OCTOBER 29, 2008 9:00 am to Noon

1. PROCUREMENT POLICY COUNCIL OCTOBER 29, 2008 9:00 am to Noon

2. PPC Agenda • Finance Transformation – Jeff Mandel / Sharon Minnich • BMWBO – Kathryn Waters-Perez • Materials – Walt Quade • Services – Roxana Dietz • Agency PO/Contracts –Jeff Mandel • Contract Attachments – Sue Rojas • Procurement Handbook Updates – Sue Rojas • SRM – Joan Kraft / Cheryl Kleeman • E-Marketplace Updates – Scott Cross / Sue Plecker • Quality Assurance – Paul Wolf • Training – Jeff Mandel Note: This PPC Presentation will be available on our Agency Dashboard web site following this Meeting

3. Project Purpose and Goals Purpose To further transform the Commonwealth’s current financial administration operations using leading practices, processes and technologies Goals Identify and Implement Strategies to Reduce Cost Use Available Resources More Efficiently Improve Accuracy Reduce Transaction Processing Time Improve Invoice Processing & Imaging Improve Cash Management & Revenue Processing Design Quality Assurance Function Develop a Strong Internal Audit Function Develop Training Organization

4. Project Scope The following processes, activities, and systems are being addressed through the Finance Transformation project:

5. Current Status Between March and June, the following activities were completed: Process reviews including procure to pay, revenue, accounts receivable, reporting/CAFR, chart of accounts, grants, budgetary accounting, special accounting and audits Workshops with OB, agency and key stakeholders Workshops produced approximately 100 recommendations focused in the following areas: Process Technology Organization structure Or, a combination of the above In July, recommendations were validated and analyzed, and grouped into the following categories: Short-Term: able to be completed by May 2009 Medium-Term: able to be completed by July 1, 2010 Long-Term: beyond 2010 and dependent on other technology not owned by the Commonwealth In August and September, the recommendations were prioritized, reviewed and ranked by the Steering Committee Detailed process and technical design is underway for prioritized recommendations Build Phase October through May 2009 Focus of PA Finance Transformation Project

6. Financial Transformation Procure-to-Pay Recommendations Invoice Processing • Centralize the receipt, mailing, sorting, scanning, and imaging of all PO and non-PO paper invoices received from vendors and grantees • Process PO-related invoices according to current three-way match business rules unless blocked. If exceptions are found in three-way match, invoice is blocked in SAP and sent via workflow to Agency PO Line Item Reconciler for resolution • Route Non-PO invoices (including grants) to agencies to provide appropriate account information and approval. Once coding is entered and approved, a document to be created in SAP and sent via workflow to PO Invoice Processing group for review, approval, and payment • Phase in non-PO invoice processing between May and September 2009 • Use special process for Utility invoices that allows agency to view image, enter account assignments and select payment (advancement account, p-card, via treasury)

7. Recommendations Procure-to-Pay Recommendations (cont’d) Workflow • Use exception processing workflow to agencies and return of documents to Comptrollers for PO invoice processing • Require all purchase requisitions to be reviewed by agency fiscal staff • Implement risk-based approach for comptroller involvement in service solicitations • Eliminate Comptroller involvement in reviewing approved agency service contracts based on involvement in solicitation process • Change thresholds for PO review and approval from $5,000 to: • $20,000 for PO against DGS statewide and agency contracts • $10,000 for all other PO types • Increase use of Purchasing Card Program by adding DGS contracts that accept p-card to SRM. Enhance the reporting and posting capabilities

8. Recommendations Procure-to-Pay Recommendations (cont’d) Anticipated Agency Benefits • Faster payment to vendors • Ability to track and monitor invoices from the point of receipt through payment completion • Reduce errors or incorrect postings involved in processing, as entry will be made at the agency, allowing flexibility based on fund changes • Decision on payment mechanism can be made at the agency (e.g., advancement accounts) • Agency confirmation of changes more prompt and accurate due to familiarity with the facilities • Significant staff time currently dedicated to exceptions processing for marginal amounts or other minor non-matching issues can be redirected to other value added activities • Agencies become more empowered as end users in accordance with Commonwealth procurement policy

