Experts

and Stakeholders

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Identify the Need and OutcomesStep 1

Why does your agency purchase goods and services?

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Identify the Need and OutcomesStep 1

Critical Thinking & Outcomes of a Purchase or Procurement

Identify Need

Identify Alternatives

Available

Evaluate & Analyze

Identify Outcomes

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Communicate Agency Need Step 2

1. Initiate planning process

2. Engage SMEs,

business owner and

other stakeholders

3. Conduct independent

research

4. Determine checkpoints

and delegated authority

14© WA Department of Enterprise Services

Purchasing vs. Procurement

Purchasing - the process of obtaining goods and services for the State of Washington.

Procurement - the combined functions of identifying needs, initiating a procurement project, selecting a vendor, contracting with a vendor, purchasing of the goods or services, managing the resulting contract.

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Identify Scope, Requirements and Timeline

Step 3

Identify and define the scope and overall contract timeline

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Identify Scope, Requirements and TimelineStep 3

Contract Purpose

High-level Functional

Areas

Contractor Responsibilities

Contract Phases & Timeline

What is NOT in Scope?

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Identify Scope, Requirements and TimelineStep 3

Common Pitfalls in Scope of Work/Requirements Writing

• Too strict and rigid• Not enough details• Written to a certain vendor or solution• Outdated or obsolete requirements

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Identify VendorsStep 4

1. DES Vendor Lists

2. Knowledge of Vendor

Marketplace

3. Vendor Pre-Bid

Communication

4. Other Sources

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Define Scope and/or Statement of WorkStep 5

Scope or Work vs. Statement of Work

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Define Statement of WorkStep 5

Statement of Work

Requirements &

Specifications

Project History &

Objectives

Deliverables

MilestonesSchedule

Reporting Requirements

Performance Standards

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SOLICITATION AND SELECTION

Communicate Formal Need With Vendors

Evaluate Vendors

Select Vendor

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Procurement Steps1. Identify the Need and Outcomes

2. Communicate Need Within Agency

3. Identify Scope, Timeline and Requirements

4. Identify Vendors

5. Define Scope and/or Statement of Work

6. Communicate Formal Need With Vendors

7. Evaluate Vendors

8. Select Vendor

9. Negotiate Contract

10. Contract Execution and Management

Pla

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hase

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& S

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Communicate Formal Need to VendorsStep 6

Request For Quote

/Quotation

OR Qualifications

(RFQ)

Request For Proposal

(RFP)/Request for Bids (RFB)

Request For Qualifications

and Quotation (RFQQ)

Communicate

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Communicate Formal Need with VendorsStep 6

Solicitation Need RFQ RFQQ RFP/RFB

Standard, Ongoing Purchase X X

Many Vendors Offer This X X

Cost is the Most Important Factor X

Vendor Qualifications and Performance Important in Addition to Cost

X X

Vendor Specialization / Few Offer This X

Complex Project Needs X

Solution Required to Meet Need X

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Communicate Formal Need with Vendors

Step 6

Assign Procurement Coordinator

•Define list of potential vendors

•Encourage WEBS registration

Draft Solicitation Content

•Requirements tailored to level of complexity

Issue Solicitation

•Use WEBS•Post Amendments on WEBS

Receive Bids

•Document date/time

•Maintain confidentiality

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Communicate Formal Need with VendorsStep 6

Evaluate Costs /Rates

• Rank based on lowest cost or rate

Award

• Lowest cost, responsive bidder

Post Results

• WEBS• Notify

successful & unsuccessful Bidders

Negotiate & Award Contract

• Conduct Debriefings

• Negotiate & award the contract

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Communicate Formal Need with Vendors - Step 6

Select Team

•Establish Team Roles

•Write Specifications

• Identify RFP/RFB Coordinator for the project

•Score and rank Bids

Draft RFP/RFB Content

•Project approach and methodology

•Finalize Scope of Work

•Outcomes and Performance Measures

•Deliverables and milestones

•Management and staffing plan

•Bidder responses format

•Cost response format

Finalize and Release RFP/RFB

•Stakeholders review draft RFP

•Finalize RFP for release

•Post and publish RFP

Post Release Activities

•Respond to Bidder questions

•Draft amendments or addendums

Evaluation Process (Step 7)

