Joint Purchasing Project

DCCVA UpdateWednesday, November 29, 2012

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Agenda

1. Overview of Our Process2. Executive Summary

0. Who Else Is Doing This?I. Joint Purchasing Structure and ProcessII. Purchasing Policy

3. Next Steps4. What We Need From You

Track, Update, and Provide Status

q u a l i t y i m p r o v e m e n t m e t h o d o l o g y

Measure

2Analyze

3Improve

4Control

5Improvement

Project Implemented

Define

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2.0 MEASUREHow big is the current

problem?How often, when, how

many, etc?

0.0 ORGANIZE TEAMWhat’s the high-level

problem, goals, and objectives?

Who’s should be on the team?

Meeting Logistics

3.0 ANALYZEWhy is the problem

happening?How do you know?

4.0 IMPROVEDevelop SolutionsRedesign ProcessDevelop

RecommendationsApprovalImplement

Organize Team0

ProposedProject

1.0 DEFINE What’s the problem? Who’s the customer? What do they need?

5.0 CONTROLHow will you make

sure it will stick?

Improvement Approach

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Executive Summary

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II. STANDARDIZE PURCHASING POLICIESA. Standard languageB. Standard expenditure levelsC. Standard statement regarding Cooperative Purchase

AgreementsD. Language that you don’t need separate quotes and bidsE. Designated lead / representative to Opt In / OutF. Local Vendor Preference Policy

Joint Purchasing RecommendationsWe seek to establish for Dane County cities and villages a centralized purchasing system that effectively and efficiently directs the available resources

III. SET-UP SUCCESS MEASURES AND REPORTINGBy Item:

A. Last 3 year $ spendB. Primary ContactC. Interest in Cooperative BuyD. Specifications / Special RequirementsE. $ SavingsF. “Money Left on the Table” Report

0. RESEARCH WHO ELSE IS DOING THIS? State UW City of Madison Other Purchasing Groups

I. DEVELOP PURCHASING PROCESS & STRUCTUREA. Sponsor Organization, Steering Committee, Purchasing Core TeamB. Determine Primary Contacts / OwnersC. Develop Guidelines / FrameworkD. Define ProcessE. Oversee Quarterly Purchases

Who Else Is Doing This?What specific organizations are involved in the purchasing process?

1. State DOA – Vendornet2. Value4gov.org – Southeast Wisconsin Collaborative Purchasing Group3. UW Madison System – Material Distribution Service4. City of Madison5. Monona, Verona, Middleton – Records6. Monona & Verona – Shared inspector7. Dane County – we all buy salt8. Group of Municipalities in Milwaukee – Purchase Card Program9. School Systems?10. Federal – only when it’s Federal grant11. Services with Dane County12. DaneCom – buying communications system together13. WAPP – Wisconsin Association of Public Purchasers14. Case Studies

• 13 Counties did joint purchase of ballot bags• Eau Claire and Eau Clare have joint purchasing manager position

State Purchasing Program

State Purchasing Program

Example

State Purchasing Program

Example

Fuel Example

Unl87 Mid 89Madison $3.008 $3.115

State Purchasing Program

Value4gov.org

Value4gov.org

Joint Purchasing Team Structure

Joint Purchasing Core Team

Pat Marsh

Business OwnerTeam Lead

Bob Miller

Executive Sponsor

Dane County City and Villages Association

Project Sponsor

Region 5 Greater WICity Managers Association

Steering Committee

Bill Burns

Verona City Manager

Matt Giese

Cottage Grove Village

Administrator

Mike Davis

MiddletonCity Administrator

Nick Probst

StoughtonClerk / Per.

DirectorMonette McGuire

City of MadisonPurchasing

Services

The Business Owner has ultimate responsibility for the overall business success of the project (processes and systems). Owns business decisions throughout the project, ensures that stakeholders are appropriately engaged, and that the project results meets the needs of the business. Has ongoing ownership of the project deliverables/results

The Executive Sponsor ensures alignment with organizational strategies and provides high level direction to the project. Has ultimate authority over the project and is responsible to the business for its success. The Executive Sponsor secures project funding, resolves issues and risks at the executive level, and is a champion of the project across the organization.