9. Recommendations Procure-to-Pay Recommendations (cont’d) Anticipated Agency Impacts • All paper invoices - Will no longer receive paper invoices at the agency. Will receive an image of the invoice for processing. • Non PO invoices - Enter data into system rather than manually recording on the paper invoice. Invalid entries will not move forward for processing. Every agency will be responsible for identification of staff who will be invoice receivers and verifiers and delivering the training to these staff (materials for training will be provided by the project). • PO invoices - Blocked PO invoices will be work flowed to agencies for exception processing. This will require communications and job aides for all line item reconcilers in agency. • Procurement - Workflow will require agency fiscal staff to review/approve purchase requisitions to ensure proper coding • Interfaces for payment – currently no anticipated changes but analysis still in process

10. Financial Transformation Project Recommendation • Shopping Cart Approval Requirement: • Fiscal officer approval regardless of dollar value • Options discussed: • Create special role for Agency Fiscal • Allow agencies to rework existing workflow • Decision: Use existing workflow • Analysis by agency • Discuss with user group during Dec 10th 2008 meeting • Meet with agencies as needed • Must be implemented by May 2009

11. MBE/WBE Utilization Role of BMWBO • Promote contracting and subcontracting opportunities for Disadvantaged Businesses (DB’s).

12. BMWBO Procurements with Deminimus Disadvantaged Business (DB) Participation BMWBO’s Evaluate submitted proposals as they relate to DB utilization and provides the agency with scores.

13. BMWBO BMWBO provides a memo to user agencies along with DB scores • Memo states if certain vendors are selected which have been identified as having deminimus participation BMWBO is to be notified of such selection • BMWBO will evaluate best and final offers (BAFOs) as they relate to DB utilization and provide the agency with revised scores

14. BMWBO Example of Memo COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF GENERAL SERVICES MEMORANDUM DATE: November 29, 2008 SUBJECT: Notification of Unsatisfactory Disadvantaged Business Participation RFP # DPW-00000000000 TO: Casey Miller Department of Public Welfare FROM: Kathryn Waters-Perez, Director Bureau of Minority and Woman Business Opportunities The Bureau of Minority & Women Business Opportunities has received the Disadvantaged Business Participation submittals received in response to the RFP. The explanation for the scoring is found on the attached. The following Proposers provided submittal with unsatisfactory or zero DB participation: Company ABC Did it Wrong, Inc. Should your final evaluation result in selection of one of these Proposers for contract negotiations, BMWBO must be immediately notified and given an opportunity to work with you in attempting to increase DB utilization for this contract. BWMBO should be invited to participate in contract negotiations in an effort to increase Disadvantaged Business Participation. Please contact me before initiating any contract negotiations with the selected offeror. Following contract negotiations and the contract being executed, the Disadvantaged Business name, address and amount of commitment made by the contractor must be forwarded to us. Point of contact in BMWBO is Gayle Nuppnau. cc: Kathryn Waters-Perez

15. BMWBO Contract Negotiations • If necessary, BMWBO will negotiate any changes in DB utilization as a part of pre-selection and/or contract negotiations when DB participation is deminimus.

16. BMWBO Contact Information • BMWBO 611 North Office Bldg. Harrisburg, PA 17112 (717) 783-3119 E-mail: RA-rfpbmwbo@state.pa.us • Procurement Liaison Gayle Nuppnau (717) 346-3819 E-mail: GNuppnau@state.pa.us

17. Materials - Fuels Liquid Fuels • Current Contract Structure • Bid differential price (margin, transport) by county • Commodity price floats on daily index • Two methods of delivery by county: truck transport for over 5000 gal., tank wagon for under 5000 gal (Just Discussed). • Disadvantages • Manages only small portion of our total unit cost (approx. 5%) • Full exposure to the daily volatility of the market • Provides little control over drastic increases in spend • FY 04-05: $19.5 million • FY 05-06: $25.9 million • FY 06-07: $38.0 million • FY 07-08: $44.7 million • Daily price changes cause frequent invoice payment problems

18. Materials - Fuels FullTruck Transport Strategy 5000 gallon plus! • Working through suppliers we plan to lock fuel purchases for large users through NYMEX. • Approx. 40% of end use customers nationwide use this strategy. • Bid differential price, then make commodity buys when price is advantageous. • Can make buys for front month or several future months if prices are attractive. • Target buy is 50% of volume for largest volume truck transport users and average up or down based on spot market.

