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Home My WebLink About11/10/2008 00 City/County Purchasing Merger Analysis: Memos and Joint Administrative Purchasing Assessment Final Report 1 • t_. 7 1 Purchasing Division ' To: Intergovernmental Committee From: Dave Zabell, Assistant City Manager ' Craig Warner, Budget Director Sue Ownby, Purchasing Manager Date: 11/03/2008 Re: City /County Purchasing Merger Analysis 1 At the conclusion of the October 6 Inter - governmental Committee meeting regarding the National Institute of Government Purchasers (NIGP) report on City and County ' purchasing, the committee tasked staff to evaluate options and recommend a means by which an implementation plan could best be developed, and to identify intermediate measures which could be put in place in the near -term. 1 Two alternatives were identified to complete the merger analysis and develop an implementation plan, those being to contract with industry experts or attempt to do the ' work with in -house staff. A third alternative of utilizing NIGP evaluators is not recommended by staff due to logistics and timing. t Staff is recommending the use of an industry expert to facilitate and prepare a plan to affect the merger. While the City Purchasing Manager and the County Budget Director understand much of what would be involved in evaluating the merger and developing an ' implementation plan, an analysis of this type cuts across several disciplines including; purchasing, finance, information . systems, organizational management, legal and ultimately the political spectrum. The complexities in each of these areas vary, requiring ' a considerable level of expertise and facilitation skills, and a significant commitment of time from staff already fully engaged in their regular duties. This is not to say that staff does not need to be engaged during this process, in fact staff from the key areas indentified above would be tapped to be a part of the cross - functional team referenced in the NIGP study. In addition, it is further recommended that the Purchasing Manager be designated as the project manager. ' The concept of hiring a seasoned buyer to backfill the technical work currently being performed by the Purchasing Manager so that she could develop the plan was considered. 1 The difficulty with this approach is that the project requires significant expertise in multiple disciplines, and equally limiting is the time it would take to recruit, select, and train even a temporary employee, provided a qualified person is presently available to 1 1 1 backfill the Manager. Additionally, this approach is still not feasible as there is not enough time for the Manager to sufficiently expedite this project given the current 1 workload. Outlined below are several tasks identified as necessary to move this proposal forward. ' These tasks are identified as those proposed to be accomplished by contract and those completed in- house: In-house Work Product Ste i s: 1. City Council and Board of County Commissioners to conduct a joint meeting ' regarding merger analysis, development of an implementation plan, and enabling agreement(s). ' 2. City and County to execute Memo of Understanding (MOU) outlining the desire to merge, and interim arrangements for assistance to County in purchasing activities. Specifics of the MOU to include: ® Designate City Purchasing Manager as project manager ® Cost sharing arrangement for professional services 1 ® Increase quote limits to $7,500 — Both City and County ® Establish approximate project timelines The County Legal Department to lead in the drafting the MOU with consultation of City Legal. 3. Jointly hire an industry expert to develop implementation plan. ' 4. Hire entry level position (Temporary Purchasing Assistant) at City so work can roll downhill. This will allow the Purchasing Manager to further engage in the merge processes. 5. City/County Inter Committee to monitor progress. ' 6. Upon conclusion of the merger analysis and development of the implementation plan, the City Council and Board of County Commissioners to conduct a joint meeting to review the report and consider an inter -local ' agreement putting the plan into action. Contracted Work Product Steps: o Work with Key staff to establish a cross - functional, technical team of city and county employees to form a vision of the program and convert the vision into measurable objectives. Preliminarily we are recommending the ' following disciplines be represented: 1 1 1 1 a Purchasing © Management ' © Finance e Address integration issues between e- procurement and financial systems ' ® Establish financial protocols for joint purchasing office ® Develop methodology for allocating costs • Information Systems o Schedule demonstrations with e- procurement firms to find a "best of breed" and determine if interface is feasible 1111 o Implement and support systems © Legal e Establish Framework for drafting consistent policies and 1 regulations ® Establish framework for developing uniform documents ' e Draft Interlocal Agreement m Human Resources ' o Immediately compensate existing city staff accordingly o Upgrade Purchasing Manager to Acting Director o Upgrade Buyer to Acting Senior Buyer /Agent ' o Upgrade Purchasing Assistant to Acting Buyer O Develop position description for Senior Buyer /Agent o Develop recruitment plan for new positions ® Other Key Departments as necessary 1 o Address Change Management (the people side of change) e Address Risk Management (identify risks associated with ' establishing joint purchasing and a plan on how to mitigate those risks) • Identify Appropriate e- procurement solution 1 ® Develop e- procurement implementation plan O Resolve hosting, networking, security and other technical issues We have appreciated the opportunity work as a team in developing this recommendation. The cooperation and tenor of our collective efforts on this topic to date, and our own experiences at the staff level, promise to make this a productive effort that will benefit both agencies. 1 1 1 1 Purchasing Division \ \ \t , .r inter-Departmental MEMO 4 To Yakima City Council — For Council Information Packet ' Fro= Dave Zabel!, Assistant City Manager Sue Ownby, Purchasing Manager Dater, November 4, 2008 ' Re City /County Purchasing Merge ' As previously communicated, and as discussed briefly during the November 4, 2008 City Council Budget Review, the Intergovernmental Committee (IGC) has tasked staff with evaluating a potential merger of the City and County Purchasing functions. The Committee has recommended that the City and County proceed with further action toward a potential merger beginning with a joint meeting of the City Council and Board of Commissioners. The purpose of the joint meeting would be to brief the full Council and Board on the proposal and to present and discuss a draft Memorandum of Understanding (MOU). 1 The documentation attached provides a more detailed description of the steps necessary to affect a merger. The IGC reviewed the staff recommendation at ' their November 3 meeting and is in agreement with the major elements of the proposed plan. Part of that recommendation is to contract with a consulting firm having expertise in merger efforts, knowledgeable of government financing t and purchasing, and software applications. A proposal from FCS Group out of Redmond, WA is also attached and will be brought to the council for approval in the very near future. A copy of the Joint Administrative Purchasing ' Assessment that the National Institute of Governmental Purchasing completed in August 2008 is also included. There is considerable information provided as this is a complex merger impacting several operational areas within the City and ' County. While this potential merger looks promising, further analysis is required and there will be several decision points required of both the City and County as this process goes forward. Should the City and County ultimately merge the purchasing functions, it would be the first joint City /County Purchasing merger in over three decades in the 1 nation and could serve as a model for other local governments. We are excited at the potential to have a part in leading the way in what could be a breakthrough in municipal government practices. 1 STRATEGIC & IMPLEMENTATION PLANNING FOR JOINT CITY /COUNTY PURCHASING CITY OF YAKIMA AND YAKIMA COUNTY DRAFT ' Scope of Work and Task Plan 1 Task i — Kick -Off Meeting and Background Review We will conduct a kick off meeting with key City /County staff to introduce the consultant team, study objectives, methodology, schedule, and the roles of the City and County staff and the consultant team. We will also review the preliminary data needs list which will include such items as current budgets, purchasing policies and 1 procedures, benchmarking data, an overview of current financial IT support systems, any preliminary plans for organizational realignment, and other related documentation. The background data will be reviewed and a follow up request will be prepared, if 1 necessary. As part of the background review, we will review the NIGP report and will review its 1 recommendations with the City's designated project manager to understand what recommendations were accepted and what implementation or recommended actions are expected as a result of the study. • ' Task 2 - Interview Key Stakeholders We will interview key City and County stakeholders in purchasing, management, finance, information systems, legal, and other key stakeholders to assess what their expectations and, issues are for a combined purchasing organization. During the interviews, we will want the stakeholders to address the following types of questions: o What is the vision of a joint purchasing program, and how will you know how ' well this vision is being achieved? o What are acceptable City /County cost - allocation methodologies in the short and long -term? ' o How should the City and County develop and maintain similar purchasing policies and regulations? o What changes need to be made to current purchasing protocols, processes and procedures, and how closely can these be aligned between the City and County? o What is the new expected level of service standards, and how should potential ' level of service issues be resolved? o What kind of e- procurement system should be used, and are there any integration issues with current financial systems? ' o What kind of hosting, networking, security and other technical issues need to be resolved? ' If the above questions have been addressed by the NIGP report, we will confirm that the report's recommendations to address these questions have been accepted and should be part of the implementation plan. Task 3 — Develop a Mission, Vision, and Goals Statement 1 ••D FCS GROUP 1 1 STRATEGIC & IMPLEMENTATION PLANNING FOR JOINT CITY /COUNTY PURCHASING CITY OF YAKIMA AND YAKIMA COUNTY DRAFT ' Based on our initial interviews, we will work with the cross functional team to develop a mission statement, a vision, and goals for a newly formed purchasing organization. We ' will hold three facilitated sessions to work with the team to develop an initial draft of these statements. This will create an initial strategic plan for the implementation period and initial operation of the joint purchasing operations. Objectives or performance measures may also be included where possible. Task 4 — Identify Ilrnnp1ementa u s. n Issues 1 Working with key staff and members of the cross functional team and the background materials, we will prepare an analysis of the issues, actions, and constraints relevant to ' implementing this merger. Potential implementation areas include the following: o Legal, o Organizational, a Staffing and personnel, o Financing and funding 1 o Financial reporting and practices, o Information Systems (e.g. e- procurement), ' o City - County communications, training, and intergovernmental relations, o Purchasing operating policies and procedures, and a NIGP report recommendations. 1 As part of this task we will prepare a summary of the various issues and steps that need to occur to create and operate a joint purchasing organization, and we will meet with the ' cross functional team to review the issues and actions summary. Task 5 — Develop the Implementation !'i n ' Based on Tasks 3 and 4 we will develop an implementation plan that will define the issues and actions, identify the steps that need to be taken, assign individual or ' department responsibility, develop a timetable, where possible, identify potential costs, and assign priorities. The implementation process will involve the cross functional team who will again participate in the review and development of the plan. The purpose of ' the implementation plan is help the City and the County make the organizational transition from two distinctly different organizations to a single unified and more effective purchasing organization. 1 1 • FCS GROUP 2 1 I STRATEGIC & IMPLEMENTATION PLANNING FOR JOINT CITY /COUNTY PURCHASING CITY OF YAKIMA AND YAKIMA COUNTY DRAFT 1 ludg t I Consultant Hours Estimated Budget Project Summit Principal Consultant Law Admin. Total Labor Tasks Moy Reese Klein/Schroeder Support Hours Budget I Effective Hourly Billing Rates: $195 $140 $350 $60 Task 1: Kickoff Meeting & Background Review 8 8 2 18 $2,800 Task 2: Interview Key Stakeholders 8 8 16 $2,680 I Task 3: Develop Mission, Vision, Goals, and Objectives 24 32 56 $9,160 Task 4: Identify Implementation Issues 30 24 8 62 $12,010 Task 5: Develop the Implementation Plan 16 12 _ 2 30 $4,920 Total Estimated Labor Budget 86 84 8 4 182 $31,570 I Total Project Budget $31,570 1 1 1 . 1 1 1 1 1 1 1 1 • 4 )FCSG ROUP 3 1 11 • 4 .-- c i ; - . , , i , , 44 4 . t.sil i , .. %% ._!_........_:„.„...7,....,..1. .. . 4rilh , ,..:„.. !te ,... .• I ..,„ 1.!...., .....,, .. ..,..,, , .,. . . rki 1 1C : rs---7 %.,!-- . / -• / r ° ti� 1 9� - • ��-''yy ..� .i - - 1 Joint Administrative 1 • g Purchasin Assessment 1 1 Final Report 1 August 2008 . 9 1 I PHILIP E. SCALES, CPPO Lead Consultant 1 WILLIAM B. IRISH, FNIGP, CPPO, C.P.M. Consultant • 1 1 NCigigglitigrillicliarlia71118, Purchasing Management Assistance Program 1 1 1 1 Table of Contents Executive Summary • ii Introduction v Methodology vi 1 1 - Organization / Joint Administrative Purchasing 1 2 - Purchasing Overview • 10 3 — Public Procurement Transformation 15 4 - Purchasing Processes 18 5 - Information Technology 26 6 - Business Improvement Plan 31 1 Appendices: A - City: City Personnel Interviewed B - County: County Personnel Interviewed C - City: Benchmark Analysis 1 D - County: Benchmark Analysis E - City: Client Survey Analysis F - County: Client Survey Analysis 1 G - City: Staff Survey Analysis H - County: Staff Survey Analysis I - City and County: Supplier Survey Analysis 1 J - City and County: Job Order Contracting K - City and County: Joint Administrative Purchasing Telephone Survey Results L - City: Central Supply 1 M - City and County: Recommendation Summary N - City and County: Assistance from NIGP for Business Improvement 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report N G Table of Contents i flaohas ing Management AsssfenceProgram 1 EXECUTIVE SUMMARY • ' The City of Yakima and Yakima County, Washington, engaged the National Institute of Governmental Purchasing (NIGP) Procurement Management Assistance Program (PMAP) (the Consultant) to conduct a joint administrative purchasing assessment. As an integral part of this engagement, NIGP conducted a limited scope procurement management review of both the City and County. The typical goals of a procurement management review are to streamline the procurement process and improve client service while maintaining sound public purchasing practices and adequate levels of internal control. The desired ' outcomes for a procurement management review include: • Improvement in client service; • Elimination of non -value added tasks and costs; ' • Accelerating and simplifying the procurement process; • Securing better value relative to the price of goods and services procured; • Improvement of the purchasing process by infusing "best practices;" and • Transition from a "process- based" to a "knowledge /results- based" procurement organization. ' The procurement management reviews established the foundation for determining the feasibility of merging the City and County purchasing functions. The primary purpose of the engagement is to ' determine if there would be operational and financial efficiencies by combining the functions. If there are tangible benefits, staffing requirements, technology enhancements and organization and procedural changes are to be articulated. PART A — Joint Purchasing Organization / Joint Administrative Purchasing The City of Yakima has a centralized /de- centralized purchasing structure, with small purchase transactions less than $2,500 delegated to using departments. Except for delegation of purchases to Public Services, the County has a completely centralized purchasing structure. This structural difference has a considerable impact on performance, which the County will need to address in order to transform its ' purchasing function. The focus of this report is on whether the City and County should establish a joint administrative purchasing office and to determine the feasibility of merging the City and County purchasing functions. The Consultant was only able to identify four such programs currently in existence. Those programs, established between 1961 and 1974, appear to be operating well and are producing the benefits anticipated when they were initially created. The analysis performed by the Consultant believes that there ' is sufficient justification to proceed with the next phase in establishing a joint administrative purchasing program — strategic planning. The strategic planning phase will provide the detailed information necessary for senior management at both the City and County to make a final decision with respect to 1 purchasing consolidation. PART B — Procurement Management Review Purchasing Overview Total purchases by the City of Yakima in FY2007 were $55.4 million. Of that amount, the Purchasing Division was responsible for $23.0 million. Construction projects over $35,000 are delegated to 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Executive Summary ii FLmSasirg Aien agemenrAcsimace Pivgram 1 Engineering and small purchases under $2,500 are delegated to using (client) departments. The annual cost to operate Purchasing in 2007 was $230,213, funding salaries for three employees. The Yakima County Purchasing Department also has three authorized positions, with an annual budget of $205,924. The Purchasing Manager retired in September 2007 and the vacancy has not been filled 1 pending a decision as to whether the City and County should establish a joint administrative purchasing program. Data provided by the County indicates that total purchases in FY2007 were $11.4 million, of which $9.5 million was processed by the Purchasing Department with the balance delegated to Public Services. 1 The Consultant conducted Internet -based supplier, client and purchasing staff surveys as part of this engagement. The responses to the supplier survey were positive, with over 80% of those responding 1 rating both the City and County as either "excellent" or "good" customers. The client survey results were also favorable with both the City and County outperforming national averages. The staff surveys provided insight into the two purchasing organizations. The County was unable to furnish most of the benchmark data requested by the Consultant. Conversely, the City was able to provide most of the data requested. The benchmark data is critical for this report in ' order to estimate the staffing levels required. One critical issue highlighted-by the benchmark analysis was the overwhelming burden of small purchases. This has been partially mitigated at the City because these small purchases have been delegated to using departments. Because County purchasing is completely centralized (excluding Public Services), the staff focuses almost exclusively on processing routine repetitive transactions where purchasing adds little value. Public Procurement Transformation 1 Procurement in both the private and public sectors is undergoing a transformation from a bureaucratic process -based organization focused on control to a knowledge /results -based organization that focuses on 1 outcomes. Major components of procurement reform include: • A shift from processing purchasing transactions to supply chain management; • Shifting primary award criteria from "lowest bid" to "best overall value;" ' • Re- defining the relationship with vendors from transactional to mutually beneficial partnerships: and • Leveraging technology to enable new procurement strategies. Using this as a general guideline, the Consultant has assessed the current status of both the City's and 1 County's purchasing functions. The City has essentially transformed its Purchasing Division to a knowledge /results -based organization. Conversely, the County has not begun the transformation process. 1 Purchasing Processes A consistent theme throughout this report is the administrative burden created by processing low- dollar, ' low -risk transactions, particularly at the County. Eighty-three percent (83 %) of the combined transactions are for less than $2,500 and account for only 11% of the total spend. - 1 Both the City and County have purchasing card programs in place, yet neither has achieved its potential. One of the primary functions of a p -card program is to remove the low- value, low -risk transactions from central purchasing so it can concentrate its efforts on high value, high -risk contracts. 1 Spend analysis, the process of aggregating, cleansing, and analyzing organizational purchasing data to identify opportunities for reducing costs has a long -term potential for saving the City and County millions 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG 1 Executive Summary - iii Purchasing Management Assistance Program 1 1 of dollars. A failure to implement a commodity coding system coupled with inadequacies in the current automated purchasing systems prevent the County Purchasing Department/City Purchasing Division from ' conducting comprehensive spend analysis. The City has the authority to establish job order contracts, a firm -fixed priced, competitively bid, ' indefinite quantity procurement process for small to medium sized construction, renovation and repair projects. Other public sector jurisdictions have documented savings of between 8% and 15% on small /medium construction projects, and reduced the lead time to initiate these projects by 150 -180 days. Information Technology The Consultant conducted a preliminary current system analysis of the City's AIMMS purchasing system ' and the County's Cayenta purchasing subsystem. Respectively, they are currently providing 35% and 30% of the functionality required. The Consultant recommends that whether or not the City and County consolidate purchasing, they cooperate in licensing and implementing an e- procurement solution. 1 Business Improvement Plan ' Normally, the first step in procurement transformation is strategic planning — the process of forming a vision of where the organization needs to head, converting that vision into measurable objectives and performance targets, and crafting a plan to achieve the desired results. Strategic planning applies to the ' adoption of joint administrative purchasing or, if that is not pursued, to procurement transformation at the County. At the City, strategic planning would only apply to specific recommendation such as information technology or p -card optimization. Change management, the people side of change, is also critical to the success of many of these initiatives. 1 This report provides an implementation plan and timetable for twenty-two recommendations, divided into three distinct phases — short, medium and long term. It should be noted that some of these ' recommendations apply to both the City and County, some apply only to one entity, and some are predicated on whether or not the jurisdictions decide to continue pursuing their joint purchasing initiative. 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG Executive Summary - iv � Rerras�gAraa ,�emei„aatsla�,cePm�am 1 INTRODUCTION ' The City of Yakima and Yakima County, Washington, engaged the National Institute of Governmental Purchasing (NIGP) Procurement Management Assistance Program (PMAP) (the Consultant) to conduct a joint administrative purchasing assessment. As an integral part of this engagement, NIGP conducted a ' limited scope procurement management review of both the City and County. The typical goals of a procurement management review are to streamline the procurement process and improve client service while maintaining sound public purchasing practices and adequate levels of internal control. The desired ' outcomes for a procurement management review include: • Improvement in client service; • Elimination of non -value added tasks and costs; ' • Accelerating and simplifying the procurement process; • Securing better value relative to the price of goods and services procured; • Improvement of the purchasing process by infusing "best practices;" and ' • Transition from a "process- based" to a "knowledge /results- based" procurement organization. The procurement management reviews established the foundation for determining the feasibility of merging the City and County purchasing functions. The primary purpose of the engagement is to I determine if there would be operational and financial efficiencies by combining the functions. If there are tangible benefits, staffing requirements, technology enhancements and organization and procedural changes are to be articulated. ' Project Team ' Sue Ownby, CPPO, Purchasing Manager, managed this engagement on behalf of the City of Yakima and acted as overall coordinator with NIGP. Craig Warner, Budget Director, managed this engagement on behalf of Yakima County. NIGP wishes to acknowledge the contributions to this project by both Ms. ' Ownby and Mr. Warner. The following members of the NIGP PMAP team managed this engagement: ' Philip E. Scales, CPPO Lead Consultant, NIGP ' William B. Irish, FNIGP, CPPO, C.P.M. Consultant, NIGP I' Donna T. McCarthy, Ph.D., CPPO, CPPB, C.P.M. PMAP Program Manager In August 2007 as a prelude to this engagement, Sue Ownby, CPPO, created a report analyzing the I' City/County purchasing functions and the possibility of merging. It is not the intent of this report to replicate the comprehensive analysis conducted by the City Purchasing Manager. The two reports should be considered as complimentary, and the reader is strongly encouraged to review both documents. 1 This report fulfills the requirements of the agreement between the City and County of Yakima and NIGP. II �I City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG& I Introduction - u Rnahasnq ManagemmtAssisfantg Pmrpam 1 1 METHODOLOGY 1 Several methods and techniques were used to conduct this Joint Administrative Purchasing Assessment. Specifically, the scope of the project encompassed: • Reviewing relevant State of Washington statutes; • Reviewing applicable sections of the City of Yakima Municipal Code; • Reviewing Chapter 2.40 of the Yakima County Code; • Reviewing City of Yakima Purchasing Procedure Manual; • Reviewing Yakima County Purchasing Manual; • Reviewing City of Yakima Procurement Card Manual; • Reviewing City and County organization charts; • Reviewing City and County position descriptions for purchasing; • Reviewing Purchasing budgets for both the City and County; • Reviewing the State of Washington Charge Card Services Contract utilized by both the City and County; • Reviewing audit findings with respect to the County; • Reviewing City of Yakima Purchasing Division management reports; • Reviewing City of Yakima Central Supply data; • Reviewing other documents provided by both the City and County; • Soliciting salary data from the City and County and comparing that data with benchmark data from the National Institute of Governmental Purchasing; • Soliciting purchasing benchmark data from both the City and County and comparing that data with benchmark data from the National Institute of Governmental Purchasing; • Conducting and analyzing a comprehensive internal client survey of both the City and County; • Conducting and analyzing a purchasing staff survey of both the City and County; • Conducting and analyzing a combined City/County supplier survey; • Conducting interviews with the City and County purchasing staffs; • Conducting interviews with representative City and County client departments; • Conducting interviews with legal, financial and information technology personnel from both the City and County; • Conducting a review of the Automated Inventory Maintenance and Management System (AIMMS) at the City with the assistance of personnel from Purchasing and Information Services; • Conducting a review of the Cayenta Purchasing Subsystem at the County utilizing the published manual; • Assessing the City and County's purchasing web sites; • Meeting with the City Manager and County Commissioner; • Identifying public sector organizations with joint administrative purchasing programs and conducting telephone interviews; and • Identifying applicable national best practices and obtaining detailed information with respect to those best practices. 1111 Project Timeline Prior to commencing onsite data gathering and analysis, the Consultant received background information 1 from both the City and County. Onsite work was conducted April 14 -18, 2008, and consisted primarily of interviews, review of source documents, gathering of statistical data, and discussions with City and County officials. A preliminary debriefing of the findings and recommendations as presented to Mike 1 Leita, Yakima County Commissioner; Dick Zais, Yakima City Manager; Sue Ownby, .CPPO, City Purchasing Manager; and Craig Warner, County Budget Director, on Friday, April 18, 2008. 11 City and County of Yakima Joint Administrative Purchasing Assessment Final Report �TT� Methodology vi l l Rmdamg drarragemarAssisia,un Program Recommendations in this report are presented as Short Term (0 — 6 months), Medium Term (7 — 12 months) and Long Term (over 12 months). Project Constraints ' In spite of the best efforts of the project sponsors and the Consultant, full application of the methodology and consequent impacts on the potential for data gathering and analysis suffered from several constraints. The most serious constraint was the lack of data with respect to purchasing activities, particularly for the ' County. In addition, due to information technology limitations, neither the City nor County had the ability to furnish comprehensive spend data, limiting the ability of the Consultant to accurately project savings as requested by the City Manager. In order to accommodate these constraints and meet the scope of this engagement, the Consultant had to rely more heavily on a higher level of abstraction for analysis and for the generation of some of the recommendations. Since this engagement was intended to reflect a high level assessment of purchasing operations at both the City and County and determine the feasibility of establishing a joint administrative purchasing program, the impacts of these constraints are minimized. 11 1 1 11 1 a 0 1111 0 City and County of Yakima Joint Administrative Purchasing Assessment Final Report d Methodology - vii RimhesrgManegamenrAssismrraaPmgram 1 1 PART A — Joint Purchasing 1 1 - ORGANIZATION / JOINT ADMINISTRATIVE PURCHASING 1 Current Organization Structure City of Yakima I The City of Yakima has a centralized/de- centralized purchasing structure, with small purchase transactions less than $2,500 delegated to using departments. This type of organizational structure is the I most prevalent in municipal governments, and is entirely consistent with the principles of procurement transformation set forth in Section 3 of this report. In addition, most public works (construction) contracts are delegated to Engineering. This delegation, while not unique, is becoming less common. I Purchasing is responsible for construction contracting in 86% and for architect and engineer contracting in 76% of the small municipalities responding to the 2007 NIGP Benchmark Survey. This represents an increase from 62% for both functions in a similar study conducted by the Center for Advanced Purchasing Studies (CAPS) in 2000. I Purchasing is a division within the City Administration Department under the direction of the Assistant City Manager. The Purchasing Division has three employees: Purchasing Manager, Buyer and 1 Purchasing Assistant. Yakima County II With the exception of blanket purchase orders, the Public Services Department has been delegated to purchase all supplies, services and constructions for that department. Otherwise, the County has a I completely centralized purchasing structure, with no delegated authority. Like municipalities, the majority of counties have a centralized/de- centralized structure; the centralized structure being found in only 34% of the counties surveyed. Also, similar to cities, purchasing is responsible for construction I contracting in 89% and for architect and engineer contracting in 83% of the counties in the 2007 NIGP Benchmark Survey. This is an increase from 63% and 50% respectively from the 1999 CAPS survey of counties. III Figure 1.1– Organizational Focus Purchasing is a separate department within the County, reporting directly City of Yakima Yakima County to the Board of County Commis- ' a t(�iy',I'PsR, ,� ,n' ,T sinners. There are three authorized '� Purchasing J I1 i Purchasing positions: Purchasing Manager, ut I Ma a9er, (i� f a Manager , � f �, � i , ray , r, r� ^,� ,uro n e,I4 Program Specialist (Buyer) and i Pu J ^° I Financial Technician. The Purchasing i rchasing q , ,F Purchasi g ' Y I " ,r Staff �` " � � �, I � 1 1 . ` i k,�f�" � tia stff ;� Manager retired in September 2007, �^� p W��i" �� Si — L 9' � �, and it is her retirement that was a 1 Routin e 4.1: 1 i h ;.ib -A4 , Routine 1,%!;4,:: , L.4'V catalyst for this engagement. As of � 1# r rpm Control Control Y g b r � I ��'i {I1 $A Purchases , A r . "y f t" m ° �y t .