Procurement Reform

Ensured value for the

State of Arizona

Background

• Several states have embarked upon procurement reform over the past 10 years

• Arizona has conducted similar initiatives at the agency/administrative level, but without a comprehensive legislative and organizational focus

• Arizona is ready for a reform initiative to gain greater value, efficiency, quality, consistency, and cost savings for our taxpayers

Procurement ReformArizona Procurement Code (APC)

Before Reform• Lobbying Regulations and

Registration limited to legislative actions with no provisions for procurement lobbying activities

After Reform• Expand definition for lobbying to

include attempting to influence the procurement of materials, services, and construction

• Prohibit vendors from soliciting state employees for employment during defined procurement period

• Prohibit specific actions for state employees, even if employing agency is exempt from APC

Procurement ReformArizona Procurement Code (APC)

Before Reform• 29 whole or partial APC

exemptions for 24 different agencies

After Reform• Expand exemptions to include

products/services where competition is not available or feasible:– Textbooks (School for Deaf and Blind)– Entertainment (State Fair)– Utilities (all agencies)– Certifications, professional

memberships, conference registrations (all agencies)

Procurement ReformArizona Procurement Code (APC)

Before Reform• Limited authority at ADOA for

procurement management

After Reform

• Expand authority to:– Establish compliance program– Establish mandatory

procurement training/ certification program

– Transfer agency Chief Procurement Officer (CPO) positions to ADOA for administrative control; CPOs physically remain at agencies (similar to Personnel Reform)

– Establish centralized Procurement Attorney unit

Procurement ReformArizona Procurement Code (APC)

Before Reform• Excessive written

determinations* required

• Low bid procurements required for all purchases unless otherwise justified (written determination)

After Reform• Establish flexible approach

regarding determinations including: – Change to Pre-Offer Conference

Schedule– Adapt contract clauses to solicitations– Refine use of cost-reimbursable

contracts

• Remove need for written determinations to use other procurement methods, i.e. Request for Proposals and Alternative Delivery Methods

* A determination is a written justification stating the basis for a particular action.

Procurement ReformArizona Procurement Code (APC)

Before Reform• Informal bid limit* of $50,000 for

all procurements

• Small Business set-aside requirement for all procurements less than $50,000

After Reform• Increase informal bid limit* to

$100,000 for all procurements

• Increase Small Business set-aside requirement for all procurements up to $100,000

*A small dollar procurement that is solicited electronically or by phone to three vendors.

Procurement ReformArizona Procurement Code (APC)

Before Reform• Extensive information systems

and telecommunications procurement evaluation requirements

• Lack of clear authority to consider vendor performance

• Cooperative Purchases– Lack authority to “piggyback” –

purchase off other contracts– Participation in cooperative purchases

limited to political subdivisions, educational and health institutions

After Reform• Eliminate actions duplicated by

other processes, i.e. Project Investment Justification (PIJ)

• Establish vendor performance standards to use in procurement evaluations

• Expand cooperative program: – Allow limited “piggyback” purchases

from other political entities and cooperatives

– Allow all nonprofit companies to utilize statewide contracts

Procurement ReformArizona Procurement Code (APC)

Before Reform• Lack of defined time period for

ADOA Director appeal decisions

After Reform• Establish required time period for

ADOA Director appeal decisions– 42 days after the date of agency

report or comments– Additional 14 days permitted, if

agreed to by all interested parties– Appeals referred to hearing, if

decision is not issued within time period