2012

RECOMMENDATIONS FOR APPLYING BEST PROCUREMENT

PRACTICES IN MIAMI-DADE COUNTY:

A BEST-VALUE BENCHMARKING REPORT

Stephanie Horna, B.A.,

Political Science, Economics, and International Studies, 2012

University of Miami

stephaniehorna@gmail.com

Table of Contents

Table of Figures ....................................................................................... 2

Introduction.............................................................................................. 3

Best Procurement Practices ............................................................... 5

A. Standardization of Procurement Codes .......................................... 5

B. Cooperative Purchasing ......................................................................... 6

C. E-procurement ........................................................................................... 8

D. E-Procurement: Electronic Vendor Registration ........................ 8

E. Purchasing Cards ..................................................................................... 11

F. Procurement Staff’s Attitude Towards Professionalism ....... 13

G. Spend Analysis .......................................................................................... 16

Conclusions ............................................................................................ 19

A. Greater Transparency and Accountability ................................... 19

B. Streamlining of Financial Activities ................................................ 20

C. Enhanced Professional Training ...................................................... 21

Notes ......................................................................................................... 22

Table of Figures

Figure 1: Purchasing Card Spend ...................................................................... 12

Figure 2: Balanced Scorecard - FY2008 ......................................................... 15

Figure 3: Financial Performance Metrics ...................................................... 17

Figure 4: Purchase Orders Issued by the County of Rockland ............ 18

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“[All states combined spend]

more than $200 billion

annually purchasing goods and

services; [and] conservative

estimates suggest that reform

of government procurement

practices could save five to ten

percent of that total spending.”

Introduction

Miami-Dade County’s procurement procedure is governed by a number

of administrative orders, ordinances and resolutions.1 Of particular interest is

Administrative Order No.: 3-38 which governs the County’s processes for the purchase of

goods, services, and professional services.2 This administrative order establishes the roles

and responsibilities of the Department of Procurement Management (DPM), the methods of

purchasing goods and services, and the authority to award contracts. Additional policies

and procedures relating to the County’s procurement processes are detailed in the DPM

procurement guidelines, the County Code, and other administrative orders.

Reform of county procurement practices can lead to significant savings for

governmental authorities. Through reform of county procurement practices, taxpayer’s

money can be spent more efficiently, and savings can be used to deliver additional services.

According to a report by The Pew Center for States Report, all states combined spend

“more than $200 billion annually purchasing

goods and services; [and] conservative estimates

suggest that reform of government procurement

practices could save five to ten percent of that

total spending.”3

The information available in this report is

based on publicly-accessed records from the

Miami-Dade County’s Department of

Procurement Management. As a result, some

recommendations for the improvement of the procurement process might already be in

place but have not yet been made publicly available. This report seeks to provide an overall

picture of the current status of procurement processes in five U.S. counties. It also explores

ways in which the Miami-Dade County (MDC) Department of Procurement Management

can capture cost savings through more effective procurement practices. In addition to the

MDC Department of Procurement Management, the study sample consists of the following

county agencies:

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Fairfax County, VA (Department of Purchasing and Supply Management (DPSM)

County of Rockland, NY (Department of General Services- -Purchasing Division)

Maricopa County, AZ (Office of Procurement Services)

Los Angeles County, CA (Purchasing and Contract Services)

City and Country of Denver, CO (General Services- Purchasing Division)

These counties were selected on the basis of the following:

1) Size of county and contract expenditures are comparable to MDC;

2) County agencies are members of the National Institute of Government Purchasing

(NIGP) and are current implementers of the NIGP Code or similar purchasing codes;

and

3) County agencies utilize nationally-recognized procurement practices that are

distinct from those used in MDC.

The agencies analyzed in this report actively participate in professional procurement

associations and have served as lead agencies for cooperative procurement contracts. The

agencies were also among those analyzed in a salary survey conducted by MDC

Procurement in the mid-2000s. Furthermore, each agency analyzed in this report has taken

innovative approaches to achieve “best value” in procurement. These case studies identify

potential opportunities and challenges for the implementation of certain procurement

policies. The report identifies best practices used by the other agencies and offers

recommendations for improving procurement practices in MDC.

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“[T]he proper foundation of any public

procurement system is a comprehensive

procurement law based on the American Bar

Association's Model Procurement Code,

which provides parameters, authorizes the

exercise of professional discretion, covers all

agencies and institutions, covers all types of

procurements, and places centralized

management in the hands of an executive at

a high level within state government.”

