Purchasing Process To Chinese Towson 072406

Overview of the Baltimore County Public Schools

Office of Purchasing

Introduction Program for Chinese Administrators at Towson University

July 24, 2006

Rick Gay, RSBOPurchasing Manager

Governing AuthorizationThe annotated Code of Maryland sections 5-112 and 7-106, and the Maryland State Department of Education Financial Reporting Manual for Maryland Public Schools.

Baltimore County Public Baltimore County Public Schools At a GlanceSchools At a Glance

• 3rd largest school system in Maryland

• 23rd largest school system in the United States

• 164 schools• 107,100 students• 2,514 English

language learners

• 13,808 special education students

• 27,630 free and reduce-priced lunch students

• 17,000 employees• 8,850 teachers

SUPERINTENDENT

BOARD OF EDUCATION

CURRICULUM &

INSTRUCTION

BUSINESS

SERVICESPRINCIPALS

AREA ASSISTANT SUPERINTENDENTS

RESULTS - STUDENT ACHIEVEMENT

SERVICE FOR THE SCHOOLS

SERVICE

SERVICE

BCPS Service ModelBCPS Service Model

04/18/23

BCPS Office of PurchasingOrganization

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K a re n H a llS e c re ta ry8 8 7-43 34

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Je a n T a ylorS e c re ta ry8 8 7-43 34

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C a ro le Jo hn sonA d m in is tra tive S ec re ta ry

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P a tti O n he iserC o n tra c tin g S p ec ia list

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C la re n ce C la w sonC o n tra c to r

Ja ck N ich o lsP u rch a sin g A g en t II

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M e lv in B u rleyP u rch a sin g A g en t II

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P a u l C ra m e r, C .P .M .P u rch a sin g A g en t II

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Je ff M ille r, C .P .M .P u rch a sin g A g en t II

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M e la n ie W eb s te rM B E O ffice r

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S h a ro n B erz insP u rch a sin g C le rk

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P e g H illP u rch a sin g C le rk

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B e ttie La n tzP u rch a sin g C le rk

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S h irle y M a rtinC le rica l A ss is ta n t

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V e ro n ica W a lshL e a d P u rcha s in g C le rk

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S u san E lyS ys te m s A n a lyst

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R ick G a y, R S B OP u rcha s in g M a na g er

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Purchasing Functions

• Administer and Coordinate all agreements for the purchase of supplies, materials, equipment and (contracted services).

• Enter into contracts with vendors to establish a fixed price to be used by all schools and offices for a specified period of time.

• Distribute information on existing state, county and BCPS contracts to schools and offices.

• Process all requisition/purchase order forms and catalog requests in accordance with established contracts to approved vendors.

• Identify purchases which require the use of established quotations and/or bid policies or procedures.

• Select potential award vendor in cooperation with the account manager. Submit the recommendation for award of contract to the Board of Education when appropriate.

Purchasing Functions

• Issue and distribute purchase order documents.• Encourage fair and equal treatment of all prospective

bidders and vendors.• Maintain a list of qualified vendors and their respective

vendor codes.• Observe procedures to identify and prohibit business

transactions with any vendor whose past performance has disqualified their status by BCPS, county, state or federal policies, procedures and statutes.

• Assure that purchases meet appropriate local, state, and federal safety and health standards.

• Facilitate the prompt procurement of goods and services for schools and offices.

2006-2007 Goals

• Expand the use of eCommerce and online purchasing.• Expand the number of catalogs on our eCommerce system • Establish internet access to announce and issue solicitations and

expand vendor publishing.• Expand Vendor Self Service (VSS) to include the issuing of bids• Develop and execute an implementation plan for AMS Financial 3.6

procurement (web based)• Develop and implement purchasing database and prepare reports that

enable the scheduling of renewals, track bids and contracts, etc. • Evaluate terms & conditions for bid specifications to support

performance standards and enhance quality of goods and services.• Standardize contracts• Complete review and update of Board policies and Superintendent

Rules to include vendor performance appraisal process

Baltimore County Public Schools

The Bidding Process

The Bid Process

• Bids must be advertised for two weeks.

• The Purchasing Agents:

- Assists schools and offices in developing bid specifications.

- Evaluate bids received and submit recommendations to the Board for contract approval

The Bid Process

• The Office of Purchasing coordinates all BCPS bids and vendor contract negotiations

• State law and Board policy require public bidding procedures to be followed for certain purchases.

