Spirited State Purchasers Bid Farewell to Pricey Paperwork

Spirited State Purchasers Bid Farewell to Pricey Paperwork

Thanks to an interactive e-procurement tool, the Arizona State Procurement Office now awards contracts online, in record time

In April 2004, the Arizona State Procurement Office (AzSPO) awarded a contract for bond underwriting. This would hardly be considered newsworthy were it not for the fact that AzSPO awarded the contract without receiving a single sheet of paper from interested vendors.

The agency accomplished this normally paper-intensive, tedious task with SPIRIT, the state’s new, automated e-procurement solution.

Senior Procurement Officer Doug Boyer completed the bond underwriting procurement. Fourteen suppliers bid on the contract, which was awarded through SPIRIT in fewer than 60 days.

“Not only did [the program] decrease the amount of time to complete the procurement process for ADOA [Arizona Dept. of Administration], but it made it easier for suppliers to submit and monitor their proposals,” Boyer says.

“SPIRIT is an intuitive and flexible system that supports every type of government procurement,” adds John Adler, CPPO, AzSPO State Procurement Administrator. “It was designed by professional public procurement officers for professional public procurement officers.”

Developed by Scottsdale, AZ-based interZnet, SPIRIT is designed to increase the efficiency of procuring goods and services, leverage buying power, and improve customer service.

“We knew what it would take to simplify the procurement process and make it more effective,” says Deputy State Procurement Administrator Jean Clark, CPPO,

CPPB, CPM, C.P.M. “InterZnet made a point to work very closely with us to ensure the end product was what we had envisioned.”

Fine-Tuning Time-Consuming Tasks
Together with the ADOA, AzSPO performed a complete reengineering evaluation of the solicitation/procurement process more than a year before initiating SPIRIT’s development. A team of AzSPO contract officers and managers reviewed the former process and made recommendations based on their findings.

As a result of the study, AzSPO reduced a 162-step, manual procurement process down to 22 steps, improving productivity by more than 20 percent.

One especially cumbersome step, issuing a letter of interest, has been eliminated.

“Everyone involved in the process can now access all the information they need online and follow their contract’s status from beginning to end. It saves a lot of time, a lot of paper, a lot of money on postage, and a lot of stress.”

—Jean Clark, AZ Deputy State, Procurement Administrator

“Previously, the staff would prepare a letter that stated we were planning to issue a solicitation,” Clark says. “Suppliers needed to respond that they were interested in receiving the solicitation, and the solicitation was issued only to those wishing to receive it. This was to minimize postage and copying charges and fulfill the legal requirement of contacting all suppliers on the bid list.

“This step has been completely eliminated,” Clark says. “Now, when the solicitation is ready to be issued, the contracting officer clicks “issue” and a solicitation notification e-mail is [sent] to all suppliers based on commodity codes.”

In addition, the formal bid opening is now much more efficient. Information is made available online, eliminating the need for a bid meeting. Also, it is no longer necessary to have an evaluation committee meeting because the entire evaluation process can occur on-line, if desired.

The streamlined process now includes just these steps: customer requisition, requisition assignment and routing, procurement plan, draft solicitation, customer review of solicitation and revisions, release of solicitation and supplier response period, receipt of offers, buyer review and distribution to committee, evaluations, clarifications, final evaluations, buyer reviews, and contract awards.

Seeking the Essence of SPIRIT
Internet-based SPIRIT is an e-procurement application that uses Requests for Quotations, Invitations for Bids, and Requests for Proposals. Through the program, AzSPO provides supplier registration, creates and issues solicitations, and receives offers. In addition, tabulations, evaluations, negotiations, contract awards, and amendments can all be done online.

“Since we went live with supplier registration on November 7, 2003, and live with issuing solicitations on January 1, 2004, we have seen a budget reduction in our printing and postage of approximately $25,000,” Clark says.