-The National Association of State

Procurement officials

Best Procurement Practices

A. Standardization of Procurement Codes

Miami-Dade County’s procurement activities are dictated by a series of ordinances

and policies, but the County does not have a single, clear legal procurement code. This

study recognizes that variations in procurement codes can lead to a wide range of

regulatory approaches. In the past, this degree of variation has had a negative impact on

the procurement process because individual policy differences can “discourage

competition by raising the costs to companies of understanding and complying with

different rules in each county.”4 Furthermore, the National Association of State

Procurement Officials has argued that “the proper foundation of any public procurement

system is a comprehensive procurement law based on the American Bar Association's

Model Procurement Code, which provides parameters, authorizes the exercise of

professional discretion, covers all agencies and institutions, covers all types of

procurements, and places

centralized management in the

hands of an executive at a high level

within state government.”5

The American Bar

Association Model Procurement

Code was created in 1979 by the

American Bar Association’s Public

Contract Law and State and Local

Government Law Sections, along

with other national organizations

interested in state and local procurement. Since the model code’s creation, sixteen states,

including Arizona and Virginia, and thousands of local jurisdictions have adopted it as part

of their legal code.6 In the face of an ever-changing procurement environment, the

American Bar Association Code was revised in 2000. The code is considered “one of the

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The National Association of State

Procurement Officials and the

NIGP both recognize that

cooperative purchasing has the

potential of saving significant

time and money in contract

production through aggregation.

most successful projects ever conducted by the Section of Public Contract Law and Section

of State and Local Government Law, and [it] has had a profound and favorable impact on

the conduct of public procurement throughout the United States since 1979.”7 The revised

version emphasizes reducing costs to both the government agency and the private sector

through increased levels of competition and technology.8

Several of the counties considered in this report use all or some of the American Bar

Association’s Model Procurement Code, and as a result, they have realized the benefits of

streamlining their purchasing operations by using standardized language. For instance, the

Board of Supervisors of Maricopa County adopted a modified version of the State of

Arizona Procurement Code in 1987 (ARS Title 41). The code is patterned following the

American Bar Association. Similarly, the Fairfax County Purchasing Resolution, adopted in

1983, abides by the Virginia state code, and is based on the American Bar Association

Model Procurement Code.9 In the County of Rockland, procurement is dictated by the

County of Rockland’s Charter.

B. Cooperative Purchasing

Cooperative contracts are increasingly popular at the federal, state, and local levels. The

National Association of State Procurement Officials and the NIGP both recognize that

cooperative purchasing has the potential of saving

significant time and money in contract production

through aggregation.10 The NIGP defines this

concept as “referring to the combining of

requirements of two or more public procurement

entities to leverage the benefits of volume

purchases, delivery and supply chain advantages,

best practices, and the reduction of administrative time and expenses. Cooperative

procurement efforts may result in contracts that other entities may ‘piggyback.’”11

Cooperative agreements are practiced by four of the six counties analyzed in this

report. In the City and County of Denver, Colorado, the Purchasing Division participates in

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cooperative procurement endeavors as provided by the Denver Revised Municipal Code. In

Maricopa County, purchasing agreements must be approved by the Board of Supervisors.

The County partners with agencies across the state and nation to provide the best value for

tax- payer dollars. Maricopa County is a member of U.S Communities, a main purchasing

cooperative at the national level “which provides procurement resources for local and state

government agencies, school districts (K-12), higher education institutes, and nonprofits

looking for the best overall supplier government pricing.”12 Furthermore, they form part of

the Strategic Alliance for Volume Expenditures (S.A.V.E.), a consortium of local

municipalities and school districts. In addition, Maricopa County is part of the National

Intergovernmental Purchasing Alliance Company, a cooperative purchasing organization,

established through the joint efforts of public agencies across the United States with the

specific purpose of reducing procurement costs by leveraging group volume.13 Maricopa

County extends cooperative purchasing to the use or share of warehousing facilities, capital

equipment, and other facilities. The Fairfax County Purchasing Resolution similarly

encourages cooperative procurement to increase efficiency and reduce administrative

expenses in any acquisition of goods and services.

Miami-Dade County does follow cooperative purchasing as one of its best practices

and also takes part in ‘piggy-backing’ to ensure that the County receives the lowest prices

from already existing contracts. MDC has also recently successfully implemented the User

Access Program (UAP). The Program issues a rebate for up to 2% of the total dollar amount

of the invoice from which 1.5% is rebated to Miami-Dade County and 0.5% is retained by

the government agency placing the order, who then decides what percentage of the rebate

to deduct from the vendor’s invoice.14 Dr. Thomas Blaine, a former employee of the

Department of Procurement Management, explained that this initiative was developed

after the County Budget Office began to require that the Purchasing Department find ways

to finance itself.15 According to Dr. Blaine, the UAP funds a large part of the Procurement

Management Department. It may be beneficial to conduct a study in which returns on

investment are calculated to ensure that resources are allocated efficiently to this program.