- _- , � , V,, the date of this report that position ,F �. , remains unfilled, and the two Complex O! uf4 Planning Complex Planning employees currently report to the Purchases i, i ,`I`,, Purchases *OW i County's Budget Director. In addition to purchasing activities, 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG Page 1 of 32 > PWohavngAlattegeman Assistance Program 1 the department was also responsible for being the receptionist for the County's rima telephone lines, rY p , operating an information booth and providing centralized mail services. The information booth has been ' closed and the phone lines automated, leaving only mail services as an additional function. It simply cannot be overstated that the overwhelming burden of processing low- dollar value transactions ' must be addressed at the County before significant improvements can be realized. As depicted in Figure 4.1, the City has achieved an organizational balance by adopting a centralized/de- centralized structure. Conversely, the County Purchasing operation is focused on routine, repetitive purchases, each with little operational or financial risk. They have neither the time nor qualifications to assist using departments ' with complex procurements, let alone engage in higher value activities such as planning and control. Whether the County purchasing function remains independent or is consolidated with the City's, this issue must be addressed through appropriate revisions of staffing, policies and procedures. Joint Administrative Purchasing Background Joint administrative purchasing is an arrangement under which part or all of the purchases of two or more ' governmental units are made by a shared administrative agency (a joint purchasing office) created for that purpose. "Consolidated" purchasing is another name for joint administrative purchasing.' The Consultant was only able to identify four current joint administrative purchasing programs: • City of St. Paul/County of Ramsey, Minnesota (established 1961) • City of Winston - Salem/County of Forsyth, North Carolina (established 1967) • City of Charlotte /County of Mecklenburg, North Carolina (established 1969) 1 • City of Lincoln/County of Lancaster, Nebraska (established 1974) Another well -known joint administrative purchasing program was the City of Louisville /Jefferson ' County, established in 1965. However, Louisville /Jefferson County became a metro government on January 6, 2003. The Consultant conducted a telephone survey of the four joint administrative purchasing programs identified above. The results of that survey are included as Appendix K to this report. All four of the purchasing managers interviewed believe that their consolidated programs are working well. It is 1 interesting that in all four, the City serves as the host agency. Louisville /Jefferson County was the exception, with the County having been the host agency. Benefits There are a number of benefits associated with joint administrative purchasing: • Leveraged buying power: 1 ➢ Lower prices — this may be somewhat mitigated in Yakima by the cooperative purchasing currently conducted by the City and County; ➢ Improved supplier performance — both through increased buying power and better supplier ' analysis. • Increased productivity — eliminate duplication of effort. (For example, both the City and County maintain a vendor's list, a time - consuming process. The vendor list maintenance could be combined 1 and automated.) National Institute of Governmental Purchasing, Inc. Background Information and Guidelines for "Joint Administrative" (Consolidated) Purchasing. 1981. Pg. 1. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG ' Page 2 of 32 Reahating Martagemem QssLslancr Pzglim r • Personnel: ➢ Greater opportunities for professional training and certification; ' > Staff specialization; ➢ Improved career path. • Improved client service — Purchasing acts as a conduit to share knowledge between agencies. ' • Consistency in procedures and documents, benefiting both clients and suppliers. • Shared technology — this could be accomplished without a joint purchasing program. Local suppliers may also benefit through economies of scale. They can register with one entity instead of 1 two; make one sales call; respond to fewer bids with greater potential sales volumes. The Consultant included questions regarding the possible consolidation in the supplier survey. Figure 4.2 shows the response to the question: "The City and County are assessing the feasibility of merging their purchasing • a functions. How would you view this merger ?" Over 53% of the suppliers who responded favor the consolidation. Figure 1.2 — Supplier Perspective on Consolidation of City and County Purchasing Merger ofCity /County Purchasing 45.0% — 40.0% - 35.0% a 30.0% 25.0% a 20.0% 15.0% - 10.0% 5.0% 0.0% Very Favorably Favorably Neutral Unfavorably Very Unfa drably —E—Merger 18.3% 35.4% 39.4% 4.6% 2.3% Potential Impediments One of the keys to establishing a successful joint administrative purchasing program is to identify all of the potential impediments and then develop a plan for mitigating those impediments. The items listed below are common to the establishment of any joint administrative purchasing program. Items that are specific to Yakima will be discussed in greater detail later is this Section. • Legislative: > Statutory Local codes, policies and procedures ➢ Preferences • Business processes 1 • Cultural: ➢ Political; perceived independence of elected officials > Client expectations City and County of Yakima Joint Administrative Purchasing Assessment T1 Final Report of Page Pa 3 o 32 . vv g PFualiasig Allayment AssistanceFrsgam a ➢ Organizational structure — centralized/de- centralized vs. centralized • Perceived degradation of client service a • Staffing: ➢ Number of personnel required ➢ Qualifications of personnel • Information technology • Priorities — Would one agency receive preferential treatment? • Confidentiality; potential conflicts of interest. fl County departments were generally supportive of joint purchasing, while City departments expressed concern regarding potential degradation of service. This highlights one of the major differences between the two organizations — the City's Purchasing Division provides outstanding client support; the County's a Purchasing Department focuses on processing transactions. If a joint purchasing program is established, it is imperative to have sufficient qualified resources so that both organizations can have the same outstanding level of service currently enjoyed by City departments. a Yakima Joint Administrative Purchasing - Analysis and Recommendations a The retirement of the Purchasing Manager for the County provides an excellent opportunity for the City and County to explore the creation of a joint administrative purchasing program. The value to the County is readily apparent. Their purchasing program is completely process- focused, performing clerical 111 functions that provide minimal value to their clients. Conversely, the City has a results -based purchasing program, staffed by highly qualified purchasing professionals. The question throughout this engagement is — are there sufficient benefits for the City to consolidate purchasing with the County? 1 Staffing The City and County each have three purchasing employees. The Consultant's original guesstimate of the number of employees necessary to staff the joint purchasing office was five: Purchasing Manager, Senior Buyer, two Buyers and Purchasing Technician. Upon more detailed examination of the data, the Consultant now believes that the original estimate is both right and wrong. Once the transition period of implementing e- procurement, optimizing p- cards, re- engineering business processes, standardizing documents and other tasks have been accomplished, four employees should be adequate. However, during the transition period of approximately 18 months, an additional buyer will be needed so that D sufficient resources are available. The Consultant recommends that a new permanent position of Senior Buyer be created to manage complex procurements, such as requests for proposals. Another buyer position should also be created. If the intent is to not transfer construction from Public Services /Engineering to Purchasing, the additional buyer should either be contractual or hired on an interim basis. If the intent is to transfer construction, then this position would be permanent. The staffing estimates are predicated on Purchasing not initially processing public works (construction) projects. The City and County did not provide the Consultant with sufficient data to determine the number of employees needed to support construction. It would be possible for the joint administrative purchasing office to support none, one or both of the entities' construction contracting programs. If solicitation of construction contracts is transferred to Purchasing, it would be advisable to do so near the end of the transition period, once the cooperative purchasing of supplies and services has been solidified. It should be noted that RCW 36.32.240 provides: "(1) In any county the county legislative authority may by resolution establish a county purchasing department. (2) In each county with a population of less than one million which exercises this option, the purchasing department shall contract on a competitive basis for all public works...." The additional personnel required in Purchasing to support construction • City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG Page 4 of 32 P1adasingeranagemev Assistance aagram a procurement would result in a corresponding decrease in resources in Public Services and /or Engineering, as applicable. There may be economies of scale which will result in additional savings. 1 The joint purchasing office will also need to re- engineer business processes, particularly those associated with the County, and implement an e- procurement system to achieve the productivity gains necessary to 1 reduce staff. The Consultant has assumed that if a joint purchasing program is established, the current staff at the City would remain and that the City would "host" the consolidated office. Budget Based upon the current budgets for both entities, the Consultant has prepared a preliminary budget for the joint purchasing office, as shown in Table 1.1. 1 It should be noted that if responsibility for construction contracting is not partially or fully transferred to the consolidated purchasing office, the staff should be reduced by one buyer after the transition period of approximately 18 months. That is based upon purchasing activity volumes reported to the Consultant by the two agencies. While the Consultant has reasonably high confidence in the data provided by the City, there is low confidence in the data provided by the County. It is highly probable that a number of County ' departments are "doing their own thing" and circumventing the Purchasing Department, particularly for complex requirements. The County's actual purchasing volumes may be significantly higher than those reported. Once the joint purchasing office has been established and an e- procurement system ' implemented, accurate data can be collected and analyzed to optimize staffing levels. The proposed budget includes a proposed salary adjustment for the Purchasing Manager. Given the additional responsibility of managing procurement for two agencies, it would be reasonable for Human Resources to determine whether the position should be re- classified. A preliminary analysis of salaries based on the NIGP 2007 Compensation Survey indicated purchasing managers of joint administrative purchasing programs are compensated approximately 25% higher; however, certain factors such as the small sample size of joint purchasing agencies, agency sizes, locations, and longevity of incumbents may have impacted these preliminary findings. Should the City and County decide to proceed with joint administrative purchasing, additional research regarding compensation would be warranted. In Section 6 of this report, Business Improvement Plan, and Appendix N, Assistance from NIGP for Business Improvement, the Consultant recommends the following consulting services directly related to 1 establishing a joint administrative purchasing program: Strategic Planning for Joint Administrative Purchasing $27,950 Purchasing Code Development 22,000 Purchasing Regulations 19,980 1 Total $69,930 The costs for these consulting services have been included in the budget in Table 1.1. The proposed budget also includes the one time capital cost for licensing and implementing an e- procurement system, which is estimated to be between $125,000 and $250,000. Section 5 of this report ' addresses the information technology issues in detail. There is more than sufficient justification for the City and County to invest in an e- procurement system, whether or not a joint administrative purchasing office is established. However, the Consultant believes that an e- procurement system is integral to the success of the joint administrative purchasing program. In addition to the consulting services and e- procurement software, there are other one time capital costs estimated by the City to be $25,000 for remodeling and $15,000 for furniture, fixtures and equipment. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG Page 5 of 32 Rac4adir9Maaeger +rem Assistance Prcgram 1 1 Table 1.1- Joint Administrative Purchasin ' Bud - et Anal sis City County Combined . Joint Office Joint Office 1 lari es: FY2008 FY2008 . FY2008 < 18 months > 18 months Sa Purchasing Manager $76,314 $65,863 $142,177 $95,392 $95,392 I Senior Buyer 51,175 51,175 Buyer 46,986 46,986 46,986 46,986 Buyer 42,650 I Program Specialist 36,805 36,805 Purchasing Assistant 37,501 37,501 37,501 37,501 Financial Technician 29,543 29,543 I Temporary Help 1,545 5,000 6,545 Longevity /Deferred 8,000 8,000 8,000 8,000 Salaries Total $170,346 $137,211 $307,557 $281,704 $239,054 1 Benefits $53,114 $42,347 $95,461 $87,892 $74,585 Supplies: I Office and Operating $7,309 $5,000 $12,309 $10,063 $8,357 Small Tools & Equip. 1,000 500 1,500 1,500 1,500 Computer Software 2,500 2,500 1 Supplies Total $8,309 $8,000 $16,309 $11,563 $9,857 Consulting Services $69,930 I Software Maintenance $7,920 Other Services & Charges $16,061 $37,45.3 $53,514 53,514 53,514 I Services Total $16,061 $37,453 $53,514 $123,444 $61,434 Capital Outlay: I Remodeling $25,000 Furniture /Equipment 15,000 E- Procurement System 250,000 I $290,000 Total Expenditures $247,830 $225,011 $472,841 $794,603 $384,930 . 1 I 2 Salary is based upon the average salary for a Senior Buyer from the 2007 NIGP Compensation Survey Report. This average salary is comparable to the midpoint of the City's pay class 978, with a range of $46,918 to $55,431. 3 Based on midpoint. 4 The current salary totals are consistent with the published budgets; however, individual salary lines items may vary I slightly due to the lack of budget detail available to the Consultant. 5 The City's line item for "Items Purchased for Resale or Inventory" in the amount of $6,400 has been deleted in accordance with the recommendation in this report to discontinue Central Supply. I 6 The Consultant did not have sufficient information to analyze each of the line items under this category. The total current amount was simply projected forward. The Consultant believes that the values of the various line items may change but the overall value will remain reasonably consistent. Minor adjustments will not have a material impact on the findings and recommendations. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG 1 Page 6 of 32 Hace ring atanagemeiu aarsmmw Pmjram 1 I will take almost five years for the joint purchasing office to achieve a positive return on investment. However, that ROI is somewhat deceptive as it includes the cost of an e- procurement system which the ' City and County need regardless of whether a joint administrative purchasing office is established. If the cost of the e- procurement system is excluded from the ROI calculation, the positive return for establishing a joint administrative procurement program occurs in two years. Subsequent to the break -even point, the ' estimated annual administrative cost savings in 2008 dollars is $87,911. The most difficult question to be addressed is how the City and County allocate costs for operating the joint purchasing function. 1 It's interesting to note that the Purchasing Department at the County already operates as an internal service fund with costs for purchasing services apportioned to all County departments. Each of the four existing joint administrative purchasing programs has a different method for dividing costs. Activity- based costing was developed subsequent to the establishment of these programs and may provide a more 1 fair and accurate methodology for allocating expenses. Legislative 1 RCW 39.34.010 and RCW 39.34.030 enable the City and County to establish a joint administrative purchasing program. There appear to be two statutory provisions that modestly impair the consolidated ' program: • The County's competitive thresholds are limited by statute; the City may set its own thresholds; • The City may utilize job order contracts for small to medium construction contracts; the County is ' prohibited. While it would be preferable to have consistent thresholds for formal and informal solicitations (which currently apply); different thresholds would pose only a minor inconvenience. The County's inability to utilize job order contracts negatively impacts both productivity and potential savings, but does not 1 constitute a substantive constraint to consolidation. To the extent permissible by state statutes, the City and County should develop consistent policies and business processes. Many of the synergies to be gained through consolidation can be lost if the policies, business processes, contractual terms and conditions, etc. are unique for each agency. It may be beneficial to engage a qualified consultant to assist the City and County in drafting appropriate procurement policies and regulations. Clearly the County needs to migrate from a centralized to a centralized /de- centralized organizational structure and modify regulations and business processes that impair productivity. To create the joint administrative purchasing program, the City and County would enter into an interlocal agreement. One agency (probably the City) would provide management and administrative support, including human resources, payroll, employee benefits, etc. The other agency would pay a fee for utilizing the consolidated services. This may be an over simplification, as either agency could provide some resources, such as office space and information technology. Keys for Success There are a number of keys for successfully implementing a joint administrative purchasing program: • Elected /appointed official active support: ➢ City and County have consolidated Probation Services; 7 Calculated by subtracting the Joint Office annualized budget after the first 18 months of $384,930 from the combined City /County FY2008 budgets of $472,841 (See Table 1.1). City and County of Yakima Joint Administrative Purchasing Assessment NI GP Final Report ` / j ' Page 7 of 32 Primhasrtg Management Assistance Prtg am 1 1 ➢ City strategic direction priority: "Lead, pursue, and encourage opportunities for greater regionalization and coordination of public services and intergovernmental cooperation which best serves all citizens;" ➢ Strong interest by both jurisdictions in consolidating purchasing. • Business processes: ' ➢ Delegate small purchases to using departments at the County; ➢ Extend p -card program to County; optimize utilization of p- cards; ➢ Standardize processes, procedures, documents, etc. • Implement e- procurement. 1 • Develop and implement comprehensive change management program. • Establish clear service level agreement with proper cost allocation methodology. • Professional staffing: 1 ➢ Education, qualifications, experience and professional certification requirements; ➢ Resources for professional development. 1 Recommendation From a macro perspective — does the consolidation of City and County purchasing benefit the citizens? The answer is an unqualified "yes." There are clearly hard savings to be realized through improved productivity, although how those savings are.to be apportioned has yet to be determined. The County also benefits from an almost immediate boost in performance as opposed to what otherwise would 1 probably be a long arduous process. Some benefits identified in this report can be quantified, while others, such as lower prices through leveraged buying power, cannot. Over the last few years; we have seen greater intergovernmental cooperation through the growth of ' national purchasing cooperatives such as U.S. Communities and the Western States Contracting Alliance. These are "piggy- back" type arrangements, where one government bids the contract on behalf of all of the other members of the cooperative, lowering prices and reducing administrative costs. This interest in ' greater cooperation between governments has not yet resulted in the creation of joint administrative purchasing programs. However, severely squeezed for resources, that may be the next evolution. A successful joint purchasing program implementation in Yakima, the first in over three decades, could serve as a model for other local governments. Naturally, the decision to establish a joint administrative purchasing program must be made by the senior 1 officials of both organizations. The Consultant highly recommends proceeding immediately to the next step in establishing a joint purchasing office - strategic planning, the process of forming a vision of program, converting that vision into measurable objectives and performance targets, and crafting a plan to achieve the desired results. While it is imperative that senior staff from both the City and County formulate the strategic plan internally, it is highly advisable to have the strategic planning sessions facilitated by a third party knowledgeable in public procurement. The City and County should establish a cross functional team which includes representatives of purchasing, finance, information technology, law, human resources and key client departments to develop the strategic plan. Some of the issues to be addressed during the strategic planning process include: • Legal: ➢ Establish framework for drafting consistent policies and regulations; ➢ Establish framework for developing uniform documents; ➢ Draft interlocal agreement. • Information technology: ➢ Identify appropriate e- procurement solution; City and County of Yakima Joint Administrative Purchasing Assessment w � Final E?eport dcrigiam Page 8 of 32 11da44asYYg MenagBmenlASSlsd2neg R y a n 1 ➢ Develop e- procurement implementation plan; ➢ Resolve hosting, networking, security and other technical issues. • Finance: ➢ Address integration issues between e- procurement and financial systems; ➢ Establish financial protocols for joint purchasing office; ' ➢ Develop methodology for allocating costs. • Human resources: ➢ Develop position description for Senior Buyer; ➢ Develop recruitment plan for new positions. ' • Facilities: ➢ Location; ➢ Furnishings and equipment. ' • Change management — the application of techniques and tools to manage the people side of change to achieve the desired results with minimal disruptions or negative side effects. • Risk management — identifying risks associated with establishing joint purchasing and a plan on how 1 to mitigate those risks. Upon completion, the strategic plan, along with the interlocal agreement, are presented to the City ' Council and Board of County Commissioners for consideration and a decision as to whether to establish a joint administrative purchasing program. Recommendation: 1 1.1 City and County — Establish a cross - functional team to engage in strategic planning to define the vision and develop an implementation strategy for joint administrative purchasing. [Short term; internal /external] 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NT� Page 9 of 32 P!! A7arq MBn9ge/REA,ASSlS47/KN Pmgmm 1 1 PART B — Procurement Management Review 1 2 - PURCHASING OVERVIEW 1 The region around Yakima was discovered in 1805 by the Lewis and Clark expedition and was initially settled in 1847 when a Catholic mission was established near Ahtanum. The City of Yakima was incorporated in 1883 and became the county seat in 1886. Yakima grew from of a town of 1,535 in 1890 to a city with a population of 54,843 in 1990. Since 1990 the population has increased 51 %, an average of 3% per year, to an estimated 82,940 in 2007. In 1994 the National Civic League gave Yakima one of its ten annual "All American City" designations. The City has a council /manager form of government. For Fiscal Year 2007, Yakima had a total budget of $179.2 million with 723 full -time employees. 1 The County of Yakima was founded in 1865 and encompasses an area of 4,312 square miles. The County is divided into the Upper and Lower Valley regions by the Ahtanum and Rattlesnake Ridges. Mt. Adams, at 12,276 feet above sea level is the highest point in the county. The area is noted for growing apples, hops for beer, and a burgeoning large wine industry. The population of the County is not growing as quickly as the City, increasing 23 %, an average of 1.4% annually, since 1990. The County's estimated 1 population in 2007 was 233,062. The County has a commission form of government. For Fiscal Year 2007, the County had a total budget of $213.8 million with approximately 1,300 full -time employees. 1 Purchasing Division City of Yakima 1 "Purchasing Mission Statement: Quality Service, Responsible Spending. As the centralized purchasing division, we are dedicated to providing excellent, responsive and courteous service to the community by: 1 • Implementing policies of State laws, local ordinances and administrative procedures, assuring the legality of the purchasing process; • Coordinating a uniform procurement system to supply City operations with an uninterrupted Flow of materials and services; • Buying competitively and wisely to obtain maximum value for the communities dollars spent. Promote good, continuous vendor relations, as well as reliable alternate sources of supply; 1 • Training and developing highly competent personnel who are motivated to make the City the Purchasing Division succeed. • Keeping inventory losses, due to deterioration and obsolescence, at a minimum; • Striving towards the completion of a centralized purchasing and receiving division. 1 • In performing these services, the Purchasing division promotes competition, impartiality, conservation of funds, and fair and open operations, done in a manner that ensures accountability, while seeking to realize the maximum value of every dollar. " ' The City of Yakima issued 12,633 purchase orders in FY2007 with a total value of $55.4 million. Using departments have been delegated authority to make small purchases up to $2,500, which accounts for the 1 majority of transactions. Engineering procures architectural /engineering services, and construction contracts in excess of $35,000. The Purchasing Division reported to NIGP that they issued $12.7 million in purchase orders in FY2007. However, the 2008 preliminary City Budget estimates that the dollar value of purchase orders processed was $16.6 million, plus $6.4 million in tenure (term) contracts administered, 8 Source: http: / /www.ci.yakima.wa.us /services /purchasing /; 6 June 2008. City and County of Yakima Joint Administrative Purchasing Assessment Final Report Page 10 of 32 e elenegemervAssistance Privarn 1 for a total annual value of $23.0 million. The Budget document also reveals that Purchasing processed approximately 25 formal bids and 35 informal written quotations. The Purchasing Division also operates ' a small Central Stores with an annual dollar volume of approximately $7,500. The total cost to operate the City's Purchasing Division in FY 2007 was $230,213 of which $207,510 1 (90 %) was for salaries and benefits. There are three employees in the division: • Purchasing Manager • Buyer • Purchasing Assistant t Yakima County "Purchasing, as mandated by RCW 36.32.240, is responsible for conducting the centralized purchasing and property disposal program for Yakima County. The Purchasing Department procures all equipment, supplies, machinery, vehicles, fuels and food items required by County departments. Purchases are made through purchase orders, contracts, and competitive bids. Surplus disposal is accomplished by trade -in and public auction. The Purchasing Department is also responsible for receiving and sorting all mail for the Courthouse; answering the switchboard and directing calls to appropriate departments; and, serves as the main information center for public visitors to the Courthouse. " 1 "The Department of Purchasing has the responsibility of purchasing all p g p ty p g goods and services and incoming and outgoing mail for the departments of Yakima County. The Purchasing Department works to: 1 1. Obtain the best pricing /product value. 2. Facilitate the needs of county departments in achieving their missions. 3. Conduct a fair and open competitive process." 11 1 From data furnished by the County, the Consultant determined that the Purchasing Department issued approximately 3,556 purchase orders in FY2007 with a dollar value of $9.5 million. In addition, Public Services issued 561 purchase orders in the total amount of $1.9 million. With the exception of Public Services, no other County departments have delegated purchasing authority. Earlier this year, the telephone receptionist function was automated and the information center for public visitors to the Courthouse discontinued. The Purchasing Department is operated as an internal service fund. "Costs for purchasing services are apportioned to all County departments (both general fund departments and non - general fund departments) according to the prior year's number of purchase orders issued and requisitions filled. " Total budgeted expenditures in 2007 were $205,924, of which $162,164 (79 %) was for salaries and benefits. There are three authorized full -time employees: • Purchasing Manager (Vacant — Retired September 2007) 1 • Program Specialist (Buyer) • Financial Technician 1 9 The Purchasing Division reports that the difference between $12.7 and $16.6 million is a result of purchase orders issued on behalf of Finance, Municipal Court, City Manager, and Clerk's Office, particularly several large purchase orders by Finance for tax assessments. 70 'Source: Yakima County 2007 Budget. 11 Source: http: / /www.co.yakima.wa.us /purchase /; 6 June 2008. 12 Source: Yakima County 2007 Budget. City and County of Yakima Joint Administrative Purchasing Assessment �� Final Report 1 7." J l Page 11 of 32 1 `s Rrdrasng Waxman Assis6rnePmgram 1 Purchasing Thresholds As shown in Table 2.1, the City and County currently have similar solicitation thresholds. However, the City enables using departments to make purchases less than $2,500, while the County does not. The City is considering increasing the threshold for informal verbal quotations to $5,000 and the threshold for 1 formal solicitations to $50,000. While the City may increase its thresholds by action of the City Council, the threshold for formal solicitations by the County is established by state statute. However, the County could increase the threshold for informal competition to a maximum of $5,000. 1 Table 2.1 Purchasin. Thresholds City q/' Yakima Procurement Type Yakima County ! Dele ated Purchasin. Card Transaction; De]e_ate P.O. Authori < $2 500 $0 ' Small Order; No Competition < $2,500 < $2,500 Informal Verbal Quotation < $10,000 < $25,000 1 Informal Written Quotation < $25,000 < $25,000 Formal Sealed IFB, RFP; Public Advertisement > $25,000 > $25,000 Public Works — Small Works Roster < $35,000 < $35,000 Stakeholder Perceptions Supplier Survey 1 The Consultant conducted an Internet -based supplier survey as a part of this engagement. The City and County mailed notices to their respective suppliers. Two- hundred thirty surveys were completed. An 1 analysis of the results is included as Appendix I to this report. The majority of the suppliers (65 %) conducted business with both the City and County. In general, the responses to the survey were favorable and exceeded the averages of similar surveys conducted by the 1 Consultant. Highlights of the responses include: • Over 80% of the respondents rated both the City and County as "excellent" or "good" customers; • Over 55% of the respondents would prefer to submit bids and quotations through a secure online 1 system; and • Over 53% would view the merger of City and County purchasing to be "favorable" or "very favorable;" less than 5% would view the merger negatively. 1 Client Surveys 1 The Consultant conducted an Internet -based client (using department) survey of both the City and County as part of this engagement. There were 36 responses to the City survey and 35 responses to the County survey. A comprehensive analysis of the results is included as Appendices E and F to this report. 1 Again, the results were generally favorable. NIGP offers a customer survey service to its members entitled Public Agency Satisfaction Survey (PASS). Some of the questions in that survey are comparable to those in the Yakima client surveys, enabling a comparison between the City/County and national 1 averages for municipal or county governments. Both the City and County outperformed the national averages in most categories, including overall performance. 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report Page 12 of 32 Ptorhasing Marragemer+r Assatance Program 1 �I Staff Surveys The Consultant conducted an Internet -based survey of the Purchasing Division/Department staffs with a ' 100% response rate. An analysis of the results is included as Appendices G and H to this report. ' Benchmark Analysis The Consultant has relied upon the data furnished by the City Purchasing Division and County Purchasing Department in preparing this report. The Consultant has compared data obtained from the 1 City and County to unpublished results from a comprehensive benchmark survey conducted by NIGP in December 2007. Results of the benchmark comparisons are in Appendices C and D of the report. The County Purchasing Department was unable to provide the Consultant with most of the benchmark data requested. In addition, most of the data provided appears to be inaccurate. The Consultant utilized data extracted from the Cayenta financial system to develop estimates of purchasing activity. However, this data is compromised because the County routinely deleted blanket purchase order information from the financial system at the end of each calendar quarter. As a result of these issues, the Consultant has an extremely low degree of confidence in the County's benchmark data. The inability of the County to provide accurate data indicates major deficiencies in purchasing processes and the automated system used to support the purchasing function. The Consultant has concerns regarding the ability of senior management to make appropriate decisions based on incomplete or inaccurate information. 1 The City was able to promptly supply the benchmark data requested. There are reporting differences between the data furnished by Purchasing and the data published in the City's 2008 Budget. Those reporting differences have an impact upon how the benchmarks are compared. For example, the I Purchasing Division reported $12.7 million in annual purchases, while the total dollar value of contractual responsibilities, including tenure (term) contracts, is $23.0 million. The former was used to compute the benchmark comparisons in Appendix C, particularly for staffing. Using the $23.0 million, the total city ' purchases per purchasing employee would be $7.7 million (instead of $4.1 million), and the total city purchases per purchasing professional would be $11.5 million (instead of $6.3 million). Because the reporting differences could be readily identified and reconciled, the Consultant has a reasonably high 1 degree of confidence in the City's benchmark data. However, the Consultant does have a concern that the more detailed data needed to effectively manage the purchasing function is not available in the current implementation of AIMMS. 