• The threshold for requiring bids is $25,000 – single item or system-wide annual needs

• Curriculum and books are chosen through an evaluation process administered by the Department of Curriculum & Instruction

The Bid Process

• Other alternatives to bidding include: - “Piggybacking” on contracts awarded by other public entities that follow public bidding procedures. - “Sole Source” if proprietary or only available from one source. A sole source

determination is made by the Office of Purchasing – and still must be submitted to the Board for approval. - Purchasing consortiums/cooperatives

Purchasing Procedures

• Notify the Office of Purchasing of any item that may need to be bid

• Plan in advance! - From start to finish the process of preparing, advertising, issuing, evaluating and Board approval can take 2 months or more!

• If No Current Approved Contract Exists for the Item:

• get two written quotes from vendors If a purchase is > $15,000 and < $25,000

• If a purchase is < $15,000 get one written quote

• Use on-line catalogs for available items• If less than $1,000 use a P-card• Contact Office of Purchasing if any assistance is

needed

Vital Statistics

FY 2001 Processed 245 bids valued at $145,808,709 Million







Procurement Cards

Procurement Cards

• Having a Visa card is a privilege!

• The card comes with responsibilities

• Make necessary small (< $1,000) purchases

• Ensure available budget $ prior to purchase

• Not to be used for contracted services

• Training is required for cardholders & Approvers

• Retain receipts, logs, statements for 5 years

• Procedures are on Office of Purchasing website

https://intranet.bcps.org/offices/purchasing/pcard_procedures/




Procure – Procurement Card Management SoftwareThe Office of Accounting:• Regularly monitors Visa card purchases and

requests documentation from school/offices• Monitors compliance with reconciling

requirements – Over 50,000 transactions annually!!

• Sends memo’s to cardholder/principal when billed items are not reconciled timely

• If necessary, sends second notice to Area Assistant Superintendent

• CONTINUED FAILURE TO LOG AND RECONCILE TIMELY WILL RESULT IN FORFEITURE OF VISA CARD!

Procure – Procurement Card Management Software

Cardholders must:• Log all purchases when

made• Select proper budget

account to charge• Reconcile billed charge to

logged purchase - Reconciled charges are posted to Advantage Financial daily

• Prior month charges must be reconciled by 20th of the month

• Print logs and forward with statement and receipts to principal for approval

• Principal is accountable for all Visa purchases at the school

Common issues:• Purchases not logged• Billed charges not

reconciled• Items charged to incorrect

budget account (e.g. toner charged to “textbooks”)

• Inadequate descriptions• Food/restaurant/catering

charges – the description should include the purpose of the meeting and the attendees

Total Dollar Amount Spent With BCPS Procurement Cards Per Year FY 97 – FY 05

$282,672

$3,530,392

$5,334,293

$6,600,288$7,354,187

$8,491,321$8,608,212

$10,127,513$10,518,422

$14,972,617

02000000400000060000008000000

10000000120000001400000016000000

Total Number of BCPS Procurement Card Transactions Per YearFY 97 – FY 05

2,159

31,986

41,571

47,657 48,632

52,138 53,488

57,977 57,953

62,024

0

10000

20000

30000

40000

50000

60000

70000

FY 1997

FY 1998

FY 199

9

FY 2000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

eProcurement

Electronic Purchasing From the Workstation to the Classroom

at the Click of a Mouse….

Rick Gay, RSBO

Purchasing Manager


BCPS Online Curriculum Catalogs

• Web-based system to order necessary curriculum and instructional materials.

• Includes textbooks and other frequently used instructional items.

• Access to office/classroom supplies• through Office Depot, Corporate

Express, and Rudolph’s – 80,000+ items


• Over 25,000 curriculum items included in the catalogs

• Searchable by title, item name, ISBN #

• Catalogs may be printed for copying and distributing


• Must attend training to get a user ID & password

• Register for training through the PDC website• Know your budget account to charge before

beginning• Orders are routed to principal for electronic

approval – before they are sent to the vendor!• Vendor ships and charges your budget through

Visa


• Print copies of approved orders for delivery identification, verifying Visa charges, follow up off backorders

• Training materials available on the Office of Purchasing web site:

https://intranet.bcps.org/offices/purchasing/pdf/BCPS-Online-Ordering-Training-Manual.pdf




What is Online Procurement?

• Online Procurement involves purchasing systems using software or applications that are "Web" or Internet-based connecting employees and suppliers making it possible to streamline and automate purchasing.