The County could also consider becoming more engaged with the Southeast Florida

Governmental Purchasing Co-operative Group. The Group was created in order to provide

“cost savings and cost avoidances to member entities by utilizing the buying power of

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combined requirements for common basic items,” and membership is available to

governmental agencies in Miami-Dade, Broward and Palm Beach counties. 16

C. E-procurement

E-Procurement has transformed procurement to a knowledge-and-results based

system. Almost every e-procurement purchasing system includes a vendor management

function, which differs from the vendor file maintained by the financial system for accounts

payable purposes. The electronic financial and accounting systems should interface

seamlessly. According to McCue and Scales’ Procurement Management Review Draft Report

released in 2011, at a minimum “this interface must include budget verification, pre-

encumbrance, encumbrance, receiving and accounts payable [and] to complete the

procurement cycle, receiving should be accomplished electronically.”17

Currently, most of the counties analyzed in this report use electronic bidding

systems or online posting sites that allow vendors to download invitations for bids,

requests for quotes, and requests for proposals that have been posted to the Internet by a

government agency. These systems also allow vendors to complete their bids or quotes

online and submit them back to the jurisdiction electronically. The submitted bids and

quotes are automatically tabulated and forwarded to the procurement officer for

evaluation and award. McCue and Scales emphasize that the “vendor’s bid information is

not re-keyed by agency personnel, reducing time, costs and errors,” and making the

process more efficient.18 Likewise, costs and delays associated with reproduction and

mailing are eliminated. Vendors typically maintain their registration online, and vendors

who are properly profiled automatically receive e-mail alerts of all opportunities for

products and services they can provide, a value-added service to the vendor.19

D. E-Procurement: Electronic Vendor Registration

Electronic vendor registration is included in both electronic bidding and electronic

solicitation systems, and it provides a means for vendors to complete the necessary

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Utilization data is automatically

captured, enabling procurement

agencies to leverage that

knowledge to obtain better prices.

registration forms directly on the Internet. Suppliers have to be registered at the NIGP 5-

digit level (or equivalent, if using another commodity coding system). Miami-Dade County

could explore the possibility of using electronic catalog systems, which allow agencies to

place orders directly with the contracted supplier and completely eliminate the need for

hard-copy purchase orders. The value derived from this application will depend on the

extent to which it can be integrated with the automated purchasing/financial system for

approval, encumbrance, accounts receiving, and accounts payable. The level of detail in the

system’s transaction history and maintenance of contract data will also impact the value

added by an electronic vendor registration system.20

Los Angeles County has standardized bid lists which are maintained online by

County officials. These bid lists are electronically available for use by County departments

and vendors alike. The County uses industry-standard NIGP commodity codes to identify

vendor commodity and service offerings. Suppliers who have registered through the Los

Angeles County’s WebVen system receive

notifications of their solicitations on particular

commodities via e-mail.21

While electronic vendor registration is

the primary application in many e-procurement

systems, it remains the most difficult to implement. Such a system allows procurement

agencies to establish and manage supplier relationships while routine ordering

transactions are entirely delegated to authorized end users. Utilization data is

automatically captured, enabling procurement agencies to leverage that knowledge to

obtain better prices. Cooperative purchasing is also facilitated.

Maricopa County does not use its own e-procurement software. Rather, the

Maricopa County Office of Procurement Services agency manages its bids through a host e-

procurement application called Bidsync. Suppliers register by accessing the home page of

this website and selecting appropriate commodity codes. Once the suppliers complete this

process, they receive notification of solicitation opportunities each time a formal

solicitation for the commodity code selected by the vendor is issued.22

In the County of Rockland, the Purchasing Division works with the County’s

Management Information Systems Division to manage the SMART e-Procurement System.

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Since 2005, the County of

Rockland (NY) has realized

$629,445 in administrative

and transactional savings

as a result of its e-

procurement systems.

This e-Procurement system is comprised of software licensed from Oracle—PeopleSoft,

Sysoft and BidNet. The County of Rockland Purchasing Department’s 2009 Annual Report

notes that “the SMART e-Procurement System has increased the efficiency of the

procurement process by decreasing the Requisition to Purchase Order cycle time.”23

Alongside Dutchess County, Ulster County, the City of New Rochelle and the Town of

Cortlandt, the County of Rockland created the Hudson Valley Municipal Purchasing Group,

establishing a regional bid notification service and e-procurement system.24 Businesses

now only have to visit a single web site to search for and download municipal bidding

opportunities within the Hudson Valley.