1 One critical issue highlighted by the benchmark surveys is the overwhelming burden of small purchase orders. Both the City and County follow the same general Pareto distribution pattern as other local governments. 1 • City of Yakima: ➢ 76.7% of the transactions are less than $1,000, representing 4.1% of the total dollar value; ➢ 87.8% of the transactions are less than $2,500, representing 7.9% of the total dollar value; 1 ➢ 1.7% of the transactions are greater than $25,000, representing 76.5% of the total dollar value. • Yakima County: ➢ 50.5% of the transactions are less than $1,000, representing 6.0% of the total dollar value; ' ➢ 88.6% of the transactions are less than $2,500, representing 32.2% of the total dollar value; ➢ 0.9% of the transactions are greater than $25,000, representing 46.9% of the total dollar value. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGI'� Page 13 of 32 PlprYiashq Manaye777emAsstis21709 Pty am 1 1 Figure 1.1— Relative Distribution of Purchase Order Volumes and Values I Purchase Orders by Dollar Range e 9 1 City # .. „ f , is City $ - Mi.<_ I I I , I I 1 ' ,;. `a " a �'�i s , s " .as* c y County # , , „ � 1 I i 1 I Count $ 1 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 < $1,000 ■ > $1,000 and < $2,500 I • > $2,500 and < $5,000 • > $5,000 and < $10,000 • > $10,000 and < $25,000 ■ > $25,000 and < $50,000 O > $50,000 and < $100,000 • > $100,000 and < $250,000 1 • > $250,000 and < $500,000 0 > $500,000 I The City has mitigated this issue by delegating routine small purchases to the delegated departments — those numbers are reflected in the data above. Conversely, County Purchasing is overwhelmed with the continuous, relentless requirement to conduct routine, repetitive transactions. Process work is not where I purchasing professionals add value. Value is added in complex contracting, analysis and strategic procurement planning, and with the development of contracting tools so that operating departments can effectively and efficiently order routine requirements themselves. 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Page 14 of 32 I - 1► au c »asap Rla- ar;eme,' Acsdlaxe Prt7rx ^ 1 3 - PUBLIC PROCUREMENT TRANSFORMATION ' The private sector has found that every dollar increase in sales results in only a few pennies profit. However, every dollar saved by procurement goes directly to the bottom line. This simple fact, coupled with new advances in technology, is catapulting purchasing from the back office to a front line strategic role within private sector organizations. This section of the report is a general discussion of procurement reform and best practices to establish a foundation as to how public sector purchasing organizations should be performing. The performance of the City of Yakima's Purchasing Division and Yakima County's Purchasing Department are addressed at the end of this section and in subsequent sections of this report. Government does not think in terms of profit. But the same simple premise remains — every dollar saved by procurement translates to a dollar of additional service that can be delivered to constituents or one less dollar of taxes to be collected. Both in the private and public sectors, the ability of an organization to 1 serve its customers or constituents is dependent upon the procurement function. Procurement emerged as a government function during the age of bureaucracy. Bureaucracy focuses on processes and absolute controls to the virtual exclusion of results and service. Bureaucratic processes add considerable time and cost without adding value. Local governments are under increasing pressures to deliver services with limited resources. All departments, including purchasing, must be able to add value ' to the delivery of services to constituents. In today's environment bureaucratic clerical approaches are no longer sufficient. ' As a result, public procurement is evolving from a highly bureaucratic process -based organization to a customer - focused knowledge /results -based organization. There are numerous factors driving this reform. The first is that using departments now perceive themselves as clients of the services provided by procurement and their expectation with respect to service are increasing. For most clients, time has become the most critical expectation, leading to efforts to substantially reduce lead times. Another reform driver is the desire to eliminate non value -added costs. Nationally, up to 80% of purchasing staff time is spent on transactional buying that adds absolutely no value. 1 In today's marketplace, knowledge is considered to be an organization's most valuable asset. Procurement's role is two -fold: to collect the appropriate information both internally and externally, and then to leverage that knowledge to fulfill the organization's goals. While the primary benefits of electronic commerce are perceived to be faster cycle times and reduced paperwork, the real benefit is the ability to collect and disseminate real -time data (knowledge) to everyone in the supply chain. Certain consistent themes emerge in any discussion regarding procurement reform: • A shift from processing purchasing transactions to supply chain management; ' • Shifting primary award criteria from "lowest bid" to "best overall value;" • Re- defining the relationship with vendors from transactional to mutually beneficial partnerships; and • Leveraging technology to enable new purchasing strategies. Supply Chain Management A number of factors are contributing to decreasing procurement's traditional role of processing transactions. Governments are no longer simply looking at the cost of goods and services purchased, but the entire cost associated with the acquisition process. For smaller individual buys, central procurement adds no measurable value, only time and expense. It therefore makes both good economic and 1 City and County of Yakima Joint Administrative Purchasing Assessment g CIVIGP) Final Report Page 15 of 32 Pomhaa <ngAlanagementAaistanasPrzgmm 1 • operational sense to delegate routine transactional buying to using departments. Freed from the burden of processing routine transactions, procurement assumes a strategic role in managing a government's ' relationships with its suppliers. In many public sector organizations the current relationship between procurement and the using 1 departments is primarily reactive, based almost exclusively upon requisition to acquisition transactions. This relationship needs to become proactive, where the central procurement staff becomes problem - solvers, instructors, consultants, and business - process designers. To perform these functions, procurement personnel must develop a thorough understanding of their clients' needs. Likewise, the clients must not only forecast their needs in advance, but also communicate desired results, not proposed solutions. This will allow procurement to work with the private sector to develop and deliver innovative and cost - effective solutions that achieve their clients' missions. With the change in emphasis, it must be remembered that central procurement delegates authority for routine transactions to the using departments, not the responsibility. The procurement department retains 1 management of supplier relationships and ownership of the integrity and efficiency of the entire acquisition process. Delegation must also include education, application of technology, and quality assurance reviews. 1 Best Value Best value procurement examines the total cost of an acquisition, not simply the purchase price. While the competitive sealed bid remains the preferred method of procurement for most commodities and equipment, the request for proposals is the primary means for soliciting competition for information technology projects, professional services and outsourcing. Requests for proposals include vendor 1 qualifications, past performance, the proposed technical solution, schedule, risk assessment and cost as criteria for selection. Many governments have also implemented problem - oriented solicitations, particularly for complex information technology projects, that define the problem and allow competing 1 vendors to develop solutions. This leads to greater innovation, while reducing the government's risks with respect to cost, schedule and performance. ' Partnerships To avoid the appearance of favoritism, the typical relationship between a government and its suppliers is 1 based upon competing each and every purchase. Therefore, vendors seek to maximize their profits on the few contracts they win by investing as little as possible and performing at the minimal level necessary. The government bears most, if not all, of the financial risks associated with the project or contract. The solution is to establish long -term, mutually advantageous "partnerships" based upon performance. "It's more important to be a significant customer to a few suppliers than to be an insignificant customer to a multiplicity of suppliers." 13 Because the relationship is long -term, each party is willing to invest in 1 efficiencies that reduce costs for both. With long -term partnerships, it is vital to collect data regarding vendor performance and to share that information with suppliers so that they can promptly address any performance deficiencies. 1 13 Wells Calvin Purchasin Agent, City of Houston). "Bucking the System." Interview by John Marcotte g g ty ) g y y hn M otte and Shane Peterson. Government Technology August 2000: 58. City and County of Yakima Joint Administrative Purchasing Assessment Final Report 0 �� Page 16 of 32 °U o4as rg Management Ass stance Pmgtam • 1 . 1 Leveraging Technology I The transformation of procurement from a process -based to a knowledge /results -based organization cannot occur without the proper application of information technology. I Most existing automated purchasing systems for government, which have evolved over the last decade and a half, are designed to support transactional buying. A few were designed for the public sector; most were created for the private sector and then adapted for government. Many are a module or component of a larger integrated financial suite. As such, they support the encumbrance and accounts payable functions 1 to the exclusion of purchasing functionality. The technologies that will have the greatest impact on public purchasing are only now beginning to I emerge. These include electronic commerce, workflow management and supplier . performance. Electronic commerce will have the most profound impact, not only for procurement, but eventually for all aspects of government service delivery. The significant benefits that these technologies offer justify both I the cost and effort of implementation. Current Status 1 There is considerable disparity between the purchasing functions of the City and County. The City has essentially transformed its Purchasing Division to a knowledge /results -based organization. The I significant impediment at the City is information technology — an outdated system that does not support electronic commerce. Conversely, the County has not begun the transformation process. The current status of the two organizations are summarized in Table 3.1 I Table 3.1— Current Status y nfuniit YrrkrmaCou my Desired Cli ent Service Proactive Reactive' Proactive • I .Approach Value-added Bureaucratic Control Value-added Focus Results Process Results Organization 14 Centralized/De- Centralized Virtual I Staff centralized Certified Professional Clerical Certified Professional Small Purchase Process Limited P -Card Blanket Orders Optimized P -Card I Spend Analysis None None Strategic Sourcing Technology Non enabler Non - enabler e- Procurement I 14 Organization structure descriptions: g P • Centralized, in which all or almost all purchasing /contracting is done through one centralized department for the I entire organization. • Centralized/Decentralized, in which some purchasing is done through a centralized department, and some is delegated to using departments. I • Decentralized, in which most purchasing /contracting (over 50% of the dollars) is performed by using departments. • Virtual Centralization, in which there is a centralized contracting process with decentralized execution. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report d Page 17 of 32 I Purrhasing Management Qssluance Program 1 I . - PURCHASING PROCESSES 1 Purchasing Cards Purchasing cards were developed in the late 1980's as a way to help federal government employees I acquire small dollar goods in an efficient and effective manner. The concept quickly migrated to the private sector in the early 1990's. The fundamental goals of a purchasing card program are: • Reduce process cost; I • Increase process efficiency; • Increase convenience for employees; • Reduce time need to obtain goods /services; and I • Reduce number of paperwork errors. As purchasing card programs mature, the organizational goals expand to include: • Obtain better data about spending; 1 • Increase control over spending; • Leverage spending to reduce prices; and • Generate rebates. 16 I Between the 1990's and 2003, purchasing cards evolved from "best practice" to "common practice" for both public and private sector organizations. Since 2003, the focus has been on "controlled growth" of I existing purchasing card spending programs. Current Purchasing Card Programs 1 Both the City and the County have limited purchasing card programs; the City has five cardholders, the County has one in Purchasing. Both the City and the County utilize the State of Washington Charge Card Services Contract with JPMorgan Chase. Table 4.1 compares the City and County purchasing card 1 programs with the results from the NIGP benchmark survey. Table 4.1- Com I arin: P -Card Usa : e at Yakima with Other Public A_ encies 1 i NIGP: Small Cities /8 NIGP Counties� - Cite oft Yakima j . - _ j[ Mdi _ Mean IT I r Mean — Medi1/n1 Yakima l i County 1 Dollar Limit er Transaction $2,319 $2,000 $3,772 ' $2,500 $2,500 N/A I Total Annual Number of Transactions 8.618 5,521 23,030 11,136 220 400 Total Annual Dollar Value 81,199,659 $1,000,000 $7,558,426 $3,050,135 $69,488 $96,500 Avera!eTransaction Value 8237 $217 $535 $305 $316 $241 Number of Cardholders 165 162 412 300 5 1 I Avg. Monthly Send per Cardholder $829 $884 $2,314 $973 3 81,158 $8,042 Percent Purchase Spend via P -Card 3.01% 2.35% 5.02% .22% 0.55% 1.02% I 15 Palmer, Richard J. and Gupta, Mahendra. 2003 Purchasing Card Benchmark Survey Results. RPMG Research Corporation, 2003. Pg. 18. I 16 Palmer and Gupta. 2003. Pg. 38. 17 Palmer, Richard J. and Gupta, Mahendra. 2005 Purchasing Card Benchmark Survey Results. RPMG Research Corporation, 2005. Pg. 22. I 18 Data Source: National Institute of Governmental Purchasing, Inc. 2007 Benchmarking Study (Unpublished). Data Analysis: Procurement Consulting Services, Inc. Small Cities = Municipalities with population < 100,000. Response Count: 5 19 Counties Response Count: 63. 1 City and County of Yakima Joint Administrative Purchasing Assessment . Final Report 1 " ) a Page 18 of 32 Purchnquansgemen tAssioance 1 The City's and County's p -card programs are significantly underperforming when compared to their respective benchmark averages. At the City of Yakima, nearly 77% of all purchase orders are less than $1,000 and 88% are less than $2,500. At the County 55% of all purchase orders, including those issued by Public Works, are less than ' $1,000 and 89% are less than $2,500. Many of these transactions could have been processed through an effective purchasing card program. An August 2002 study by the National Association of Purchasing Card Professionals found that the average cost of the traditional purchase order process, including receiving and payment, was $79.73 per transaction. The average cost of a purchasing card transaction 1 was $16.28, a savings of $63.45 per transaction. The 2005 Palmer and Gupta study which includes both public and private sector organizations, shows similar results, with the traditional process cost of $89.21, a p -card cost of $21.83 and a net difference of $67.38. Recommendations in this report for ' staffing levels in Purchasing are predicated on the productivity gains resulting from instituting effective p- card programs. Impediments to P -Cards The risk of fraud or misuse is one of the greatest impediments to p -card implementation. However, the . perception of misuse has been proven to be far greater than the reality. Purchasing card misuse accounts on average for 0.034% (3.4 "basis points ") or $340 for every $1 million of p -card spending. Improper purchases account for only one out of every 14,925 transactions. Further, the Palmer and Gupta study also showed that 80% of the misuse spending occurred in 12% of the organizations, indicating poor controls in those select few companies. Effective internal controls will prevent fraud and misuse and quickly identify any potential improper purchases so that they can be rectified. The Consultant recommends the City and County review "Auditing and Investigating the Internal Control of Government Purchasing Card Programs," published by the United State General Accounting Office (May 2003), to determine how effective controls can be established. Periodic internal audits and an annual external audit will also reduce the incidence of improper purchases. The external audit should be conducted following the guidelines set forth in the GAO Audit Guide referenced above. Improving the P -Card Program There appears to be a high correlation between p -card technology and program success, confirmed by the 1 2005 Palmer and Gupta report. Virtually all of the high performing p -card organizations NIGP has reviewed utilize card management software that enables real -time self - management, built -in controls, and robust reporting capabilities. The current contract includes PaymentNet. The Consultant has not reviewed the functionality of this system. Implementation of PaymentNet is precluded by the fact that the state contract with JPMorgan Chase expires October 31, 2009. However, the City and County may have the option of implementing the new p -card program with U.S. Bank, including their card management software, AccessOnline, as early as July 2008. There may be a perceived conflict between purchasing via a contract and purchasing via a p -card. a However, the best public procurement practice is to actually combine the two, purchasing items on contract via p -card, preferably using e- procurement. Under this model, centralized purchasing establishes and administers the contractual relationship with the supplier, while routine transactions are fully delegated to end users. P -cards facilitate the ability of using departments to order from established 20 Palmer and Gupta. 2005. Pg. 44. 21 Palmer and Gupta. 2005. Pg. 119. City and County of Yakima Joint Administrative Purchasing Assessment Final Report �G•�IJ Page 19 of 32 l nu,day era segemen,Assutw,ae A y,rm, 11 contracts by use of electronic catalog ordering for such commodities as office, janitorial and computer supplies. Processes that add time and cost, but no value, such as requisitions and purchase orders, can be eliminated. e- Payables While primarily an accounts payable and not a purchasing function, the City and County should consider leveraging the p -card program to facilitate e- payables. Several banks are now offering e- payable solutions that integrate with the organization's financial system. The benefits include improved cash . management, reduction in paper checks and increased rebates. Recommendations: 4.1 City and County - Develop strategy and plan to optimize utilization of p- cards. [Short term; internal /external] 4.2 City and County - Select and implement card management software. [Medium term; internal] 4.3 County - Develop p -card policy and manual; City - Revise p -card policy and manual as necessary to include card management software; City and County - Re- engineer business processes as applicable. [Medium term; internal] 4.4 City and County - Integrate the use of p -cards with term contracts. [Medium term; internal] 4.5 City and County - Explore the use of e- payables. [Medium term; internal] 4.6 City and County - Conduct periodic external audits of p -card program. [Long term; external] • Spend Analysis Currently neither the City nor County conducts any form of spend analysis — the process of aggregating, cleansing, and analyzing organizational purchasing data to identify opportunities for reducing costs. This is both a business process issue and an information technology issue. To effectively perform spend analysis, a commodity coding system such as the NIGP Commodity/Service Code needs to be integrated into the purchasing module. More information on commodity codes is provided in the Information Technology section of this report. In a recent study, the Aberdeen Group reports that public sector organizations can reduce total spending by 2% to 15% through spend analysis. Without conducting a comprehensive spend management analysis, the Consultant is unable to develop accurate estimates of the potential savings. It would be reasonable to assume that the City would probably be on the low end of the estimated range, and the County on the high end. Any savings accrued via spend analysis would be "hard," directly attributable to various expense line items. It should be noted that absent a comprehensive spend management analysis, it will take several years to internally collect the data to fully achieve the projected savings. Recommendation: 4.7 City and County - Implement spend analysis to reduce costs and improve operational performance. [Long term; internal] 22 Minahan, Tim A. et al. Supply Management in the Public Sector. Aberdeen Group and Government Procurement PP g P News: May 2004. City and County of Yakima Joint Administrative Purchasing Assessment Final Report CIVIGP) Page 20 of 32 Purchasing Management AssisgxeProgram Job Order Contracting Job Order Contracting (JOC) is a firm -fixed priced, competitively bid, indefinite quantity procurement process for small to medium sized construction, renovation and repair projects. The City is authorized in RCW 39.10.420 et seq. to award up to two job order contracts with a maximum value of $4 million each. In FY2007, the City awarded 88 contracts for construction projects under $300,000, with a total value of $7 million. The City of Miami Beach, Florida, won the NIGP Best Practices Award in 2005 for "Job Order Contracting (JOC) System for Construction and Maintenance Projects." Their award submittal, which details their success, is included as Appendix J to this report. Miami Beach reported that the lead time to initiate a project was reduced by 150 -180 days. They also reported a hard dollar savings between 8% and 15% on each project. For all practical purposes, the small works roster would be eliminated. JOC was introduced in the United States in 1985 within the Federal Government. There are over 2,000 job order contracts in use nationally at the federal, state and local levels, with over $2 billion in construction projects placed annually. It must be noted that some local governments in Washington have implemented job order contracts without the assistance of an outside consultant. As a result, their programs may not be achieving the level of success anticipated. The City is strongly encouraged to follow the model set by Miami Beach and engage a qualified consultant in order to maximize potential benefits of the program and minimize the internal resources necessary to solicit and administer the contracts. Unfortunately, only counties with a population greater than four hundred fifty thousand are authorized to use the job order contracting procedure. Yakima County is strongly encouraged to lobby for appropriate legislation to enable it to enjoy similar benefits. Recommendations. 4.8 City — Implement job order contracting for small to medium construction projects. [Medium term; internal /external] 4.9 County — Lobby for legislation to authorize Yakima County to use the job order contracting procedure. [Medium term; internal] Blanket Purchase Orders • A "blanket order" is defined as "an arrangement under which a purchaser contracts with a vendor to provide the purchaser's requirements for an item(s) or service, on an as- required and often over-the- counter basis. Properly prepared, such an arrangement sets a limit on the period of time it is valid and the maximum amount of money the may be spent at one time or within a specified period. " The term "open -end contract" or "open" is used by the County Purchasing Department. Blanket purchase orders were primarily created as a means for controlling budgets, thus making them more of a financial tool than a purchasing tool. A using department would request that a blanket order be ' issued to a supplier they frequently used for small purchases. The blanket purchase order would establish the maximum dollar value that could be spent during its term, quarterly in the case of the County. The 23 National Association Sat Purchasing `" of State Purch g Officials. State and Local Government Purchasing, 4 Edition. 1994. Pg. 304. City and County of Yakima Joint Administrative Purchasing Assessment �� w Final Report Page 21 of 32 AxchasingMmemAccskirarProgram O full amount of the blanket order would be encumbered, preventing those funds from being spent elsewhere. As invoices were received, the actual expenditures would reduce the encumbrance. The County does not encumber blanket orders, thereby eliminating their value as a fiscal tool. They have little value as a purchasing tool as blanket purchases are rarely procured competitively. The blanket purchase order is rapidly becoming extinct, being supplanted by purchasing cards, electronic commerce and other more effective tools. This is clearly a process that adds time and cost, but no value. Once a p- card program has been established, the County should discontinue the use of blanket purchase orders. 1 Recommendation: 4.10 County — Eliminate use of blanket purchase orders. [Medium term; internal] Central Supply The City operates a small Central Supply, managed by and located in the Purchasing office, with a total of 39 line- items, 25 of which are active. Most of the items in Central Supply are readily available from commercial sources for next -day delivery. The City purchased $7,477.89 in inventory for the supply room in 2007. A more detailed analysis of Central Supply is in Appendix L of this report. The Purchasing Manager reported that the Purchasing Assistant spends 10% of her time managing Central Thf, h la c op Central Sy, excluding supervision replenisng • suppli es, is $4ere,864. ore t Th e erefore , if bor the City ost to were to erate simply recover uppl the labor cost of operations , they would hi need to mark the items up by 65 %. Clearly, this is an inefficient and ineffective means of conducting business. Recommendations: 4.11 City — Discontinue Central Supply; distribute inventory to using departments or surplus. [Short term; internal] 4.12 City — Where necessary, establish contracts for items currently in Central Supply to provide a continuing source of supply. [Short term; internal] Procurement Planning and Forecasting ' One of the characteristics that distinguishes the City and County is procurement planning. At the County the current requisition to purchase order cycle is entirely reactive — it commences only when the client initiates the process. One goal of procurement transformation is to become proactive. In a perfect world, the Purchasing Department would be able to anticipate the needs of their clients and have the contractual solutions in place before they were needed. ' Procurement planning means becoming an integral part of your client's management team. If the client does not invite purchasing to the table, then purchasing invites itself. Purchasing must be involved in those early client discussions so that it can properly advise its client, leverage the procurement process to 1 provide solutions, and commit the necessary resources. Once the need has been identified, it is necessary to create a procurement plan, including schedule, and then work the plan. While forecasting is used more in manufacturing than in government, it still involves accurately identifying needs based upon both past history and future plans. To a certain degree, master contracts are predicated upon developing accurate forecasts of future needs. City and County of Yakima Joint Administrative Purchasing Assessment Final Report d v ia Page 22 of 32 N ► Remas rg AtaaagemeniASUSrexe asayrrvm 1 At the City, Purchasing staff routinely interacts with their clients, becoming involved in the procurement planning process. The County should recognize that Purchasing's focus is not processing routine paperwork, but rather providing solutions. Recommendation: 4.13 County — Engage in procurement planning and forecasting through proactive client interaction. [Medium term; internal] Performance Measures A fundamental truth is that what gets measured gets done. Currently there are no performance standards for procurement operations. There are no mechanisms in place to capture and report performance. Objective, measurable goals have not been established for Purchasing Division /Department personnel. A suite of efficiency and performance measures, including customer satisfaction, needs to be developed to reflect the transformation objectives of Purchasing. Such internal and external measures are critical not only to drive strategic objectives, but also to enable a program of continuous improvement. Mechanisms for gathering and monitoring performance must be built into the procurement processes and systems. Further, performance standards must be developed in consultation with clients and be made fully visible to them. Performance standards for procurement should measure the key attributes of outcomes, outputs and efficiencies of the business process of purchasing. There should be a strong focus on client service and satisfaction for using departments, on vendor service and satisfaction because they represent a distinct group served by procurement, and on process efficiencies (outputs divided by inputs and cost savings). Finally, there should be a mechanism to celebrate anecdotal successes. Although there is no single magic formula, there exists considerable guidance for setting up performance standards for purchasing. A Balanced Scorecard approach provides an excellent platform for casting operational metrics. Furthermore, in conjunction with NIGP, research staff at Florida Atlantic University had proposed a parsimonious set of public purchasing metrics and validated those with a panel of public procurement experts during the 2003 NIGP Forum. • Efficiency measures ➢ Purchasing budget divided by purchasing volume ➢ Dollars purchased per purchasing employee ➢ Percentage of dollars spent through term contracts and cooperative purchasing • Effectiveness measures ➢ Average cycle time (formal bids) ➢ Average cycle time (informal bids) • Quality measures ➢ Average training hours per employee ➢ Average errors per Purchase Order ➢ Average time to answer complaints Since the application of purchasing cards constitutes a major component in the strategy to eliminate low dollar value transactions, it would be useful to consider additional measurements directly targeting the p- card program such as: 1 ° Cardholder satisfaction with the p -card program • Number of active cardholder accounts • Dollar amount of p -card purchases City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGJO Page 23 of 32 Pwa7agngManagamemAsuuaag9Program 1111 • Number of transactions on p -cards • Average dollar value of p -card purchases • Targeted percent of small dollar transactions charged on p -card • Rebate paid by the card issuer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report C Page 24 of 32 1 Plmm�77asr+y Marrsgemem,4ssLrfanne Pmgrnm 1 1 Recommendations: 4.14 City and County - Establish internally and externally facing performance standards for the Purchasing Division/Department. [Short term; internal] 4.15 City and County - In conjunction with e- procurement initiative, develop the means for gathering, maintaining and reporting purchasing performance measures. [Medium term; internal] 1 1 1 1 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NA Page 25 of 32 Himhas rg AlanagemenlAssiAiApe Auy r n 1 5 e INFORMATION TECHNOLOGY IT as a Business Process Enabler Supply chain management is defined as "the integration of business processes from end user through original suppliers that provide products, services and information that add value for customers. " For local governments, there are several key components to this definition. The supply chain extends from the supplier to the end user; it focuses on relationships as opposed to transactions; and it includes both information and physical product flows. In order to best support City/County operations, the Purchasing Division/Department must be able to access comprehensive, accurate and timely data. If an organization's most valuable resource is knowledge, then for Purchasing there must be a robust information technology system to capture, communicate and report essential data to everyone in the supply chain. Dr. Michael Hammer: "Without the creative use of technology, there is no reengineering. "25 Commodity Code The commodity code is the cornerstone of any automated purchasing system. It is used to register and maintain the vendor file, capture purchase history, maintain specification files, issue purchase orders, and generate management reports. Effective commodity coding systems have a hierarchical structure to both facilitate searching and to enable spend analysis. The City's Purchasing Division is making very limited use of an older edition of the NIGP Commodity /Service Code for its vendor registration process. The City's Automated Inventory Maintenance and Management System (AIMMS) provides limited support of commodity codes; however, this function has not been implemented. Likewise, the County's Cayenta system also provided limited support; however, the County does not utilize any form of commodity coding. The NIGP Code is the most prevalent in use by state and local governments. It was developed by NIGP to meet the specific needs of local governments and is continuously updated. It also provides excellent classification of supplies and services used by governments and a high level of detail to support term contracting and electronic catalogs. To conduct spend analysis as described in Section 3 of this report, a comprehensive commodity code system must be fully integrated with the automated purchasing system. Recommendation: ' 5.1 City and County - License and implement the most current edition of the NIGP Commodity/Service Code to enable procurement tracking and comprehensive spend management. [Long term; internal] Existing Environment — City ' The City of Yakima is utilizing a module of a maintenance management system from The System Works, Inc. (currently Ventyx, Inc.) for Purchasing. The installed version is 17.0 and is self - maintained by the City. Within the City, the system is known as the Automated Inventory Maintenance and Management 24 Giunipero, Larry C., and Sawchuk, Chris. E- Purchasing Plus. Goshen, NY: JGC Enterprises, 2000, p. 101. 