Steering CommitteeRegion 5: Pat Marsh, City Administrator, Monona - Coordinator Counties of: Dane, Crawford, Columbia, Grant, Green, Sauk, Richland, Iowa, Lafayette. Provides overall direction and feedback on team’s recommendations. Help to execute in their city / village.

Stephen Bechler

MiddletonIntern

Walter Jankowski

FacilitatorReinvention, LLC

Brian Chapman

Co-FacilitatorCity of Oshkosh

Pam Hoffman

Co-FacilitatorState of Wisconsin

Liz Menzer

Co-Sponsor and SupportWCPE

Gary Becker

Co-Sponsor and Support

Each DCCVA Member

Project Champion

The Project Champion is the point person for the Joint Purchasing team. They ensure the appropriate people in their organization is aware / involved in the team’s efforts.

Problem StatementIn one sentence, what’s the problem?The cities and villages of Dane County have not taken advantage of market competition opportunities available through joint purchasing.

Project VisionSo, what is the desired future state or vision?We seek to establish for Dane County cities and villages a centralized purchasing system that effectively and efficiently directs the available resources. 

Joint Purchasing Project 14

1.0 Define

Project Definitions

1.0 Define Project Charter: Joint Purchasing

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TeamExecutive Sponsor Mayor Bob Miller – MononaTeam Lead/Bus. Owner Pat Marsh - MononaTeam Members Bill Burns, M Davis, M Giese, N Probst, Stephen Bechler,

Monette McguireOther Res: B Chapman, L Menzer, W Jankowski, G Becker

ProjectProblem Statement

The cities and villages of Dane County have not taken advantage of market competition opportunities available through joint purchasing.

Project Mission & Vision

We seek to establish for Dane County cities and villages a centralized purchasing system that effectively and efficiently directs the available resources

Project Goals

Develop joint purchasing structure including scope, process, and methodology for a joint purchasing program among DCCVA members

Reduce the overall $ spent by participating communities on selected purchase items

Document actual savings Create an easy, “opt-in” joint purchasing program that leverages the

purchasing power of several communities Increase the cooperation among DCCVA members for joint benefit

Benefits / Business CaseReduce Expenses

• We will collect data but we anticipate significant savings

Work Packages Upcoming Tasks Define Scope of Potential Products / Services Research Best Practices and Who’s Done This Before Data Gathering / Finance Team: How much has been spent, track savings Process: Define Program Structure, Process, Policy and Procedures,

Guidelines / Ground Rules Technology: How can we make this easy, on-line for purchasers and vendors Communication / Training / Marketing

Form Steering Committee - Set-up Meeting Logistics Plan and Execute First Meetings Start Collecting Data Start Researching existing purchasing processes and Programs

TimeframeStart Date October, 2012Presentation to Sponsors December, 2012Solution Delivered Jan-Feb, 2013Estimated Costs / ResourcesTeam Member Time 4 hours / week - 6 weeksFacilitator 60 hours – FREE for 1st ProjectMisc. Expenses $500Approach• Focus on execution and follow the 80/20 rule• Perform projects like “Kaizen” events (short duration)• Challenge the status quo • Collaboration across all communities• Avoid complexity--keep it smart and simple• Follow formal, proven methodologiesRisk & Dependencies• Consensus / agreement by all government entities on

approach and program• Approval by local elected officials• Adoption by core number of members• Communities wanting to “buy local” only

Pam

Guidelines / FrameworkWhat are the fundamental guidelines / framework of the program? 1. Opt in / Opt out2. When opting in – you are committing to purchasing from contract3. Guideline: If an organization “opts out” purchase should be with 5% of joint

purchasing contract4. Price structure will be based on volume5. We will leverage existing processes and technologies when it makes sense6. Quarterly Municipal Purchasing Organization (MPO) Meetings

• What do we purchase together this quarter?• Assign lead agency – they take a % for administering contract (if

applicable)• Defined communication structure

Joint Purchasing Project 16

Joint Purchasing Program Structure

Joint Purchasing ProcessHigh-Level Process for Purchasing Common Items

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Track, Update, and Provide Status

j o i n t p u r c h a s i n g p r o c e s s

Gather Specifications

and Data

Research Existing

Contracts

Compile Best Deals, Options,

& Recomm.