The County of Rockland has realized significant return on investment from the e-

procurement system that was implemented in 2005. A recent assessment of this system

indicated that 63% of all purchase orders were transmitted electronically, eliminating the

cost of postage and saving the County $2,092 in a single

fiscal year. Furthermore, “the County has also seen

significant administrative cost savings stemming from

their use of the auto-sourcing feature of their software

system.”25The County of Rockland’s e-procurement

System allows County employees to make purchases

from approved vendors without the direct involvement of the Purchasing Division, which

has led to $29 savings per purchasing transaction. Since 2005, the County has realized

$629,445 in administrative and transactional savings as a result of its e-procurement

systems.26

Although not stated in the Internal Services website, MDC’s Procurement

Management department uses two separate systems: FAMAS Financial for financial

transactions and ADPICS for purchasing. The ADPICS system was upgraded in 2005

following a two-year transition in which MDC spent over two million dollars.27 While these

two systems have provided positive results, MDC would benefit from a system that

integrates the independent programs under a single e-procurement software platform.

MDC has started the upgrade to the e-procurement software, Webprocure, but due to

budgetary issues, the full upgrade has not been completed. The County does not currently

have fully developed e-procurement software..

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MDC currently has in place a partially electronic and semi-green procurement

practice. To transition to a more fully-formed electronic system, MDC could conduct

another life-cycle analysis of Webprocure with updated statistics to get an estimate of the

cost-savings for the County once integrated

with FAMAS. MDC could also consider SciQuest

and Periscope software systems, given that

these systems are widely considered more

robust systems with shared information. The

system currently in place in MDC provides

vendors with e-notices, at which point vendors

submit hard copies of their responses.

E. Purchasing Cards

Purchasing cards or “p-cards” enable procurement departments and agencies to

order from established vendors by using electronic catalog ordering for commodities such

as office, janitorial and computer supplies. Following the adoption of p-cards, the time and

resource-intensive process of requisitions and purchase orders can be eliminated.

In MDC, the p-card program is managed by the Finance Department’s Purchasing

Card Administrator; however, each participating department has a Department Purchasing

Card Coordinator to manage its purchasing card program.28 Periodic audits are conducted

by the Audit and Management Services Department to ensure that the p-card is being used

properly according to the laws and regulations of the County.

Fairfax County reviews its Procurement Card Policy annually. This is done by the

County Legislature in conjunction with its annual review of the County’s procurement

policy. It might be favorable for MDC to set a specific time when the audits will be

conducted for the p-card so that there is a team that works within that timeline. The e-

procurement system should be used to reconcile purchases with the p-card.

P-cards offer savings in transaction costs and staff hours spent managing purchases,

without an increase in misuse or abuse. In 1996, the United States Federal Government

Pinal County, AZ assessors

determined that the county saved

$53.87 per transaction when a p-

card was used instead of a purchase

order. A study by RPMG Research

Group cited a time savings of 6.3

days and a cost savings of ($67.38)

per transaction when using p-cards.

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adopted regulations making a purchasing card the preferred method for acquisition of

supplies or services under $3,000 and concluded that p-card use reduced payment

processing and labor costs. These results were corroborated by an independent study in

Pinal County, Arizona, in which assessors determined that Pinal County saved $53.87 per

transaction when a p-card was used instead of a purchase order.29 Furthermore, a Federal

Government Accounting office (GAO) report released in August of 1996 concluded that

increased use of p-cards was not associated with increased abuse.30 Rather the GAO study

found that the added electronic data associated with p-cards enhanced oversight. Finally,

according to a 2005 study by RPMG Research Corporation, there is a significant time

savings when using a p-card. This study cited a time savings of 6.3 days and a cost savings

of ($67.38) per transaction when using such method.31 Efficiency savings from the

expanded use of p-Cards would allow MDC’s Purchasing Division to reallocate current

resources to more value-added activities for the organization, such as strategic

procurement planning and contract development.

The County of Rockland has carried out purchasing card performance metrics in

which they measure the amount of dollars spent on p-cards (p-card spend), the

Figure 1: Purchasing Card Spend

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administrative cost savings from p-card transactions, and the average p-card transaction.

All of these can be seen in the charts below that were included in their 2009 Annual

Report.32

The MDC Procurement Management Department could develop a similar metric

system for p-card transactions to better determine cost savings. The Chief Financial Officer

of MDC could present the Board of Supervisors a revision of the MDC p-card policy to

include the use of p-card for all purchases of $1,000 or less, unless a vendor does not accept

purchasing card payment. This change could be monitored to determine whether further

expansion of p-card use (>$1,000) would offer additional savings, while allowing

reasonable control of the process.