25 Hammer, Michael. "Public Sector Reengineering." Interview. By Brian Miller. Government Technology September 1995: 30 -31. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report ) Page 26 of 32 Purchasing M9ntiy72men1AssLMatltvProgram 1 1 System (AIMMS). It is integrated with the City's Keystone Information Systems, Inc. Financials Version 9.0. AIMMS supports remote requisitioning and online approvals (workflow). I Figure 5.1— Purchasing Automation: Client Perspective There were several questions related to the AIMMS I Purchasing Automation - Client Perspective purchasing system in the client survey. Complete 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 results, including comments, are included in Appendix E of 1 Data Entry - Requisition _MIIIIMIMMIIIMMI this report. Table 5.1 Requisition Approval compares the City results with - ■ ' ' i responses to other client I Inquiries surveys conducted by the Report Generation Consultant. Responses range from 1.0 (low) to 5.0 (high). Training I - I I With the exception of "Help Manuals /Documentation Desk Assistance," AIMMS Help Desk Assistance 1 scored consistently lower than ± Y I 1 -- systems implemented by other • PMAP Average • City of Yakima public entities. I The City has a separate vendor management system that was developed in -house in the 1970's and is not integrated with AIMMS. At the time of the onsite work, the Purchasing Department had a limited presence on the City's web site. I The scope of this engagement did not include a detailed examination of purchasing functionalities available in the current AIMMS implementation. However, a preliminary current system analysis I indicates that AIMMS provides only 40% of the functional needs normally required for local government purchasing. Yakima has implemented 88% of the available functions, meaning that the current installed system provides 35% of the functionality required. Generally, organizations seek to achieve not less than I 90% of the required functionality; with 95% or greater considered optimal. The Purchasing Division has reviewed the functionality that has not been implemented, particularly solicitations, and determined that those functions would not improve performance or productivity. Existing Environment — County The County is using a Purchasing Subsystem of their financial system, Cayenta Version 7.4. Initially I implemented in 1993, the system has been periodically upgraded and continues to be supported by the software developer. Functionality such as remote requisitioning, while available, has not been extended to the using departments; therefore, no questions regarding the Cayenta system were included in the I County's client survey. Instead, the County uses an internally developed e -mail based system for requisitions, requiring them to be re -keyed once they arrive in Purchasing. U Again, the scope of the engagement did not include a detailed examination of the current Cayenta implementation. However, a preliminary current system analysis indicates that it provides approximately 37% of the functional needs normally required for local government purchasing. The County has I implemented 82% of the available functions, meaning that the current installed system provides 30% of the functionality required. The Consultant did not contact Cayenta to determine if additional modules or functions are offered. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Page 27 of 32 I -IP- A.lda.' Managernerr: ASS,S r Pl7gratt. 111 Concerns Regarding the Existing Systems Purchasing automation is the replacement of manual operations by computerized methods to assist with managing the internal purchasing functions of an organization. E- procurement comprises the actions taken by a purchasing organization to integrate Internet -based technologies into the role of managing the upstream (supplier) portion of the supply chain in order to reduce costs and time and increase productivity. The primary difference between purchasing automation and e- procurement is that purchasing automation is internal, while e- procurement is external in order to facilitate the communication of information to enable supply chain management. The current implementation of AIMMS and Cayenta support neither procurement automation nor e- procurement; the primary focus is on financial/budget control functions including requisitions, purchase orders, receipts and payments. There is absolutely no support of the solicitation process, contracting or supplier management, all critical 1 procurement functionalities. In reviewing the two systems, there are a number of fundamental aspects of particular concern to the work of Purchasing, including: • Sourcing. Sourcing is a primary value -added procurement function. All of the sourcing functions are currently performed outside the two systems, requiring staff to re -key the data into multiple ' systems. E- commerce functionality is not supported by either system. • Contract Management. Similarly, contract management is a value -added procurement function. Neither system provides robust contract management functionality. • Commodity Management. Commodity coding has not been implemented within either system, precluding spend analysis. • Supplier Management. The City uses a shadow system to maintain its bidders' lists. The Consultant was unable to access the functionality of the County's supplier management system, but believes that Purchasing may not routinely notify suppliers of bidding opportunities. There is no supplier performance analysis functionality. • Electronic Catalogs. Electronic catalog systems provide a means for using agencies to place orders directly with contracted suppliers, completely eliminating the need for hard -copy purchase orders. The value derived from this application will to some degree be dependent on (a) the extent to which it can be integrated with the automated purchasing system for approval, encumbrance, receiving and ' accounts payable; (b) the extent to which purchasing cards can be utilized; (c) the level of detail reporting transaction history; and (d) who maintains the contract data and how. An electronic catalog allows Purchasing to establish and maintain supplier relationships while routine ordering transactions ' are entirely delegated to authorized end users. Utilization data is automatically captured, enabling Purchasing to leverage that knowledge to obtain better prices. Cooperative purchasing is also facilitated. Neither the City nor County currently have this functionality. • Electronic Ordering. Currently it is not possible to send purchase orders to suppliers directly out of ' the two systems by facsimile transmission, e -mail or electronic transmission (i.e., XML). However, 96.8% of the suppliers responding to the survey (Appendix I) indicated that they could receive purchase orders electronically. ' Supply chain management, which includes information flow between either the City or County and their suppliers, simply cannot exist in the current environments. The current processes are primarily manual and paper- driven. This is important simply because information technology is absolutely critical to enable the procurement transformation process. A study of e- procurement in the public sector by the Aberdeen Group found that it: • Reduced prices paid by 7 %; • Improved compliance by 50 %; • Cut process costs by 73 %; and City and County of Yakima Joint Administrative Purchasing Assessment Final Report Nd G Page 28 of 32 d RnMaSng SAsnemant 4ss stancm P2gmm 11 • Shortened the requisition -to -order cycle by 75 %. ' Obviously, the actual results that may be achieved by the City and County may differ considerably from the published studies. However, it should be noted that the results of various surveys in both the public and private sectors have been remarkably similar. • Policy The Consultant recommends adopting policies and /or procedures that specifically authorize the use of electronic commerce similar to the following: 1. Authorization for the Use of Electronic Transactions. The City/County may, to the fullest 1 extent permitted by law, conduct procurement transactions by electronic means or in electronic form including, but not limited to, the advertising and receipt of competitive sealed bids, competitive sealed proposals and informal quotations. Procurement Regulations shall be adopted regarding identification, security, confidentiality and the utilization of digital • signatures in accordance with. RCW 19.34. 2. Reverse Auctions. The City /County may award contracts for supplies and non - professional ' services by reverse auction. During the bidding process, bidders' prices are revealed and bidders shall have the opportunity to modify their bid prices for the duration of the time period established by the solicitation. Award shall be made to the lowest responsive, ' responsible bidder. Procurement Regulations regarding public notice, pre - qualification of suppliers and security shall be adopted. 3. Electronic Posting. Procurement Regulations shall provide for the electronic posting of 1 solicitations, award notices, determinations and other matters related to procurement on a centralized Internet website designated by the City/County for this purpose. ' Electronic Procurement Strategy When combined with a business _process redesign stage at the front end, the effectiveness gains and process efficiencies through electronic procurement are compelling. For example, the use of electronic catalogs backed for payment by purchase cards result in item cost savings and considerable process cost savings per transaction; at the same time, they greatly enhance control and visibility while providing a delegation mechanism for low value transactions. Similarly, the next logical step after making bids and ' RFPs available electronically is to enable online bid receipt: Available and proven technology is available to substantially boost client service and purchasing performance. ' The Consultant recommends that both the City and County migrate from their current purchasing systems to an independent best -in -breed e- procurement solution. Certainly, if the City and County establish a joint administrative purchasing program, having a single e- procurement system will greatly facilitate the t consolidation. If the purchasing programs remain independent, because both entities need a similar solution, it would still be advisable to procure a single shared system, which one of the two entities would then host. There exist e- purchasing systems which support multiple jurisdictions, while allowing for ' some functions, such as contracting to be partially or completely merged. The e- procurement system' would be interfaced with each entity's financial system. An approximate cost for the software, implementation and integration is between $125,000 and $250,000. 26 Minahan, Tim A., et al. Supply Management in the Public Sector. Aberdeen Group and Government Computer News: May 2004. City and County of Yakima Joint Administrative Purchasing Assessment Final Report 1 Page 29 of 32 Rnd ring Ata rsgemenrAssslancr Program 1 It is important to emphasize that implementation of an e- procurement system be considered an integral start-up cost for establishing a joint administrative purchasing program. Otherwise, Purchasing is forced ' to use two completely separate systems, making it far more difficult and labor- intensive to achieve the benefits of consolidating. Once the City and County make a decision as to whether to merge purchasing, the next step would be to develop a strategy and plan for leveraging e- procurement and define the ' functional needs of the system. Recommendations: ' 5.2 City and County — Develop policies and procedures enabling and governing the utilization of electronic procurement. [Medium term; internal] 5.3 City and County - Develop a strategy and plan for leveraging e- procurement. [Short term; 1 internal /external] 1 1 1 1 1 1 1 1 1 1 • 1 1 City and County of Yakima Joint Administrative Purchasing Assessment T, Final Report Page 30 of 32 RmYJesrrA; Management AssakncrA.yma 1 6 e BUSINESS IMPROVEMENT PLAN ' All of the recommendations in Sections 4 and 5 of this report can be implemented whether or not the City and County decide to create a joint administrative purchasing program. In these sections the Consultant has identified several opportunities for business process changes that will benefit the City and County, ' independent of the decision to consolidate. Section 1 focused on joint administrative purchasing. Once fully established, the joint administrative purchasing program provides the potential for $87,911 in annual savings, divided between the City and County. Organization ' What has not been addressed in this report is what actions would be required should the City and County decide not to pursue purchasing consolidation. ' The City has no critical organizational issues. The only decision is whether to transfer responsibility for architect /engineer and construction contracting from Engineering to Purchasing. Transferring it provides a better system of checks and balances. It enables each of the departments to focus on their strengths. Purchasing should also lead the effort for soliciting and implementing job order contracting. As highlighted throughout this report, the County has a number of critical issues, including organization, which require immediate attention. Yakima County needs to transform itself from a process- driven t bureaucracy to a customer - focused, results -based organization. The costs of consulting services that the County would incur related to procurement transformation are estimated at $52,430. Strategic Planning Should the City and County not pursue joint purchasing, the first step in the County's procurement ' transformation would be strategic planning. While it is imperative that the strategic plan be formulated internally by senior administrative staff, it is again highly advisable to have the strategic planning sessions facilitated by a third party knowledgeable in public procurement. The strategic planning sessions should also address change management. The County will need to establish a cross - functional team ' which includes Financial Services, Technology Services, Prosecuting Attorney, Public Services and other key using departments to guide the implementation project. Recommendations: 6.1 County - Establish a cross - functional team to manage the purchasing transformation process based upon the strategic plan and change management strategy. [Short term; internal] 6.2 County - Engage in strategic planning to define the vision and develop an implementation strategy. [Short term; internal /external] 1 6.3 County — Conduct a change readiness assessment and, based on that assessment, develop a change management strategy. [Short term; internal/external] 1 Implementation Plan and Timetable 1 The recommendations in this report are classified as Short, Medium and Long Term in order to reflect a series of progressive phases due to the complexity of the changes proposed. These phases should build City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGIO Page 31 of 32 Purchasing 44144101778171ASSI547X19 Plagram 1 ' incrementally to minimize operational disruptions, and also to ensure that successful completion of one phase establishes a solid foundation for the next phase. Once work commences, it should take I approximately six months to complete the first phase. Phase Two will take approximately six months more. The time necessary to complete Phase Three cannot be reasonably estimated at this time. It includes implementation of more complex operational and technological initiatives. I . A summary list of recommendations is included as Appendix M to this report. An overview of major recommendations against an implementation schedule is shown at Figure 6.1. A more comprehensive plan and timetable should be established during the strategic planning process. Figure 6.1 — Overview o Recommendation g f com datton Haghltghts and Implementation Schedule I 2008 2009 2010 Aug I Sept I Oct I Nov 1 Dec Jan 1 Feb I Mar 1 Apr 1 May 1 June 1 July 1 Aug 1 Sept 1 Oct 1 Nov I Dec Jan 1 Feb I Mar I Apr 1 NV I i I j 1;C Pif see 2 ` x Phase. I � 1 I Phase 1 (Short Term) Phase 2 (Medium Term) Phase 3 (Long Term) Establish cross - functional team Realign organization structure Implement technology I Develop a strategic plan Implement Job Order Contract enhancements Develop change management Eliminate Blanket PO's Implement commodity code program Develop uniform procurement Implement spend analysis Develop e- procurement strategy codes regulations Continue to re= design business Develop p -card strategy Delegate routine transactions to processes. I Expand p -card program using departments Continue change management Discontinue Central Supply Redesign business processes communications Establish performance measures Continue change management Conduct lessons learned I Articulate case for change; communications initiate communications Facilitate feedback sessions to assess and monitor progress 1 Assistance from NIGP for Business Improvement 1 There is a component of ongoing assistance that can be provided by NIGP on a task order basis. Most of the recommendations annotated as requiring "internal/external resources fit into this category. Specific I scope, statements of work, costs and resources would have to be determined for each task order. However, preliminary estimates of resources, timings and cost estimates are included as Appendix N to this report. 1 The only "external" recommendation for which NIGP does not provide assistance is implementation of a job order contracting system. The Consultant recommends that the City contact The Gordian Group (http: / /www.gordian- group.com) for additional information. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report N I Page 32 of 32 • 1 .1 1 1 1 1 a 1 1 Appendix A City of Yakima City Personnel Interviewed 1 1 1 1 1 1 1 > P} H» asing Management Ass istanceProgram 1 PERSONNEL INTERVIEWED ' City Attorney 's Office Jeff Cutter City Manager's Office Dick Zais, City Manager Dave Zabell 1 Finance Office Rita DeBord Cindy Epperson Glenda Godfrey Information Services Ethan Schrank Rick Pettyjohn Fire Department Dave Willson Connie Mendoza Engineering Department Bob Desgrosellier Wendy Leinan Transit Department Ken Mehin Purchasing Department Sue Ownby, CPPO Maria Mayhue, CPPB Susan Knotts 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG Appendix A -Page 1 �► f}adasag Alanageme mACSlsfancgProgram 1 1 1 1 1 1 1 1 1 Appendix B 1 County of Yakima County Personnel Interviewed 1 1 1 1 1 1 NIGPJ 1 �• Ptrn»eung Management AssistanceProgram 1 PERSONNEL INTERVIEWED 1 County Commissioners' Office Mike Leita, County Commissioner Craig Warner ' Technology Services George Helton ' Mike Sloon County Legal Office Paul Mcllrath Stefanie Weigand Cindy Irwin 1 Department of Corrections Steve Robertson Kelly Rosenow Sheriff's Office Ken Irwin Dan Garcia Facilities Services ' Brad Songhurst Reggie Goforth Barb Laurvick Ron Reiker Courts Robyn Berndt Public Services Vern Redifer 1 Gary Eckstedt Dave Veley Carmen Hayter 1 Finance Department /A /P Craig Warner Keri Larson Purchasing Department Rhonda Counts Becki Deel Telephone Interview 1 Debbie Anderson (Retired) City and County of Yakima Joint Administrative Purchasing Assessment Report / \Tr. Appendix B Pagel d ♦ l �/ � Amusing Management Assistance Program 1 1 1 1 1 1 1 1 1 Appendix C 1 City of Yakima Benchmark Analysis 1 1 .1 1 1 1 NIG �' Pu#Masing ManagemenMA,ssistance Program 1 Il CITY DEMOGRAPHICS . 1 Overview: The City of Yakima reported that 12,633 purchase orders were issued in FY2007 in the total amount of I $55,424.719. The Purchasing Division has delegated authority for small purchases less than $2,500 to the using departments. In addition, contracts for architectural and engineering services and construction in excess of $35,000 have been delegated to Engineering. As a result of these delegations, the Purchasing Division procured $12,666,668 in supplies, services and construction in FY2007. Most, but not all, of the 1 remainder is related to public improvements. The automated system does . not track delegated procurements by type (supplies, services, construction or other); therefore, NIGP did not have sufficient data to conduct a benchmark analysis by procurement type. I Organizational Structure: 1 NIGP City of Small Structure Type Description Cities All Cities Yakima I Centralized, in which all or almost all purchasing /contracting is done through one centralized department for the entire organization. 25% 27% No Centralized /Decentralized, in which some purchasing is done through a I centralized department, and some is delegated to using departments. 58% 59% YES Decentralized, in which most purchasing /contracting (over 50% of the dollars) is performed by using departments. 13% 12% No I Virtual Centralization, in which there is a centralized contracting process with decentralized execution. 4% 2% No Reporting Structure: 1 NIGP Cit y of Reporting Type Description Small Cities All Cities Yakima 1 CFO /Director of Finance 50% 56% No General Services or Administration 17% 12% No CEO /City Manager /County Administrator (or Assistant/Deputy) 21 % 23% YES 1 Elected Council or Board 4% 2% No Other 8% 7% No 1 Purchasing Responsibilities: . NIGP City of I Purchasing Buys: Small Cities All Cities 86.2% 80.8% Yakima Construction No Architectural and Engineering Services 75.9% 72.1% No 1 Travel Management 32.8% 34.6% No I - 1 Data Source: National Institute of Governmental Purchasing, Inc. 2007 Benchmarking Study (Unpublished). Data Analysis: Procurement Consulting Services, Inc. 2 Small Cities = Municipalities with population < 100,000. Response Count: 58. 3 All Cities Response Count: 104. I _ City and County of Yakima Joint Administrative Purchasing Assessment pp Final Report T A endixC -Page 1 Amhasi�gManagnmenracsistmaProgram 1 1 ' Purchasing Training: NIGP - Small Cities NIGP - All Cities City o I y f Mean Median Mean Median Yakima Training Hours per Purchasing Employee 32 30 35 30 27 III Training Budget per Purchasing Employee $1,273 $1,000 $1,116 $778 $1,926 1 Percent of Purchasing Budget Spent on Training 1.83% 1.41% 1.46% 1.15% 2.56% 1 Competition Thresholds: NIGP - Small Cities NIGP - All Cities City of 1 Solicitation Type Mean Median Mean Median Yakima Verbal Quotation $2,725 $2,500 $3,275 $2,500 $2,500 Written /Electronic Quotation $13,919 $6,250 $14,437 $9,999 $10,000 I Formal Sealed Bid $27,182 $25,000 $29,558 $25,000 $25,000 Formal Sealed Proposal $26,355 $25,000 $27,903 $25,000 $25,000 Public Advertisement $23,015 $25,000 $30,696 $25,000 $25,000 1 Competition Thresholds 1 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 I Verbal Quotation Written /Electronic Quotation I I Formal Sealed Bid 1 - Formal Sealed Proposal 1 ._. Public Ad'.ertisement 1 l _ _ ■ Sma ll: Mean ■ Small: Median ■AII: Mean • AII: Median •Yakima 1 Surplus Property: NIGP - Small Cities NIGP - All Cities City of I Mean Median Mean Median Yakima Purchasing Manages Surplus Property Program 72.4% 67.3% Yes Surplus Property Revenue $74,774 $43,000 $219,446 $70,772 _ $109,398 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP 1 Appendix C - Page 2 1 1 CITY PURCHASING BENCHMARKS - BUDGET 1 Purchasing - Budget Benchmarks NIGP - Small Cities NIGP - All Cities City of Mean Median Mean Median Yakima I Purchasing Expenditures/ Total City Expenditures 0.33% 0.23% 0.32% 0.21% 0.13% Purchasing Expenditures/ I Total Purchases 1.54% 1.25% 1.46% 0.75% 1.82% Purchasing Employees/ Total City Employees 0.72% 0.61% 0.71% 0.50% 0.42% Purchasing - Budget Benchmarks I 0 0 1.5% 0 O.O 0 A) 0.5/0 1.0% 1.5/0 2.0% 1 Purchasing Expenditures/ Total 1 City Expenditures Purchasing 1 Expenditures/ Total Purchases 1 Purchasing Em ployees/Total 1 City Employees • Small: Mean ® Small: Median • Al: Mean m All: Median • Yakima 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) i Appendix C - Page 3 1 1 CITY PURCHASING BENCHMARKS — STAFFING 1 Purchasing - Staffing Benchmarks NIGP - Small Cities NIGP - All Cities City of Mean Median Mean Median Yakima I Total City Expenditures/ Purchasing Employee $50,986,865 $35,537,678 $49,552,350 $36,666,667 $58,562,092 I Total City Purchases/ Purchasing Employee 8,691,530 6,458,846 11,842,252 10,897,613 4,139,434 Total City Purchases/ Purchasing Professional 14,078,495 10,500,000 18,206,053 15,666,667 6,333,334 1 Purchasing - Staffing Benchmarks 1 (Millions) $0 $10 $20 $30 $40 $50 $60 $70 1 Total City 1 I Expenditures /Purchasing 1 Employee Total City 1 Purchases /Purchasing Employee I Total City Purchases /Purchasing Professional r � 1 • Small: Mean • Small: Median • All: Mean 0 All: Median • Yakima 1 1 1 1 1 4 Purchasing Employee = Professional and Clerical Staff. 5 Purchasing Professional = Administrative and Buying Staff. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report N. l n 1 Appendix C - Page 4 G l 1 1 CITY PURCHASING BENCHMARKS - PERFORMANCE 1 Average Cycle Time - Calendar Days NIGP - Small Cities NIGP - All Cities City of Mean Median Mean Median Yakima I All Purchase Orders 12 5 13 6 7 Informal Written Quotations (RFQ) 13 10 14 6 10 Competitive Sealed Bids (IFB) 66 45 65 49 45 I Competitive Sealed Proposals (RFP) 59 45 43 42 60 1 Average Cycle Time Calendar Days 1 70 - 60 50 - 1 40 30 1 20 10 — 1 All Purchase Orders Informal Written Competitive Sealed Competitive Sealed Quotations (RFQ) Bids (IFB) Proposals (RFP) 1 • Small: Mean 51 Small: Median • AII: Mean ❑ AII: Median o Yakima 1 Procurement Cards NIGP - Small Cities NIGP - All Cities City of I Mean Median Mean Median Yakima Program Statistics Dollar Limit per Transaction $2,319 $2,000 $5,239 $2,000 $2,500 I Total Annual Number of Transactions 8,618 5,521 13,434 11,866 220 Total Annual $ Value $1,199,659 $1,000,000 $3,343,049 $1,500,000 $69,488 Number of Cardholders 165 162 340 184 5 I Program Performance Measures P- Card -to- Employee Ratio 38.8% 36.7% 25.6% 24.7% 0.7% Percent Purchase Spend via P -Card 3.01% 2.35% 2.65% 1.79% 0.55% I Cardholder Activity Measures Monthly Spending per Card $829 $884 $720 $678 $1,158 Monthly Transactions per Card 3.63 3.95 3.71 4.01 3.67 I Average Transaction Value $237 $217 $200 $183 $316 Active Cards 85% 88% 89% 100% 100% 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP i Appendix C - Page 5 1 I CITY PARETO DATA 1 Purchase Orders by Dollar Range $ Avg. Purchase Order Value Total $ Value Transactions Value Transactions Value I < $1,000 $2,245,819 9692 4.1% 76.7% $232 > $1,000 and < $2,500 2,132,564 1398 3.8% 11.1% 1,525 > $2,500 and < $5,000 2,350,146 705 4.2% 5.6% 3,334 I > $5,000 and < $10,000 2,574,321 371 4.6% 2.9% 6,939 > $10,000 and < $25,000 3,746,722 247 6.8% 2.0% 15,169 > $25,000 and < $50,000 3,117,025 92 5.6% 0.7% 33,881 I > $50,000 and < $100,000 4,041,521 60 7.3% 0.5% 67,359 > $100,000 and < $250,000 4,985,553 36 9.0% 0.3% 138,488 > $250,000 and < $500,000 2,794,128 8 5.0% 0.1% 349,266 1 > $500,000 27,436,920 24 49.5% 0.2% 1,143,205 Total $55,424,719 12,633 100.0% 100.0% 4,387 Ascending Descending I Purchase Order Value $ # $ # < $1,000 4.1% 76.7% 100.0% 100.0% $1,000 and < $2,500 7.9% 87.8% 95.9% 23.3% I > $2,500 and < $5,000 12.1 % 93.4% 92.1% 12.2% > $5,000 and < $10,000 16.8% 96.3% 87.9% 6.6% > $10,000 and < $25,000 23.5% 98.3% 83.2% 3.7% > $25,000 and < $50,000 29.2% 99.0% 76.5% 1.7% I > $50,000 and < $100,000 36.5% 99.5% 70.8% 1.0% > $100,000 and < $250,000 45.5% 99.7% 63.5% 0.5% > $250,000 and < $500,000 50.5% 99.8% 54.5% 0.3% 1 > $500,000 100.0% 100.0% 49.5% 0.2% Purchase Orders by Dollar Range T T T T T T T T T Transactions I $ Value 7 I I I � i __w _ .. I 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% O < $1,000 ■> $1,000 and < $2,500 II 1 •> $2,500 and < $5,000 •> $5,000 and < $10,000 ■ > $10,000 and < $25,000 ■> $25,000 and < $50,000 ❑> $50,000 and < $100,000 ■> $100,000 and < $250,000 I •> $250,000 and < $500,000 _ 0> $500,000 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP I Appendix C - Page 6 1 A ,r =as 9x ^ ?cx ^rr _s:ativ'r 'd 1 1 1 1 1 1 1 1 1 Appendix D 1 County of Yakima Benchmark Analysis 1 1 1 1 111 1 ( 7rIG j 1 PwchasiagManagemmlAssataxe Prtigam 1 1 COUNTY DEMOGRAPHICS I Overview: Yakima County was unable to provide summary purchasing data for benchmark analysis. At the Consultant's request, the County created an Excel spreadsheet from the Cayenta Purchasing Subsystem 1 that listed purchase orders issued for the past several years. However, this data was compromised because blanket (County term "open ") purchase orders have been deleted from the Cayenta system at the end of each quarter. 1 Using the blanket order data from the first quarter of FY2008 (which had not been deleted) and the direct purchase order data from FY2007, the Consultant was able to create a rough estimate of total annual I purchases. It should be noted that because of the large number of blanket orders, actual expenditures are probably considerably less than the total value of purchase orders issued. The Consultant's estimate of purchase orders issued by the Purchasing Department is 3,556 in the total I amountof $9,496,957. Public Services also has the authority to issue direct purchase orders. In FY2007 Public Services issued 561 purchase orders in the total amount of $1,884,427. With the exception of Public Services, no other County departments have delegated procurement authority. 1 Organizational Structure: 1 NIGP Yakima Structure Type Description Counties County Centralized, in which all or almost all purchasing /contracting is done through one centralized department for the entire organization. 34% YES I Centralized /Decentralized, in which some purchasing is done through a centralized department, and some is delegated to using departments. 54% No I Decentralized, in which most purchasing /contracting (over 50% of the dollars) is performed by using departments. 6% No Virtual Centralization, in which there is a centralized contracting I process with decentralized execution. 6% No Reporting Structure: 1 NIGP Yakima Reporting Type Description Counties County CFO /Director of Finance 31% No I General Services or Administration 17% No CEO /City Manager /County Administrator (or Assistant/Deputy) 36% YES Elected Council or Board 8% No 1 Other 8% _ No 1 I 'Data Source: National Institute of Governmental Purchasing, Inc. 2007 Benchmarking Study (Unpublished). Data Analysis: Procurement Consulting Services, Inc. 2 Counties Response Count: 63. 1 City and County of Yakima Joint Administrative Purchasing Assessment � Final Report NIGP Appendix D - Page 1 s Ytimiesrig Management Assds bmnProgram 1 1 Purchasing s ng Responsibilities: I NIGP Yakima Purchasing Buys: Counties County Construction 88.9% No I Architectural and Engineering Services 82.5% No Travel Management 28.6% Yes 1 Purchasing Training: NIGP - Counties Yakima I Mean Median County Training Hours per Purchasing Employee 37 20 0 Training Budget per Purchasing Employee $820 $700 $667 1 Percent of Purchasing Budget Spent on Training _ 1.14% 1.00% 0.97% Competition Thresholds: I NIGP - Counties Yakima Solicitation Type Mean Median County I Verbal Quotation $5,179 $1,501 $2,500 Written /Electronic Quotation $14,824 $5,000 N/A Formal Sealed Bid $34,628 $25,000 $25,000 I Formal Sealed Proposal $36,936 $25,000 $25,000 Public Advertisement $38,923 $25,000 $25,000 1 Competition Thresholds 1 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 Verbal Quotation � 1 1 Written /Bectronic Quotation 1 Formal Sealed Bid 1 Formal Sealed Proposal 1 Public Advertisement 1 j , I 1 i . 1 • NIGP: Mean • NIGP: Median •Yakima 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report CIVIGP) 1 Appendix D Page 2 _lb- Rmc»asop Mxnagemew isush e Pwram 1 Surplus Property: I NIGP - Counties Yakima Mean Median County Purchasing Manages Surplus Property Program 57.1% � Yes 1 Surplus Property Revenue $281,656 $97,500 _ $27,845 1 1 1 1 1 1 1 1 1 1 I City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP I Appendix D - Page 3 1 I COUNTY PURCHASING BENCHMARKS — BUDGET I Purchasing - Budget Benchmarks NIGP - Counties Yakima I Mean Median County Purchasing Expenditures/ Total County Expenditures 0.29% 0.17% 0.09% I Purchasing Expenditures/ Total Purchases 1.30% 0.75% 2.45% Purchasing Employees/ Total County Employees 0.62% 0.48% 0.23% Purchasing - Budget Benchmarks I 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 1 Purchasing Expenditures/ Total County Expenditures I Purchasing Expenditures/ Total 111 Purchases Purchasing I Employees/ Total County Employees i I • NIGP: Mean • NIGP: Median • Yakima 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NTTGP I Appendix D Page 4 1 ♦ l - l• .mya9047 M94.991 lAWSLI 2 Prywr 1 COUNTY PURCHASING BENCHMARKS — STAFFING 1 Purchasing - Staffing Benchmarks NIGP - Counties Yakima ' Mean Median County Total County Expenditures/ Purchasing Employee $44,359,982 $43,940,493 $74,108,100 ' Total County Purchases/ Purchasing Employee 13,377,265 9,889,831 3,165,652 Total County Purchases/ Purchasing Professional 18,062,209 13,390,570 4,748,479 Purchasing - Staffing Benchmarks • II (Millions) $0 $20 $40 $60 $80 Total County Expenditures /Purchasing Employee ' Total County Purchases /Purchasing Employee Total County Purchases /Purchasing Professional 1 • NIGP: Mean • NIGP: Median • Yakima 1 1 111 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix D - Page 5 1 I COUNTY PURCHASING BENCHMARKS - PERFORMANCE 1 Average Cycle Time - Calendar Days NIGP - Counties Yakima Mean Median County I All Purchase Orders 4 4 1 Informal Written Quotations (RFQ) 10 9 30 ' Competitive Sealed Bids (IFB) 42 33 40 Competitive Sealed Proposals (RFP) 54 30 45 1 Average Cycle Time - Counties Calendar Days 1 ! 60 50 I 40 30 I 20- - .11111111111— 10 0 All Purchase Orders Informal Written Competitive Sealed Competitive Sealed Quotations (RFQ) Bids (IFB) Proposals (RFP) ' • NIGP: Mean ®NIGP: Median ® Yakima 1 Procurement Cards NIGP - Counties Yakima Mean Median County 1 Program Statistics _ Dollar Limit per Transaction $3,772 $2,500 N/A Total Annual Number of Transactions 23,030 11,136 400 1 Total Annual $ Value $7,558,426 $3,050,135 $96,500 Number of Cardholders 412 300 1 _Program Performance Measures 1 P- Card -to- Employee Ratio 19.1% 15.7% 0.1% _Percent Purchase Spend via P -Card 5.02% 3.22% 1.02% Cardholder Activity Measures I Monthly Spending per Card $2,314 $973 $8,042 Monthly Transactions per Card 4.06 3.84 33.33 Average Transaction Value $535 $305 $241 I Active Cards 81% 92% 100% 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Appendix 6 ' pp � ' PJRJ78$wA/8/19lef17B!w ACSiti7dM'P PwI().T 1 I COUNTY PARETO DATA I Purchase Orders by Dollar Range $ Avg. Purchase Order Value Total $ Value Transactions Value Transactions Value I < $1,000 $567,942 1,799 6.0% 50.5% $316 > $1,000 and < $2,500 2,490,335 1,356 26.2% 38.1% 1,837 > $2,500 and < $5,000 792,594 245 8.3% 6.9% 3,235 I > $5,000 and < $10,000 551,162 87 5.8% 2.4% 6,335 > $10,000 and < $25,000 636,737 40 6.7% 1.1% 15,918 > $25,000 and < $50,000 631,535 17 6.6% 0.5% 37,149 > $50,000 and < $100,000 374,577 5 3.9% 0.1 % 74,915 I > $100,000 and < $250,000 769,309 5 8.1% 0.1 % 153,862 > $250,000 and < $500,000 349,587 1 3.7% 0.0% 349,587 > $500,000 2,333,179 4 24.6% 0.1% 583,295 1 Total $9,496,957 3,559 100.0% 100.0% 2,668 Ascending Descending Purchase Order Value $ # $ # I < $1,000 6.0% 50.5% 100.0% 100.0% > $1,000 and < $2,500 32.2% 88.6% 94.0% 49.5% > $2,500 and < $5,000 40.5% 95.5% 67.8% 11.4% I > $5,000 and < $10,000 46.4% 98.0% 59.5% 4.5% > $10,000 and < $25,000 53.1% 99.1% 53.6% 2.0% > $25,000 and < $50,000 59.7% 99.6% 46.9% 0.9% t > $50,000 and < $100,000 63.7% 99.7% 40.3% 0.4% > $100,000 and < $250,000 71.8% 99.9% 36.3% 0.3% > $250,000 and < $500,000 75.4% 99.9% 28.2% 0.1% > $500,000 100.0% 100.0% 24.6% 0.1% i Purchase Orders by Dollar Range T T - T T T T T 1 Transactions I I I 1 $ Value y I 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ❑ < $1,000 • > $1,000 and < $2,500 I ■> $2,500 and < $5,000 ■> $5,000 and < $10,000 ■> $10,000 and < $25,000 •> $25,000 and < $50,000 ❑> $50,000 and < $100,000 ■> $100,000 and < $250,000 1 •> $250,000 and < $500,000 O> $500,000 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) I Appendix D - Page 7 1 1 1 1 1 . 