• An Online Procurement network typically uses sophisticated technology that provides a secure marketplace, sales platform and transaction tracking system available only to selected buyers and suppliers.

26

The benefits are real….

• In a recent study of early adopters of eProcurement systems, the Aberdeen Group reported the following key benefits:– Improved data gathering and reporting

on fiscal year expenditures– Tighter control over off-contract or

“maverick” buying– Lower procurement administration costs– Shorter requisition and order fulfillment

cycles

eProcurement Solution Benefits

• Expands sourcing and purchasing process to more buyers

• Maintain control over process and approvals• Bring approvals and accounting codes

forward• Integrates seamlessly with existing

purchasing card process and tools • Reduces supplier costs to serve• Streamlines procure-to-pay, business

processes

Benefits for Employees• A well-designed eProcurement system provides

employees with:– ready access to catalog information – the ability to requisition a product or service

from their workstation computers– the ability to browse the product/service list– The ability to create a requisition/purchase

order, without expending time and effort searching for missing information or tracking down specific people.

Benefits for Purchasing Personnel

• eProcurement frees purchasing personnel from:– clerical, order processing activities

that are time-consuming and non-strategic

– Allows them to focus on strategic activities, such as negotiating contracts with suppliers and analyzing purchasing behavior.

eCommerce Suite On-Line Orders Summary ReportNumber of Orders Per YearFY 00 – FY 07

32

863

1951

2550

4846

71546774

1604

0

1000

2000

3000

4000

5000

6000

7000

8000

# eCommercesuite Orders

eCommerce Suite On-Line Orders Summary ReportTotal Dollar Value of Orders Per YearFY 00 – FY 07

$9,088.69$322,540.04

$668,173.41$831,336.50

$1,696,329.40

$2,328,846.88$2,561,204.83

$544,648.91

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

eCommerce Suite Purchases

Number of Suppliers Per YearFY 01 – FY 06

1430

74

154

195212

225

0

50

100

150

200

250

FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06

04/18/23 Total Numbers include all funds

34

Number of Purchase Orders Processed Each Fiscal Year

31,189

28,228

20,603

16,818

11,887 11,334 10,815

0

5000

10000

15000

20000

25000

30000

35000

BCPS Goals

•Improved data gathering and reporting on fiscal year expenditures

•Tighter control over off-contract or “maverick” buying

•Lower procurement administration costs

•Shorter requisition and order fulfillment cycles

eProcurement Results

• Order Submission

• Delivery of Goods• Shipping Costs• Vendor Payment

• Sourcing Consolidation

• Real-time Notification to Vendors

• 24-48 hours of Order Placement

• 10-15% Reduction

• 24-48 hours from Shipment

• 33% Reduction of Catalog

Surplus

Overview of BCPS’s On-Line Program• Shoppers

• Approvers

• Administrators

• Suppliers/Contracted

Vendors

• Unique Contracts

• Line Items

• 1202 Teachers• 577 Principals

• 5 Purchasing Agents

• 225

• 299

• 425,000

BCPS Catalogs• Art Supplies / Photo

• Athletic Equipment &

Supplies

• Audio Visual

• Family Studies

• Handwriting Materials

• Library Media

• Math Supplies

• Media

• Medications and First Aid

• Music

• Periodicals

• Physical Education

• Science Supplies

• Technology Education

• Textbooks

• Unique Office Supplies

BCPS Future Goals

•Expand Catalog Offering

•Add Tier 1 Suppliers

Grainger, Office Depot, Corporate Express, Rudolph’s

•Expand and offer program to the surrounding counties

•Leverage spending with local and national consortiums to negotiate improved pricing

•Bid new contracts for the 2005-2006 FY

BCPS eProcurement Implementation Plan

• Develop and Deploy on-line catalogs• Deploy Vendor Self Service and on-

line bidding• Offer additional on-line access to

employees to vendors electronic catalogs

• Integrate into a global ERP system

eProcurement Process• Phase I (2000-2001)

– began pilot operation with US Bank Pcard

– 20 Schools, 5 Catalogs

• Phase II (2001-2002)

– All Schools using the same five Catalogs

• Art Supplies

• Science

• Physical Education

• Library Media

• Audio Visual Supplies

– 1951 transactions, 33 Vendors,valued at over $668K

eProcurement Process• Phase III (2002-2003)• Increase to 13 catalogs with potentially 150 additional

suppliers– Instrumental Music– Vocal Music– Technology Education– Medical & First Aide Supplies– Unique Office Supplies– Secondary Math– Family Studies– Art Photography