F. Procurement Staff’s Attitude Towards Professionalism

All of the counties analyzed in this report have an ethics manual that outlines

permissible and appropriate actions for procurement departments and agencies. The

County of Rockland Ethics Handbook is based on the American Bar Association’s Model

Procurement Code, the Rockland County Procurement Policy, the City of New York

Procurement Ethics Guide, the State of Virginia’s Guide to Technology Procurement, and

the State of Maryland Ethics Guide.

Maricopa County requires that employees not accept any gifts or favors that would

suggest favoritism or the appearance of favoritism.33 Similarly, Arizona law prohibits all

employees affiliated with the County to receive anything of value in addition to their

regular salary for conducting duties on behalf of Maricopa County.

MDC has strict guidelines and protocols for the oversight of procurement practices.

The County’s Ethics Commission, the Office of the Inspector General, and the Miami-Dade

State Attorney’s Office have frequent contact with the MDC Department of Procurement

Management. Miami-Dade County even requires all contractors to adopt a code of ethics

prior to the execution of any contract with the County. Contractors must also submit an

affidavit, on a form provided by the County that, states the contractor has adopted a code

that complies with County regulations. Failure to submit the affidavit can result in

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contractors being ineligible for any contract award. The Ethics Guide of Miami-Dade County

also applies a practice known as the “Cone of Silence,” which prohibits oral

communications regarding a particular bid, RFP, or RFQ between potential vendors,

contractors, and lobbyists with County or City public officials.34

Los Angeles County has developed general guidelines derived from county conflict

of interest policies as well as excerpts from the related National Institute of Government

Purchasing (NIGP) standards and the NIGP Code of Ethics. Miami Dade County also applies

the NIGP Code of Ethics to guide its procurement activities. MDC could include a

specification and qualifications policy in its publicly-accessed documents. Having

competition between suppliers is required to induce new firms to enter the market,

perform at a higher level, and invest in research and development, thereby contributing to

an efficient use of scarce resources. According to the NIGP, “when the competitive system

works unhindered, it provides all parties—both the public entity and the vendor

community—with a fair and unbiased procurement program that encourages feedback,

provides a safe environment for communication, and eliminates or limits the possibility for

repercussions as a result of that feed-back.”35 Strong leadership from a chief procurement

officer and a central office at a high-executive level is associated with effective public

procurement management. Leadership also requires that the chief procurement officer and

his/her staff adopt an attitude of professionalism, openness, cooperation, and creativity.36

Training, outreach, planning, and contractor management are just a few of the other

activities that are critical to effective management of the procurement process. The central

procurement office should have a mechanism for reaching out to suppliers and training

them about the procurement process, thereby enhancing competition, lowering costs, and

ensuring quality service. Given the ubiquity of Internet availability, the procurement office

can make training available 24 hours a day, 7 days a week to current and prospective

suppliers. MDC could also develop a “Supplier Procurement 101” course to communicate

the procurement process with suppliers. Maricopa County has a link to a similar course on

its website.37 Finally, it is important to set strategic objectives related to financial

management, customer service, policy compliance, economic inclusion, staff development,

and business processes. The County of Rockland developed a “Balanced Scorecard” that is

used to assess performance alongside set goals (see below).38

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Fig

ure

2: B

ala

nce

d S

core

card

- FY

20

08

36

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MDC also could develop a comprehensive contract administration training program

that offers certification upon completion. The training and certification should be required

for all Dade County Procurement Management personnel with any contract administration

responsibilities. In addition, new procurement skills should be required of all procurement

personnel, and strong education professional certification credentials should be sought in

all hiring decisions.

In other counties, high levels of education and professional certification are

required of all personnel involved in procurement. In the County of Rockland, for example,

county leadership encourages Purchasing Division employees involved in the procurement

process to obtain certification as Certified Professional Public Buyers (CPPB). Management

personnel are encouraged to obtain professional certification designating them as Certified

Public Purchasing Officers (CPPO) or as Certified Purchasing Managers (C-P-M). The