1 1 . 1 1 Appendix E . • 1 City of Yakima • Client Survey Analysis 1 , ."„-- . x, .. . . ''' , .,.. . ,r1r ,..:' v .< ,': 1 1 1 1 1 1 1 NIA 1 Pua» asing Management AssistameProgram 1 1 CLIENT SURVEY RESULTS I NIGP conducted an Internet -based survey of the City of Yakima using departments as part of this engagement. The Purchasing Division e- mailed a notice of the survey to all using departments. A total of thirty -six (36) surveys were completed. 1 Purchasing Operations I 1. For those purchases made for your department by the Purchasing Division during the past twelve months, please indicate you level of satisfaction for each performance criteria. [Maximum Response: 4.0 - Very Satisfied] I 2. For those purchase made for your department by the Purchasing Division, please rank the following performance criteria by level of importance. [Maximum Response: 6.0] 1 Very Very Response Satisfied Satisfied Dissatisfied Dissatisfied Average Importance Quality of goods and t services 65.7% 34.3% 0.0% 0.0% 3.66 5.27 Prices obtained for goods and services 51.4% 48.6% 0.0% 0.0% 3.51 4.14 I Timeliness of supplier performance /delivery 40.0% 57.1% 2.9% 0.0% 3.37 3.52 Supplier customer I serv 42.9% 54.3% 2.9% 0.0% 3.40 3.37 Timeliness of procurement process 65.7% 31.4% 2.9% 0.0% 3.63 2.97 Supplier qualifications 54.3% _ 45.7% 0.0% 0.0% 3.54 2.53 1 Purchasing Division Client Satisfaction 1 0% o 40% 60% o ° 0% 20% 40% 60% 80% 100% Quality of goods and services I Prices obtained for goods and services Timeliness of supplier pp er performance /delivery 1 Supplier customer service r Timeliness of procurement process I 1 Supplier qualifications • Very Satisfied • Satisfied ❑ Dissatisfied • Very Dissatisfied 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix E Page 1 I - ■ a; . ,. , .4.; , k, a ri 4.,< 'h7 r,A d, 1 1 Purchasing Division Performance III 3. For each criteria listed below, please summarize your experience with the Purchasing Division for the past twelve months. [Maximum Response: 5.0 - Excellent] 1 Response Excellent Good Adequate Fair Poor Average I Expertise and knowledge - of Purchasing staff 85.3% 11.8% 0.0% 2.9% 0.0% 4.79 Communication skills of I Purchasing staff 77.1% 20.0% 2.9% 0.0% 0.0% 4.74 Professionalism and courtesy of Purchasing staff 85.7% 11.4% 2.9% 0.0% 0.0% 4.83 I Accessibility of Purchasing staff 68.6% 25.7% 2.9% 2.9% 0.0% 4.60 Client training regarding 1 purchasing 50.0% 25.0% 25.0% 0.0% 0.0% 4.25 1 Purchasing Division Performance 1 0% 20% 40% 60% 80% 100% a Expertise and knowledge of Purchasing staff t Communication skills of Purchasing staff Professionalism and courtesy of Purchasing staff I Accessibility of Purchasing staff Client training regarding purchasing 1 • Excellent • Good ❑ Adequate ❑ Fair • Poor 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix E - Page 2 1 1 Purchasing Division Customer Service 1 4. For each of the items listed below, please summarize your experience with the Purchasing Division for the past twelve months. [Maximum Response: 5.0 - Strongly Agree] Please begin I each item listed with the words "The Purchasing Division..." Strongly Strongly Response I The Purchasing Division: Agree Agree Neutral Disagree Disagree Average Provides consistent interpretation of policies and procedures 52.9% 47.1 % 0.0% 0.0% 0.0% 4.53 t Provides services within the time promised 64.7% 26.5% 8.8% 0.0% 0.0% 4.56 I Provides service right the first time 58.8% 32.4% 8.8% 0.0% 0.0% 4.50 Understands my specific needs 41.2% 44.1% 11.8% 2.9% 0.0% 4.24 1 Notifies my promptly of delays 38.2% 50.0% 11.8% 0.0% 0.0% 4.26 Processes emergency /rush 1 orders quickly 58.8% 32.4% 8.8% 0.0% 0.0% 4.50 Effectively resolves vendor performance issues 44.1% 41.2% 8.8% 5.9% 0.0% 4.24 I Effectively represents us in disputes with vendors 50.0% 26.5% 23.5% 0.0% 0.0% 4.26 Effectively follows up on I problems 47.1% 41.2% 8.8% 2.9% 0.0% 4.32 1 Purchasing Division Customer Service 0% 20% 40% 60% 80% 100% Interpretation of policies and procedures Rovides services w ithin the time promised I Provides service right the first time I i i Understands my specific needs i Notifies rry promptly of delays 1 Processes emergency orders quickly it Resolves vendor performance issues 11 I Effectively represents us in vendor disputes Effectively follows up on problems • Strongly Agree • Agree ❑ Neutral 0 Disagree • Strongly Disagree 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Appendix E - Page 3 1 1 Purchasing Processes 1 S. For each of the items listed below, please indicate your level of satisfaction. [Maximum Response: 4.0 — Very Satisfied] 1 Very Very Response Satisfied Satisfied Dissatisfied Dissatisfied Average Overall quality level of I City contracts in meeting your operational needs 60.6% 39.4% 0.0% 0.0% 3.61 I Purchasing card program for small purchases 26.7% 53.3% 16.7% 3.3% 3.03 I Delegation of purchasing authority 40.0% 46.7% 13.3% 0.0% 3.27 Excess /surplus 1 property program 25.8% 64.5% 9.7% 0.0% 3.16 1 Purchasing Processes 0% 20% 40% 60% 80% 100% 1 Quality level of City contracts 1 Purchasing card program for small purchases Delegation of purchasing authority 1 Excess /surplus property program - • Very Satisfied • Satisfied ❑ Dissatisfied a Very Dissatisfied 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report C-NIGP) 1 Appendix E - Page 4 a Problem Identification 6. For each type of procurement listed below, please indicate any process or activity that you perceive to be a problem. Problem Identification Delegated: Purchasing: Supplies/ Professional 8 Small Small Services ITB Services Purchases Purchases RFP 42,500 <$25,000 >$25,000 >$25,000 Construction III Specification development 0% 6% 8% 8% 6% Solicitation development 3% 0% 3% 3% 3% Identifying qualified suppliers 0% 3% 3% 0% 3% ll Bid /proposal evaluation process 0% 6% 3% 3% 0% Receiving process 0% 0% 0% 0% 0% Payment process 3% 6% 3% 3% 0% Contract administration 3% 0% 3% 0% 0% 8 Clarity of policies /procedures 3% 3% 6% 6% 3% "Red Tape" 0% 0% 3% 0% 0% Other 0% 0% 0% 3% 0% 1 7. Please provide details from Question 6; list "other" .1. Q P 8 — The system for budgeting and payment is outdated and very slow. Several difficulties with local suppliers who do not receive funds in a timely fashion. I - Sue Ownby is fantastic. However, if she is out of the office, there is no one else available to field questions. M — Were instrumental in allowing us to "piggyback" on existing bids. Also, guided us in utilizing sole source process. 11 II 11 II .1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG& � i Appendix E - Page 5 d fiuro' iasv4lanagemartAcsisfencePrta3ram 1 1 Purchasing Automation I 8. For each of the tasks listed below, please summarize your experience with the AIMMS System. [Maximum Response: 5.0 - Very Easy] Very _ Very Response Easy Easy Moderate Hard Hard Average II Data Entry - Requisition 7.1% 28.6% 50.0% 10.7% 3.6% 3.25 Requisition Approval 6.9% 44.8% 34.5% 3.4% 10.3% 3.34 Inquiries 3.6% 25.0% 46.4% 17.9% 7.1% 3.00 I Report generation 0.0% 17.2% 44.8% 24.1% 13.8% 2.66 AIMMS System Experience 1 0% 20% 40% 60% 80% 100% Data Entry - Requisition , I iiimi Requisition Approval Inquiries ■ 1 I 1 Report generation 1 1 1 • Very Easy • Easy 0 Moderate 0 Hard • Very Hard 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report CNIGP) I Appendix E - Page 6 1 9. For each criteria listed below, please summarize customer support for the AIMMS System. I [Maximum Response: 5.0 — Excellent] Response I Excellent Go Fair Poor Average AIMMS Purchasing Training 3.6% 17.9% od Adequate 25.0% 28.6% 25.0% 2.46 Manuals /Documentation 0.0% 13.8% 17.2% 31.0% 37.9% 2.07 1 Help Desk Assistance 13.8% 37.9% 24.1% 17.2% 6.9% , 3.34 1 AIMMS System Customer Support 0% 20% 40% 60% 80% 100% AIMMS Purchasing Training 1 Manuals /Documentation 1 Help Desk Assistance I I I I I • Excellent • Good ❑ Adequate ❑ Fair • Poor 1 I 10. What do you like most about the AIMMS system? — Have never used it. 1 — I don't! — The system does have the ability to communicate and track purchases for the people up and down t the approval chain. — I don't use the AIMMS system. I — Very minimal use of system. I - The requisition form is easy to use. — Good tracking. 1 — It's relatively easy to use. — I don't have to write out disbursement requests. I — It allows me to do the job I need to do. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report CNIGP) Appendix E - Page 7 PP g 1 — We've had it so long and since all the reports come out in the same format, it is easy to do data comparisons. — Computer based. a — Nothing [2 responsesJ. — Requisitions are easy to create — Not much. — Nothing much I really "like" - I consider it bearable. 11. What do you like least about the AIMMS system? 1 — Not user friendly. — Only one person is authorized to make entries for a 250 employee division. Constant delays in both ordering and payment. — The system is not particularly user friendly, especially if you do not use it constantly. — Very minimal use of system. — I have a difficult time tracking requisition forms through the system. — A little difficult to move around. — Time consuming. — Ability to track individual purchases, to look back on the details of a requisition. — Retrieving data can be challenging. — If you make a mistake you have to start completely over. — Not user friendly, can't look up history without exiting the current purchase order working on, • can't easily duplicate information from line to line on manual PO (when entering a large volume of invoices for the same vendor), get "locked out" and have to call IS to be logged out if you don't exit correctly. — It is not very forgiving when you have errors typing. — Not very, user friendly...It can only do what it is programmed to do... There is no flexibility in generating reports...you take what it gives you... — AIMMS was designed such that engineering had to be fit into the program that was designed for every other division, rather than having the AIMMS system designed to work "with" Engineering. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG1'� Appendix E - Page 8 Pludres/rrg ManagementAssistxe Program 11 — That we cannot use General Ledger accounts numbers therefore we have two sets of accounts. — You can't backspace, or clear typing easily. It might leave funny characters that you don't see on the screen. - Difficult, I do not utilize. — Reports. 1 — Too complicated, not user friendly, difficult learning curve. — It's a very rigid system for users. 12. What would you do to improve the AIMMS System? 9 — Get new system — Expand to each section of a division. 9 — Improve the user friendly nature of the system so that it is self explanatory. — Minimal use...not sure. — Offer training in the use of the system to users. — More windows based, be in more than one module at a time. Get rid of it and start over with a new system. — Make it windows compatible, easier data entry. — Simplify the steps necessary to complete a transaction. — Utilize a different, more user friendly system. 9 — Make it possible to duplicate information from the previous line in a manual PO like you can do in a requisition. — It would be nice to have a Windows based system that is easier to use. — Enhance its functionability. Using it reminds me of the Atari systems available in the early e 1980's. — Get ability to get reporting such that we could track funding, funding sources, fund ownership, a funds spent to date, project spending trends, tie to project completion, etc. — That an account number cannot be changed after approval of a PO. There should be an approval 9 process to go through in order to change an account number. — Make it windows based. City and County of Yakima Joint Administrative Purchasing Assessment Final Report �r Appendix E - Page 9 d Portasng Management Assistance Program 1 1 — Make it more transparent to the users. I — Buy a modern, windows -based system. — Absolutely make it more user friendly. It's taken years and years of experience to get to my 1 level of comfort and even now, I still get stuck and have to call Glenda at Finance. — Add capability to have two screens open simultaneously. 1 Overall Performance 1 13. How would you rate the overall performance of the Purchasing Division for the past twelve months? [Maximum Response: 5.0 — Excellent] Excellent Good Adequate Fair Poor Average 1 Overall Performance 62.5% 34.4% 3.1% 0.0% 0.0% I 4.59 1 Purchasing Division Overall Performance 1 T I 1 I 1 T 1 1 0% 20% 40% 60% 80% 100% • Excellent • Good ❑ Adequate ❑ Fair • Poor 1 NIGP Public Agency Satisfaction Survey Comparison I NIGP offers a customer survey service to its members entitled Public Agency Satisfaction Survey (PASS). Some of the questions in that survey are comparable to those in the City of Yakima's Purchasing Division Client Survey, enabling a comparison between Yakima and national averages for city I governments. Multiple cities have used the PASS survey with 1,405 total responses. Purchasing Operations 1 There were three comparable questions on the PASS survey. Those questions and possible responses are as follows: a. How do you rate the quality of goods and services procured for your department? 1 Very High Quality; Good Quality; Neutral; Poor Quality; Very Poor Quality b. How do you rate the timely responsiveness to your request and needs? Very Responsive; Responsive; Neutral; Occasionally Responsive; Not At All Responsive I c. How do you rate the overall quality level and appropriateness of the requirements (term, annual, etc.) contracts in meeting the needs of your department? Very Appropriate; Appropriate; Neutral; Sometimes Appropriate; Not At All Appropriate 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP i Appendix E - Page 10 �,,,X ,,) drs a w s;a7 -a 1 1 Please note that the Yakima survey had four possible responses (Very Satisfied; Satisfied; Dissatisfied; Very Dissatisfied) while the PASS survey added a fifth response: Neutral. The PASS Average Response I scores have been adjusted to reflect the four point range. Yakima - City /PASS Comparison: Operations 1 Very Very Response Satisfied Satisfied Neutral Dissatisfied Dissatisfied Average Quality of goods Y - City 66% 34% �< 0% 0% 3.66 and services PASS 23% 56% 18% 3% 0% 3.18 Timeliness of Y - City 66% 31 % i 3% 0% 3.63 procurement process PASS quality Y - City 39% 43% 10% 8% 1% 3.28 0 1 Overall 61 /° 39% 0% 0% y 39% �� 0% 0% 3.61 level of City 1 contracts PASS 22% 48% 22% 7% 1% 3.06 II I Yakima - City /PASS Comparison: Operations I 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 1 0 o 0 Y - City N o R PASS O � ° Y - City IIIIIIMIIIMIIIIIIIIIIIIIMMIMIC ti E III - a� a C a) U a) U o F o. 2 PASS '� U ,o Y - City I _ m T 75 o > a'> o PASS O — 1 1 1 1 1 1 1 I • Very Satisfied • Satisfied Cl Neutral ❑ Dissatisfied • Very Dissatisfied I Purchasing Division Performance I There are three comparable questions on the PASS survey. Those questions and possible responses are as follows: a. How do you rate the professionalism and courtesy of our staff? I Extremely Professional /Courteous; Occasionally Professional /Courteous; Neutral; Generally Unprofessional/Discourteous; Extremely Unprofessional/Discourteous b. How do you rate our accessibility when you need us? Very Accessible; Mostly Accessible; Neutral; Occasionally Accessible; Not Accessible I c. How do you rate the effectiveness of the customer training sessions conducted for your staff that have purchasing responsibilities? Very Effective; Effective; Neutral; Somewhat Effective; Not At All Effective I City and County of Yakima Joint Administrative Purchasing Assessment Final Report 7\TIGP) i Appendix E - Page 11 Ptmrasrog 6l8osyeme7r 455ciIrVICe P war 1 I Yakima - City /PASS Comparison: Performance Response A Excellent Good Adequate Fair Poor Average Professionalism / courtesy Y - City 86% 11% 3% 0% 0% 4.83 of Purchasing staff PASS 63% 29% 6% 1 % 0% 4.54 I Accessibility of Purchasing Y - City 68% 26% 3% 3% 0% 4.60 staff PASS 45% 40% 7% 7% 1% 4.22 I Client training regarding Y - City 50% 25% 25% 0% 0% 4.25 purchasing PASS 17% 38% 32% 11% 3% 3.56 1 Yakima - City /PASS Comparison: Performance 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% I i , y o 1 Y - Qty C N 0 Q 1 iii 'FT, PASS -' � a' >., y Y - Qt y II i n t N N 2 PASS a 2rn o, Y Qty c C V 111 U n PASS :i_ 1 1 1 1 1 1 1 • Excellent • Good o Adequate o Fair • Poor 1 I Customer Service There are two similar questions on the PASS survey. Those questions and possible responses are as I follows: a. How do you rate our ability to clearly communicate procurement processes? Very Clearly Communicated; Adequately Communicated; Neutral; Somewhat Communicated; Poorly Communicated. I b. How do you rate our ability to work with you as partners by understanding your needs and working with you towards common goals? Excellent Understanding; Usually Understands; Neutral; Occasionally Understands; Poor 1 Understanding I I City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP 1 Appendix E - Page 12 1 1 Yakima - City /PASS Comparison: C ustomer Service II The Purchasing Strongly Strongly Response Division... Agree Agree Neutral Disagree Disagree Average I Provides consistent Y - City 53% 47% 0% 0% 0% 4.53 interpretation of policies PASS 28% 47% 9% 12% 3% 3.84 Understands my Y - City 41% 44% 12% 3% 0% 4.24 I specific needs PASS 33% 46% 10% 8% 2% _ 4.00 1 Yakima - City /PASS Comparison: Customer Service 1 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% a � I C U y a Y - City 1 N _ c O 0 c N O N d M 'o a PASS :.. C U U 2 N Y - City N aa)i - v Q c c m PASS ' 1 lo 1 1 1 1 1 • Strongly Agree • Agree 0 Neutral ❑ Disagree • Strongly Disagree I Overall Performance I There is a comparable question on the PASS survey: How do you rate your overall satisfaction with the quality of our service? Possible responses are: Extremely Satisfied; Satisfied; Neutral; Dissatisfied; and Extremely Dissatisfied. 1 Yakima - City /PASS Comparison: Overall Performance Excellent Good Adequate Fair Poor Average 1 Yakima - City 62.5% 34.4% 3.1% 0.0% 0.0% 4.59 PASS 25.9% 57.5% 10.5% 4.8% 1.3% 4.02 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report (IVIGP) i Appendix E - Page 13 F 111 Yakima - City /PASS Comparison: Overall Performance I 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 Yakima - City 1 i I 1 PASS 1 ■ Excellent ■Good ❑ Adequate ❑ Fair • Poor Client Comments 14. What does the Purchasing Division do well? Where does it add value in assisting your I department? — Always there to help when called. Il — They are willing to assist with issue at any time. I - Responds to inquires and helpful in large purchases. — The Division is very receptive to requests for assistance with complex tasks such as RFP's. It offers clear explanation in addition and composition of specialized documents related to large 1 purchases and contracts. — Follow -up and information sharing. I - Always very informational...always leading us to right direction for ordering. I - Customer service. They know the system and are very willing to help or provide service. — Contracts are good, better price. 1 — They are always extremely responsive to our needs, especially in a time - crunch. 1 — It provides guidance in seldom used processes and those times when bids must be received. They provide me with confidence and assure that I am following the process correctly. — Timely, efficient and professional service. 1 — They promptly respond to requests and are quick to assist us. 1 — What ever I need to order they are always ready to help and make sure I have the right product. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report 7E-P' Appendix E -Page 14 - 1 a,zr a 444-,90ene'.t 4scst,M t =•r ', ' O — If purchasing agrees to move forward, then we get little resistance from other managers on whether we can acquire the item.... — They know the rules and regulations very well and how to apply them. D - Quickly solve any issues we have. • — Following federal grant requirements. — Establish the contracts and guidelines, something we don't have time to do. — Purchasing staff (at City Hall) are excellent resources for our needs. The system breaks down our here due to staff /system issues. — Assistance in major purchases has been excellent. — Purchasing staff are always so helpful with information and ideas. They are accessible and responsive as well. — They are quick to respond to questions and assistance from start to finish is good. Record keeping is also very good. 15. How do you think your priorities and objectives on behalf of your department are the same as those of the Purchasing Division? How are they different? — Different levels of spending authority. — The Purchasing Division attempts to assist the Department effectively and quickly, but has to weigh our priorities against those of other departments when determining the order of business. Our department's interest usually lies in making our issues the top priority in the order of business. - They are very helpful and eager to assist. - They aren't. Purchasing is a valuable tool for us. — We are all interested in making the purchasing experience a smooth one. — Close. — They are very easy to work with. They provide on the spot guidance. They have assisted in researching available supplies. — I think the staff treats our department like they are working specifically for us and not like we are a "thorn in their side." — Both Departments go through almost the same process to have items purchased. Both care a great deal on how things are taken care of. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG Appendix E Page 15 RarimaigManagema *Assist:w eP,ayram 11 — We both look for value and price. They always want us to take the low bid, which may not be in our best interest.... — Our priorities are the same in that we want to help our "customers" as best we have the time and ability. They are different such that when "projects /procurement" comes to our division it is due a to it being bigger than Purchasing handles according to City/State Guidelines/Laws. This can put a great burden on the Engineering Division. It is not due to Purchasing pushing things onto us that they can't or won't do, but due to rules /laws out of their control. City Purchasing Guidelines place "projects /procurement" onto our division due to dollar amounts involved. The "project /procurement" could be for relatively small or for large amounts of City, State or Federal funds, but the impact is often such that unplanned "projects /procurement" cut into our limited staff available that already has a full plate of high - priority projects plus a multitude of other responsibilities. — We just want to get things asap. — I believe we get excellent support from the City Hall Purchasing Dept. Support at the Public Works level is a stumbling block and does not support departmental needs. — Purchasing staff treat us as though our procurement needs are their needs as well. - I think that we both want to stay within the legal limits set. I don't know of any place where they are different. 16. List the biggest problems, time wasters, and/or inefficiencies you confront on the purchasing process. — Having to produce legislation to surplus items. - Establishing vendors paperwork, responding to outstanding bills once a PO has been established. - A backlog of work can delay bids and/or purchases from taking place as quickly as might otherwise be the case. — Have had all good experiences with large and small purchases. — The biggest timewaster is when vendors have to register with Purchasing each time before they can perform a job for the city. — Figuring out what we want or need — Just using AIMMS - -very time consuming. — Going "out to bid." — The biggest problem has been with the distribution of some previous Purchasing functions to the various departments, most notably the office supply ordering. This has actually resulted in less 1 control for our department than the previous system. — The AIMMS System the way it is currently. City and County of Yakima Joint Administrative Purchasing Assessment Final Report Appendix E - Page 16 J[ ParhasbghlarragemswAssimrePavan; 1 — Having to re -entry account numbers and other information on multi -item orders. - Meeting the requirements...has to be over this or under that...Need more quotes... — Using new vendors that aren't in the system yet. — Public Works purchasing. — They are all mandated and cannot be adjusted by our local purchasing people. 111 17. What suggestions do you have for improving the purchasing .f P g P g rocess? P — Allow authority to purchasing to make decisions on procurement and surplusing of items easier. — I would like to see individual departments have the ability to seek and receive authorization to handle purchases directly when such purchases involve specialized equipment or supplies unique to that department. This would be particularly useful when specialized knowledge is required to adequately assess the equipment's ability to meet departmental requirements. — Form a list of approved vendors, allowing them to perform work without all the paperwork hassles. Make the list good for a defined period of time (more than one year). 111 — Better enforcement of the contract provisions. D — No suggestions, I think the current purchasing staff is very efficient and helpful. — Let them do their job, they do it awesome - Give us the flexibility to handle routine things ourselves...designate individuals from each department to be responsible for the paper trail... — Provide more staff to handle the surprises that come to the Engineering Division. — Revise system at Public Works — Upgrade AIMMS. — I can't think of anything at this time. — Make sure that they have adequate staffing levels to deal with the amount of work that they have to complete. 18. Comments; clarifications to earlier answers. — Good to have them when you are audited... City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix E Page 17 Purchasing AlartagerruAsstsHncn Program 1 11 1 1 1111 1 11 1 Appendix F 'y F 1 County of Yakima 'k 4, Client Survey Analysis 1 1 1 1 1 1 i NIGH' Pumhasrng Management Assistance Program 1 1 CLIENT SURVEY RESULTS I NIGP conducted an Internet -based survey of the County of Yakima using departments as part of this engagement. The Purchasing Department e- mailed a notice of the survey to all using departments. A total of thirty-five (35) surveys were completed. 1 Purchasing Operations I 1. For those purchases made for your department by the Purchasing Department during the past twelve months, please indicate you level of satisfaction for each performance criteria. [Maximum Response: 4.0 - Very Satisfied] 1 2. For those purchase made for your department by the Purchasing Department, please rank the following performance criteria by level of importance. [Maximum Response: 6.0] 1 Very Very Response Satisfied Satisfied Dissatisfied Dissatisfied Average Importance I Quality of goods and services 55.9% 44.1% 0.0% 0.0% 3.56 5.10 Prices obtained for goods and services 42.4% 57.6% 0.0% 0.0% 3.42 4.68 1 Timeliness of supplier performance /delivery 51.5% 48.5% 0.0% 0.0% 3.52 3.93 Timeliness of 1 procurement process 42.4% 51.5% 3.0% 3.0% 3.33 3.33 Supplier customer service 48.5% 51.5% 0.0% 0.0% 3.48 2.93 1 Supplier qualifications 41.2% 58.8% 0.0% 0.0% - 3.41 1.57 1 Purchasing Department Client Satisfaction 0% 20% 40% 60% 80% 100% Quality of goods and services I Prices obtained for goods and services Timeliness of supplier performance/delivery , 1 1 I Timeliness of procurement process Supplier customer service Supplier qualifications ■ Very Satisfied ■ Satisfied 0 Dissatisfied • Very Dissatisfied 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) 1 Appendix E - Page 1 1 1 Purchasing Department Performance 1 3. For each criteria listed below, please summarize your experience with the Purchasing Department for the past twelve months. [Maximum Response: 5.0 - Excellent] 1 Response Excellent Good Adequate Fair Poor Average I Expertise and knowledge of Purchasing staff 65.7% 17.1% 11.4% 5.7% 0.0% 4.43 Communication skills of Purchasing staff 48.6% 31.4% 8.6% 11.4% 0.0% 4.17 ' Professionalism and courtesy of Purchasing staff 51.4% 25.7% 17.1% 5.7% 0.0% 4.23 I Accessibility of Purchasing staff 57.1% 31.4% 11.4% 0.0% 0.0% 4.46 Client training regarding 1 purchasing 29.4% 35.3% 20.6% 8.8% 5.9% _ 3.74 1 Purchasing Department Performance 0% 20% 40% 60% 80% 100% I Expertise and knowledge of Purchasing staff ® I Communication skills of Purchasing staff -® Professionalism and courtesy of Purchasing staff ® I Accessibility of Purchasing staff i 1 Client training regarding purchasing ® 1 • Excellent ■ Good ❑ Adequate ❑ Fair • Poor 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix E - Page 2 1 1 Purchasing Department Customer Service 1 4. For each of the items listed below, please summarize your experience with the Purchasing Division for the past twelve months. [Maximum Response: 5.0 - Strongly Agree] Please begin I each item listed with the words "The Purchasing Department..." The Purchasing Strongly Strongly Response I Department: Agree Agree Neutral Disagree Disagree Average Provides consistent interpretation of policies I and procedures 42.9% 37.1% 11.4% 8.6% 0.0% 4.14 Provides services within the time promised 37.1% 57.1% 5.7% 0.0% 0.0% 4.31 I Provides service right the first time 40.0% 48.6% 8.6% 2.9% 0.0% 4.26 Understands my specific needs 37.1% 37.1% 20.0% 5.7% 0.0% 4.06 1 Notifies my promptly of delays 34.3% 34.3% 20.0% 8.6% 2.9% 3.89 Processes I emergency /rush orders quickly 54.3% 28.6% 17.1% 0.0% 0.0% 4.37 Effectively resolves I vendor performance issues 45.7% 28.6% 17.1% 5.7% 2.9% 4.09 Effectively represents us in disputes with vendors 40.0% 25.7% 22.9% 5.7% 5.7% 3.89 1 Effectively follows up on problems 45.7% 31.4% 11.4% 11.4% 0.0% 4.11 1 Purchasing Department Customer Service I 0% 20% 40% 60% 80% 100% Interpretation of policies and procedures -® I Provides services w ithin the time promised Provides service right the first time 1e i 1 Understands my specific needs Notifies my promptly of delays 1 Processes emergency orders quickly Resolves vendor performance issues Effectively represents us in vendor disputes Effectively follows up on problems I --'-- . • Strongly Agree • Agree ❑ Neutral o Disagree • Strongly Disagree I City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP 1 Appendix E Page 3 ->, a, ''.a� - ,( Rr,aW e',e,-Y�:.1,4,ev,Arg 1 1 Purchasing Processes 1 S. For each of the items listed below, please indicate your level of satisfaction. [Maximum Response: 4.0 — Very Satisfied] 1 Very .. Very Response Satisfied Satisfied Dissatisfied Dissatisfied Average ' Overall quality level of County contracts in meeting your I operational needs 36.3% 58.5% 2.9% 2.9% 3.26 Purchasing card program for small purchases 22.6% 67.7% 6.5% 3.2% 3.10 I Delegation of purchasing authority 37.5% 59.4% 3.1% 0.0% 3.34 Excess /surplus 1 property program 30.3% 54.5% 15.2% 0.0% 3.15 Purchasing Processes I C I 0% 20% 40% 60% 80% 100% i Quality level of County contracts 1 I 1 Purchasing card program for small purchases I I Delegation of purchasing authority I I Excess /surplus property program 1 • Very Satisfied • Satisfied ❑ Dissatisfied • Very Dissatisfied 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP I Appendix E - Page 4 1 R, • .^. ao- y^M,ana�eorear4cs:;�:r, - r F•.�;.�. III 111 Problem Identification m 6. For each type of procurement listed below, please indicate any process or activity that you perceive to be a problem. • III Problem Identification Purchasing: Supplies/ Professional m Small Services Services Purchases ITB RFP <$25,000 >$25,000 >$25,000 Construction Specification development 6% 6% 11 % 6% III Solicitation development 3% 6% 11% 3% Identifying qualified suppliers 6% 3% 3% 0% W Bid /proposal evaluation process 3% 11 % 9% 0% Receiving process 3% 0% 0% 0% Payment process 3% 0% 3% 0% Contract administration 6% 3% 9% 3% Clarity of policies /procedures 14% 9% 14% 11 % "Red Tape" 11% 9% 9% 0% m Other 6% 6% 9% 3% m 7. Please provide details from Question 6; list "other "problems. — Currently the County does not have a Purchasing Department with much knowledge of the laws. That makes it difficult when you need assistance in issuing a RFP. I was able to contact the prior 111 Purchasing Manager and had confidence in her answers. — I was not involved in ordering items of these amounts. m — The waste of time compared to money saved when having to go to a supplier (store), find what you need, document the price and specifications, physically go to County Purchasing, obtain a requisition, return to the store, receive the item, process the paperwork required by Purchasing at the store with a clerk who doesn't know what to do, take the paperwork back to County Purchasing ... there's got to be a better way. Too much time is wasted on process. D — I feel that departments need more training /education in the area of RFP's, bids, etc. — The solicitation of qualifications, although advertised by Purchasing Dept, is administered by another and specialized to their needs with no involvement of other users. 1 — One example: I ordered a new photo program. We needed a new PC and monitor to accompany D the software. The photo software vendor could provide the least expensive PC and monitor. Purchasing would not let me order the PC and monitor from the software company, because it "appeared" to be a package deal. I had to resubmit my software order, AND order the PC and 1l1 monitor from another vendor for a higher cost. Another: We wanted to order a load of gravel. It only needed to be delivered to our office, and we would use it for a project. The Small Works roster was required, even though this was strictly a delivery, not any type of work project. 