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2013 Spokane Vendor Training

Vendor View of State Procurement Changes

Presented by Roselyn Marcus

June 19, 2013

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• Fiscal Crisis = Government Reform• ESSB 5931 – The reorganization of five

agencies into three agencies and two new offices:

What Happened in 2011?

Before ESSB 5931 After ESSB 5931

Office of Financial Management Office of Financial Management

Department of Personnel Department of Enterprise Services

General Administration Consolidated Technology Services

Department of Information Services State HR Director

Department of Printing Office of Chief Information Officer

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“To maximize the benefits to the public, state government should be operated in an efficient and effective manner. The Department of Enterprise Services is created to provide centralized leadership in efficiently and cost-effectively managing resources necessary to support the delivery of state government services. The mission of the department is to implement a world-class, customer-focused organization that provides valued products and services to government and state residents.”

Department of Enterprise Services

Department of Enterprise Services

Contracts & Legal Services Division

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LEGISLATIVE FOCUS ON WA SMALL BUSINESS

•2009 SSB 5723 Defines WA Small Business & requests new policies to increase purchases from WA Small Businesses for GA, DIS, PRT, and OFM purchase authorities: RCWs 43.19, 43.105, 43.19.736, and 39.29 respectively•2010 ESB 5041 Defines Certified Veteran Owned Businesses•2011 HB 1770 Redefines WA Small Business (removes owner domiciled requirement) requires a web based system by Dec 31, 2013

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Prior Statutory Scheme:

• Chapter 39.29 RCW (OFM)• Chapter 43.19 RCW (GA)• Chapter 43.105 RCW (DIS/ISB)• Chapter 43.78 RCW (Printer)

State Contracting Agency

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• 2SHB 2452 - Signed March 30, 2012• Combines 3 statutory chapters into one –

Chapter 39.26 RCW• Governs all state procurements for goods

and services.• Went into effect January 1, 2013

2012 – Procurement Reform is Born

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• Promote open competition• Promote transparency• Centralize oversight • Centralize location of contract data in a

searchable manner• Encourage/facilitate participation by

Washington small businesses• Increase accountability

RCW 39.26.005

Intent of Procurement Reform

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GOVERNMENT CONSOLIDATION SUSTAINS COMMITMENT TO SMALL BUSINESS

“In addition, the legislature intends that the state develop procurement policies, procedures, and materials that encourage and facilitate state agency purchase of goods and services from Washington small businesses.”

RCW 39.26.005

Procurement Reform ImplementationOrganization

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Procurement Reform Advisory Committee

Chair: Roselyn Marcus, DES Asst Director Contracts & Legal ServicesLead Staff: Servando Patlan DES Procurement Reform & Outreach ManagerKathy Marshall – Chief Financial Officer DSHS Steve Reinmuth – Chief of Staff WSDOT Lisa Darnell – Fiscal Manager Ecology Wadell Brent – Contracts Veterans Affairs Denise Doty – Assistant Secretary DOC Gail Douglas – Assistant Director Legal & Admin Services HCA Richard Woodruff – Accounting Services Director SBCTC Ann Anderson – UW Ted Lucas, CPPO – Purchasing Manager Snohomish County Nora Huey – Port of Seattle Jeanine Livingston –WFSE Frank Lemos – Co-chair of OMWBE Ad Hoc Adv. Committee Small Business Rep

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• The procedures and requirements must:

Guiding Principles

Be FAIR Be COMPETITIVE

Be able to obtain FAIR and REASONABLE PRICES

Be ACCOUNTABLE & provide HIGH ETHICAL STANDARDS

Be TRANSPARENT Be COST EFFICIENT & EFFECTIVE

Be TIMELY Be FLEXIBLE

Be SIMPLIFIED Be INNOVATIVE

PROMOTE SMALL BUSINESSES SEEK BEST VALUE

NOT OVER REGULATE EMPLOY BEST PRACTICES

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Procurement Reform Small Business Work Group

Co-Chair: Servando Patlan DES Procurement Reform & Outreach ManagerCo-Chair: Fernando Martinez, NW Minority Supplier Development Council Dave Davis - WSDOT Tim Carroll - WSDOT Linda Cornwall - LNI Tiffany Scroggs - PTAC Jay Field - The Evergreen State College Mick Matsuzawa - OMWBE Irene Reyes - Excel Supply Company Chesca Ward - University of Washington Business Diversity Manager Jennifer Brown - Brown Pear Solutions Greg Mowat - GTM Transformations LLC Janet McNaughton - Lasting Impressions Merle Holden - Native PTACFrank Lemos - Co-chair of OMWBE Ad Hoc Adv. Committee Small Business Rep

Agency Procurement Authority Impacts

Chapter 39.26 RCW Addresses Many Vendor Concerns, including:• Agency success purchasing from Washington Small

Businesses• Debarment for vendor non-performance• Notice to vendors of contracts, contract awards, and

inspection of sole source determinations prior to contract

• Paperless purchasing & contracting

Agency Procurement Authority Impacts

• An agency procurement and contracting risk assessment is being considered as a basis for the level of purchasing and contracting authority delegated to specific state agencies