County of Rockland stresses the importance of certification by indicating that it

demonstrates a standard of competency for the benefit of the public. In addition, they note

that “the trend in governmental purchasing is for mandatory certification of procurement

professionals [and] the CPPB/CPPO designation communicates to the taxpayer that the

public employee who manages their tax dollars has reached a specific level of education

and experience and is knowledgeable about government purchasing.”39 Since 2007, seven

of eight County of Rockland Purchasing Division employees hold professional certification

in public procurement. Fairfax County, meanwhile, has created a road map for strategic

training and hiring needs. The County provides extensive procurement training to state

officials at all levels through the Virginia Institute of Procurement. The State of Virginia also

provides vendors with various training options including online tutorials on “how to

conduct business with the state [from registration] to determining what goods and services

are being purchased by state agencies.”40

G. Spend Analysis

According to McCue and Scales, spend analysis is considered “the process of

aggregating, cleansing, and analyzing organizational purchasing data to identify

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opportunities for reducing costs; this is both a business process issue and an information

technology issue.”41 In order to effectively perform spend analyses, a commodity coding

system needs to be integrated into the purchasing automation system. The Aberdeen Group

reports that “public sector organizations can reduce total spending by 2% to 15% through

spend analysis.”42 In the County of Rockland, New York, procurement officials employ

procurement metrics, which track the performance and accomplishments of the Purchasing

Division (see below).

Purchase order dollar value varies from fiscal year to fiscal year based on the

current budget and capital projects initiated during the year. According to the County of

Rockland’s Purchasing Department 2009 Annual Report, the County’s purchase order

spending averages “approximately $90-$100 million annually.”43 MDC’s Purchasing

Management division could produce a chart that illustrates the number of purchase orders

issued relative to the dollar value of the purchase orders, and they could make this

information freely available to the public.

Figure 3: Financial Performance Metrics

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Figure 4: Purchase Orders Issued by the County of Rockland41

Financial performance metrics, e-procurement performance metrics, social

responsibility performance metrics, and p-card performance metrics are all included in the

Rockland County’s Annual Report. The full report can be found online at:

http://co.rockland.ny.us/departments/purch/purch20/include/docs/2009annualReport.p

df

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Conclusions

Many counties have engaged in procurement reform. While MDC already has begun

to adopt some nationwide best practices, there still is

potential for gains in efficiency and cost-cutting,

particularly in cooperative purchasing and p-card

management. Therefore, based on available data

from other counties, this report outlines three

concrete steps that could benefit MDC to further

streamline its procurement processes.44

A. Greater Transparency and Accountability

All relevant information should be made available to the public through the

Procurement Management’s website to ensure accountability and greater understanding of

the processes both by the staff and by vendors. The main challenge encountered in the

development of this report has been the lack of available MDC data that is publically

accessible. Fairfax County displays bid tabulation tables that could be displayed on MDC’s

website with the aim of helping bidders understand why their bid was not successful and

easing the preparation of future bids. For instance, Fairfax County displays bid tabulation

tables that have been created in response to Invitations for Bids which appear online for a

period of thirty days from the time of contract. The information then becomes public

record and is accessible by contacting the Purchasing Division.

To maximize accountability and efficiency, MDC could adopt a single, clear, legal

procurement code such as the ABA Model Procurement Code. It also would be beneficial for

the Department of Procurement Management to request an audit by a respected

organization such as the NIGP to evaluate the internal operations of the agency.

Performance Metrics such as the ones developed in Rockland County should be

derived from such internal audit. It might be favorable for MDC to set a specific time when

While MDC already has begun

to adopt some nationwide best

practices, there still is

potential for gains in efficiency

and cost-cutting, particularly

in cooperative purchasing and

p-card management.

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To maximize accountability and

efficiency, MDC could adopt a

single, clear, legal procurement

code such as the ABA Model

Procurement Code. It also would

be beneficial for the Department

of Procurement Management to

request an audit by a respected

organization such as the NIGP

to evaluate the internal

operations of the agency.

the audits will be conducted for the p-card so that there is a team that works with that

timeline.

B. Streamlining of Financial Activities

MDC could develop a system that integrates both its financial and purchasing

programs under a single e-procurement software platform such as Webprocure. A life-cycle

analysis of Webprocure could be conducted again with the current statistics to get an

estimate of the cost-savings for the County once integrated with FAMAS.

MDC could also develop a cost containment and revenue generation activities report

with the goal of quantifying the value that the Purchasing Division brings to the

procurement process. This report could also identify the savings realized from the

procurement process and the revenue that

Procurement Management can bring to the County

through the procurement process. Furthermore, it

would be beneficial for the County to conduct or

commission a study in which the returns on

investment are calculated so that resources are

allocated efficiently to the UAP program.

The MDC Procurement Management office

could work with the Department of Finance to

define cost containment and revenue generation

activities that will be measured each fiscal year. Using this data, the Procurement

Management division can produce an annual Profit & Loss Statement that details all costs

and revenues associated with the operation of the division. The ultimate goal will be to

produce and document sufficient cost savings and additional revenues that equal or exceed

the operational costs of the Department on an annual basis.

