Post on 02-Jan-2016
Overview of DIR Sourcing Initiatives
Sherri Parks Director
Contracting and Procurement ServicesTexas Department of Information Resources
LONE STAR CHAPTER
NATIONAL CONTRACT MANAGEMENT ASSOCIATION
October 1, 2008
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Who is DIR? DIR is the state agency responsible for
• Effective planning, implementation and management of a statewide technology infrastructure that supports agency business operations
• Pooling the purchasing power of government and leveraging it to drive down costs and add value to ICT purchases for state government entities
• Adopting statewide technology rules and standards that contribute to effective enterprise management of ICT
• Promoting security and privacy of state data and networks
Key operations• TexasOnline, the official State of Texas website
• Data Center Services
• Telecommunications and IP Network
• Security
• ICT Cooperative Contracts Program
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448 Cooperative Contracts• 290 Total Resellers
• 140 HUB Prime Vendors
• 121 HUB Resellers
38% Growth in Last 2 Years (FY05-07)
Over $1 Billion Projectedfor FY08
Customer Base• Market Segmentation Analysis
45% Education
29% State Agencies
26% Local Government
ICT Cooperative Contracts – Statistics
ICT Cooperative Contract Sales
$719$805
$993
$571
$0$100$200$300$400$500
$600$700$800$900
$1,000
Millions
FY05 FY06 FY07 FY08YTD
Sep 07 – Feb 08
Sep 07 – Feb 08
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Where are DIR’s Customers Located?
REGIONAL DISTRIBUTION OF FY08 YTD SALES
$248
$133
$105
$34$15 $13 $12 $11
$0
$100
$200
$300
$400
Millions
3 2 1 4 5 7 8 6
Reg. 5
$15 M
Reg. 2
$133 MReg. 8
$12 MReg. 7
$13 M
Reg. 6
$11 M
Reg. 1
$105 MReg. 3
$248 M
Reg. 4
$34 M
*Telecommunications Go DIRect
sales of $36 M were distributed to regions
via prorated percentage of sales.
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ICT Cooperative Contracts – Cost Savings/Avoidance
DIR CUSTOMERS/TAXPAYERS
Savings calculated as difference between DIR price and price available in other states and from other cooperative contracting programs
Additional value (soft costs) not included in calculation• Time/salary savings
associated with streamlined procurement process
• Additional services or benefits such as “free training”
• Improved performance standards and accountability requirements
ICT Cooperative ContractCost Savings/Avoidance
$70.2$82.0
$114.8
$60.9
$0$10$20$30$40$50$60$70$80$90
$100$110$120
Millions
FY05 FY06 FY07 FY08YTD
Sep 07 – Feb 08
Sep 07 – Feb 08
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Strategic Sourcing Strategies: Knowledge-Driven Supply Chain
Skills, knowledge, and organizational structure
Move from traditional transactional purchasing to strategic supply chain management
Comprehensive, integrated supply chain services
PEOPLE
Contracting andProcurement Services manages all phases of contract lifecycle
●
Supply Chain Management provides business intelligence/analytics, bench-marking, etc., used to identify and prioritize contracting opportunities, develop new contracts, and implement new sourcing strategies
●
Revenue and Sales Reporting (RASR) analytical platform
DIRect Compare
TECHNOLOGY
Online interactive tool enables customers to easily review and compare contract pricing
●
New, metric-drivenbusiness processes
● Spend analysis
● Demand/opportunity analysis
● Improved performance standards and accountability requirements
● Specifications based on market intelligence
● Category management
● Streamlined administrative requirements
● Benchmarking
● Channel management
BUSINESS PROCESSES
Industry-standard data warehouse and business intelligence portal collects data, generates information to support sourcing decisions
●
●
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Business Model: ICT Cooperative Contracting Program
NEGOTIATIONS (RFO Process) Leverage state’s buying power Benchmark pricing with competitive regional and national cooperative
buying options, federal government, and other states
MULTIPLE AWARDS Provides flexibility to meet unique business needs of statewide
customers
“NOT-TO-EXCEED/QUANTITY OF ONE” PRICING Customers allowed and encouraged to negotiate additional discounts
for volume purchases
Go DIRect PURCHASING, ONLINE DIR STORE Customers deal directly with vendors for ordering, delivery, payment
DIR ADMINISTRATIVE FEE INCLUDED IN NEGOTIATED PRICING Capped at two percent (2%). FY07 average: .81% Vendor invoices customers (included in contract price), remits to DIR
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Supply Chain Life Cycle
RFO DEVELOPMENT RESEARCH
• With DIR customers, other states and federal government, Gartner, Forrester, Infotech
SOURCING STRATEGY
• Prequalification of vendors for IT project contracts in specific technical areas
• Limited to 10 categories and projects of $10 M or less
BUSINESS CASE
Value to state = cost savings + more effective contracting vehicle
RFO ISSUANCE
• Webcast of pre-bid conference
Deliverables-Based Information Technology Services Contract (DBITS)
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Sourcing Strategies Augmenting RFOs
• IT Staffing Services
• Software
• Networking Equipment
• Surveillance Cameras
DBITS• Prequalification of vendors in specific technical areas
Regional-Based Contracts• Break/Fix (equipment repair)
• Cabling
Managed Services• Contract with multiple qualified service vendors, to drive innovation,
capacity and marketplace competition allowing customers to improve service levels, reduce operating costs and extend capabilities while remaining focused on their core missions
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Future Contracting Opportunities
CURRENT CONTRACTING INITIATIVES
Posted on DIR’s Web site (www.dir.state.tx.us/store/cci) to improve communications between DIR vendors and customers
Lists initiatives by procurement stage• Planning
• RFO Postings – links directly to the posting on theElectronic State Business Daily (ESBD)
• Evaluation
• Negotiation
• Recent Awards
Each initiative has a brief description, expected phase completion date, and contact information
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Major Procurements in Process: TexasOnline
TexasOnline Reprocurement Vision
The TexasOnline procurement will establish the next generation e-government infrastructure that implements the components required to support the TexasOnline vision. The TexasOnline vision leverages the state’s cooperative contracting program and the state’s existing investment in both computing and communications infrastructure.
TEXASONLINE VISION STATEMENTTexasOnline will provide a single point of access to government information and services that is private, secure, convenient, efficient, service-oriented, and accessible.
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Major Procurements in Process: TEX-AN
CURRENT TEX-AN TELECOMMUNICATIONS CONTRACT EXPIRES AUGUST 31, 2009.
RE-PROCUREMENT WILL TAKE PLACE FALL 2008 THROUGH SUMMER 2009.
GOALS AND OBJECTIVES
Simplify service acquisition
Simplify service establishment and support
Enhance value from sharing
Establish solutions driven marketplace
Enhance vendor partner/supplier performance