dvbe best practices thomas j. johnson, c.p.m. [email protected] march 22, 2006

DVBE BEST PRACTICESDVBE BEST PRACTICES

Thomas J. Johnson, C.P.M.Thomas J. Johnson, C.P.M.

[email protected]@cslanet.calstatela.edu

March 22, 2006March 22, 2006

DVBE GOALDVBE GOAL

3%3%

DIFFICULT GOALDIFFICULT GOALMANY PLACES TO STUMBLEMANY PLACES TO STUMBLE

• Large Construction Contracts• System Wide Contracts• MEAs• Contracts with large Suppliers such as Dell & HP• Commodities without DVBEs• Laws do not help much• Workload• Priorities-expedite

What do we do?What do we do?

• 1) Change “have” to “get”• 2) Outreach• 3) Relationship/Networking• 4) Use the laws• 5) Strategy• 6) Continuous Improvement—Feedback• 7) Make it easy for DVBE• 8) Team CSU

Change “have” to “get”Change “have” to “get”

• This is an opportunity

• Win-Win: CSU meets goals; Suppliers are developed

OutreachOutreach

• DVBEs are small businesses.

• Promoted by state

• 1) Need to locate DVBEs

• 2) Determine their skills & products

• 3) Develop them as CSU suppliers

RelationshipsRelationships

• System tends to discourage relationships

• Develop relationships. Use knowledge of suppliers in creating strategy

• Also, DVBEs are well organized—great networking opportunity

• Use DVBEs as resources to find and develop other DVBEs

Use the LawsUse the Laws

• Everyone is familiar with 5% SB preference

• SB115 adds a DVBE incentive of 15% up to $100,000

• It may be possible to make 3% DVBE participation mandatory

• It may be possible to set participation goal higher than 3% and mandatory

StrategyStrategy

• Need to create a procurement strategy

• Where will DVBE participation come from?

• Construction?

• Commodities?

• Services?

• In what percentages?

Continuous ImprovementContinuous Improvement

• Look at strategy. Is it working?

• Did you make goal?

• Where did you succeed? Why?

• Where did you miss? Why?

• What adjustments are needed?

• Review periodically and when starting new year

Make it Easy for DVBEMake it Easy for DVBE

• Our campuses are tough to crack

• Need to open our doors to them

• Help them to help us

Team CSUTeam CSU

• My experience is that we’re fragmented

• Share successful DVBEs with other campuses

• Include commodities bought, contacts, experiences

Best PracticesBest Practices

• Areas:

• 1) Commodities/Services

• 2) Public Works

• 3) PCARD

Commodities/ServicesCommodities/Services

• Opportunities:????• Computers• Hospitality• Peripherals• Office Supplies• Consultant Service—Peoplesoft• Paper Products• Janitorial

TargetTarget

• Target commodities/services that offer best reward

MethodsMethods

• Award under $50,000 bid limit

• Bid DVBE against DVBE

• When unable to find DVBE, use DVBE flowdowns on Bids

• Use DVBE as a minor partner on contracts such as Office Max—Also use off ramp

Public WorksPublic Works

• Public works is critical to DVBE results:

• 1) Large Contracts without DVBE destroys any chances of meeting goals

• 2) Large Contracts with excess DVBE can make your year

• 3) Meet DVBE requirements on contract

Must ensure meet either 2 or 3

Public Works ProceduresPublic Works ProceduresAdvertisementAdvertisement

• Invite DVBEs to Job Walk; contact them personally—don’t trust the mail to convey you interest

• Where to find them:

• 1) Log of DVBEs from previous bids (DVBEs who have bid or are subs on bids—look at winners and losers)

• 2) Review DGS for potential DVBEs

Public Works ProceduresPublic Works ProceduresAdvertisementAdvertisement

• Advertise with DVBE Alliance

• Contact Rich Dryden, 916 446-3510 or

• www.CADVBE.org

Public Works ProceduresPublic Works ProceduresWalk ThroughWalk Through

• Hand Out and Read DVBE Warning Letter

Public Works ProceduresPublic Works ProceduresDVBE Warning LetterDVBE Warning Letter

• Disabled Veteran Business Enterprise (DVBE) Participation Requirement

• • Project TJ050088, Hydrogen Fueling Station Irrigation & Fencing

Project• California State University, Los Angeles

• 5151 State University Drive• Los Angeles, California 90032

• • VERY IMPORTANT NOTICE!

• • In order to satisfy and be responsive to the DVBE requirement, the

bidders must either meet the three (3%) percent DVBE Participation Goal or document a “Good Faith Effort” to meet that goal.

•

Public Works ProceduresPublic Works Procedures DVBE Warning Letter DVBE Warning Letter

• Disabled Veteran Business Enterprise (DVBE) Participation Requirement

•

• Project TJ050088, Hydrogen Fueling Station Irrigation & Fencing Project

• California State University, Los Angeles

• 5151 State University Drive

• Los Angeles, California 90032


• VERY IMPORTANT NOTICE!• • In order to satisfy and be responsive to the

DVBE requirement, the bidders must either meet the three (3%) percent DVBE Participation Goal or document a “Good Faith Effort” to meet that goal.

• • DVBE Participation Goal Attainment


• As an example, if the apparent low bidder bid the Architect’s construction estimate amount of $49,000.00 the firm could be responsive to the DVBE requirement by achieving the three (3%) percent DVBE Participation Goal with a minimum of $1,470.00 in DVBE subcontractor and/or supplier participation in the project.

• • Or


• Good Faith Effort• • A “Good Faith Effort” to meet the DVBE goal is

achieved by doing all of the following five items prior to the final bid due date. The bidder shall:

• • 1. Contact the Trustees’ DVBE Coordinator,

telephone (323) 343-3488, to identify potential DVBEs. This telephone call will initiate the provision of information to the bidder;


• 2. Contact other state and federal government agencies and local DVBE organizations to identify potential DVBEs for this contract;

• • 3. Advertise in trade paper and papers focusing

on DVBEs. Advertisement must have appeared in publications at least ten (10) calendar days prior to the bid due date, unless time limits imposed by the Trustees do not permit that advertising;


• 4. Send solicitation to potential DVBE subcontractors and suppliers for this contract with sufficient lead time to fully entertain and consider responding bids; and

•

• 5. Consider responding DVBEs for participation in this contract.

Public Works ProceduresPublic Works ProceduresWalk ThroughWalk Through

Suggest Mandatory Walk throughs

Introduce DVBEs

Discuss costs to losers of using good faith

Use a DVBE: Avoid Protests, reduce costs

State that we have had great success with DVBE utilization and we will challenge any Good Faith effort

Public Works ProceduresPublic Works ProceduresOpportunities/ProblemsOpportunities/Problems

• Campus Architects

• Design Build

PCARDPCARD

• Flowdown DVBE requirements to campus when performing trainings

• When auditing, when DVBE alternates are available, suggest to campus user

SUMMARYSUMMARY

• Excellent DVBE Results are possible when Campus has a plan and executes it

• Commitment and belief in the program will yield results

DVBE BEST PRACTICESDVBE BEST PRACTICES

Thomas J. Johnson, C.P.M.Thomas J. Johnson, C.P.M.

[email protected]@cslanet.calstatela.edu

March 22, 2006March 22, 2006

dvbe best practices thomas j. johnson, c.p.m. [email protected] march 22, 2006

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