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The expanded use of p-cards may also lead

to cost savings. Efficiency savings from the

expanded use of p-cards would allow MDC’s

Purchasing Division to reallocate current

resources to more value-added activities for the

organization, such as strategic procurement

planning and contract development. A revised

MDC p-card policy could allow the use of the p-

card for all purchases of $1,000 or less, unless a

vendor does not accept purchasing card payment.

This change could be monitored to determine whether further expansion of p-card use

(>$1,000) would offer additional savings, while allowing reasonable control of the process.

C. Enhanced Professional Training

MDC could develop a comprehensive contract administration training program that

offers certification upon completion. This training and certification should be required for

all MDC Procurement Management personnel with any contract administration

responsibilities. Additionally, a percentage of the operating budget of the Department of

Procurement Management should be allocated towards training for both staff and vendors,

and attendance to procurement conferences and workshops should be encouraged.

The expanded use of p-cards

may also lead to cost savings.

Efficiency savings from the

expanded use of p-cards would

allow MDC’s Purchasing Division

to reallocate current resources

to more value-added activities

for the organization, such as

strategic procurement planning

and contract development.

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Notes 1 The author of this report wishes to express her appreciation to Dr. Thomas F. Blaine, Jr., CPPO, FCPA, FCPM, whose assistance and support were instrumental in the report’s development. 2 Excluding those professional services whose selection is governed by Sec.287.055 F.S and Secs. 2-10.4 and 2-10.4.01 of the Miami-Dade County Code. 3 Brown, Trevor L, Sergio Fernandez and Alexander Heckman. States Buying Smarter: Lessons in Purchasing and Contracting from Minnesota and Virginia, The Pew Center for States, May 2010. Web. 23 Apr. 2012. Available online: <http://www.stateinnovation.org/Publications/All-Publications/2010-5-PEW-StatesBuyingSmarter.aspx> 4 American Bar Association. Introduction to the Model Procurement Code, 2000. Web. 20 Apr. 2012 Retrieved from <http://meetings.abanet.org/webupload/commupload/PC500500/relatedresources/3_2000_Model_Procurement_Code_Introduction_and_2002_Regs.pdf> 5 NASPO Issue Brief: Value of Procurement.Web. 7 May.2012 Retrieved from: <http://www.naspo.org/userfiles/file/Value%20of%20Procurement.pdf> 6 American Bar Association. Model Procurement Code Adoption dates. Web. 21 Apr. 2012 . Retrieved from:<http://www.aia.org/aiaucmp/groups/aia/documents/pdf/aias078879.pdf> 7 American Bar Association. Introduction to the Model Procurement Code, 2000. Web. 20 Apr. 2012 Retrieved from <http://meetings.abanet.org/webupload/commupload/PC500500/relatedresources/3_2000_Model_Procurement_Code_Introduction_and_2002_Regs.pdf> 8 American Bar Association. Introduction to the Model Procurement Code, 2000. Web. 20 Apr. 2012 Retrieved from <http://meetings.abanet.org/webupload/commupload/PC500500/relatedresources/3_2000_Model_Procurement_Code_Introduction_and_2002_Regs.pdf> 9 Adopted on Jan. 1, 1983 - VA Code 11-35 to 11-80; ABA Model Procurement Code adoption dates: <http://www.aia.org/aiaucmp/groups/aia/documents/pdf/aias078879.pdf> 10 NASPO. Strength in Numbers: An Introduction to cooperative procurements, 2006. Web. 15 May. 2012. Retrieved from: <http://www.naspo.org/documents/Cooperative_Purchasing0410update.pdf> 11 NIGP. Public procurement dictionary of terms, 2010. Web. 18 May.2012 12 U.S Communities Government Purchasing Alliance. Web. 11 Jun.2012. Retrieved from: <http://www.uscommunities.org/> 13 National IPA. Web. 19 Jun. 2012. Retrieved from: http://www.nationalipa.org/ 14 Miami Dade County. New Joint Purchase Agreement, July18, 2011. Web. June 21, 2012. Retrieved from:< http://www.miamidade.gov/dpm/library/new_joint_purchase_agreement.pdf> 15 Blaine, Thomas F. Personal communication. 31 May 2012.