19. Materials - Fuels Truck Transport Strategy- 5000 gallon plus. (Cont.) • Advantages of fuel hedging strategy • Gain control of total commodity cost • Reduce market exposure and variability. • Smooth out large spikes in pricing. • Can use this strategy to buy incremental components of usage, reduces risk. • “Diversified Portfolio” of fuel purchase quantities and prices. • Flexibility to purchase one or multiple months of usage when market prices reach low • BOP will do the PO’s, will provide higher quality usage data, visibility of delivery frequency. • DGS will make payment to vendors via P-Card and cost allocated back to Agency when the card is reconciled.

20. Materials - Fuels Small Fuel Delivery Program: • We have many small tanks (500 gal. or less) located in remote areas. • Suppliers bite off more than they can chew, causes problems with on-time deliveries. • Limits supplier base, discourages new entrants. • Invoice Payment problems. • Recent Petroleum past due balance of over $1.25 million. • Vast majority of invoices less than $5000. • GR entry problems. • Supplier confusion. • Those who receive deliveries closer to 5000 gal. and/or pay bills on time subsidize those who don’t.

21. Materials - Fuels Small Fuel Delivery Program: • ITQ Contract for deliveries less than 5000 gal. • This is a contract of convenience. • Qualify suppliers by county. • Agencies follow procurement procedures based on low dollar amount. • Agencies obtain Small Procurement Policy and obtain quotes from qualified suppliers in county, select best price. • Invoicing • Quoted prices firm, less potential for errors. • Mandated utility card use for orders under $5000 should remove bulk of past-due payment issues.

22. Contract Update

23. Contract Update

24. Contract Update

25. Shared Services - Roles & Responsibilities • BOP-003 Delegation Request (Updated) • APPROVALS – The agency is responsible for obtaining any approvals required due to the nature of the material or service or both being procured, in addition to compliance with any applicable Management Directives, Information Technology Bulletins and/or Commonwealth policy. • Method of Procurement: □ RFP □ IFB□ ITQ-RFQ • BOP-003_REV._10-2008

26. Shared Services - Roles & Responsibilities Denied Delegations: Roles & Responsibilities

27. IT Procurements • IT Contracting Office • Consistent with Executive Order 2004-8, the Office of Administration has established the IT Contracting Office (ITCO). • Three attorneys will oversee the legal aspects of all IT project procurements that fall within the COP process. • Nora Doyle -General Government Operations & Public Safety • Sonja Zucker - Environmental • Crystal Fox - Health & Human Services

28. IT Procurements Primary Functions of IT Contracting Office: • Providing guidance related to the proper procurement method for IT Services. • Establish training programs for DCIO’s, the CIO’s & any agency personnel who wish to participate. • During the procurement process, documents will be provided to ITCO through the DCIO in conjunction with the COP review. • Review documents related to RFQ’s and RFP’s prior to posting • During contract negotiations they will work with the issuing office to ensure requirements, terms & conditions and service level expectations are achieved. • At the request of an agency they will review software licenses and advise agencies related to general IT matters.

29. IT Procurements • DGS will assist agency’s in meeting the project timeline; developing procurement strategy and preparing the final RFP documents; receiving proposals; facilitate the evaluation; lead the negotiation team; and processing the necessary documents for the contract award. • All these activities are joint efforts that will be heavily influenced by the Office of Administration’s and the Agency’s expertise and experience as the administrator of their current contract. DGS will not participate as a voting member of the technical evaluation committee. • After the contract is successfully awarded, the Agency will retain responsibility for managing the contract with the awarded supplier, including contract maintenance, administration of the contract, including ensuring delivery of expected savings and/or service improvements and contractual obligations, leverage and focus supplier capabilities, ensure rapid resolution of issues and provide consistent direction to the supplier. • DGS should be informed of any contractual changes necessary or if the supplier defaults their contractual obligations to the Commonwealth.

30. Enterprise ITQ System • Enterprise ITQ System – Phase 1 to be complete by Jan. 2009 • Phase 1: ITQ Administrators can get into the ITQ and create ITQ contracts, and that Suppliers can register (or use their SRM registrations) and pre-qualify. • Phase 2:  ITQ administrators can get into the ITQ and evaluate the Suppliers applications, and approve or deny the applications, and supply any ancillary functionality that works with the Phase 1 functionality but was not vital to Phase 1. • Phase 3: Local Municipalities and Agencies can get into the ITQ and use the supplied functionality to find Suppliers that can perform the jobs that the Local Municipalities and Agencies need, and supply any ancillary functionality that works with the Phase 2 functionality but was not vital to Phase 2.