• Incorporate lessons learned from FY 01• Implemented continuous product improvement

methodology• enhance software to support the competitive

procurement process and awards of bid

eProcurement Process• Phase IV (2003-2004)• Increase to 23 catalogs with orders valued at $2.5 million with

potentially 200 additional suppliers– Textbooks – Senior– Textbooks – Middle– Textbooks – Elementary– Textbooks – Special Education– Instructional Media _ Secondary– Instructional Media – Elementary– Instructional Media – Special Education– Football Equipment– Athletics– Instructional Software and Periodicals

• Continuous ability of Curricular Offices to edit their Instructional Materials Catalogs

• Incorporate lessons learned from FY 02• Continue to enhance software to support the competitive

procurement process and awards of bid on-line

eProcurement Process• Phase V (2004-2005)

– Incorporate supplemental textbook and media catalogs into original online catalogs

– Increased from 23 catalogs to 29 catalogs– Incorporate Office Depot/Corporate Express/BSN

Sports/Grainger into eCommerce Suite Platform (Spending went from $129K in 2002 to $900K+ in 2003 – an increase of 856%!)

– Add catalogs for AV Equipment,Computers, Douron & Glover Furniture, and Advance Business Systems & Imagistics Copiers

– Conduct extensive feedback meetings with faculty & staff, and vendors regarding improvements for FY 2006

SourcingSourcingSourcingSourcing OrderOrder PlacementPlacement

OrderOrder PlacementPlacement

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SettlementSettlement

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Recon-Recon- ciliationciliation Recon-Recon- ciliationciliation

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ControlControl

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ControlControl ReportingReporting ReportingReporting

Procure-to-Pay Process Management

• RFQ • Catalogs/Contracts• Ordering Placement• Order Approval• Order History

• Order Notification• Order Processing• Payment Processing• Payment Settlement

• Automatic account code allocation• Order-transaction reconciliation & audit• General Ledger integration

• Management reporting



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ControlControl

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Procure-to-Pay Process Tools

eCommerce SuiteeCommerce SuiteeCommerce SuiteeCommerce Suite PurchasingPurchasingCardCard

PurchasingPurchasingCardCard AccessOnlineAccessOnlineAccessOnlineAccessOnline

• eCS Shopper • eCS Buyer• eCS Supplier

• Purchasing Card• eCS Supplier

• Order Management• Transaction Management• Financial Extracts• Data Exchange

• Reporting



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AuditAudit &&

ControlControl

AuditAudit &&


Management Reporting

Supplier ManagementSupplier ManagementSupplier ManagementSupplier Management

Financial ManagementFinancial ManagementFinancial ManagementFinancial Management

Tax & ComplianceTax & ComplianceManagementManagement

Tax & ComplianceTax & ComplianceManagementManagement

Program ManagementProgram ManagementProgram ManagementProgram Management

BuyerPlacesOrder

eCSApplication

OrderProcessed

bySupplier

OrderProcessed

bySupplier

SupplierShips

Completeor

PartialOrder

SupplierShips

Completeor

PartialOrder

SupplierProcesses

VisaTransaction

SupplierProcesses

VisaTransaction

TransactionPostsfromVisa

TransactionPostsfromVisa

TransactionManagement

foreProcurement

TransactionManagement

foreProcurement

eProcurementOrder Input

File

eProcurementOrder Input

File

OrderMatching &

Reconciliation

OrderMatching &

Reconciliation

BuyerPerforms

TM Functions

BuyerPerforms

TM Functions

ReportingReporting TrackingAnalysis

&Reference

TrackingAnalysis

&Reference

StandardTM

OutputFile

StandardTM

OutputFile

Map Datato

InternalSystems

Map Datato

InternalSystems

U.S. Bank U.S. Bank eCS SuppliereCS Supplier

U.S. Bank P-Card U.S. Bank P-Card Management SystemManagement System

BuyerBuyerFinancialFinancialSystemSystem

U.S. Bank eCS ShopperU.S. Bank eCS Shopper

eProcurement Transaction Flow

On-Line Vendor Supply Catalogs

Vendor Catalogs Available to Faculty and Staff via the BCPS Intranet

Vendor Catalog registration page

Questions?