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February 4, 2009

9:00 AM to 11:00 AM

PROCUREMENT CONNECTION

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Agenda

Presentations1. Webinar - ePlus Punch-out:: Carl Skiba2. DOT Agility Program: Toni Crawford & Tammy McElfresh

Technical:3. PO Effective Dates: Patti Chapman4. Recommendations for Improvements to Solicitations: Patti Chapman5. Deactivated Contract Error: Cheryl Kleeman6. Changing Fully Approved Shopping Carts: Cheryl Kleeman7. BI Failure: Global Spend Reports: Cheryl Kleeman8. SRM Ship To Address: Cheryl Kleeman

Legal:9. Procurement Organization Responsibility: Chuck Anderson10. Independent Agency EPO: Chuck Anderson11. Right to Know: Chuck Anderson

Business Process:12. Commonwealth Payment Terms: Cheryl Kleeman13. DGS Contracts in SAP R/3: Sue Rojas14. DGS Shopping Cart Requirements: Cheryl Kleeman

Appendix:A. Supplier EnablementB. Sole Source Procurement ProcessC. Finance Transformation

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PresentationsAgenda Item #1

WEBINAR: ePlus Punch-out

DGS Contracts:• 4400003673, IT Hardware (Lot 2 Storage)• 4400002811, IT Hardware (Lot 2 Networking)• 4400002815, Peripherals (Lot 1)• Supplier: ePlus

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PresentationsAgenda Item #2

DOT Agility Program• Sharing Services• Fact Finding

– Agency interest in DOT Winter Academy

• Plowing

• Deicing techniques

• Deicing products

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TechnicalAgenda Item #3

PO Effective Dates– When changing an existing PO where a GR and IR entry have

already been made on one or more lines, the system changes the effective date to the latest modification and the original effective date is lost.

– How are we to handle that for our records? – The original effective date should NEVER change– How will this be recognized by the auditor(s)?

Response: After researching the output issue, IES found the effective date displays correctly; however the “issue date” becomes an issue when the original PO has never beenoutputted.   GR/IR activity has no impact on these dates.

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TechnicalAgenda Item #3

Example: PO 43XXXXXXXXOriginally PO Effective Date:  08/07/08NEVER OUTPUTTED Change 1 (added new line item) made on 01/28/09PO output displays:PO 43XXXXXXXXOriginal Effective Date:  08/07/08PO Issue Date:  08/07/08

Reason for wrong issue date:  Original status of not processed processing status (output log)  “Generated on” date remained = 08/07/08.  Development change will be made to correct.

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TechnicalAgenda Item #4

Issue:• Agencies have run into instances where suppliers thought

they attached items when in fact they didn't. • In some cases the attachments were attached in the item tab

rather than the header.• Can something be done to remind the suppliers to attach any

and all necessary attachments prior to being able to submit the bid/quote.

Recommendations for Improvements to Solicitations:

Can something be added to a solicitation to indicate how many attachments are within the solicitation?

Can something be added to a supplier’s quote to indicate how many documents have been attached?

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Supplier’s View of BidPage 1 – 1 to 10 of 13:

Page 2 – 11 to 13:

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Purchaser’s view of Suppliers Quote:

Page 1 – 1 to 10 of 12:

Page 2 – 11 to 12:

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TechnicalAgenda Item #5

Deactivated Contract Error– What do you do when trying to reduce the quantities on an old

PO and you get a hard stop error message saying “Associated contract item deactivated” & “No Default Values from Vendor Master”?

– Procedure: 1. Agency must contact the DGS Commodity Specialist (CS)

responsible for the contract– Inform them of the situation

2. CS must activate the contract3. CS will notify the agency of the activation4. Agency makes necessary changes to PO and notifies CS

when they are complete5. CS deactivates the contract

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TechnicalAgenda Item #6

Announcement:– Fully approved shopping

carts can be edited– Procedure has been

developed & tested– EUP: Edit Approved

Shopping Carts• Will be posted to the DGS

website

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Agenda Item #7

•  A failure on data extraction for Global Spend occurred

• The affected reports are:

– Top 25 Suppliers and Categories

– Invoice Values

– Global Spend Document Level Details

• The data contained in the Global Spend workbooks is as of January 15, 2009 and no later

• Anticipated fix time: Mid-February

• Updates will be forthcoming

Technical Difficulty . . . .Technical Difficulty . . . .