“As to time savings, each month we have consistently exceeded our performance measures for processing time for all types of solicitations,” Clark says. “We have seen the reduction in processing time grow each month with an approximate improvement of 25 to 30 percent. We have also experienced a reduction in staff time for bids and proposals because the information is available to the supplier community immediately after the close of the solicitation.”

Another significant area of time-savings has been in the evaluation component of the process. Each evaluator reviews the offers and prepares the initial evaluation report for each offer online.

Once this review is complete, the procurement officer can prepare a recommended evaluation report on-line independently or by conducting an evaluation meeting. When evaluation meetings are held, a laptop and projector are used, and an evaluation report is prepared online.

“This saves a great deal of time for the procurement officer because, when the meeting is complete, the officer may continue with the award process rather than the old method of meeting, taking notes, writing a report, and issuing the report to the evaluators for approval and then making a contract award,” Clark says. “The evaluators have been pleased with this method.”

The program even expands the information available to purchasers.

“SPIRIT enables us to obtain supplier demo-graphics and data regarding the classification of suppliers that were not easily accessible,” Clark says. “We are able to search for the small business, woman-owned business, and minority businesses to obtain competitive quotations.”

SPIRIT allows customers to view the status of their requisitions and procurement online. This provides real-time access to information and minimizes voice-j16mail messages and e-mails. Customers are even involved in the development of the procurement plan schedule and in reviewing solicitations. The availability of complete information improves turnaround time, which enhances customer service.

The procurement/contracting system is designed for contract sourcing and formation but not for ordering products and services. Although SPIRIT does not issue purchase orders in its present configuration, it may be interfaced with purchasing and supply chain systems.

Vetting Program Perks— Vendors Vote YES
“Suppliers have been positive towards the application,” Clark says. “They can now submit their offers without having to hand-deliver their packages and can work on the system 24/7. The application provides suppliers with a “to do” list and provides alerts if a section is not complete. The state is assured of complete offers—no more missing signatures, manufacturer/model information, or pricing.

“To assist the suppliers in the transition,” Clark says, “we staffed a help desk to handle questions, offered supplier training, and developed an online tutorial to walk suppliers through the supplier registration and the process for submitting an offer.”

When suppliers register, they are automatically notified of pending solicitations, which increases the level of competition.

Providing all contract award information online allows suppliers to view not only the final contract awards, but the unsuccessful awards, as well, providing suppliers even more insight as to the level of competition for future contracts.

Suppliers have commented on how easy the application is to use and appreciate the new standardization in doing business with the state. They find the information regarding responses beneficial and more convenient than having to physically re-view the contract files.

In addition, suppliers have been pleased with the elimination of the requirement for multiple copies of their proposals for submittals.

Contract officers use the system as their method for pre-bid and pre-proposal conferences to assist the suppliers in the application.

Forging Ahead: Future Efforts
Currently, there are about 30 solicitations in various stages—from draft to contract evaluation and award—in the SPIRIT program. More than 7,600 vendors have registered with the program since its January launch.

All AzSPO contracts are now bid through the SPIRIT program. The application will be rolled out to other state agencies beginning in September. All cities, counties, and

school districts throughout the state will eventually “catch the SPIRIT,” as well.

“We currently have a university and school district using the supplier registration component,” Clark says. “We are also working with an Arizona county during this fiscal year to enhance the application for local government.”

Pitching Procurement Paperwork
For AzSPO, the move to e-procurement has been nothing but positive.

“SPIRIT facilitates the entire procurement process and enhances customer service,” Clark says. “It allows the procurement officer to focus on key procurement functions of market research, strategy, and negotiations and eliminates the heavy paperwork burden.

“SPIRIT not only allows us to award contracts in a shorter amount of time but provides a huge convenience to state agencies with solicitations and suppliers,” Clark says. “Everyone involved in the process can now access all the information they need online and follow their contract’s status from beginning to end. It saves a lot of time, a lot of paper, a lot of money on postage, and a lot of stress.”