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16 NIGP South Florida Chapter, 2012. Web. 6 May,2012. Retrieved from: https://www.nigpsefl.org/chapters/nigp-nigpsefl/coop-main.cfm 17 McCue, Clifford and Phillip E.Scales “Procurement Management Review” Draft Report, February 2011, p.57 18 McCue, Clifford and Phillip E.Scales “Procurement Management Review” Draft Report, February 2011, p.57 19 McCue, Clifford and Phillip E.Scales “Procurement Management Review” Draft Report, February 2011

20 McCue, Clifford and Phillip E.Scales “Procurement Management Review” Draft Report, February 2011 21 Los Angeles County Online: About Purchasing & Contracts in the County of Los Angeles. Web. 8 May, 2011. Retrieved from: <http://doingbusiness.lacounty.gov/about_purchasing.htm> 22 Maricopa County Vendor Manual: Participating in County Procurement, May 15,2011. Web 19 Apr.2012. Retrieved from: <http://www.maricopa.gov/procurement/PubDocuments/VendorManual.pdf> 23 County of Rockland, Department of General Services. Purchasing Division. 2009 Annual Report. Web. 11 June,2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/2009annualReport.pdf>

24 County of Rockland. Supplier Handbook, 2007. Web. 10 June 2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/SupplierHandbook07.pdf>

25 County of Rockland, Department of General Services. Purchasing Division. 2009 Annual Report. Web. 11 June,2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/2009annualReport.pdf>

26 County of Rockland, Department of General Services. Purchasing Division. 2009 Annual Report. Web. 11 June,2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/2009annualReport.pdf>

27 Miami Dade County. Information Technology Business Case – Section A– FY 2005-06, Project Justification Document - Funding Application January 31, 2005. Web. 13 Apr.2012. Retrieved from: <http://www.miamidade.gov/itgovernance/library/business_cases_2005/Business%20Case-ADPICS%20Upgrade%20v4.0%20Section%20A.pdf> 28 Miami Dade County. Administrative Orders. June,2005. Web. 29 Mar.2012. <http://www.miamidade.gov/aopdfdoc/aopdf/pdffiles/AO3-35.pdf> 29 Pinal County, Office of Internal Audit. Purchasing Final Report. Web 21 May, 2012. Retrieved from: < http://pinalcountyaz.gov/departments/internalaudit/documents/purchasing final report.pdf> 30 Pinal County, Office of Internal Audit. Purchasing Final Report. Web 21 May, 2012. Retrieved from: < http://pinalcountyaz.gov/departments/internalaudit/documents/purchasing final report.pdf> 31

RPMG Research Corporation. Purchasing Card Benchmark Survey Report. 2005. 32 County of Rockland, Department of General Services. Purchasing Division. 2009 Annual Report. Web. 11 June,2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/2009annualReport.pdf>

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33 Maricopa Ethics Handbook, 2002. Web. 5 May, 2012. Retrieved from: <http://www.maricopa.gov/procurement/PubDocuments/ethics_handbook.pdf> 34 Miami Dade County. Ethics Handbook. Web.June 2, 2011. Retrieved from:<http://www.miamidade.gov/ethics/pdf/Ethicsmanual.pdf> 35 Brady, William D, Rick Berry and Louis Moore. Sarasota County Procurement Department Procurement Management Review Draft Report, 2011. Web. 17 Mar.2012. Retrieved from: www.scgov.net/CFPO/ProcurementPurchasing/.../NIGPFinalReport.pdf 36 Brady, William D, Rick Berry and Louis Moore. Sarasota County Procurement Department Procurement Management Review Draft Report, 2011. Web. 17 Mar.2012. Retrieved from: www.scgov.net/CFPO/ProcurementPurchasing/.../NIGPFinalReport.pdf 37 Maricopa Office of Procurement Services, Procurement 101. May 16,2012. Web. 12 June, 2012. Retrieved from: <http://www.maricopa.gov/procurement/PubDocuments/procurement-101-V4.pdf> 38 County of Rockland. Department of General Services- Purchasing Division. Balanced Scorecard- FY 2008. Web 21 Apr.2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/BalancedScorecard.pdf> 39 The Universal Public Procurement Certification Council (UPPCC) Home Page. Web 10 Jun.2012. Retrieved from: < http://www.uppcc.org/benefits/index.aspx> 40 Brown, Trevor L, Sergio Fernandez and Alexander Heckman. States Buying Smarter: Lessons in Purchasing and Contracting from Minnesota and Virginia, The Pew Center for States, May 2010. Web. 23 Apr. 2012. Available online: <http://www.stateinnovation.org/Publications/All-Publications/2010-5-PEW-StatesBuyingSmarter.aspx> 41 County of Rockland, Department of General Services. Purchasing Division. 2009 Annual Report. Web. 11 June, 2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/2009annualReport.pdf>

42 McCue, Clifford and Phillip E.Scales “Procurement Management Review” Draft Report, p.55 February 2011. 43 County of Rockland, Department of General Services. Purchasing Division. 2009 Annual Report. Web. 11 June, 2012. Retrieved from: <http://co.rockland.ny.us/departments/purch/purch20/include/docs/2009annualReport.pdf>