31. IT ITQ • IT ITQ Expires June 2009 • OCT 2009: Finalize T&Cs with suppliers • NOV-DEC: Review new IT ITQ with Suppliers and Tech Council • JAN 2009: Allow suppliers to begin qualification process • JAN 2009: New ITQ web site available (proposed date) • APR 2009: Begin issuing RFQs under new IT ITQ • JUN 2009: End all work under old IT ITQ • For work slippage only • Can go past end of contract by 90 days • Needs DGS approval • JUL 2009: New ITQ effective date

32. IT • WSCA Cell Phone Contract • Implemented • Met with TMOs on details • Moving to shared minutes • Suppliers gave TMOs presentation of implementation • What procedures will be available? • PCs, Laptops, Rugged Laptops and Thin Clients • All punch-out sites up and running, all contracts approved • Dell Lease Payments • Professional AV • Multiple award contracts • Peripherals & Networking • 2 suppliers on Peripherals • Recommend to get 2 quotes on orders over $2500 • Web Sites to be fully functional in next 30 days • P-card enabled • Networking is multiple award • Servers & Storage • Interim Agreement in Place, pending approval • Best Value, Multiple Award • To use other than Best Value, need DGS approval • Can purchase maintenance from this contract, not mandatory E:\Procurement Policy Council Meeting\PPC_October.29.2008_docs\Copy of Cell Phone Contract Overview.xls

33. IT • New Procurements in Process • 3rd Party Maintenance • Enterprise IT Help Desk • Enterprise Software (3 companies) • Film and sundry supplies • IPAM • Time Management • Radio Repair and Equipment E:\Procurement Policy Council Meeting\PPC_October.29.2008_docs\IT Contracting Office10.08.pdf

34. Agency PO/Contracts Background Issue – Inconsistent interpretation of MD 310.3 within comptrollers- Encumbering and Lapsing of Appropriations following the implementation of SRM Background – Prior to SRM, agencies created the following document types to commit funds: • Agency Standard Contract with follow on PO. (contract no commitment, PO commitment) • Agency Encumbered Contracts with follow on PO. (contract no commitment, CO creates a funds reservation entered into the contract, and a PO to commit with manual reduction of the funds reservation) • Multiple year or single year PO. (PO commitment) Due to the multiple step process and room for error, the Agency Encumbered Contract document type was eliminated with the SRM implementation. Agencies were given the option of a contract with PO’s or multiple year PO’s to encumber funds. Inconsistent interpretation of the MD • Perception by CO is that funds must be encumbered at the time of award and only means to do so is via the PO as contract does not trigger encumbrances. Certain offices require a contract and single year PO’s to be created for every year of the contract immediately upon award. Question/issue – Why create the contract if all PO’s have to be created at same time? Defeats purpose of contract=extra work.

35. Agency PO/Contracts Responses • Contacted several agencies to see how they processed ongoing services contracts. • L&I: Creates multi-year purchase orders. • DPW: Creates agency contracts for some services that are purchased on an as needed basis. For ongoing services, multi-year purchase orders are created. • PSP: Creates multi-year purchase orders. They know their budget for future years, but don’t want to create a contract, then cut a PO every year. They would rather cut one PO for the full term so they don’t have to remember to create a new PO in each consecutive year.

36. Use of Agency Contract Recommended Decisions for Document Types • An agency contract was to be created when: • More then one entity was purchasing off of it – , i.e. districts creating their own PO’s at time of service • Agency cannot commit the future year funds or are not ready to commit the funds. • then create a PO at the time you are ready and another one thereafter • Requirements (materials or services) quantity and timing unknown or uncertain over future years • A multiple year PO was to be created when: • The agency wanted to commit all funds at time of the award

37. Examples • Scenario 1 - Intergovernmental Agreements (IGA) for services mandated to be provided that will continue for the next several years, but because they are contingent on State funding, the exact amount to be allocated may not be known years in advance. • IGAs currently take 6-8 weeks for approvals in SRM and because some of the work must be done when school is not in session, agency cannot afford a lapse in services at the start of the FY. • Solution - Multiply a single year times 5 and enter an agency contract for 5 years with an annual PO to establish exact funding done immediately at the start of the new FY. With this scenario, there would not have a lapse in services and when a PO is issued, would only have Comptroller to approve instead of the original 6-8 weeks for full IGA. • Scenario 2 - Purchase of educational materials (curriculum) where it is known there will be a multiple year need for the item(s) plus instructional services but do not know exactly how many schools would be serviced each year as it would be contingent on the annual budget allocation. • Solution - Manage this with a handful of contracts, not the much higher number we would use for IGAs. In this case, again, it would prevent a lapse of services and allow agency to cut a timely purchase order without risking a lengthy break in services. Even though these contracts would only have three or four approvers (based on cost) instead of the six with IGAs, consistently run into the backlog in many of these offices as we try to push through the new purchase orders. This would reduce everyone’s workload as the PO would only go to Comptroller. • If any one of the agency contracts prove to be too small, could amend to add services or quantities mid-FY cycle so as not to risk the break in services at year end.