Communicate to Partners

Joint purchase

Commit & Purchase /

Contract

Identify Potential

Purchase Items

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Joint Purchasing Opportunities

2 3 4 5 6

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3.0 RESEARCH EXISTING CONTRACTS

State ContractsValue4gov.orgCity of MadisonOther

1.0 IDENTIFY POTENTIAL PURCHASE ITEMS

Select high-gain commodity items

Assign item lead on team

4.0 COMPILE BEST DEALS, OPTIONS, & RECOMM.

What are the best prices

Spec. optionsRecommendations

5.0 COMMUNICATE TO PARTNERS

Communicate to all buyers

RecommendationsWhen decision is dueNext purchase items

and date

2.0 GATHER SPECIFICATIONS AND DATA

For each Item: Identify key

purchasing lead / contact

Last 3 year $ Spend Special requirements Are you interested?

6.0 COMMIT & PURCHASE / CONTRACT

Each community commits go/no go decision

Make purchase

7.0 TRACK, UPDATE, AND PROVIDE STATUSBy CommunityParticipation Rate$ Savings$ “Left on the Table”

Draft

Potential Product Purchase Items

Joint Purchasing Project 18

Product Assigned To Comments

1 Fuel Stephen Middleton has in place a card vendor system – has state contractNeed to address bulk purchase (have tank) or non-tank options

2 Paper / Office Supplies Pam Existing State contract

3 Computers / Software Brian4 Asphalt Crack Filling / Seal Coating Stephen5 Fleet Vehicles Pam6 Lights / LED Lighting Brian7 Forestry / Trees Pam8 Street Signs Stephen Madison has own sign shop – can we sub-contract?

9 Solar Panels Later

10 Lawn Mowers Second quarter

DEPARTMENT SPECIFIC11 Emergency Radios DANECOM radios need to be purchased by June, 2013 – already group

purchase

12 Fire Equipment?

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NEED TO FIGURE OUT BULK PURCHASE OR DELIVERED

Brian

Potential Service Purchase Items

Joint Purchasing Project 19

Service Assigned To Comments

1 HR 4 communities already interested

2 IT Can we “tap into” City of Madison IT services?

3 Building Inspections Monona and McFarland already sharing inspector

4 Assessor

5 Printing

6 Cleaning

7 Building Maintenance

8 Street Painting

9 1011121314

Standardize Policies1. Develop recommended

standard policy language2. Standard statement regarding

Cooperative Purchase Agreements

3. Recommend standard expenditure levels that are compliant with State statutes

4. Include “if you buy from consortium” you don’t need separate quotes and bids

5. Designated lead / representative to Opt In / Out

6. Local Vendor Preference Policy (if opt out – local vendor must be within 5% of recommended cost)

Next Steps and Timeline

Joint Purchasing Project21

Task / Activity Who When

1 Joint Purchasing Team Meeting• Presentations by State, UW, and Madison

Available ItemsProcess for Purchasing / Joining Contracts

• Update on Research Items• Review Proposed Survey to DCCVA Members

Joint Purchasing Team Dec 10

2 Joint Purchasing Team Meeting• Finalize Survey• Review of Recommendations• Select final purchase items

Joint Purchasing Team Dec 19

3 Send Out Survey Joint Purchasing Team to DCCVA Project Champion

3rd Week of Dec

4 Surveys Completed and Due Purchasing Contacts 2nd Week of Jan

5 FIRST PURCHASE COMMUNICATION Joint Purchasing Team to Purchasing Contacts

3rd week of Jan

6 FIRST QUARTER PURCHASE / CONTRACT Joint Purchasing Team to Purchasing Contacts

Feb

7 FIRST QUARTER REPORT• Participation• $ Savings• Money “Left on the Table”

Joint Purchasing Team to DCCVA Project Champion

End of March

8 SECOND QUARTER PURCHASE COMMUNICATION Joint Purchasing Team April

Draft

What We Need From You

1. Your Feedback2. Support Our Efforts

– As Project Champion, YOU will get initial e-mail

3. Assign Primary Purchasing Contact in Your City / Village– Could be you– Coordinates filling out specific item survey– Coordinates Go / No Go decisions

4. Assign Primary Contact for Each Item5. Timely Responses from Everyone6. Participate!7. Again, Your Feedback

QUESTIONS

DCCVA UpdateWednesday, November 29, 2012

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