More for Less. Ministry of Transportation Procurement. Financial Management Institute April 18, 2012 FINANCE BRANCH

Transcription

1 More for Less Ministry of Transportation Procurement Financial Management Institute April 18, 2012 FINANCE BRANCH Ministry of Transportation

2 Introduction Who We Are Procurement & Costing Office, Finance Branch Corporate Services Division, Ministry of Transportation What We Do Support the delivery of the Ministry s priorities in accordance with corporate procurement policies, directives, and trade agreement obligations. Provide advisory services to clients on large, complex and politically sensitive procurement initiatives within MTO. Lead the submission of major procurement requests to executive approval councils in support one of the largest annual and in-year procurement planning cycles in the Ontario Public Service. 2

3 Purpose & Outline This presentation has been developed to provide an overview of procurement at the Ontario Ministry of Transportation (MTO) relative to today s theme more for less. We will achieve this by dividing the session into the following sections: 1 An Introduction to MTO Procurement 2 More for Less: Optimizing Value 3 Case Study 3

4 Section 1 An introduction to procurement at MTO: Defining Procurement What does the Ministry purchase? Principles & Governance Our Role in the Process 4

5 1 Defining Procurement 5

6 1 Defining Procurement at MTO What is procurement? Procurement is the acquisition of goods and services. With the appropriate delegated authority from the Deputy Minister of MTO, you act on behalf of the Ontario government when you acquire goods and services. What does the Ministry purchase? The vast majority of our annual procurement activity in terms of volume and spend is dedicated to construction, rehabilitation, and maintenance of the provincial highway network. We also manage public facing programs, conduct planning studies, in addition to developing policy and influencing legislation to ensure the safe and efficient transportation of people and goods in Ontario. Each division within the Ministry is unique with diverse needs and business lines. 6

7 1 Principles and Governance What governs procurement in the OPS? Procurement is governed by Ontario s obligations under various agreements and procurement policy which are based on the following principles: 1. Vendor Access, Transparency and Fairness 2. Value for Money 3. Responsible Management 4. Geographic Neutrality and Reciprocal Non-Discrimination 7

8 1 Competitive Procurement Requirements It is a requirement of Ontario s Trade Agreements that all goods valued at $25,000 and above, and all services valued at $100,000 or above, are advertised through an open competitive process. An open competitive process is achieved by issuing procurement documents through electronic tendering systems and other mechanisms including: MERX RAQS Daily Commercial News 8

9 1 Our Role Our role is to advise clients on procurement strategies, developing tools and learning resources to assist Ministry clients in planning, developing, posting, evaluating, awarding and managing procurements. What other policies impact my purchase? What approvals do I need? What options do I have? How do I effectively manage a contract? When can I use a non-competitive procurement? How do I post a document on MERX? What documentation should I prepare? What evaluation criteria should I use? How do I conduct vendor debriefings? When should I get legal involved? Who can sign the legal agreement? Effective Planning How do I avoid conflict of interest? Should I hire a fairness commissioner? How do I manage poor performing vendors? What are the associated risks? 9

10 2 More for Less: Optimizing Value MTO by the Numbers Challenges & Opportunities Our Procurement Environment Obtaining Value For Money Exercise Obtaining Value for Resources 10

11 2 MTO by the Numbers Annual Planning Requirements MTO submitted more than 900 requests through to our executive approval councils through annual and in-year procurement planning. More than 500 requests have proceeded this year through our planning process. Agreement on Internal Trade Statistics Results from the Agreement on Internal Trade Report indicated that 711 acquisitions were undertaken with 98.2% of the acquisitions subject to competitive procurement processes. % of Non-Competitive Awards 11

12 2 Challenges of Our Procurement Environment Challenges Our Policy Environment: procurement is an environment of continuous change with respect to policy and legislative requirements. Our Operating Environment: challenges ranging from organizational changes, shifting government priorities fiscal and resource restraints. In the context of obtaining more for less the above challenges are two-fold when applied to MTO procurement: on one hand we must ensure that the Ministry obtains value for money in the acquisition of products and services. on the other we must look to generate efficiencies in the manner in which we acquire them: creating value for resources. 12

13 2 Obtaining Value for Money One of the key areas we routinely advise on is to ensure the most appropriate procurement strategy is applied to the good or service that we are acquiring. The procurement method and evaluation criteria used in the selection of a successful vendor depends on a number of factors which vary depending on the size and complexity of the acquisition. EXERCISE: Can you suggest evaluation criteria that would be used to obtain value for money? 13

14 2 Exercise Results Evaluation Criteria: Methods These are some of the examples and tools utilized to obtain the best value for money: each scenario must be uniquely applied to the scenario. 14

15 2 Obtaining Value for Resources Obtaining value for resources is essential as the procurement process can be timely and involve a number of stakeholders and mandatory processes. Below are some of the ways that we employ value for resources: 1. Leveraging Functions: Finance Branch is now advisory center to the Ministry on financial and corporate procurement matters. Similar cyclical functions generate efficiencies for our clients and increase synergies and knowledge transfer between job-functions Lesson learned: leveraging functions wherever possible to optimize value for resources. 15

16 2 Obtaining Value for Resources (Cont d) 2. Review Existing Processes & Procedures Continually review and question existing processes Identify opportunities to positively impact business process change Influence corporate policies and procedures whenever possible 3. Establish Clear Lines of Communication Based on the size of the Ministry and the annual volumes of procurement activity we are faced with many challenges. Develop learning resources and reference tools for divisional clients based on rules and best business practices to build divisional capacity 16