38. Contract Attachments • This list of required attachments was created to assist in maintaining the correct documents within contracts. They were derived based on: • Minimum Right to Know requirements • SRM compatibility Contract Attachments Location: Contract Attachment Documents

39. Procurement Handbook Changes Non-contract purchases under $10K (reinstated) • Part I Chapter 7 Thresholds and Delegations • Section B Thresholds for Specific Procurements • Agencies are authorized to procure on a non bid basis, up to $10,000 for the following: • Repair, maintenance, modification, or calibration of equipment services to be performed by, and repair parts supplied by, the manufacturer of the equipment or by the manufacturer's authorized dealer • Software license maintenance agreements and extensions of software licenses • Agency leasehold construction improvements

40. Complete Procurement Handbook Changes Political Contribution Letter for Sole Sources (new) Relating to the PO or Contract issued to the Supplier, a Political Contribution Letter is to be sent to the supplier reminding them of their responsibility to file a report of Political Contributions, by February 15 of each year. This report is to be sent to the Secretary of the Commonwealth for all political contributions exceeding $1,000 during the preceding year. Sole Source Procurements of Materials, Services and Construction. 70% Thresholds Part I, Chapter 6: Methods of Awarding Contracts In order for a proposal to be considered for selection for BAFO or selection for contract negotiations, the total score for the technical submittal of the proposal must be greater than or equal to 70% of the highest scoring technical submittal.

41. Procurement Handbook Pending BMWBO Changes • Part 1, Chapter 3: Responsibilities • Currently, the agency evaluates the STD-168 over $250K • At any dollar amount, an STD-168 MBE/WBE Subcontractor and Supplier Solicitation form, will be sent to the supplier to complete, sign and return to the agency. • - The agency will evaluate their responsibility for a value of up to $50K and BMWBO will review if the contract is over $50K. • Part 3, Chapter 7: Competitive Sealed Proposals (RFP Process) • Will read the same as Part 2, Chapter 7: • BMWBO assigns the minimum weight for DB participation at 20% of total points • Agency establishes a maximum point value for each major evaluation criterion prior to RFP issuance • - Cost criterion must be a minimum of 30% total points

42. Procurement Handbook Pending BMWBO Changes Part 1, Chapter 20: Non Discrimination Currently the Form GSMWBE-16 is completed only on construction contracts. They will be needed for any contract over $50K. - The Form GSMWBE-16, "MBE/WBE Subcontractor and Supplier Certification Solicitation and Commitment Form", is to be included in contracts with sole source contractors when the total procurement is estimated to be more than $50,000 annually for single or multiple year awards. The contractor must complete Form GSMWBE-16. - Before processing a contract in the amount exceeding $50,000 (or suchhigher amount as BMWBO may establish for a particular agency), including those amendments and change orders that directly affect MBE/WBE participation, the purchasing agency is required to forward the bidder-completed GSMWBE-16 to BMWBO which will determine the contractor's responsibility in regard to nondiscrimination unless exempted from the BMWBO Program requirements. - If BMWBO determines the contractor is nonresponsive and/or not responsible, and the agency decides to make an award, the agency must consult with its Office of Chief Counsel, and its agency head or appropriate Deputy Secretary and fully justify, in writing, its reasons for proceeding with award. The agency must forward a copy of this justification to BMWBO. Part 2, Chapter 3: Delegated Formal Competitive Sealed Bidding - This section of the Handbook is under review to eliminate the need for agencies to send solicitations to suppliers. BMWBO will require suppliers to provide an email address so that the supplier can receive Ealerts.