1 City and County of Yakima Joint Administrative Purchasing Assessment C-IV-IG& Final Report PP g A endixE -Pa e � Razriayrny ,tlerwyame,tarsstanctr arrgem 1 Eventually, going over the head of purchasing, we were able to work the problem out. This may all have changed in the past year, due to personnel changes in purchasing, but I haven't had an I opportunity to order any items of a similar nature since the change. — Small Works Projects: A unit of county government that doesn't pay facility maintenance fees is I required to write a contract with the vendor for services, regardless of the price. This is called a Small Works Project. The purchasing department has no templates for these contracts and they have to be reviewed by the county prosecuting attorney before approval with the board of county 1 commissioners. Being forced to wait for authorization for a vendor to install security latch plates on a couple of doors at a cost of $250 should never take 2 months. I Overall Performance I 8. How would you rate the overall performance of the Purchasing Department for the past twelve months? [Maximum Response: 5.0 — Excellent] I Excellent Good Adequate Fair Poor Average Overall Performance 60.6% 21.2% 12.1% 6.1% 0.0% 4.36 1 Purchasing Department Overall Performance T T T 1 1 1 0 0l0 20% 40 °l0 60% 80% 100% • Excellent • Good p Adequate p Fair • Poor J 1 111 NIGP Public Agency Satisfaction Survey Comparison I NIGP offers a customer survey service to its members entitled Public Agency Satisfaction Survey (PASS). Some of the questions in that survey are comparable to those in the County of Yakima's Purchasing Department Client Survey, enabling a comparison between Yakima and national averages for city governments. Multiple counties have used the PASS survey with 629 total responses. I Purchasing Operations I There were three comparable questions on the PASS survey. Those questions and possible responses are as follows: a. How do you rate the quality of goods and services procured for your department? 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report rG n) I Appendix E - Page 6 P;s»asr Ma ; 1.- sta F` ^r,;,- 1 1 Very High Quality; Good Quality; Neutral; Poor Quality; Very Poor Quality b. How do you rate the timely responsiveness to your request and needs? I Very Responsive; Responsive; Neutral; Occasionally Responsive; Not At All Responsive c. How do you rate the overall quality level and appropriateness of the requirements (term, annual, etc.) contracts in meeting the needs of your department? I Very Appropriate; Appropriate; Neutral; Sometimes Appropriate; Not At All Appropriate Please note that the Yakima survey had four possible responses (Very Satisfied; Satisfied; Dissatisfied; 1 Very Dissatisfied) while the PASS survey added a fifth response: Neutral. The PASS Average Response scores have been adjusted to reflect the four point range. I Yakima - County /PASS Comparison: Operations Very Very Response Satisfied Satisfied Neutral Dissatisfied Dissatisfied Average I Quality of goods and Y - County 56% >< 44% � 0% 0% 3.56 services PASS 21% 60% 16% 3% 1% 3.17 Timeliness of Y - County 42% 52% �� 3% 3% 3.33 I procurement process PASS 35% 45% 9% 10% 1% 3.24 Overall quality Y - County 35% 59% j = 3% 3% 3.26 level of County 1 contracts PASS 23% 51% 16% _ 8% 2 % 3.08 1 Yakima - County /PASS Comparison: Operations 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% co V N o oo CD Y - County o) .2 o m T N To c m co 1 PASS F, w Y - County 2 £ y c m o E ° °- PASS i— n . I Y c To = N Y - County QU c° O C i i • m m 0 1 immium...,: I O PASS 1 1 1 ± 1 J_ 1 i 1 • Very Satisfied • Satisfied ❑ Neutral 0 Dissatisfied • Very Dissatisfied 1 I � 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP I Appendix E - Page 7 a , ,as,,g rik ;a >..: > 4, >, :,., 1 1 Purchasing Department Performance I There are three comparable questions on the PASS survey. Those questions and possible responses are as follows: a. How do you rate the professionalism and courtesy of our staff? I Extremely Professional /Courteous; Occasionally Professional /Courteous; Neutral; Generally Unprofessional /Discourteous; Extremely Unprofessional /Discourteous b. How do you rate our accessibility when you need us? Very Accessible; Mostly Accessible; Neutral; Occasionally Accessible; Not Accessible I c. How do you rate the effectiveness of the customer training sessions conducted for your staff that have purchasing responsibilities? Very Effective; Effective; Neutral; Somewhat Effective; Not At All Effective 1 Yakima - County /PASS Comparison: Performance I Excellent Good Adequate Response Fair Poor Average Professionalism / courtesy Y - County 51% 26% 17% 6% 0% 4.23 I of Purchasing staff PASS Accessibility 63% 26% 9% 2% 0% 4.51 bility of Purchasing Y - County 57% 31 % 11 % 0% 0% 4.46 staff PASS 41% 44% 7% 7% 1% 4.16 1 Client training regarding Y - County 29% 35% 21% 9% 6% 3.74 purchasing PASS 16% 42% 31% 7% 3% 3.61 1 Yakima - County /PASS Comparison: Performance , 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 1 0 o w Y - County FT, p N C Ca N N I tin, O o' PASS o_ a I N Y - County y m I I I 1 4 C d t J ¢ e PASS a 1 e,' C 2 c rn Y - County m '. f0 L C c1 ` 1 v ` a PASS 1 1 1 1 1 1 1 • Excellent • Good ❑ Adequate 0 Fair • Poor 1 L 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) i Appendix E - Page 8 1 I Customer Service There are two similar questions on the PASS survey. Those questions and possible responses are as ' follows: a. How do you rate our ability to clearly communicate procurement processes? Very Clearly Communicated; Adequately Communicated; Neutral; Somewhat Communicated; Poorly Communicated. I b. How do you rate our ability to work with you as partners by understanding your needs and working with you towards common goals? Excellent Understanding; Usually Understands; Neutral; Occasionally Understands; Poor 1 Understanding Yakima - County /PASS Comparison: Customer Service I The Purchasing Strongly Strongly Response Department... Agree Agree Neutral Disagree Disagree Average I Provides consistent Y - County 43% 37% 11% 9% 0% 4.14 interpretation of policies PASS 30% 45% 10% 10% 4% 3.87 Understands my Y - County 37% 37% 20% 6% 0% 4.06 1 specific needs PASS 38% 41% 10% 7% 3% _ 4.05 111 Yakima - County /PASS Comparison: Customer Service 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 N N o .0 V - 8 Y - County 1 N c 4 5 o U 1 ti o OC co . 'o e. PASS 1 1 U o. N Y - County o • CD iimmilmOilliA c c c m �. PASS ID D -- - 1 1 L 1 L • Strongly Agree a Agree ❑ Neutral ❑ Disagree ■ Strongly Disagree I Overall Performance I There is a comparable question on the PASS survey: How do you rate your overall satisfaction with the quality of our service? Possible responses are: Extremely Satisfied; Satisfied; Neutral; Dissatisfied; and Extremely Dissatisfied. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGIP) I Appendix E - Page 9 -.- 41m »3s#0,80,ot,k — 4, ,;, ,.: r L ; ; 1 1 Yakima - County /PASS Comparison: Overall Performance 1 Excellent Good Adequate Fair Poor Average Yakima - County 60.6% 21.2% 12.1% 6.1% 0.0% 4.36 I PASS 30.5% 52.0% 9.4% 6.2% 1.9% 4.03 1 Yakima - County /PASS Comparison: Overall Performance 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% I Yakima - Count ,.„,.,, 1 , 1 1 I 1 ,,,.. i PASS 1 I 1 ± 1 1 1 1 • Excellent • Good 0 Adequate 0 Fair • Poor Client Comments I 9. What does the Purchasing Department do well? Where does it add value in assisting your department? I — County small office supplies contract. — They know which department orders what. When an invoice ends up on my desk, and I don't I have a req for this invoice. I always turn to the purchasing dept for assistance. From there we than decipher if this is my invoice or another county entity. There isn't a week that goes by that I don't need there assistance. 1 — Process requisitions in a timely manner. I - They go out of their way to help me find what I need if I am unable to locate it in the catalogs. — It helps provide additional information regarding vendors. 1 — Efficient, knowledgeable — Purchasing resolves issues with Supplier very well: Product unavailable, late delivery, back I order, missing items. If they deal with the Supplier then we're not allocating resources to do the same. 1 — Don't have to go to bid for items. — Keeps us from making technical errors that run afoul of policy or law. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) ii Appendix E - Page 10 -1 1 — Day to day supplies, requisitions, etc., are handled very well, very timely and with good customer I Im service. II — Speed in issuing POs when requested; confirming flight arrangements; answers questions promptly; processes requisitions promptly. Helps our office run efficiently. 1 — The Purchasing Department always is willing to help when I have problems with a vendor. They always have the information I need to solve an issue or if they don't have the information, they II can always find it. The ladies are always willing to go the extra mile to help with issues. — Getting contracts for low cost supplies and processing them promptly. fi — Explains processes and requirements patiently, works with each secretary without mixing up the orders or information. III — Saves me a lot of time with venders. — They are always quick to answer my questions. II — Always willing to help. Knowledgeable on intergovernmental purchasing contracts, vendors. 1 — Assisting in finding item not listed in catalog from supplier — Turn around on supply orders is excellent. III Ability to locate the best price for item wanted. III — Rhonda is very good at locating items for us, if we are unable to find them ourselves. She is very good at returning calls, and her customer service is great. I don't think many of the problems have to do with her or her staff. Perhaps the problems come from higher up the chain. — Standard product ordering and company mail. — They are proficient at telling you what steps are missing in the purchasing process and will stop m the purchase. The value is that you learn from your mistakes. — Communication between our procurement office and Purchasing is excellent. They have been II effective to ensure that our departments are apprised of government legislation guidelines as they relate to procurement: o — They are available and efficient in requests and replies. Another great resource is the way they recycle the items and have open fairs for staff to view items which may be used in the workplace. D thos 10. How do you think your priorities and objectives on behalf of your department are the same as of the Purchasing Department? How are they different? — I try not to use our purchasing department currently. — They treat us equal. I don't find any difference from our department to the next. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NTG n i Appendix E - Page 1 l L Pu chasrtg Manag gwatAsis&n a Piagtam 1 — We both want the best service for the best price. 11 — Get the job done in the most cost effective, efficient way possible. — The Purchasing Department understands the basic office supply needs but cannot understand each 1 department's unique needs. — Need the best cost. 1 — Purchasing is all about set process and avoiding sins in the eyes of an audit. Departments just need to "get it done" in a streamlined way to protect the public's money. 11 — I don't know. I — Since we have no major complaints, I'm assuming our priorities and objectives are in sync. - It is important that our requests /requisitions are handled promptly. I - The priorities and objectives that are the same for our department and the Purchasing Department, are getting the best quality for the best price. Getting satisfactory supplies at the lowest cost possible. — If I need it, they're on it. 1 — We are considered a county department, however, operate independently from the county. Not a part of the General Fund. Il — Timeliness and keeping cost down are both item that our department and purchasing have in common III — n/a — They are the same in that we both are trying to follow the state procurement guidelines. No 111 differences that I see. — We just want to find the product we need at the best cost, and buy it. They seem to be required to I find every kind of obstacle to that process. Again, I understand these are not all the fault of the staff in purchasing. Knowing that does not, however, always make it easier to deal with them. II — They understand that we need specific equipment for use in our job. They don't understand our priorities when we need to find equipment that is not on the state contract. This is normally done because of product quality or compatibility with existing equipment. 11 — We both strive to ensure that we are following government legislation as it relates to procurement. We also strive to keep procedures as clear and simple as possible and that there is a clear line of communication between our departments. I - I believe both our departments strive to save funding as much as possible, as well as quickly supply the department needs. II City and County of Yakima Joint Administrative Purchasing Assessment Final Report IVCIlia l Ap pendix E - Page 12 1• Afirl tvitg ManagemevtAssista,Ke r3wiam 11 (II 11. List the biggest problems, time wasters, and/or inefficiencies you confront on the purchasing process. . 11 — Not enough expertise currently in the Purchasing Department. We use to have that with our prior Purchasing Manager. 11 — I don't feel there is any. I - None [4 responsesJ. — Trying to find the best price for products needed. 1 — We have no problems with the purchasing process as it is, other than they are understaffed. — Listed previously. — Inability for dept staff to keep up on purchasing policy and law. - When it comes to bids for small carpentry type work or small remodels, it seems there is I confusion as to the appropriate process, policy and procedure. Education of dept staff may be the key, however, when I've asked for clarification in the past, I've been told to contact Public Services, but when I contacted them, they didn't know why I was referred to them. — How one Purchasing Dept. employee presents herself, and her negative attitude at times, makes it III uncomfortable to work with her. Sometimes our requisitions are not processed the same day they are received by our Purchasing Dept. 1 — All of the problems I have faced have been worked out to eliminate the problem. Our Purchasing Department works very hard to help us and make our lives easier. — Some of the signatures needed makes it difficult to get things done quickly. More people able to 1 sign would be good - especially for small items. 1 — n/a I — Sometimes the length of time for the TPR process is delayed due to the absence of one of the approvers. This is not the fault of the purchasing department. 11 — Misunderstanding of the rules and regulations. Different answers from different steps on the whole purchasing chain. The biggest waste of time, however, is the Technology Board approval rn process. — Disposal of equipment/assets, bid process, RFP development, and Public Work evaluation. 1 — Lack of a clear set of rules for each purchase. Why is it the responsibility of the department that wants to buy an item from a new vendor to chase down a signed W9? This should be the role of the purchasing department. In the military this is referred to as the tail wagging the dog. If a 1 combat unit wants the item bad enough they will perform a non - combat function of research and procurement in order to expedite the process. It creates mission drift where the target becomes acquisition of the product versus acquisition of the target. City and County of Yakima Joint Administrative Purchasing Assessment Final Deport i Appendix E - Page 13 CIVIC?) Purchasing ,NaaagemeiuAssisYanaePi gram I1 — Some vendors are more apt to dealing direct with our department staff as opposed to purchasing staff. Especially with specific items which require online design or items that need logos or special printing needs. Those tend to take a bit longer. 12. What suggestions do you have for improving the purchasing process? I believe that the County needs a qualified Purchasing Manager. — Keep up the good work. — None [5 responses]. — Add more staff. — Email form instead of having to fax it. — Streamline using today's technology more efficiently. - More help with the RFP and bidding process. I don't know if they should or would help with the contract process, but it seems they go hand in hand in many instances. — I would suggest a training class in customer service for this particular employee. — At the moment I can't think of any suggestions for improving the purchasing process. — It has served me extremely well. — n/a — Perhaps regular meetings to discuss the issues. Maybe the commissioners rep, an attorney rep, an auditor rep, purchasing rep, technology rep, public works rep, and a rep or two from the customers (other departments in the county). Perhaps this will keep us all on the same page. — Purchasing staff should look for ways to help in a process versus looking for ways to say no. — Dedicate or increase the purchasing staff to purchasing duties only. In my view they are saddled with other distracting duties such as mail sorting. The purchasing process is semi automated now. I would like to see an online purchasing menu with fully explained drop down menus. The purchase could explain the "item" (go here), "vendor ", (go here), "quantity, price, department, budget code, auditing officer ", etc. Items often become part of our inventory. Purchasing initiates the first step with procurement. Wouldn't it be nice if the procurement generated a county inventory bar code sticker that updated the Commissioner's Inventory equipment database and encumbered the correct fund? How useful would it be to have a computerized replacement schedule for those items (vehicles, computers) that are on a regular rotation and would notify the departments that their items are due for scheduled replacement? A system that would print disposal tags for items that are due for auction? That's pretty high tech stuff but I believe it would work. — Maybe just a bit of clarifying on our part what we can do to help them. A lot of the time I see us not providing what they need. a City and County of Yakima Joint Administrative Purchasing Assessment Final Report �T� n Appendix E - Page 14 l l Rachastay Management Assistance Arpin; 11 1 13. Comments; clarifications to earlier answers. I - The current Office Max catalog doesn't list everything in the Catalog - you have to go on line for some of the things which I find is a time waster for me. 1 — None — Statutes making public funding of projects and supplies, the most expensive way to go, seems ICI counter productive and a huge waste of time and money. Maybe it is time someone looked into changing some of them so we can actually be better guardians of the public's money. — I have shared my vision on the way I believe a purchasing department should interact with the I agencies that it serves. I can be contacted by email, by phone, or in person — Let them know they are doing a wonderful job. II II II 1 II 11 11 11 11 1 III City and County of Yakima Joint Administrative Purchasing Assessment III Final Report 1 •l a Appendix E -Page 15 > PumYasnyMansyemeniassiumeProgram 1 1 11 1 1 1 , Appendix G 1 City of Yakima Staff Survey Analysis 1 1 1 1 1 1 1 > Ptnahasing Manage/nen 4ssislance Pmg,am 11 1 CITY OF YAKIMA PURCHASING DIVISION STAFF SURVEY ANALYSIS I NIGP conducted an Internet -based survey of the City of Yakima Purchasing Division staff as a part of this engagement. All three current employees responded to the survey. I Purchasing Division Performance 1. For each type of procurement listed below, indicate (check) any process or activity that you I perceive to be a problem. _ Problem Identification Delegated: Purchasing Supplies/ Professional I Small Purchases Small Services Services Purchases ITB RFP /RFQ <$2,500 <$25,000 >$25,000 >$25,000 Construction 1 Specification development 0% 0% 33% 33% 33% - Solicitation development 0% 0% 0% 0% 0% Identifying qualified suppliers 0% 0% 0% 0% 0% I Bid /proposal evaluation process 0% 0% 0% 0% 0% Contract award process 0% 0% 0% 0% 0% Receiving process 0% 0% 0% 0% 0% I Payment process 0% 0% 0% 0% 0% Contract administration 0% 0% 33% 33% 33% Clarity of policies /procedures 0% 0% 0% 0% 0% 1 "Red Tape" 0% 0% 0% 0% 0% Other 0% 0% 0% 0% 0% 2. Provide details from Question 1; list "other "problems. — Much of the time Purchasing is not given specs or specs are insufficient and we spend a lot of 1 time developing specs on our own. — We are weak in contract closeout and tracking of insurance, expiration dates, etc. 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment NIGP Final Report 1 Appendix G- Page 1 1► Pruaharing Management Azata uav Prog em 1 1 3. For each of the criteria listed below, please summarize how you believe the Purchasing Division 1 performs. [Maximum Response: 5.0 - Excellent] Response I Excellent Good Adequate Fair Poor Average Expertise and knowledge of purchasing staff 67% 33% 0% 0% 0% 4.67 I Communication skills of purchasing staff 67% 33% 0% 0% 0% 4.67 Professionalism and courtesy I of purchasing staff 100% 0% 0% 0% 0% 5.00 Ability to provide effective solutions 33% 67% 0% 0% 0% 4.33 I Consistent interpretation of policies and procedures 67% 33% 0% 0% 0% 4.67 Timeliness of procurement process 33% 67% 0% 0% 0% 4.33 Il Accessibility of purchasing staff 33% 33% 33% 0% 0% 4.00 1 City of Yakima Purchasing Division Performance 1 0% 20% 40% 60% 80% 100% Expertise and knowledge of purchasing staff I Communication skills of purchasing staff Professionalism and courtesy of purchasing staff I Ability to provide effective solutions Consistent interpretation of policies and procedures Timeliness of procurement process I Accessibility of purchasing staff I • Excellent • Good ❑ Adequate p Fair • Poor 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report C-TVIGP) I Appendix G - Page 2 . 1 1 4. For those purchases made by the Purchasing Division, please rank the following performance I criteria by level of importance. [Maximum Response: 6.0 — Most Important] 5. How do you believe your clients (using departments) will indicate their level of satisfaction for I each of the following performance criteria? [Maximum Response: 4.0 — Very Satisfied] Very Very Response I Satisfied Satisfied Dissatisfied Dissatisfied Average Importance Quality of goods and services 33% 67% 0% 0% 3.33 5.33 I Prices obtained for goods and services 0% 100% 0% 0% 3.00 4.33 Timeliness of procurement process 33% 67% 0% 0% 3.33 4.00 I Timeliness of supplier performance /delivery 33% 67% 0% 0% 3.33 3.67 Supplier qualifications 33% 67% 0% 0% 3.33 2.33 I Supplier customer service 0% 100% 0% 0% 3.00 1.33 I City of Yakima Purchasing Division Satisfaction 1 0% 20% 40% 60% 80% 100% I I Quality of goods and seances 1 Prices obtained for goods and services Timeliness of procurement process Timeliness of supplier performance /delivery Supplier qualifications I Supplier customer service 1 — 1 L • Very Satisfied • Satisfied ❑ Dissatisfied • Very Dissatisfied I The following table compares the results of the client survey with the results of the staff survey. The t survey response averages are very similar with the clients consistently rating performance higher than the staff. Purchasing staff attached greater importance to "timeliness of the procurement process" while the clients believed "supplier customer service" was significantly more important. Based upon experience 1 with other clients, the consultant believes that the clients would find "timeliness of the procurement process" to be of far greater importance if it were an issue. I City and County of Yakima Joint Administrative Purchasing Assessment Final Report N_ IGP I Appendix G - Page 3 1 1 I Response Average Importance Client Staff Difference Client Staff Difference Quality of goods and I services 3.66 3.33 0.33 5.27 5.33 (0.06) Prices obtained for goods and services 3.51 3.00 0.51 4.14 4.33 (0.19) I Timeliness of supplier performance /delivery 3.37 3.33 0.04 3.52 3.67 (0.15) Supplier customer I service 3.40 3.00 0.40 3.37 1.33 2.04 Timeliness of procurement process 3.63 3.33 0.30 2.97 4.00 (1.03) I Supplier qualifications 3.54 3.33 0.21 2.53 2.33 0.20 6. How do you believe your clients would rate the overall performance of the Purchasing Division for the past 12 months? [Maximum Response: 5.0 - Excellent] I 7. How would you rate the overall performance of the Purchasing Division for the past 12 months? [Maximum Response: 5.0 - Excellent] I Results from Client Survey imported: "How would you rate the overall performance of the Purchasing Division for the past 12 months ?" [Maximum Response: 5.0 - Excellent] 1 Excellent Good Adequate Fair Poor Average Staff: Clients 33.3% 66.7% 0.0% 0.0% 0.0% 4.33 1 Staff: Selves 33.3% 66.7% 0.0% 0.0% 0.0% 4.33 Clients 62.5% 34.4% 3.1% 0.0% 0.0% 4.59 City of Yakima Purchasing Division Overall Performance 0% 20% 40% 60% 80% 100% I I f I Staff: Clients I I I 1 Staff: Selves 1 I I Clients 1 L L _, L • Excellent • Good ❑ Adequate ❑ Fair • Poor 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report CNTIGP) 1 Appendix G Page 4 rlicaas v Alalseemer acs 447, e P a,< 1 1 Staff Qualifications 10. Experience (averages): 1 a. Total years with City of Yakima: 12.00 b. Total years in Purchasing Division: 11.33 c. Total years in current position: 6.67 d. Total years in public purchasing: 12.67 1 e. Total years in purchasing (public and private): 13.67 11. Level of Education: a. Some College: 66.7% 1 b. 2 -year College Degree: 33.3% 12. Field of Education: a. Business: 66.7% b. Other: 33.3% 13. Certifications: r a. CPPO: 33.3% b. CPPB: 66.7% c. Do not hold a certification: 33.3% 1 14. Professional Affiliations: a. NIGP: 100% b. NIGP Chapter: 66.7% 1 16. Please rate your level of experience for each of the software systems listed below: Somewhat Very Do Not 1 Beginner Experienced Experienced Expert Use MS Word 0.0% 0.0% 100.0% 0.0% 0.0% MS Excel 0.0% 66.7% 33.3% 0.0% 0.0% AIMMS 0.0% 0.0% 66.7% 33.3% 0.0% City and County of Yakima Joint Administrative Purchasing Assessment Final Report (-NIG& Appendix G - Page 5 '► Rarhasny Alatzsgement Asstrantv Program 1 1 1 1 1 1 1 1 1 Appendix H F 1 County of Yakima Staff Survey Analysis 1 � i i ce" al iR ', ° 1. 0 " 53 :.i¢P �Sg �'» . �fe8 -' 1 1 1 1 1 1 I . vIGP) i Pwahasing Managemen/AssistsnceProgram 1 1 COUNTY OF YAKIMA PURCHASING DEPARTMENT STAFF SURVEY I ANALYSIS . NIGP conducted an Internet -based survey of the County of Yakima Purchasing Department staff as a part 1 of this engagement. While both current employees responded to the survey, only one responded to the section on performance. Purchasing Department Performance I 1. For each type of procurement listed below, indicate (check) any process or activity that you perceive to be a problem. (Table is provided for informational purposes only — no problems were 1 identified.) Problem Identification 1 Purchasing Supplies/ Professional Small Services Services Purchases ITB RFP /RFQ I <$25,000 >$25,000 >$25,000 Construction Specification development 0% 0% 0% 0% Solicitation development 0% 0% 0% 0% 1 Identifying qualified suppliers 0% 0% 0% Bid /proposal evaluation process 0% 0% 0% 0% Contract award process 0% 0% 0% 0% 1 Receiving process 0% 0% 0% 0% Payment process 0% 0% 0% 0% Contract administration 0% 0% 0% 0% III Clarity of policies /procedures 0% 0% 0% 0% "Red Tape" 0% 0% 0% 0% Other 0% 0% 0% 0% 1 2. Provide details from Question 1; list "other "problems. 1 — We don't handle any type of "Public Work" projects. Since the Purchasing Manager retired in Sept 07 everything has a learning curve. 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report (TVIGP) 1 Appendix H - Page 1 Purchasing Maru+gemamAssis Program 1 1 3. For each of the criteria listed below, please summarize how you believe the Purchasing 1 Department performs. [Maximum Response: 5.0 - Excellent] Response I Excellent Good Adequate Fair Poor Average Expertise and knowledge of purchasing staff 0% 100% 0% 0% 0% 4.00 I Communication skills of purchasing staff 100% 0% 0% 0% 0% 5.00 Professionalism and 1 courtesy of purchasing staff 100% 0% 0% 0% 0% 5.00 Ability to provide effective solutions 0% 100% 0% 0% 0% 4.00 I Consistent interpretation of policies and procedures 0% 100% 0% 0% 0% 4.00 Timeliness of procurement process 100% 0% 0% 0% 0% 5.00 Accessibility of purchasing staff 100% 0% 0% 0% 0% 5.00 1 4. For those purchases made by the Purchasing Department, please rank the following performance 1 criteria by level of importance. [Maximum Response: 6.0 — Most Important] 5. How do you believe your clients (using departments) will indicate their level of satisfaction for I each of the following performance criteria? [Maximum Response: 4.0 — Very Satisfied] The rating was "satisfied" for each of the performance criteria, ranked in the following order (the client I ranking of performance is in parenthesis): > Quality of goods and services (1) > Prices obtained for goods and services (2) ➢ Supplier qualifications (6) I > Supplier customer services (5) > Timeliness of supplier performance /delivery (3) ➢ Timeliness of procurement process (4) I 6. How do you believe your clients would rate the overall performance of the Purchasing Department for the past 12 months? [Maximum Response: 5.0 — Excellent] Response: Good — 4.0 1 7. How would you rate the overall performance of the Purchasing Department for the past 12 months? [Maximum Response: 5.0 — Excellent] Response: Good — 4.0 1 Results from Client Survey imported: "How would you rate the overall performance of the Purchasing Division for the past 12 months ?" [Maximum Response: 5.0 — Excellent] Response: 1 See Appendix F; 4.36. 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report CNIGP Appendix H - Page 2 Purchasiog UanagementAssigore Proirem 1 1 Staff Qualifications 1 10. Experience (averages): I a. Total years with County of Yakima: 12.00 b. Total years in Purchasing Division: 9.00 1 c. Total years in current position: 4.50 Total years in public purchasing: 6.50 I d. e. Total years in purchasing (public and private): 8.00 1 11. Level of Education: a. High School: 50.0% 1 b. TechnicallVocational School: 50.0% 12. Field of Education: I a. Business: 50.0% 1 13. Certifications: a. Do not hold a certification: 100.0% 14. Professional Affiliations: a. NIGP: 100% b. NIGP Chapter: 100.0% 11 c. PNPPA: 100.0% 16. Please rate your level of experience for each of the software systems listed below: 1 Somewhat Very Do Not Beginner Experienced Experienced Expert Use 1 MS Word 0.0% 100.0% 0.0% 0.0% 0.0% MS Excel 0.0% 100.0% 0.0% 0.0% 0.0% 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG i Appendix es - Page 3 s Roaming 6fanagamentAssistance Program 1 1 1 • 1 1 1 1 Appendix I 1 City and County of Yakima Supplier Survey Analysis 1 �'- — :':`4. ,� `a cF i, "�•r ` ,,, a,..+e -�., �.f'.,., ;� „.s ^u ..._`�. ' #'r. � ,. ..z .:”- '.7..:i °'"5 1 1 1 1 1 NIGP PurtriasMg Management Assistance Program 1 METHODOLOGY 1 NIGP conducted an Internet -based supplier survey as a part of this engagement. The City and County mailed a notice of the survey to their respective suppliers. A notice of the survey was also posted on the City's web site. Two - hundred thirty surveys were completed. 1 • NIGP utilized an Internet -based service, SurveyMonkey.com, to conduct the survey. • NIGP has conducted similar supplier surveys for other units of local government. NIGP compared the results of the City and County of Yakima survey with the results of the other surveys, indicted in this report as "All Surveys." The other units of government include: Santa Clara County, California District of Columbia ' City of Homestead, Florida City of Lee's Summit, Missouri • Within the supplier comments, the consultant corrected obvious spelling and typographical errors. 1 • Within the supplier comments, the consultant edited out references to specific companies or individuals. 1 1 1 1 1 1 1 11 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report / A endix1 -Pa e1 (71VIGP PP g Rac4asi Ma ag nagemamAswsianca Pray= 1 SUPPLIER DEMOGRAPHICS Business Type — select the most applicable classification for your organization. 1 Business Type 0% 5% 10% 15% 20% 25% 30% 1 Manufacturing 13.6% � 9.5% - 8.6 /o v v xl 0 Construction 9.2% ° �7 19.1 /o Wholesale Trade /Distributor 16.5% 1 Retail Trade 11.2% 26.4% Information Technology 7 7� °10.1 Finance and Insurance 11 5.0% Architect/Engineer 11114.6% ' Professional (exc. A/E) 6.4% 14.9% Health Care 0.0% 1.8% • /° Social Assistance 0 11.1% Non -Prof. Services 11111Lii t Utility 0 1.5 % Other 7.0% 1 ■ Yakima • All Surveys ' Response Count: Yakima — 220; All Surveys — 1,790 Note: The use of "Other" has been discontinued in recent surveys, including Yakima. It was determined that virtually all suppliers could be readily classified as one of the listed business types. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Appendix I - Page 2 SUPPLIER DEMOGRAPHICS 1 Business Classification — Number of Employees 1 Business Classification: Number of Employees 1 0% 5% 10% 15% 20% 25% 30% I ' I 17.0% 1 -5 22.0% 13 ° .J /o 5 -10 ° 12.810 - I 11 - 25 7 22.4 I /° 1 26 - 100 2 25.1% - I I 1 101 - 500 12.6% 3.6% 501 - 1,000 1113 A 2. 1 1,001 - 2,500 2,501 - 10,000 0.9% .8 Over 10,000 1.8 ' 5 % 1 1 1 ® Yakima • All Surveys Response Count: Yakima - 223; All Surveys — 1,759 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix I - Page 3 Prom '.�s- ngM1la¢agememl4c._aa.xe �;var SUPPLIER DEMOGRAPHICS Business Classification — Annual Revenues 1 Business Classification: Annual Revenues 1 0% 5% 10% 15% 20% 25% 30% 35% 40% 314% I Less than $100 thousand 8,6% 6.9 /° $100 - $249 thousand 7. /° 1 $250 - $499 thousand 45 .9 5% $500 - $999 thousand 1 9.8% $1.0 - $4.9 million 35.8% 1 - 31. $5.0 - $24.9 million .1111 . 50/0 $25.0 - $99.9 million Mei - 5.4% 1 $100.0 - $499.9 million 11111 1 $500.0 - $999.9 million ' I Over $1.0 billion 113 14% % o Yakima • All Surveys Y 1 Response Count: Yakima - 204; All Surveys — 1,666 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report l NTG n) Appendix 1 Page 4 � • R l i.) %3.v', 418 ,.,e1: 1 SUPPLIER DEMOGRAPHICS Organization Type: Organization Type 0% 10% 20% 30% 40% 50% 60% i I I i C- Corporation 7.7 4% % 1 15. Subchapter S Corporation 17.8% 1 .;�f. <.. 131 °0 Limited Liability Company 13.0 °0 Partnership 1 Sole Proprietor MIX . % Non - Profit Organization 34 1 °/ ® Yakima • All Surveys Response Count: Yakima - 213; All Surveys —1,725 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Deport C-TVIGP) Appendix 1 - Page 5 ',;a as o Manace^e- +;Asssa.�e -� 1 I CITY /COUNTY BUSINESS I How long has your company been doing business with the City and/or County? I - - I Length of Time Doing Business with City /County 0% 10% 20% 30% 40% 50% 60% Less than one 12.2% 11 I year 12.9% 0 1 - 2 years 11 % I 0.0% 14.90 1 3 - 5years 15.00 1 19.3% I - 12.7 % I 6 - 10 years 12.4% 15.1% 1 More than 10 50.8% I 49.7% years 4 7 0 L ® Yakima - City • Yakima - County • All Surveys Response Count: Yakima - 199; All Surveys - 1,761 I Do ou currently have one or more contracts with the City and/or County? y y � � 1 Current Contract(s) with City /County I o% 20% 40% 60% 80% 100% Yakima - City 1 Yakima - County I All Surreys 1 1 1 I ■ Yes ■No I Response Count: Yakima — 201; All Surveys — 1,832 City and County of Yakima Joint Administrative Purchasing Assessment �� Final Report t Appendix I - Page 6 CITY /COUNTY BUSINESS 1 In the past twelve months, approximately how many contracts, purchase orders, and/or release orders have you received from the City and/or County? Number of Purchase Orders /Contracts 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1 1 1 37.9% ' 0 42.1 . % 1 ' 1 -5 Y° 42.0% 8 8% 6 10 / 7.8% 0 % 11 -20 111; 1 3. % ' 8. Over 20 EIR8. % % _ 1 1 _ _ 1 i ' IE Yakima - City • Yakima - County • All Surveys 1 Response Count: Yakima - 195; All Surveys — 1,801 Does your company Conduct Business with City /County Purchasing conduct business (sell products; provide services; submit quotes or bids) with 1 either the City or County? Response Count: 12.5% Yakima — 208 101% ® Both CITY and COUNTY • CITY Only Note: This question is unique o COUNTY only to the Yakima survey. o Neither 1 City and County of Yakima Joint Administrative Purchasing Assessment �� Final Report /appendix 1- Page 7 1 CITY /COUNTY PURCHASING SOLICITATIONS Do you respond to invitations for bids, requests for proposals or quotations from the City of Yakima Purchasing Division or the County of Yakima Purchasing Department? Respond to Solicitations from Purchasing Division /Department 1 0% 20% 40% 60% 80% 100% Yakima - City Yakima - County I All Surveys 1 L 1 I ' ■Yes ■No I Responses: City of Yakima — 161; County of Yakima — 149; All Surveys — 1,754 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NI GP Appendix I - Page 8 1 I CITY /COUNTY PURCHASING SOLICITATIONS 1 Please rate your agreement with the following: In general, the invitation for bids and requests for proposals from the [City of Yakima Purchasing Division or County of Yakima Purchasing DepartmentJ clearly communicate specifications and contractual requirements. Rate your agreement with the following: In general, the specifications from the [City of Yakima Purchasing Division or County of Yakima Purchasing DepartmentJ provide for fair 1 competition. I Purchasing Division /Department Solicitations Strongly Strongly Response Agree Agree Neutral Disagree Disagree Average i City 17.8% 58.5% 20.7% 2.2% 0.7% 3.90 County 22.4% 52.6% 24.1% 0.9% 0.0% 3.97 Communicate Requirements All 12.5% 57.7 %. 