17 3 Obtaining Value for Money: Case Study General Walkthrough of Competitive Procurement Process Outline Issues/Associated Timelines Theory Into Action: Establishing Vendor of Record Arrangements Demonstrating Value for Resources Demonstrating Value for Money 17

18 3 Procurement Process Walk-Through 1-2 weeks 1-2 weeks Step 1 Planning Stage Maintained by Program Area Submit business case to Divisional senior management for project / assignment approval. Step 2 Document Preparation 1-3 weeks 1-3 weeks 1-2 weeks 1-2 weeks 1-2 weeks 1-2 weeks Develop - finalize RFP/T document in consultation with Ministry Procurement Advisors Legal Review if required Obtain necessary Ministry Delegation of Authority Authorization (DOA) to post the RFP/T Step 3 Invitation Posting Depending on value of assignment, RFP/T 2-3 weeks 2-3 weeks 2-3 weeks 2-3 weeks VOR - is issued directly to vendors for minimum of 10 working days. <25K goods, <100 K Services, no VOR - is issued directly to vendors for minimum of 10 working days. >25 K goods, >100k Services, no VOR forwarded to OSS for posting on MERX 3-4 weeks 3-4 weeks 3-4 weeks 3-4 weeks.5 of a week.5 of a week -OSS Review - Posting on MERX <600K 10 working days, >600K 20 working days -- OSS to receive the submissions and conduct Stage I Mandatory review forward hard copies to Ministry for Stage II / III Evaluation 18

19 3 Procurement Process Walk-Through (Cont d) 2 weeks 2 weeks 3-4 weeks 3-4 weeks 1-2 weeks 1-2 weeks Step 4 Submission Evaluation Evaluating committee evaluate submissions. (Stage II Rated Requirement / Stage III Price evaluation) Evaluating committee evaluate submissions. (Stage II Rated Requirement / Stage III Proponent Interview / Stage IV Price evaluation) Program Area prepare evaluation summary and Justification Report and Memo to award contract to successful vendor. 1 to 2 weeks ( * ) 1 to 2 weeks ( * ) 1 to 2 weeks 1 to 2 weeks Step 5 Award Approval If RFP/T was posted in MERX, evaluation results sent to OSS with necessary approval to award contract. OSS sends contract to successful vendor. (*) Add 2-3 weeks if contractor security screening is required Step 6 Execute SLA & Requisition Completed in IFIS Upon receipt of signed contract from OSS/Vendor MTO sign off completed and submit to IFIS engagement of Vendor / Supplier / Consultant. Estimated Timelines: Estimated Timelines: weeks weeks 4-5 months min 4-5 months min If in-year submission to If in-year SCLC is submission required to SCLC is required weeks weeks 5-6 months min 5-6 months min 19

20 3 Establishing a VOR Arrangement Establishing a VOR Stage 1 Qualification of Vendors 1. RFQ (Qualification) Document is posted on MERX 2. Proponents submit their Qualifications 1. Mandatory Requirements 3. Assigned MTO Committee Evaluates Submission 4. Successful Proponents are added to the VOR Listing Part Part 1 1 Part Part 2 2 Part Part 3 3 Part Part 4 4 Conflict of Conflict Interest of Interest Tax Compliance Tax Form Compliance Form Reference Listing Reference Listing 2. Qualifications Proponents' Response Workbook Company A Company B Company C Company D For a Proponent to qualify for the VOR listing, they must score a minimum of 2 point in each of the Rated Criteria Categories of Part 3 of the RFQ document Company A Company B Company D Company C Company C can reapply, if their qualifications change. See NOTE A NOTE: A A A B C Evaluation Process to the criteria that is identified in the posted RFQ. Listing E.G. Listing for is a for 3 year a 3 year Period with 2 1 year optional extensions. The VOR Listing is not closed for the three years annually the Ministry will open the opportunity to Pre-Qualify for this VOR vendors who are interested would (A) Submits 1, and 2. (B) The Committee evaluates the Qualifications Declaration Forms, and if successful, (C) The Proponent is listed on the VOR Listing 20

21 3 Establishing a VOR Arrangement (Cont d) Establishing a VOR Stage 2 Posting of an Assignment 5. RFS/p or RFS/t is forwarded to Proponents on VOR listing A A B B C C 6. Pre- Qualification Listing Company A Company B Company D 7. Proponents Submit Their Proposal Company Company A A Company Company B B Company Company D D D D 8. Assigned MTO Committee Evaluates Submission RFS/p or RFS/t contains the following A: Background B: Objective / Deliverables (Services) Etc. C: Evaluation Criteria Proposal highest scoring Vendor, Tender Lowest Price D: Sample Statement of Work. Evaluation Process to the criteria that is identified in the posted RFS/p or RFS/t. 9. Award Award of Assignment through a Form of Agreement Company A Company B Company D Form Form of of Agreement Agreement 21

22 Questions & Contact Information 1 Alex Booth Procurement Solutions Consultant Procurement & Costing Office, Finance Branch Corporate Services Division Ministry of Transportation (905) Alex.Booth@ontario.ca Bill Gibson Procurement Solutions Consultant Procurement & Costing Office, Finance Branch Corporate Services Division Ministry of Transportation (905) Bill.Gibson@ontario.ac 22