• Given the strong legislative intent for procurement reform to facilitate business with Washington Small Businesses, agency success in contracting and purchasing with Washington Small Business may become an important component of the risk assessment

Small Business Barrier Consideration

• Number of years in business requirements biases against start-up firms

• Firm size requirements bias against sole proprietorships

• Number of years of state experience requirements bias against firms with federal experience sufficient to meet state needs

• Excess insurance & bond requirements for the project risk, e.g. a $3M umbrella policy will cost $6,000 a year, a $1M bond can cost $50,000

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DES Procurement Reform Web Page http://des.wa.gov/about/pi/ProcurementReform/Pages/default.aspx

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DES Procurement Reform Web Page http://des.wa.gov/about/pi/ProcurementReform/Pages/default.aspx

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DES Procurement Reform Web Page http://des.wa.gov/about/pi/ProcurementReform/Pages/default.aspx

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• RCW 39.26.200 gives DES director the authority to debar vendor for cause.

• Debarment rules - chapter 200-305 WAC. • Process in development.– Updating website– Referral form developed– Training being scheduled

 

Debarment

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1. A common approach for the procurement of all goods and services will be developed.

2. Requires training for all employees who develop, manage or execute contracts.

3. Oversight of all sole source contracts, except those otherwise exempt, in place of oversight of only personal services contracts.

4. Contractors and agencies will be allowed to submit bid documents and signatures electronically for ease of transaction.

 

What Will Be Different?

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5. Allows use of best value criteria to award contracts.6. Agencies will notify bidders and identify awarded

contractors in a central system.7. Agencies will post information about awarded

contracts with DES so the public can see basic information about all awarded contracts on a single site.

8. DES will be able to debar contractors for cause. 

What Will Be Different?

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1. The bill keeps the same exemptions for the Legislature, higher education, public hospitals, client services and the data center as in current law.

2. DES will establish rules and guidelines for procurement of goods and services.

3. Agencies can continue to make emergency purchases, direct buy purchases and negotiate contracts when appropriate.

What Will Be The Same?

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Small Business Definitions

• RCW 39.26.006 codifies the 2011 HB 1770 definition of a Washington Small Business and includes definitions for 2 additional types of small business classifications:–Mini-Business–Micro-Business

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Washington Electronic Business SolutionWEBS

• WEBS provides vendors the qualifying criteria and allows vendors to self identify as a small business

• http://des.wa.gov/services/ContractingPurchasing/Business/Pages/default.aspx

• WEBS will be updated with new qualifying criteria for mini and micro businesses and vendors will be notified to verify and adjust their status in WEBS as a self identified small, mini, or micro business

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WEBS Statistics Nov 9, 2011 Oct 5, 2012 Mar 21, 2013

• 254 345 412 WA Certified Veteran Owned Businesses• 2,075 3,085 3,727 WA in-state Small Businesses• 632 616 648 WA Certified Woman Owned Businesses• 460 436 456 WA Certified Minority Owned Businesses• 242 230 243 WA Certified Woman & Minority Owned Businesses• 23,210 23,215 25,715 WEBS Registered Vendors• 1.1% 1.5% 1.6% Veteran, • 8.9% 13.2% 14.5% in-state small business, • 2.7% 2.7% 2.5% Woman, • 2% 1.9% 1.8% Minority, • 1% 0.99% 0.9% Woman & Minority

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WEBS Statistics March 21, 2013

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WEBS Statistics March 21, 2013

Transparency Focus 201 solicitations posted in WEBS as of March 20, 2013

Transparency Focus DES State Master Contracts

Transparency Focus All State Contracts

• A project is currently underway to provide the means and processes to fulfill the intent and mandates of SSHB 2452 legislation and supporting procurement reform policies being implemented to foster transparency by maintaining a list of all contracts and procurement efforts for each fiscal year and making them publicly available.

WEBS For Sole Source Transparency9 Sole Source Postings on March 20, 2013

WEBS For Sole Source Transparency

WEBS For Sole Source

DES For Sole Source Transparency

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• Contact the agency that posted the sole source to understand why your solution doesn’t fit.

• If after the agency contact you feel your solution is a fit and this is not a sole source. Submit a capability statement to the agency that posted the sole source.

• A capability statement gives the details of your ability to meet the state’s requirements by – due date of proposals or capacity statements, i.e. within

five (5) calendar days of this announcement. – The following information should be included in the

capability statements: add a list of items that need to be included.

Sole Source What To Do?

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• Public disclosure (RCW 39.26.030)

• Bonds (RCW 39.26.190

• Complaint and Protest Process Requirements (RCW 39.26.170)

• Electronic world (or welcome to the 21st century)

– Electronic submittal of bids under RCW 39.26.090(70)

– Electronic signatures under RCW 39.26.180(1)(f)

• Training (RCW 39.26.110)

Other Changes

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• Servando Patlan• Department of

Enterprise Services• Email

servando.patlan@des.wa.gov

• Phone 360-407-9390

• Roselyn Marcus

• Department of Enterprise Services

• Email roselyn.marcus@des.wa.gov

• Phone 360-407-8569

Questions Visit the Procurement Reform Website at

http://www.des.wa.gov/Procurement_reform