24.4% 3.9% 1.5% 3.76 I City 21.5% 45.9% 26.7% 4.4% 1.5% 3.81 County 13.9% 55.7% 26.1% 2.6% 1.7% 3.77 Fair Competition All 12.1% . 50.4 %' ' , 27.9% 7.0 %, 2.7% 3.62 I City/County Purchasing Division/Department tY 9 artment Solicitations p ' 0% 20% 40% 60% 80% 100% I I I w (n City I C13 C 22 County 1 U lY All � I I o City 1 o County 0 1 All I • Strongly Agree • Agree ❑ Neutral 0 Disagree • Strongly Disagree Response Count: City of Yakima - 135/135; County of Yakima: 116/115; All Surveys: 1,309/1,308 1 1 I City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP I Appenducl - Page 9 -, 19 s^. aa-^ w• Ala ^.x;er•e,,,Ass. .elaaePrus I CITY /COUNTY PURCHASING SOLICITATIONS I Is there anything about the bid process through the [City of Yakima Purchasing Division or County of Yakima Purchasing Department] that is particularly cumbersome or which increase your costs of responding? 1 City/County Purchasing Division /Department - ' Cumbersome Solicitation Requirements ' 0% 20% 40% 60% 80% 100% � I Yakima - City Yakima - County 1 All Surveys 1 • Yes • No Response Count: City of Yakima — 131; County of Yakima — 113; All Surveys — 1,285 ' CITY — Supplier Comments: — Often asked for piece prices as 1 -36; price for 36pcs. would be less than 1 -10 but there is no way to represent this on bid. — Not sure where the best place is to look for bids -- many times I find out too late that bids are ' available. — We never see any bid requests. — There is not a notification process for new bid opportunities so I have to check for them or I will miss them. ' - They do not seam to make an effort to do business with local companies. — Anything that involves Prevailing Wages are difficult since we rarely do those kinds of jobs. - It clearly needs to be stated when jobs require State Prevailing Wages prior to the awarding of the contract. - Since we are a subconsultant many times, I don't have a strong answer either way at this time. ' City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix I - Page 10 - � P A1,3wtmP4,' ;G4S((7'1. i' 1 — Quite often we have less than 48 hours to respond. We should have at least 10 business days. Quite often when we have done a bid, we aren't given enough information, then later we are asked to modify our specifications to match somebody elses. ie frequency of service on fitness equipment. ' - City does not provide an accurate usage with correct UM. — Free dispensers. 1 COUNTY Supplier Comments: — Similar to City -- Just need to be aware of bids, possibly be put on a bid list so I know as soon as they come out. — Complicated work requests. 1 - Sometimes unrelated items are in the bid. - The county should take registrations from vendors by business interests to receive emails regarding new bid requests or RFP's. 1 Don't know. — Not all departments adhere to the bid. — No price increases over the life of the contract. 1 — As of yet, we have not had any dealings with the county and therefore are not qualified to answer these questions. — Keep it local if possible. It is local tax money. Spend it local. - We do not receive any bid requests but would gladly respond to all needs for election supplies and equipment as they come up. We specialize in the hundreds of products used by elections 1 office that do not involve the final tabulation of votes. This is everything for voters and pollworkers, poll sites, the counting center, the elections warehouse and products to transport all this to and from locations. — Contact with end user for better details on scientific equipment (microscopes). — Cost to print. — The bid process needs to clearly state if State Prevailing Wages are required prior to the awarding ' of the contract. — We don't do much work directly for the County but as part of the engineering team. City and County of Yakima Joint Administrative Purchasing Assessment Final Report 1 ♦l GL 1 Appendix 1 Page 11 Purchasing Management Assistance Pmg ram I PURCHASING DIVISION /DEPARTMENT I Rate your agreement with the following: In your relationship with the [City of Yakima Purchasing Division or County of Yakima Purchasing Department], the professional staff is: 1 Strongly Strongly Response Agree Agree Neutral Disagree Disagree Average City 38.0% 42.3% 19.0% 0.7% 0.0% 4.18 A County 38.0% 41.9% 19.4% 0.8% 0.0% 4.17 Professional and courteous All; a. o-,a ira W gV'' Wi ;f :4 w I City 30.5% 41.8% 24.8% 2.8% 0.0% 4.00 Knowledgeable regarding County 29.2% 47.7% 21.5% 1.5% 0.0% 4.05 products /services All 18.4% 44.5% 30.9% 4.7% 1.5% 3.74 1 City _ 34.3% 39.3% 23.6% 2.1 % 0.7% 4.04 1 Helpful regarding City /County County 32.8% 42.2% 23.4% 1.6% 0.0% 4.06 policies /procedures All 21.2% 44.1% 29.5% 3.5% 1.7% 3.80 I City /County Purchasing Division /Department I 0% 20% Professional Staff 40% 60% 80% 100% -0 c City o .2 r C I 6 o' o a All t , { ID ) City U as co N C N g N County 3 c 'a a All I (a m City T a m c °) o' no U _ a County IIMIII.MIIII*IMIMMIM[=_= w T N ' a V . a 2 .o All a _1 1 1 I • Strongly Agree • Agree ❑ Neutral ❑ Disagree • Strongly Disagree I Response Count: City of Yakima - 144; County of Yakima - 131; All Surveys - 1,570 I City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP i Appendix 1- Page 12 1 PURCHASING DIVISION /DEPARTMENT 1 In conducting business with the [City of Yakima Purchasing Division or County of Yakima Purchasing Department], have you encountered any significant problems in the past three years? Significant Problem with Purchasing Division /Department 1 0% 20% 40% 60% 80% 100% I I Yakima - City Yakima - County 1 All Suneys • Yes • No 1 Response Count: City of Yakima — 145; County of Yakima — 130; All Surveys — 1,600 CITY Supplier Comments: - No provision for fuel surcharges. ' — Bringing a huge concern to the city's attention and it being completely ignored. — Not even asking for local bids on products and services. — Not been told ifs prevailing wage when called to do a bid. — In the last 3 years, we have only received 1 bid request for signage for the City or County. We ' are 1 of 3 larger sign companies locally...that would lead you to believe (they) are not requesting competitive bids or are going to an out of town source. — Lack of sending quote requests. COUNTY Supplier Comments: — Have taken time to help county employees only to be told that they are taking work to other locations. 1 - We have had no dealings with the county and cannot adequately answer this question. — Same thing keep our money local. City and County of Yakima Joint Administrative Purchasing Assessment NIGl Final Report Appendix 1 - Page 13 anras -c 4/ • a F 1 1 — I am a certified transcriptionist and the only problem I have with the County is they pay very slowly. 1 — Bills have not been paid in timely manner. - Relay of information between departments is slow, with many issues understanding who is in charge. 1 1 1 1 1 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NGP, Appendix I -Page 14 L 1 L Runha io Marragement Assistance Program 1 I PAYMENT I Do you accept purchasing cards (Visa) for payment? 1 1 Purchasing Card Acceptance 0% 20% 40% 60% 80% 100% 1 Yakima I _, All Surveys i _I l 1 •Yes ■No Response Count: Yakima — 155 All Surveys — 1,401 1 Are invoices paid on a timely basis? 1 Timely Receipt of Payment 0% 20% 40% 60% 80% 100% I I I Yakima - City I I I Yakima - County _ 1 All Surveys 1. 1 1 1 III Yes ■No Response Count: City of Yakima — 134; County of Yakima — 116; All Surveys — 1,361 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report C-1VIGP) 1 Appendix 1 - Page 15 1 Estimate the number of days it takes to receive payments. Average Payment Days ' 0 10 20 30 40 50 Yakima - City 31.2 Yakima - County 9,4 All Surveys 43.4 J ' Response Count: City of Yakima 104; County of Yakima — 93; All Surveys — 1,094 Note: Median number of days to receive payments is 30 days for the City, County and All Surveys. Note: For "All Surveys," one agency has an average payment time of 69.3 days. Excluding that agency, the average response for "All Surveys" is 31.1 days. 1 1 1 1 1 ' City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Appendix 1 - Page 16 444.0:11,X, 1 1 ELECTRONIC COMMERCE Do you currently download bid solicitations from the County's web site? Download Solicitations I 0% 20% 40% 60% 80% 100% 1 Yakima - County 1 1 All Surveys 24 7% i 1 i L • Agency ❑ 3rd Party • No 1 Response Count: Yakima — 209; All Surveys — 1,531 I Note: Some agencies utilize an application services provider to distribute solicitations, either exclusively or in combination with the agency's own web site. 1 Would you like to be able to download bid solicitations from the City's web site? I Download Bid Solicitations from City's Web Site 1 • Yes • No 1 0 20% 40% 60% 80% 0 0% 20% 40% 60% 80% 100% 1 Response Count: Yakima — 210 1 Note: This question is unique to the Yakima survey. 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix 1 Page 17 I 1 ? . .. . .r as, rr 0 A/arrapm 4 . c/rn e u;y'd ^- ! Can you receive purchase orders electronically? (Select all that apply) Electronic Receipt of Purchase Orders 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Internet 45.5% ° 54'7 /° � EDI 157.70/0 a.s% e -Mail :7‘1,19034,8% Fax I 88 .0% .0% 3 None 1 Yakima • All Surveys Response Count: Yakima - 209; All Surveys - 1,494 Does your company have an online electronic catalog? Online Electronic t onic Catalog 0% 20% 40% 60% ° 100% 80 /0 100 /o Yakima All Surveys 1 1 i 1 • Yes • No Response Count: Yakima — 208; All Surveys — 1,477 1 ' City and County of Yakima Joint Administrative Purchasing Assessment Final Report 71V-IGP) Appendix 1 - Page 18 �^ �3i2;hasoy M,;aaurTi�2' n.4., cGd: X'P G'RxBrr 1 1 Can you accept electronic payments? 1 Accept Electronic Payment I 0% 20% 40% 60% 80% 100% I Yakima I r � I II All Surveys 1 L ± I i CM Yes ■No Response Count: Yakima — 204; All Surveys — 1,476 1 Can you submit invoices electronically? Ability to Submit Electronic Invoices 0% 20% 40% 60% 80% 100% I Yakima I All Surveys 1 1 1 I I ■Yes ■No Response Count: Yakima — 210; All Surveys — 1,480 1 1 1 1 r City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix 1 -Page 19 ' - av0, w,s;a - , I 1 1 Rate your agreement with the following: Given the opportunity, I would prefer to submit bids and quotations through a secure online system. Strongly Strongly Response U Agree Agree Neutral Disagree Disagree Average Yakima 28.2% 26.8% 36.8% 5.7% 2.4% 3.73 All Surveys 22.6% 35.7% 32.6% 6.4% 2.7% 3.69 1 r Electronic Submission of Bids 1 0% 20% 40% 60% 80% 100% 1 I I 1 I Yakima I All Sur'eys 1 I _ 1 1 1 • Strongly Agree • Agree o Neutral ❑ Disagree • Strongly Disagree 1 Response Count: Yakima — 209; All Surveys — 1,495 1 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP 1 Appendix 1- Page 20 —� Ar^=.a;ps',tl;,rarmer: 4c=sta9, %.]m 1 I SUMMARY I Based upon your dealings with the [City or County], in your opinion, please rank the following factors in order of importance to the [City or County]. (Highest = 6.0; Lowest = 1.0) 1 Importance 1.00 2.00 3.00 4.00 5.00 I Quality 3.83,1 I I I 3.83 j 3.65 i I Price . 57 3.66 -- __ "` `.I. - '- ',...� i 2. 80 Customer Service 2.8 1 .. 2. 9 Delivery Time 2.78 .95 U Supplier Qualifications 2.45 2.71 m Yakima - City • Yakima - County • All Surreys Response Count: City of Yakima - 135; County of Yakima - 131; All Surveys - 1,223 I How would you characterize your relationship with the [City of Yakima Purchasin g Division or County of Yakima Purchasing Department'? I Supplier Relationship with City 1 i 60.0% - 50.0% - I 40.0% - -- 30.0% \ .411\\ , 20.0% I 10.0% 0.0/ l Mutually • i Advanageous Neutral Adversarial �- Yakima -City 42.3% 17.6% 38.7% 0.7% 0.7% -a- Yakima - County 49.6% 20.2% 29.5 % 0.0% 0.8% l I -a-All Surreys 1 37.0% 18.8% 41.8% 1.7% 0.8% Response Count: City of Yakima - 142; County of Yakima - 129; All Surveys - 1,492 I City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Appendix 1 -Page 21 a Pua:^asrny ente :4..,osrime.rw,;,,. 1 1 Overall, how would you rate the [City of Yakima or County of Yakima] as a customer? ii (Maximum Average Response: 5.0 — Excellent) Excellent Good Adequate Fair Poor Average I Yakima -City 40.1% 40.8% 13.4% 3.5% 2.1% 4.13 Yakima - County 42.6% 38.8% 13.2% 3.9% 1.6% 4.17 All Surveys 26.9% 43.1% 18.7% 6.8% 4.6% 3.81 Rate the City/County as a Customer I 0% 20% 40% 60% 80% 100% 1 1 1 Yakima - City —® I Yakima - County 111 All Surveys —® 1 L t • Excellent • Good ❑ Adequate 0 Fair • Poor �I 1 Response Count: City of Yakima — 142; County of Yakima — 129; All Surveys — 1,422 I CITY: If there is one thing about the City's contracting process you could change, what would it be? I — Keep bids in Yakima when qualified vendors are available - be aware of pricing problems as stated earlier (piece price range). I - Don't have to always go with the lowest bid. Customer service means a lot. — Knowledge of our industry, and it's current rates. 1 — Simplify work requests. — Yearly contract process involving price increases; city does so much business with us it is hard to 1 keep up with price increases. — Give companies whose main office or which have the most employees in the city extra points 1 when awarding bids. — Factors of importance (number 3) should be changed. Our company has an excellent service and I delivery rating, but is turned down because of being a little above the bids of others that do not have the necessary qualifications for the profession that is purported. 1 — Nothing comes to mind. I City and County of Yakima Joint Administrative Purchasing Assessment Final Report / \T TG n Appendix l Page 22 q:;..,t•, rtl, ^era.; -sra sr <",,x;-,J. 1 — When prices are the same the city awards the purchase order on the basis of a coin toss and NOT on the basis of being a local business. This should not be the case. Those who provide jobs in ' the community should be given special consideration even if the price is close. — No long term contracts over a year. 1 — Notification to registered vendors of new bid opportunities. — The City does a great job. No critical comments to add. — More timely decisions. — More timely payment. — The current process works well for me. 1 — Keep more tax dollars in the city. It is our money being spent. — Look at vendor value and not buy on lowest bid only. — From what I have experienced — None. — None I can think of - they always are clear when ordering, and pay in a very timely manner. — We do not do much work directly with the City but as part of the engineering team. — It would be nice if they awarded bids based on years of experience & quality of service & not automatically to the lowest bidder. - Make the contracts longer to off set the cost of paper dispenser change out. - Only deal with one person regarding what they want. ie. 1 person in the fire dep't, 1 person in purchasing for the fitness committee, 1 person in the police dept. - Change from 'government' employee to 'run it as if it were my money' employee. — More clarity and output of bids. — Improve the City's ability to utilize cooperative purchasing where it may prove beneficial to the City. — To be open to a failed process. — Easier access to bids, of all categories, we have much overlap into many segments — More flexibility in establishing service parameters, it seems like the city is very rigid about how the service should be performed and not very interested in listening to ideas that might improve or reduce the cost of the service. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP Appendix I `Page 23 I gora 0017eyeme1uaWSSamennydn 1 1 COUNTY: If there is one thing about the County's contracting process you could change, ' what would it be? — Use local vendors when quality is available. 1 — Hiring arborists that actually practice correct industry standards. — Simplify the bid sheets. 1 — Awarding a contracts to companies that reside in the county if the can g p ty y provide the same service. — Accountability of contractors. — To make sure that the quality of work performance is what is expected and not related to the 1 price. — Nothing comes to mind. 1 — NONE — Allow for price increases during the contract period if manufacturer pricing goes up. — Current process works for me. — Shop local. — Please let us know what else we must do to participate actively in bid opportunities. We will gladly comply. — Don't buy using lowest bid, look at vendor value as well. — Not applicable to me. 1 — None - again, usually we deal with public works /fire depts., and they are always clear when ordering, and timely when paying. 1 - Automate the purchasing process (web /edi /xml ordering) so they no longer need to fax po's. — We don't do much work directly for the County but as part of the engineering team. — For the county to award bids based on experience & quality of service, not just to the lowest bidder. — Nothing. — Stop tailoring bids towards certain vendors. — Make contracts longer to off set price of paper dispenser. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG1� Appendix 1- Page 24 Annhasing Management Assistance Program 1 1 — We have had very little contact with the county in the last 3 years. Most of it has been the COG. ' - We have not received any request for quotes in the last 3 years. — Not Applicable. 1 — Better availability of bids. — Better communication of information for quotations. We rarely get requests for quotes. 1 1 1 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report Appendix -Page 25 1 �� Ptaraasing Management AssismnceProgram I JOINT PURCHASING ' The City and County are accessing the feasibility of merging their purchasing functions. How would you view this merger? Merger of City/County Purchasing 45.0 % ' 40.0% - 35.0% ' 30.0% 25.0 % - 20.0% 15.0% - I 10.0% 5.0 %- I 0.0% Very Favorably Favorably Neutral Unfavorably Very Unfavorably �— Merger 18.3% 35.4% 39.4% I 4.6% 2.3% Response Count: Yakima — 175 Note: This question is unique to the Yakima survey. Supplier Comments: — Keep it local. — Whichever avenue is decided upon, [supplier name's] top priority will be to support the City and I County in any every way possible. Both entities have been long time [supplier name] customers and are truly valued as such. - I think the city and county should do what they believe is the best for them. We are flexible enough to service both entities whichever way they elect to go. — LOOOONG past due! — Anything that can be done to make the selection and contracting process with professional engineers and planners more efficient is always appreciated. — This wouldn't work for every City/County team ... but I think it would for Yakima. — Unless the city changes this would have negative impact on the county if the city leads. — Economies of scale exist on our end, too. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGP) Appendix 1- Page 26 RmA9s44) Management Assistance Program 1 — Hopefully does not complicate orders /confuse orders. ' — In general, it seems as though the city and the county have difficulty dealing inter - departmentally, how would they be able to merge the separate entities? ' - We do not deal directly with the City or County Purchasing Departments. We get our orders directly from the facility. The source funds is not from the county coffers. I don't know how a merger would affect the purchasing system. — Vendor relationships with The City are generally hostile. County has treated us perfectly. We expect we would lose valuable local business if these functions were merged. Do you have any additional comments or recommendations regarding contracting and procurement by either the City or County of Yakima? - The service we provide involves looking at and selecting apparel for printing - also custom artwork that is often reviewed and changed. Hard to imagine doing this with out of town or state vendors. We recently lost a bid for a job we've been doing to a vendor across the country. Can't imagine doing business like that. By the time you see your product it's a done deal. — Both the City and County are able to take advantage of contracts that [supplier name] currently ' utilizes: WSCA, NJPA, KCDA, and GSA. — No. — Keep business local. 1 — Keep the taxpayers monies in the County by awarding contracts to companies within the City or County. — Overall impression/rating is 90% favorable. Thank you. ' - We are very interested in getting on your bid list and would like to compete and win your business. 1 — None at this time. ' - You could use the MRSC roster. — I would like to give more feedback. Please feel free to contact. 1 — Need to contact me more often for your truck needs. See our website. 1 — Our first and only dealing with the city or county was for a recently submitted bid. Still do not know how it turned out. Bid tab info is hard to come by — For our product both the City and County use the Washington State Contract. This appears to 1 work very well. City and County of Yakima Joint Administrative Purchasing Assessment Final Report d.crid17P Appendix I - Page 27 Ana7asing ManagamemAssistanca Program 1 — It is helpful to know the status of the award, if we were not successful who was, who were the other bidders? 1 — Not at this time. ' - No (5 responses) — I could not answer some of the questions accurately because DIS is an agency of the State of ' Washington and not a company or corporation. — We have not had bids or quotes directly to the purchasing departments. Our an Y contact has g been with the specific departments. ' — Most of the questions do not apply to what I do for the County. I rarely do transcribin for the City. 1 - Since we are a plan room, some of these questions do not really apply to us & have been left blank. 1 — Why does the city and county merge their printing operations? — I have always found their departments easy to work with regarding their travel needs. 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NTG Appendix I - Page 28 Purchasing dlenagemanrAssis&ncu Program 1 1 1 1 1 1 1 1 1 Appendix J 1 City and County of Yakima Job Order Contracting 1 1 1 1 _ 1 . Puni18$0 ManeyementAssr /axe Rvgiam JOB ORDER CONTRACTING Best Practices Library Detail Search Results ' Submission Year: 2005 Program Name: Job Order Contracting (JOC) System for Timely Completion of Construction • Projects Agency Name: City of Miami Beach Department: Procurement ' Contact: Gus Lopez, CPPO, CPPB ' City: Miami Beach State: FL • ' Phone: 305.673.7495 E -mail: quslopez a( miamibeachfl.gov ' Background: The City of Miami Beach has developed various programs to improve the quality of life of its residents. The residents approved the issuance of approximately $92 million in General Obligation (GO) Bonds for Neighborhood, Parks, Beach and Fire ' Safety Improvements, of which $57 million is allocated for capital right -of -way infrastructure projects (Program). In addition to this allocation, the City Administration proposed that a portion of the recent Water and Wastewater Bond and Storm Water Bond issues also be allocated for capital right -of -way ' infrastructure projects. Over the next six (6) years an estimated $187 million of public right -of -way infrastructure improvement projects are to be implemented. Program elements include citywide water, wastewater and storm water improvements; as well a variety of streetscape enhancement projects. Achieving timely and cost effective procurement of construction projects is one of the most difficult and challenging construction - related tasks facing the City of Miami Beach. Complying with the standard procurement regulations required for traditional construction services contracts, combined with the necessary technical component of defining the requirements (i.e. architectural and engineering drawings and specifications) for bidding, makes it difficult to be responsive to our residents and project managers in a timely manner. The City's dynamic environment has created ' a need for procurement professionals and project managers to have a more responsive contracting technique for the accomplishment of maintenance, repair and construction projects. Constraints imposed by the existing supply, contracting and personnel systems limit the City's ability to respond to urgent and time sensitive capital improvement and public works projects. Element #2: The Mayor and City Commission adopted Resolution No. 2001 - 24524, which ' Summary or Abstract of Best authorized the issuance of a Request for Proposals (RFP) for the establishment of a Job Order Contracting (JOC) System for Achieving Timely and Cost Effective Practice /Innovation: Procurement of Maintenance and Construction Services for Capital Projects. The Mayor and City Commission adopted Resolution No. 2002 - 24914, which authorized the Mayor and City Clerk to execute an agreement with The Gordian Group for the establishment of the JOC system. An Invitation for Bids was issued and a pre -bid conference was held for the purpose of discussing the JOC concept City and County of Yakima Joint Administrative Purchasing Assessment Final Report IGP Appendix J Page 1 ® HarhasagManagementAssistancePropmm 1 1 and the Contract Documents, the City's construction program, and bid considerations. A total of 18 bidders attended the pre -bid conference. Intending ' bidders were required to submit a "bid" on all work contained in the unit price book by quoting a single adjustment factor that would be applied for work accomplished during normal working hours and a single adjustment factor for work to be accomplished during other than normal working hours. These two adjustment factors represent the contractor's only adjustment to the prices published in the unit price book and must include all indirect cost such as overhead, profit, bonds, insurance, design and contingency costs. For example, an adjustment factor of ' 25% would be bid as 1.25. During the execution of the contract the unit price of a specific construction task is multiplied by the appropriate adjustment factor to obtain the final price to be paid for the specific task. JOC represents a competitively bid, firm fixed price contract since all the prices and the adjustment ' factors are established before the contract is awarded. All bidders were provided with a Bid package that consisted of the following three major documents: 1.A location specific Unit Price Book containing over 140,000 construction tasks. Each ' task contains a task description, unit of measurement, and a unit price. Each unit price contains locally developed direct costs for material, equipment, and labor. The construction tasks encompass all aspects of construction work. 2. A set of detailed technical specifications for each of the 140,000 construction tasks. The specification set incorporates the City's own specifications. 3. The legal terms and conditions that contain the specific contract language concerning the execution of the contract. The City received 10 bids for the Citywide JOC Contract, 8 bids for ' Public Works Contract, and 9 bids for the CIP JOC Contract. The recommended contractors were selected based on the following evaluation criteria which was incorporated into all three Invitation for Bids: a. Factor Weights for Determining the Low Bid Only: -Type of Work Non Davis Bacon -- 90% -Type of Work Davis Bacon ' -- 10% - Normal Working Hours — 90% -Other Than Normal Hours — 10% - Architectural and Engineering Services -- 30% b. The ability, capacity and skill of the bidder to perform the contract. c. Whether the bidder performed satisfactory on contracts within the time specified, without delay or interference. d. The character, integrity, reputation, judgment, experience and efficiency of the bidder. e. The quality of performance of previous contracts. f. The previous and existing compliance by the bidder with laws and ordinances relating to the contract. In determining a Bidder's responsibility and ability to perform the Contract, City investigated and requested information concerning the financial condition, experience record, personnel, equipment, facilities, principal business location and organization of the Bidder, the Bidder's record with environmental regulations, and 1 the claims /litigation history of the Bidder. Element #3: Individual Job Orders issued will determine the scope of work. Upon receipt of a Supplemental Notice to Proceed, the Contractor will furnish all architectural and engineering Information: services to support individual Job Orders, shop drawings, samples, management, documentation, materials, supplies, parts (to included system components), transportation, plant, supervision, labor and equipment needed to perform the work at designated City properties. The Contracts included but were not limited to the following construction repair, renovation, or new construction projects: Public Works, Capital Improvements Projects, Facilities and Parks, Parking, and the ' Miami Beach Convention Center. The Public Works Department and the Capital Improvements Program (CIP) Office will administer the Contracts. The contractor will be evaluated on each Job Order. Results of the evaluation will impact the issuance of future Job Orders. The Contract Price is to include the furnishing of all ' labor, materials, equipment including tools, services, obtaining permits, applicable taxes, overhead, architectural and engineering services, overhead and profit for the completion of each Job Order. The cost of any item(s) of Work not covered by a 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report Appendix J - Page 2 Pordiasng AlertagementAcsalance Program 1 1 specific Contract unit price shall be treated as a Non Pre - priced item and the procedure for ordering these tasks are outlined in the Contract. Other Government 1 Agencies (i.e. City of Miami and Broward County) have taken a look at Miami Beach's JOC System and have implemented a similar JOC program. Cost: The Consultant that the City hired via a competitive RFP process is paid 1.5% of any amount ordered via the JOC system. The Consultant in turn agreed to the following services: 1. Provide experienced staff that will be responsible for the JOC development and implementation program. This staff will report directly to the City's Public Works and CIP Office, and will be available to assist City staff with any JOC related issues. 2. Responsible for the development of JOC documents including the unit price book, technical specifications, contract terms and conditions and bid documents. 3. Responsible for the development of the automated JOC • 1 proposal development system, which will be capable of generating the JOC documents including contractor cost proposals, cost estimates and other management reports and forms. 4. Responsible for installing and testing software 1 applications on both City and JOC contractor hardware systems. City will have no restrictions on the number of software application installations. 5. Responsible for testing /debugging software applicatoins under actual field conditions before the implementation of JOC. 6. Responsible for conducting the activities necessary for 1 establishing the structure of the City's JOC program, informing the internal City staff as well as the contracting community about JOC, assisting with procurement of the actual JOC contractors and assisting with development of the actual execution procedures that City will use in executing the JOC concept. Specific 1 services will include: • Develop the JOC Program Structure /Bidding Strategy, • Prepare and Conduct Pre -Bid Seminars, • Prepare and Conduct an External Marketing Program, • Prepare and Conduct an Internal Marketing Program, and • 1 Coordinate and Develop the JOC Execution Procedures. 7. Responsible for developing a comprehensive JOC training program, which will include different course modules in order for City staff to receive specialized training. 8. Attend and monitor initial site visits, proposal development and negotiation sessions. During 1 the ninety (90) day period after award of the first JOC contractor, Gordian will provide on -site service as needed to ensure that the implementation phase of the JOC program is completed successfully. 9. Responsible for providing 1 comprehensive JOC support to the City for a period of sixty (60) months following the award of the first JOC contract by City. Gordian will also monitor the overall program and prepare any status reports required by City. Benefits: The City's JOC program has delivered a fast, cost - effective procurement system that provides Public Works, Capital Improvements Projects (CIP) Office gives each Department an option in the procurement of construction services. As of March 2003, the City of Miami Beach's JOC program has issued 131 projects in a period of 24 months totaling $22,922,248.25. The number of construction projects initiated and awarded via JOC in the aforementioned two -year period (131 projects), is greater than the total number of construction projects awarded via traditional bidding (78) in the past five years! Additional benefits have included the following: Significant time savings -- an average savings of between 150 to 180 days per project. Lower overall construction costs typically in the range of 8 to 15 %. Consistent increase in the level of quality. An increase in contractual control. Significant reduction in claims and changes. Substantial increase in the utilization of local, minority and women owned businesses. The major advantage of the Job Order Contracting System is that the individual work orders give the contractor a 1 "continuing incentive" to do timely and high quality work. The incentive is generated because each work order only represents a small portion of the total possible contract. By doing responsive and high quality work, the contractor can 1 City and County :f 311a Yai Joint Administrative Purchasing Assessment Final Report �T G Appendix J Pag 1- ♦ Arr asiv AlanagemeniAssiskucePavan 1 expect follow on work orders. The General Accounting Office (GAO) has fully reviewed the JOC concept and found it to be consistent with all Federal 1 procurement laws and policies. Therefore, any federal funds received by the City can be obligated through the JOC process. The JOC concept was designed with internal controls as an integral part of the check and balance process. The JOC concept relies on automated software, which provides an excellent audit trail of all 1 JOC work orders and transactions as well as various verification programs to ensure the integrity of the JOC database. 