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Communicate Formal Need w/ Vendors - Cost Sheets Step 6

Vendor Name Cost

Time

Materials

Total:

Vendor Name Deliverable Cost

Deliverable A

Deliverable B

Deliverable C

Total:

Vendor Name

Hourly Rate

Hours Total

Staff level

Total:

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Evaluate VendorsStep 7

Evaluation Objectives

Provide clear direction and guidance Ensure integrity of fair evaluation process Create a documented process Recommend for contract award

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Evaluate VendorsStep 7

Evaluation Step Considerations

Confidentiality and Security Conflict of Interest Evaluation Milestones Evaluator Availability?

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Evaluate VendorsStep 7

Procurement

Coordinator

• Ensure Adherence

• Prepare & Distribute

Evaluation Committee

• Evaluate• Score

Executive Sponsorship

• Supports & Authorizes

• Controls Expenditures

Evaluation Roles include ….

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Evaluate VendorsStep 7

Phase 1• Initial Screening

Phase 2

• Evaluation of Technical and Management Response

Phase 3

• Oral Presentations (if applicable)

Phase 4

• Evaluation of Cost Proposals

Phase 5

• Best and Final Offers (BAFO)

Phase 6

• Ranking of Proposals

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Evaluate VendorsStep 7

Technical Evaluation

Technical Evaluation CriteriaPoints

(Weighted Score)

1 Executive Summary (75 points max) and Vendor Identifying Information (25 points max)

100

2 Qualifications of Firm (300 points max) 300

3 Approach to Scope of Work (300 points max)

300

4 Qualifications of Proposed Key Personnel (200 points max)

200

5 Corporate References (100 points max) 100

6 Total Weighted Score 1000

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Evaluate VendorsStep 7

Cost Evaluations

Vendor Name CostVendor A $150,000

Vendor B $175,000

Vendor C $180,000

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Evaluate VendorsStep 7

Cost Evaluation

Cost Component

Vendor A Vendor B Vendor C

Supplies $50,000 $60,000 $70,000

Staff $50,000 $90,000 $90,000

Administrative Expenses

$20,000 $5,000 $5,000

Profit/Overhead $30,000 $20,000 $15,000

Total $150,000 $175,000 $180,000

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Select VendorStep 8

Once the evaluation is complete

Award to Highest Scoring Bidder

OR

Reject all Bids or Re-Issue the Solicitation

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Select VendorStep 8

Once all bidders have been notified, conduct debriefings if requested.

Following the award, as you get ready to negotiate and establish a contract make sure the solicitation files are complete.

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POST-PROCUREMENT

Negotiate Contract

Contract Execution and Management

39© WA Department of Enterprise Services

Procurement Steps1. Identify the Need and Outcomes

2. Communicate Need Within Agency

3. Identify Scope, Timeline and Requirements

4. Identify Vendors

5. Define Scope and/or Statement of Work

6. Communicate Formal Need With Vendors

7. Evaluate Vendors

8. Select Vendor

9. Negotiate Contract

10. Contract Execution and Management

Pla

nni

ng P

hase

Sol

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tion

& S

ele

ctio

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ost

Pro

cure

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t

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Negotiate ContractStep 9

Conduct Baseline Contract Review

Edit contract based on proposal

Finalize and Route

for Signatures

Contract Starts

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Contract Execution and Management Transition Step 10

Contract Execution

Initial Kick-off Meeting

Contract Management Framework

Project

Management

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Ongoing Contract Management

Schedule Monitoring

Risk Mitigation

Compliance with T&C Approve

Contractor Invoices

Contract Execution and Management Transition Step 10

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Summary & Key Points

Identified purchasing and procurement needs and outcomes

Described the importance of communicating need within the agency

Identified scope, requirements and timeline, and vendors as part of the planning process

Discussed how to evaluate and select a vendor Applied the purchasing and procurement planning

phases

44© WA Department of Enterprise Services

Next Steps

Complete test and achieve 80% or higher Complete evaluation form

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QUESTIONSQuestions after the training? Call Cheryl Shaw at (360) 407-9376.