Handshake 1 Challenges p2p training...Handshake 1 Definition • A “handshake” is a data exchange between two functional communities (in this case, procurement and accounting)

PROCURE-TO-PAYTRAINING SYMPOSIUM 2019

Handshake 1 Challenges

Presented by: LeAntha Sumpter and Lora Muchmore

12019 Procure-to-Pay Training Symposium

Why P2P Handshakes?

2018 Procure-to-Pay Training Symposium 2

To focus the operational communities governing the P2P process on enterprise standards and procedures critical to efficient and effective business at nine critical exchanges

HS-1:Create PR

HS-2:Validation of Funds / Funds Check Prior to

Award

HS-3:Record

Obligation to Accounting

HS-4:Record

Obligation for Entitlement

HS-5:Receipt /

Acceptance

HS-6:Perform

Entitlement

HS-7:Distribute Payment

HS-8:Disbursement

HS-9: Contract Closeout

Handshake 1 Definition• A “handshake” is a data exchange between two functional

communities (in this case, procurement and accounting). Because two functional communities are involved, there are often non-standard or conflicting business rules and internal controls.

• Handshake 1 is the creation of a purchase request (procurement) and the assignment of committed funds to that purchase request (accounting).


Handshake 1 Critical Issues• Differing understandings of what a PR includes -> lack of necessary data to

create good purchases, poor traceability

• Differing understandings of who the “owner” of the requirement is -> poor traceability

• Using amended PRs after contract award -> lack of traceability

• Not carrying PR and PR Line Item through to award –> inability to link back to the original PR

• Commitment Identification Number (CIN) and PR Line Item Number usage is not standard -> lack of traceability

• PR Numbering format is not standard -> system interoperability issues

• PR Numbering is not unique DoD-wide -> lack of traceability and visibility


Purchase Request Content• Procurement Request Data Standard was established to include any and all data

that might be needed to describe the requirement; can be used to create a draft solicitation or contract

• Amounts• Requirements description• Shipping and Packaging Information• Telecommunications Information• Construction Information

• Most accounting systems only need/want information that speaks to Purpose, Time, and Amount, and the related line of accounting data, and may consider that a “full PR”

• Problems arise when PR content gets “dropped” when passing between functional areas.

• Ideally all systems that create or store PRs should be PRDS-compliant.


Comparison of PR and Contract Content

Funding

List of items

Technical requirements(SOW/PWS or Specifications, packing,

marking, inspection criteria, etc.)

Delivery schedule and locations

Supporting documents(to contract file, e.g. IGCE)

Contract attachments

Header(addressees, PR number, approvals)

Funding

List of items and prices/costs(revised and completed from solicitation

based on proposal)

Technical requirements(SOW/PWS or Specifications, packing,

marking, inspection criteria, et.c)

Delivery schedule and locations

Contract attachments(including those added from proposal)

Header(Contractor; Issue, Admin, and Pay offices;

PIID; signature and effective dates)

Contract clauses

PR Number

PR Contract

List of items

Comparison of PR and Contract ContentERP view

Funding

List of items

Header(addressees, PR number, approvals)

Funding

Header(Contractor; Issue, Admin, and Pay offices;

PIID; signature and effective dates)PR Number

PR Contract

PR Traceability• Requires:

• PR number is unique • PR number is not re-used for another requirement

• To enable traceability of the requirement through execution, the PR number and PR Line Item Number (PRLIN) must be carried on the contract document.

• Procurement Data Standard provides a place for this but it is not required in regulation

• Currently done sporadically, in different ways• For some systems, the CIN is the same as the PR Number/PRLIN

combination


Handshake 1 Critical Data and Processes• Data Standard

• Globally unique PR Number• PR Content• Any other key data that supports traceability (e.g. CIN)

• Business Rules• Carrying PR/PRLIN

• Automation• Ability of PR-writing systems (often accounting ERPs) to produce to data standards (PRDS)• Ability of contract writing systems to ingest PRDS and produce PDS• Ability of accounting system to ingest PRDS/PDS


Discussion• The following scenarios portray the ways in which one or more

systems may collectively create a “PR Package” (i.e. a detailed requirement that contains funding), which is sent to contracting

• Focus is on identifying which system’s PR Number (and PR line item number) shall be captured in the contract’s PR Number field

• Assumption: These charts are designed to demonstrate the ways in which PRDS can be implemented across the Department


PR Scenario 1

PR #: W912KH12345678

PR/Acctg System

1

PIID: W91KH16C0001PR #: W912KH12345678

Contract Writing System

2

Steps1. PR System Generates a funded requirement in the PRDS format, and sends the package to the contract

writing system2. Contract writing system records the PR system’s PR number and includes it on the contract as a key to link

the contract to the PR

Potential need for an acknowledgement transaction from the CWS to the PR system

11

PRDS

PR/Accounting system are fully integrated.


Presenter

Presentation Notes

Assumes Accounting system uses/accepts the PR number as its identifier for the commitment. Therefore CIN and PR # are the same.

PR Scenario 2

Funding Doc #: APR678910PR#: W912KH12345678

Accounting System

2

PR #: W912KH12345678 Funding Doc #: APR678910

PR System

1 3

4 PIID: W91KHZ16C0001PR #: W912KH12345678


5

Steps1. PR System Generates a requirement in the PRDS format, and sends to accounting for funding information2. Accounting system records PR number, creates its own identifier, performs funds certification, and sends

funding document (including accounting citation data) back to PR system3. PR system records funding document number and adds accounting citation to the PR package4. PR System sends complete (i.e. funded) PR to contract writing system. 5. Contract writing system records the PR number in the PR field on the contract

12

TBD

PRDS w/o Funding

PRDS


Presenter

Presentation Notes

Note that there is already a field in the PRDS to carry CIN.

Steps1. PR System Generates a requirement in the PRDS format, and sends to accounting for funding information2. Accounting system records PR number, performs funds certification, and sends an acknowledgement with

its reference number and accounting citation data (optional) to PR system3. PR system records funding document number and adds accounting citation to the PR package4. Accounting system sends complete (i.e. funded) PR to contract writing system.5. Contract writing system records the PR number in the PR field on the contract

PR Scenario 3

Funding Doc #: APR678910PR#: W912KH12345678

Accounting System

2

PR #: W912KH12345678Funding Doc #: APR678910

PR System

1 3

4

PIID: W91KHZ16C0001PR #: W912KH12345678


5

13

PRDSPRDS w/o Funding

TBD


Presenter

Presentation Notes

Assuming 1. the PRDS transaction is sent from the accounting system, and the 2. Contract Writing System must notify both the PR system and the accounting system after award: what data is used to route to the PR system?


Documents

Handshake 1 Challenges p2p training...Handshake 1 Definition • A “handshake” is a data exchange between two functional communities (in this case, procurement and accounting)