1 Savings: Actual Cost of Construction savings in excess of $1.5 million based on results of traditional bidding process compared to JOC cost proposals. 1 1 1 1 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG1'� Appendix J - Page 4 Flac4asing ManagementAssisiaxe Program • 1 1 1 1 1 1 1 1 1 Appendix K City and County of Yakima 1 Joint Administrative Purchasing 1 Telephone Survey Results 1 1 1 1 1 NIGP 1 1 Purchasing ManagementAssislaxe Program JOINT ADMINISTRATIVE TELEPHONE SURVEY RESULTS Agencies Interviewed City of Charlotte — County of Mecklenburg, North Carolina ' • Kay Elmore, Procurement Manager • Purchasing Staff: 15 City of Lincoln — County of Lancaster, Nebraska ' • Vince Mejer, Purchasing Agent • Purchasing Staff: 6 City of St. Paul — County of Ramsey, Minnesota • Linda Camp, Manager, Contract Services • Purchasing Staff: 6 U City of Winston -Salem — County of Forsyth, North Carolina • J. Marshall Mather • Purchasing Staff: 6 ' City of Nashville — Davidson County, Tennessee • Dr. Stephen B. Gordon, FNIGP, CPPO • Metro Government ' City and County of San Francisco, California • Lynn Khaw, C.P.M., CPPB • Metro Government ' City of Green Bay — County of Brown, Wisconsin • Linda Dupris ' City of Louisville — County of Jefferson, Kentucky • Betty Y. Bingham, CPPO' • Administrative Joint Purchasing established 1965 • Became Metro Government on January 6, 2003 ' Methodology ' The Consultant conducted a telephone survey of representatives of agencies that currently operate under a "joint administrative purchasing" arrangement. The purpose was to determine the background as to why, when and how the current arrangement was established. The agencies were also questioned on how the ' current arrangement worked, if it was meeting expectations, and how the consolidation was funded. Finally, the team wanted to ask if the current agencies had any suggestions to help insure a successful implementation, as well as any caveats or other `heads -up' that would be helpful. The team posted an inquiry on the NIGP listsery to find as many current agencies as possible to survey. The current list is based on a combination of responses from the posted inquiry. Agencies that function as ' a "metro government" or "unified government" were contacted but not included in the survey results. A monograph published by NIGP in 1981 was obtained for background information. This publication, Background Information and Guidelines for "Joint Administrative" (Consolidated) Purchasing, National Institute of Governmental Purchasing, Background Information and Guidelines g nes for "Joint Administrative" (Consolidated Purchasing. Monograph No. 2. 1981. • ' City and County of Yakima Joint Administrative Purchasing Assessment Final Report �TT� ' Appendix K - Page 1 1 l Puirhasvv Management Acsistanse Program Monograph No. 2, 1981, Stephen B. Gordon, was able to provide background information; as well as copies of the interlocal agreements to three of the "joint administrative purchasing" programs. Additional ' comments from this publication have been included in the survey results as noted. The Consultant also contacted the City of Green Bay, Wisconsin; however, they are not included in the I survey results. The City of Green Bay and County of Brown had started the process of implementing a "joint administrative purchasing" operation in July 2007. However, after the process had started support from the City mayor's office was withdrawn, causing all implementation efforts to cease. The city and the county had apparently established, and discontinued, at least twice a joint administrative human ' resources operation. The City Purchasing Agent felt there was a potential for problems when combining single services, such as human resources, or purchasing, instead of combining all administrative services. The two purchasing offices are continuing work on creating a full set of standard terms and conditions, boiler plates, contract formats, etc., in case this project is revived in the future. Based upon the research conducted in 1981, NIGP provided the following outline on how to establish a ' successful joint administrative purchasing program: 1. Insure satisfactory level of interest within each governmental agency. ' 2. Have a study group address the following: • What is the cost and quality of purchasing and supply services currently being provided. • Who or what body would make policy for the joint purchasing program, and how? ' • On what basis would operating costs be shared? • Which government or what body would provide administrative support, such as personnel, payroll, and accounting, to the joint purchasing office? • Who would manage the joint purchasing office on a daily basis? • Who or what body would review requests by other government agencies wanting to take advantage of the joint purchasing program? ' • Where have similar joint purchasing offices been established and what benefits have they provided to participating governments? o Overhead costs are almost always lower when a single agency purchases for ' several governments. o Combined requirements result in lower prices. o Improved timeliness and quality of goods and services delivered • Enabling authority or legal obstacles. ' 3. Execute an agreement to establish the joint purchasing program and provide for its operation. 4. In some instances, specific legal authorization may be needed from the state legislature. 1 5. Once established there are some very basic issues which must be addressed, such as: • Where will the office be physically located, and how will it be equipped? ' • How many and what types of staff positions should be provided for? • What are the appropriate qualifications of the staff? • What forms will be used? • What will the operating procedures be? 2 National Institute of Governmental Purchasing, Inc. Background Information and Guidelines for "Joint Administrative" (Consolidated Purchasing. Monograph No. 2. 1981. 3 Consultant Note: When this was written in 1981, procurement automation did not exist. ' City and County of Yakima Joint Administrative Purchasing Assessment NIGP Final Report Appendix K - Page 2 111 • Purchasing Management Assistance Program i M — — M MI — MN I= — ® NE MO ME M NM — MS NM Joint Administrative Purchasing Telephone Survey City of Charlotte /County City of Lincoln /County of City of St. Paul /County City of Winston - Salem/ NIGP Question of Mecklenburg, NC Lancaster, NE of Ramsey, MN County of Forsyth, NC Is your agency considered to be Loose consolidation for Purchasing performed by City. Contract and Analysis Services Merger of Purchasing, Planning a `metro government "? If not, is Purchasing. Division, Department of and Inspections departments of it a blending of functions within Financial Services, of the City the two agencies. multiple agencies? If blended, sells services to the county and what functions have been to other quasi - governmental merged? agencies. Additional Comments —1981 NIGP Monograph: City of Louisville /Jefferson County: Merger of two purchasing operations What government agencies are City and County. Other City of Lincoln, County of County of Ramsey, City of St. City of Winston -Salem and involved? agencies (Public Works, Lancaster and Building Paul, St. Paul Water Authority, County of Forsyth. The two Transportation, Utilities) provide Commission (quasi- St. Paul Port Authority. Usage governments also created joint some levels of purchasing as governmental agency created to varies on annual basis. boards for utilities (water and well. construct buildings under Currently, of the total purchasing sewer), and for transportation. separate statutory rules). done by the city, the county represents 42 %, the Water Authority about 10% and the Port Authority about 1 %. The remainder (47 %) represents the • city usage. Additional Comments —1981 NIGP Monograph: City of Louisville /Jefferson County: City and County, except for the sheriff, county clerk and county attorney, which are legally independent entities. When was the merger Agreement was signed on Interlocal agreement signed in Joint agreement approved in Interlocal agreement signed in implemented? Are copies of the February 24, 1969. 1974. November, 1961. 1967. interlocal agreement available that can be shared? Operationally, is one agency the Operationally, it is a All purchasing functions are As part of the joint agreement, a Combined purchasing lead? decentralized operation. The handled by the City purchasing permanent committee of county, departments of both agencies county doesn't have to go office. city and school district was into one purchasing department. through city purchasing, but can established to create procedures [Consultant Note: Department is opt for other service providers. and provide direction in under the City's Financial The county has no purchasing resolving problems. Management Services.] staff. • Additional Comments — Telephone Interview: City of Nashville /Davidson County: Combined purchasing departments of both agencies into one purchasing department, reducing overall staff from 12 to 10. City and County of Yakima Joint Administrative Purchasing Assessment Draft Report NIGP JJ)) Appendix K - Page 3 �` fl fL Pumfiasiag Management assiP Awe., City of Charlotte /County City of Lincoln /County of City of St. Paul /County City of Winston - Salem/ NIGP Question of Mecklenburg, NC Lancaster, NE of Ramsey, MN County of Forsyth, NC How is the merged entity The original plan was for a city/ The City Purchasing Agent The agencies are charged for On implementation, all funded? What is the formula for county split of 75 %/25% to cover creates an annual budget for the actual services provided at the personnel in the combined funding? cost of operations. The county county and bills the county on a end of each fiscal year based on purchasing office were put on currently provides about 30% of quarterly basis. Charges are a system developed in 1987. the City payroll. City Purchasing the city Purchasing Department based on the cost for one buyer, They track work done for all Agent prepares an annual operating budget. It is felt that 1/8 time for two clerks, and 1/6 agencies, and every month will activity report of all purchase the county uses approximately time for the Purchasing Agent. track the buying staff work for orders issued, bids /proposals 50% of the staff capacity in two weeks. At the end of the issued, etc., and submits an purchasing. year all data is entered into an invoice one time per year to the Access program what will county, as well of the utility and calculate a unit cost for each transportation boards for function and the bill is submitted services rendered during the to each agency. Unit costs will prior year. vary annually, as will the number of units of each type of function by each agency. Additional Comments — NIGP Monograph: City of Louisville /Jefferson County: Initially set up to share costs on a formula based on ratio of purchases each agency made. Developed into a 2/3 -1/3 split, city to county. What was the reason(s) behind • Better staff availability to both When the agreement was Following actions of the state Current City Purchasing Agent is the move to merge purchasing? city /county agencies; reached, the reasoning was legislature, on recommendation unsure; preceded his • Better qualified staff; strictly cost cutting. The county of the County Legislative employment but feels that the • Specialized purchasing staff; eliminated their Purchasing Research Committee report reasoning was based on • Better pricing based on larger office and 3 FTE's associated which indicated potential cost economies of scale. quantities; with it. Occasionally, a politician savings. Approved by voter • Better vendor performance at the county raises a question referendum. and delivery about doing it cheaper in- house, but generally accepted that the county couldn't do the same level of work for the same dollars as are currently being spent. Additional Comments —1981 NIGP Monograph: City of Louisville /Jefferson County: County judge (executive) and mayor were convinced the merger would "produce obvious and substantial savings in workload and prices paid." What level of legislative or County uses the city regulations The work with the set of rules for No response. Besides signing an interlocal regulatory restrictions were for purchase of goods /services. each agency. Will sometimes agreement between the two City and County of Yakima Joint Administrative Purchasing Assessment Draft Report � Tjjlf � JJ �) Appendix K - Page 4 d V �[ l�JJ PachasmgManappmeNasysunce P,w,a ME >• I MN I•= I OM I I M_ ;, • -- r MIR City of Charlotte /County City of Lincoln /County of City of St. Paul /County City of Winston - Salem/ NIGP Question of Mecklenburg, NC Lancaster, NE of Ramsey, MN County of Forsyth, NC needed to overcome to allow the County regulations are generally use county rules which may be agencies, there was some kind merger to be accomplished? looser. more liberal than City rules. of enabling legislation that was enacted to authorize the • establishment of the joint administrative purchasing office. How well is the merged agency From the city's perspective, Works extremely well. Biggest • Generally working well. The Generally working well. functioning? Has it fulfilled excellent; hard to tell from the problems have been with the agencies that they work with expectations? If not, how has it county's perspective. If the legal staffs of the city and county like the services being failed to meet expectations? customers work with Purchasing, who are unable to come up with provided. Occasionally an service is considered excellent. a standard set of terms and elected official will raise the There are cultural issues conditions, contract formats, etc. issue but it has been between the city and county that Each agency must approve each generally accepted that the create problems, but not just contract and must sign each county could not provide the Purchasing; general adversarial contract — this causes delays in same level of service they are relationship. processing. currently receiving as effectively and efficiently. • In 1991 -92 the county became a home rule county. They now have the authority under their new charter to create their own purchasing operation. • The city and county both use different accounting systems which creates some additional work for the buying staff. • The city buys most of the goods /services for the county. They do not buy the human service contracts, and will provide most constructions contracting except what the county does on design -build basis (county is authorized to use this method but the city is not). City and County of Yakima Joint Administrative Purchasing Assessment Draft Report Appendix K - Page 5 NosingdranagemeitAw Program • IIIIIl N ® _ ME — r — I= MI — • • — MR I I MI City of Charlotte /County City of Lincoln /County of City of St. Paul /County City of Winston - Salem/ NIGP Question of Mecklenburg, NC Lancaster, NE of Ramsey, MN County of Forsyth, NC • Currently the city has 200 — 300 master contracts that are available to the county, as well as other public agencies in the state. What advice or suggestions for • Proper resources and funding • Get the legal staffs on -board • Don't deal with human • Determine compatibility of a city /county which are contem- • Understand the workload and before you get the politicians services contracts corporate cultures of two plating a joint administrative estimates of expectations on -board • Establish protocols for agencies involved. purchasing department can you • Cost allocations • Need to standardize sets of disposal of assets • Try to have a common offer to help insure success? • Determine balance between T &C's, contract formats, hold financial, and purchasing centralized /de- centralized harmless, etc. system at work in the two • Understand the environment/ • Standardize insurance agencies, otherwise data culture requirements collection and reporting is • Need commonalities — • Coordinate bid thresholds difficult and potentially systems, regulations, etc. • Recognize the impact to joint inaccurate. • Establish clear service level bids that imposing agreement requirements such as living wage, or local preference, will have on the bid process. • City and County of Yakima Joint Administrative Purchasing Assessment Draft Report I ��J� JIG Appendix K - Page 6 PYndesingMariagemenrAss6tancePm m 1 1 1 1 1 1 1 1 1 Appendix L City of Yakima Central Supply 1 1 1 1 1 1 Ni 1 i Pz/t asmg ManagementAssislance Program 1 CENTRAL SUPPLY • 1 Background The current inventory in Central Supply (CS), located in the Purchasing office, can be broken down into 1 six general categories as follows: 1. Batteries (five sizes) 2. Medical supplies (five items) 3. Audio - visual supplies (seven items) 4. Flags; US, Washington, POW — MIA (three sizes) 5. Office supplies (two items) ' 6. Printed forms (three items) • The Consultant conducted a review of the "Check Out Record" (COR) forms. The test period was for the period of January 2007 through April 17, 2008. There were 30 departments that signed out supplies from ' Central Supply which correlated with the "Central Supply — 311 Account Numbers" list in the same notebook. The review of the record of items distributed from Central Supply revealed: 1. Batteries • The City maintains a stock of AA, AAA, C, D, and 9V batteries. • Batteries are the most frequently requested items and were requested by 23 of the 30 agencies noted in the COR. • A total of 2,590 assorted packages of batteries were requisitioned during the test period. • There has been a marked increase in the number of batteries being requested from CS during the first 3.5 months in 2008 over FY 2007. 2. Medical Supplies • The City maintains a stock of Advil, Tylenol, elastic bandages, 3M face masks, and latex gloves. • The masks and gloves, according to Purchasing staff, have not been requisitioned by agencies for several years. The masks appear to be the last remaining stock of masks that were purchased the last time that Mt. St. Helens erupted. • The last box (opened) of latex gloves appear to be dry rotted as they tore when gloves were tried I on. • The elastic bandages (generic Band -aids) were requested by only three offices during the test period. A total of eight boxes had been requisitioned by the three offices. • The Advil and Tylenol are among the most frequently requisitioned items • The Advil and Tylenol were requested by 23 offices during the test period. A total of 94 bottles (72 Advil, 22 Tylenol) were requisitioned during this period. • The bottles are unusually large bottles, between approximately 245 to 300 pills per bottle, depending on brand. 3. Audio - visual Supplies • The City maintains a stock VHS cassettes, DVD -R (and sleeves, a separate item), HF cassettes, and 60 -, 90 -, and 120 - minute audio cassettes. • At the time the review of CS was conducted there were no 60 -, 90 -, or 120- minute cassettes in stock. • According to Purchasing staff, the HF cassettes have not been requested in several years • The items in this category were requested by nine agencies during the test period. ' City and County of Yakima Joint Administrative Purchasing Assessment Final Report 1 Appendix L -Page 1 1 Puichashrg Management Assistance Progiam 1 ' 4. Flags: US, Washington, and POW -MIA • The City maintains a stock of each of the above noted flags in three sizes (except the POW -MIA flag, only 3X5 and 4X6). I • The items in this category were requested by five agencies during the period tested for a total of 32 assorted sized flags. ' 5. Office Supplies • The City maintains a stock of compressed air cans, and surge protectors. 111 6. Printed Forms • The City distributed three printed forms; time card forms, receipt forms, and vehicle incident report forms. t • Time card forms were distributed to 15 of the 30 agencies. • Receipt forms were distributed to three of the 30 agencies. • Vehicle Incident Report forms were distributed to one of the 30 agencies. 1 Analysis The general trend in public and private organizations has been away from maintaining a warehouse, or central supply type of operation, except in the case of certain mission - critical and /or long -lead time items, (ex., landing lights for runways at airports. If too many lights are out the FAA will require the airfield to close). Organizations have identified several problems with maintaining inventories, such as: a) cost of the physical space to maintain the inventory as well as the security, HVAC, electricity, etc.; b) inventory shrinkage; c) rotating stock and dealing with expiration dates; and ' d) proper accounting procedures (LIFO, FIFO, etc). The trend has been a movement away from in -house inventories and a movement toward next -day delivery of goods based on established contracts. The use of eCommerce allows for the online ordering of goods directly from the user's computer to the vendor's computer for next day delivery. The use of such contracts is more cost effective than the use of blanket orders with local vendors because of contract pricing instead of shelf -price less a small discount, along with the cost involved with having an employee ' travel to the vendor's location instead of being at their work site. Recommendations The Consultant recommends that the existing Central Supply operated by the City's Purchasing Division be discontinued. The remaining stock in Central Supply should be distributed to using departments. ' Those items not claimed by using departments should be declared as surplus and sold or disposed of in accordance with established procedures. ' Purchasing should determine if the items currently in Central Supply can be procured via existing contracts or if new contracts need to be established to provide a continuing source of supply. ' City and County of Yakima Joint Administrative Purchasing Assessment � Final Report 7 1 V l Appendix L -Page 2 v �► Aua',asny ManegamenrAcsismxe Program 1 1 1 1 1 1 1 1 Appendix M 1 City and County of Yakima Recommendation Summary t: 1 1 1 1 1 1 ° VS `f 1 1 . RECOMMENDATION SUMMARY I There are a total of twenty -two (22) recommendations in this report, classified as Short Term (0 — 6 months from now), Medium Term (7 — 12 months) and Long Term (over 12 months) activities to be conducted by internal or external resources. In some cases, recommendations are indicated as I "internal /external" to indicate where work is to be done by the City and /or County but facilitated by external resources; in the summary table, those recommendations are indicated as "external" to reflect the external component. Please note that some recommendations are applicable to only the City or County. 1 Table M.1 - Summary Table of Recommendations Report Section Number of Number of Number of ilrn,e; Infernal Rees External Bee's short/medium/Lout" Term S Reco M L S NI L S i'J L I Organization 1 1 Purchasing Processes 4 9 2 3 8 1 1 1 1 Information Technology 1 1 1 1 1 1 I Business Improvement 3 1 2 Totals 9 10 3 4 9 2 5 1 1 I There are no recommendations contained in Sections 2 and 3 of the report. The followin g is a list of recommendations presented by individual section. I 1 — Organization / Joint Administrative Purchasing I 1.1 City and County — Establish a cross - functional team to engage in strategic planning to define the vision and develop an implementation strategy for joint administrative purchasing. [Short term; internal/external] 1 4 — Purchasing Processes 1 4.1 City and County - Develop strategy and plan to optimize utilization of p- cards. [Short term; internal /external] 4.2 City and County - Select and implement card management software. [Medium term; internal] I 4.3 County - Develop p -card policy and manual; City - Revise p -card policy and manual as necessary to include card management software; City and County - Re- engineer business processes as I applicable. [Medium term; internal] 4.4 City and County - Integrate the use of p -cards with term contracts. [Medium term; internal] 1 4.5 City and County - Explore the use of e- payables. [Medium term; internal] I 4.6 City and County - Conduct periodic external audits of p -card program. [Long term; external] 4.7 City and County - Implement spend analysis to reduce costs and improve operational performance. [Long term; internal] 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report CNIGP) Appendix M - Page 1 Rocha* MaregemenlAssiA9nce Avon • 1 4.8 City — Implement job order contracting for small to medium construction projects. [Medium term; internal /external] 1 4.9 County — Lobby for legislation to authorize Yakima County to use the job order contracting procedure. [Medium term; internal] 1 4.10 County — Eliminate use of blanket purchase orders. [Medium term; internal] 4.11 City — Discontinue Central Supply; distribute inventory to using departments or surplus. [Short term; internal] 4.12 City — Where necessary, establish contracts for items currently in Central Supply to provide a ' continuing source of supply. [Short term; internal] 4.13 County — Engage in procurement planning and forecasting through proactive client interaction. ' [Medium term; internal] 4.14 City and County - Establish internally and externally facing performance standards for the Purchasing Division /Department. [Short term; internal] 4.15 City and County - In conjunction with e- procurement initiative, develop the means for gathering, maintaining and reporting purchasing performance measures. [Medium term; internal] 5 — Information Technology 5.1 City and County - License and implement the most current edition of the NIGP Commodity /Service Code to enable procurement tracking and comprehensive spend management. [Long term; internal] 1 5.2 City and County — Develop policies and procedures enabling and governing the utilization of electronic procurement. [Medium term; internal] 1 5.3 City and County - Develop a strategy and plan for leveraging e- procurement. [Short term; internal/external] 6 - Business Improvement Plan 6.1 County - Establish a cross - functional team to manage the purchasing transformation process based ' upon the strategic plan and change management strategy. [Short term; internal] 6.2 County - Engage in strategic planning to define the vision and develop an implementation strategy. [Short term; internal/external] 6.3 County — Conduct a change readiness assessment and, based on that assessment, develop a change management strategy. [Short term; internal /external] • 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report Appendix M -Page 2 l L Purchasing A lrmagemenrAssisrar>AVFiogram 1 .: 1 1 1 1 1 1 1 1 Appendix N u 1 City and County of Yakima Assistance from NIGP 1 for Business Improvement 1 1 1 1 1 1 Ai � II Purchasing Management Assistance Program 1 ASSISTANCE FROM NIGP FOR BUSINESS IMPROVEMENT Onsite Report Presentation Purpose: The Consultant will give an onsite presentation and discussion of the findings and recommendations of the Joint Administrative Purchasing Assessment to senior management Estimate: 1 consultant, 12 hours = $2,100; plus travel and administrative $1,460; Total = $3,560. Recommendation 3.1: Purchasing Card Strategy g t ategy Purpose: Develop a comprehensive strategy and plan to optimize use of p -cards at both the City and County. ' Scope of Work: • Review /revise City p -card policy; • Draft County p -card policy; • Establish effective p -card controls; • Review cardholder and approver training; • Flowchart processes; 1 • Develop p -card implementation plan; • Establish migration plan to new bank card provider; • Develop internal marketing program; and • Identify e- payable opportunities. Estimate: 1 consultant, 80 hours = $14,000; plus travel and administrative $2,900; Total = $16,900. Recommendation 3.6: Conduct External Audit of P -Card Program 1 Purpose: Conduct an external review of Yakima's purchasing card programs and provide recommendations for best practices and improvement in internal controls, if necessary. The internal control review will provide reasonable assurance that the goals and objectives of the p -card program are ' being met, and safeguards against fraudulent, improper, and abusive transactions are adequate. Scope of Work: • Review of Yakima purchasing card policies and procedures; ' • Review and evaluation of current p -card processes, internal controls and workflow; • Interview selected cardholders, approving officials, purchasing staff and management; • Review of representative sample of p -card transactions. Estimate: 1 consultant, 100 hours = $17,500; plus travel and administrative $4,000; Total = $21,500. r Recommendation 4.1: Strategic Planning for Joint Administrative Purchasing Purpose: Establish a cross - functional team to engage in strategic planning to define the vision and develop an implementation strategy for joint administrative purchasing. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG& • Appendix N - Page 1 Rim as ng Managemen,assisiance Pt gram 1 Scope of Work: The consultant would facilitate a series of three onsite meetings: • Session One: ➢ The objective of the first team meeting would be to develop a vision for joint administrative purchasing and define an organizational structure to fulfill that vision. ➢ Conduct meetings with sub - groups of the cross - functional team, including legal, finance, 1 purchasing and human resources to address specific issues. ➢ A second team meeting would be conducted following the sub -group meetings to convert the vision into measurable objectives and performance targets. • Session Two: ➢ Meet with sub - groups to review progress and resolve outstanding issues. ➢ Facilitate a team meeting to develop an implementation strategy, including activities, schedule, resources and risks. ' ➢ Meet with the legal departments of both entities to draft an outline of the interlocal agreement. • Draft the strategic plan based upon the onsite meetings and submit to the City and County for review. • Session Three: 1 ➢ Final meeting with the cross - functional team to review the strategic plan. ➢ Conduct change readiness assessment and identification of the change management tools to be utilized. ' ➢ Present strategic plan and recommendations regarding joint administrative purchasing to senior management /elected officials. Estimate: 1 consultant, 120 hours = $21,000; plus travel and administrative $6,950; Total = $27,950. Recommendation 5.3: e- Procurement Strategy and Plan Purpose: Develop a comprehensive e- procurement strategy and plan for the City and County. ' Scope of Work: • Needs Analysis — In conjunction with cross - functional team, determine the functional requirements of the e- procurement system to be utilized by both the City and County. ' • Gap Analysis — A prioritized list of the business and functional requirements required to close the identified gaps. • Solution Recommendation — A review of solution alternatives based upon current best practices. • Business Value Analysis — A high level identification of the potential costs, benefits, return on ' investment and risks associated with implementing the recommended solution. • Implementation Strategy — The tasks and activities required to complete implementation, an implementation schedule and the resources required. 1 Estimate: 1 consultant, 80 hours = $14,000; plus travel and administrative $2,900; Total = $16,900. • Recommendation 6.2: Strategic Planning (County) Purpose: Facilitate the development of an infrastructure within the Yakima County to assure the ongoing success and improvement of procurement operations. 1 Scope of Work: There would be facilitation of two onsite meetings. The objective of the first meeting would be to develop a vision, converting that vision into measurable objectives and performance targets, and defining an organizational structure to fulfill that vision. The objective of the second meeting is to City and County of Yakima Joint Administrative Purchasing Assessment Final Report �TTG Appendix N- Page 2 .1C l 111 /// Rfrdraskt AianagememAssr ancv Program develop an implementation strategy including activities, schedule, resources and risks. There would also be a change readiness assessment and identification of the change management tools to be utilized. Estimate: 1 consultant, 40 hours = $7,000; plus travel and administrative $3,450; Total = $10,450. Purchasing Code Development Purpose: Develop comprehensive purchasing codes for the City of Yakima and Yakima County consistent with the principles set forth in the American Bar Association's Model Procurement Code for State and Local Governments, Washington statutes, and the vision defined by the strategic planning process that foster excellence and performance, while maintaining the basic principles of competition and integrity. Scope of Work: • Document Review; • Draft purchasing codes for City and County; • Meet onsite to review draft documents; and • Submit revised drafts to City and County for adoption. Estimate: 1 consultant, 88 hours to 100 hours = $15,400 - $17,500; plus travel and administrative $3,040 - $4,500; Total = $18,440 — $22,000. Purchasing Regulations Purpose: Following the MPC model, the codes (ordinances) should provide the fundamentals of sound procurement that are implemented via administrative regulations. "Procurement continues to be a dynamic process that is continually evolving and that requires revision of procurement methods as experience and requirements change. Incorporating a large number of details in [an ordinance] tends to establish an overly rigid structure that constricts good procurement practices, hinders improvement and reform, frustrates initiative and innovation, and may lead to strained judicial interpretation.' Scope of Work: • Draft regulations based upon new codes; • Meet onsite to review draft regulations; • Submit revised draft to City and County for adoption; and • Create high level flowcharts to illustrate basic procurement and solicitation processes. Estimate: 1 consultant, 96 hours = $16,800; plus travel and administrative $3,180; Total = $19,980. On- Demand Consulting Services The NIGP Procurement Management Assistance Program is also able to provide other consulting services to the City and County of Yakima on an as- needed basis. Those services may include: • Flowchart and re- design business processes; • Conduct method of supply studies on high volume commodity groups; ' American Bar Association. The 2000 Model Procurement Code for State and Local ocal Governments. Chicago, IL; ABA, 2000, page xi. City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIGI'� Appendix N - Page 3 PrecSashq Management Assistance Program 1 • Develop a suite of metrics for rocurement operations; p p • Develop position descriptions; and • Drafting standard boilerplate for solicitations and contracts, etc. NIGP can provide additional information regarding establishing an agreement for these services upon request. 1 1 1 1 11 1 1 1 1 1 1 1 City and County of Yakima Joint Administrative Purchasing Assessment Final Report NIG Appendix N - Page 4 PwrhathIg Management Assistance Pmgam