43. Procurement Handbook Pending Modifications to Document Builder – MBE/WBE The following issues are being addressed: - List the number of documents required - Link to BMWBO website RFP Template • Part 1, Sections 12 and 13: will update the phone, fax and website for BMWBO • Part 1, Section 19: will address confidential information and the Right To Know requirements • Part 2, Section 9a: revises the number of Disadvantaged Business submittal copies to 2 • Part 3, Section 4: adds the 70% rule for technical proposals, language to disclose the weights for technical, cost and Disadvantaged Business scoring and bonus points • Part 4, Section 6: adds “through any renewal or extension of the contract” • Appendix B: Domestic Workforce Utilization Certification form was revised • RFP Template Archiving templates from DGS website - Templates commonly found on the DGS website are being archived to allow agencies to find templates from prior years - DGS templates only will be saved - Agencies are recommended to archive their own “agency specific” documents - Templates can be found at PUForms/ArchivedForms

44. Procurement Handbook Pending Publishing RFP Weights • It is DGS’ intention to publish RFP weights • Using this process makes debriefings easier and clearer • Suppliers cannot claim the scoring weights/criteria were inappropriate, as they were pre-published Treasury - Developing a new chapter on Department of Treasury which will include ‘Right To Know’ requirements. Green Procurement Part 1, Chapter 22: Green Procurements - Currently drafting policy on Environmentally Preferable Purchasing - Developing tools and website resources along with training - Identifying 3-5 commodities for pilot projects

45. Procurement Handbook Pending Subscriptions Part 1, Chapter 1: General Provisions - Clarifying the scope surrounding subscriptions. GSA Schedules - There are schedules (contracts) available from the Federal government - They are used on a limited basis - DGS will be reviewing policy to allow limited usage of GSA Schedules - Establish DGS as a initial checkpoint prior to purchase www.gsa.gov

46. Requisition Pricing Purpose • Some agencies are occasionally changing the “Do not adopt” to “As net price” setting in the Line Item Details section of an R3 requisition. Changing Settings • Requisitioners should not change the valuation setting of “Do not adopt”. • This setting is necessary so that contract pricing is maintained throughout the documents. • When a requisitioner pulls up a contract item, the correct price will be pulled into the document.

47. Bidding Guide To create your bid: • Go to www.pasupplierportal.state.pa.us • Go to Supplier Log On • Select “Bidder” Tab • Select “Process Bids” • Locate Bid Opportunity • Select “Create” Action Icon To complete your bid: • Go to: General Data Tab • Select “Attributes” and respond to all questions/statements • Add Attachments by selecting “Browse” – locate file & upload by selecting “Add” • Enter Price • Submit the Bid • The “Submit” button will not be available until the “Check” button is invoked. To delete a bid completed incorrectly: • 1.Search for previously submitted bid. Once it appears, click the pencils for “Change mode” • 2. Select the “Hold” button • 3. Select the “Change” button, “Delete” button should appear • 4. Select the “Delete” button Support Options • Live Support exists for suppliers available via the Customer Support Center • Email: ra-srmhelp@state.pa.us • Phone: 717-346-2676 (local) • Phone: 877-435-7363(outside Harrisburg) • www.pasupplierportal.state.pa.us Document can be found: Bidders Guide - Checklist for Creating, Responding and Deleting a Bid

48. Live Auction • Live Auction Cockpit (LAC) refers to an auction that takes place online in “real time” via the SRM portal. Live auctions are held to get the best available market price at the time of the bid. Throughout the bidding process the price is driven down, which often results in a lower price paid than traditional sealed bids or negotiations. A matrix is available for use which will allow a user to decide if Live Auction is the right tool. DGS offers this service to agencies To access the EUP: Live Auction EUP

49. Live Auction Decision Tool The Decision Tool is utilized to determine the viability of performing a Live Auction.

50. Why conduct an Auction? • To get the best available market price at the time of the bid • Auctions drive down costs, often resulting in a lower price paid than traditional sealed bids or negotiations • Real cost savings of 10% or more can be realized • For example: An item which is purchased in a significant quantity, and there is pricing flexibility in the market • To improve and streamline the strategic e-procurement process • Precise specifications will be provided to potential suppliers • Historical spend data can be used to develop business forecasts • Negotiation time is reduced from weeks to minutes • Auction events are easily duplicated • Auction events are visible and the results measurable • The live web-based event is viewed in real time • SRM reporting offers detailed analysis across auctions • Increased competitiveness within the public sector • Ongoing cost reductions and improved productivity are essential in government activities • Results and benefits are measurable and easily reported • Many suppliers appreciate the openness of auctions