A Failure Has OccurredA Failure Has Occurred

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Agenda Item #8

Subject: • Ship to addressesEffective date: • To be determined. A formal notification will be sent to all agencies

when a date has been setChange: • SRM will require a valid ship to address on all shopping carts

– XML suppliers receive on a weekly basis a list of valid ship to addresses with a system generated number

– A validation has been added preventing requisitioners from overwriting the “Exec Branch” entry in the Name field

– This validation was required to facilitate the transmission of XML purchase orders to suppliers

– The validation is required to ensure an exact match of the address data with the address number

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Agenda Item #8

• System messages have been created to communicate these validations

– If a requisitioner overwrites the Name field, the message informs the creator that the field cannot be overwritten, please re-select a valid ship to address:

– If a requisitioner has not selected a valid ship to address, a system message will instruct the creator to select a valid ship to address:

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Agenda Item #8

• Set “Delivery address” attributes– Do not attempt to change the address– Will not encounter any system messages

Setting Your Attributes

1. My Settings: Change Attributes

2. Attribute: Select Delivery address

3. Enter Agency SRM address code

4. Click save

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Agenda Item #8

• Requisitioners relying on the Name field to add specific address information should:– Follow the current process

• Request a new address number or Change existing address data

• Use Ship To Address Change Form on the DGS website– Agencies can make the needed changes in the c/o

Agency/Division field in place of the Name field:

Examplec/o Agency/Division: Jane Doe, DOT, Dist 08, Dauphin CtyFloor or Room#/Bldg: Keystone Bldg Rm 324 Street: 41 N. Commonwealth Ave, 3rd floor

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Legal: Agenda Item #9 - Procurement Organization and Responsibility Under the Procurement Code

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LegalAgenda Item #10

Background:• Independent agencies utilizing SRM document type services

EPO’s. • This routes to BOP for approval

Issues:

1. BOP does not have authority for service procurements for independent agencies

2. Without a document type = EPO, Treasury will not pay invoices that precede the PO (due to emergency) and lack of evidence of competitive bidding.

Options:

1. Independent agencies use standard doc type and indicate emergency situation in approval notes section of PO when >$5K.

2. Continue with current process

3. Long term - Create new EPO doc type for independent agencies

Feedback?/Thoughts?

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LegalAgenda Item #11

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LegalAgenda Item #11

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Business ProcessPayment Terms - Agenda Item #12

Commonwealth Payment Terms– Have NOT Changed to Net 45– 45 Day Payment should NOT be mentioned– This is NOT Commonwealth Policy

• Responding to Suppliers’ Inquiries Relating to Receiving Payment Within the Established Time Periods – Standard Response:

• “The Commonwealth has, and will, continue to make reasonable efforts to pay within time periods established by contract, but payments may be delayed based on the timing of the receipt of Commonwealth Revenue.”

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Business ProcessPayment Terms – Agenda Item #12

• Payment Terms should Reflect the Contract’s Terms and Conditions– Present

• Purchase Order States: Payment Terms – Net 30 – Future

• Requested a System Change to Eliminate the Notice of Payment Terms – Net 30 from Purchase Orders

– Legal Requested this change– The “Net 30” Payment Term is inconsistent with the Payment

Terms in the Standard Contract Terms and Conditions

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Business ProcessAgenda Item #13

DGS Contracts in SAP (R3)– More state contracts mandating PO’s be generated in SAP (R3)– Shopping carts created in SRM do not replicate to SAP (R3)– Requisitions can be created in SAP (R3)

• This enables the purchasing agent to copy the requisition into the PO with out double work

• Training available:– SAP R/3 Purchasing (MRP/Inventory and Market Price

Contracts)• February 18, 2009 (8:30am – 4:00pm)

– SAP Procurement Overview and Process• March 3, 2009 (8:30am – 4:00pm)

– Courses are instructed on a quarterly basis

DGS Training Website

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Agenda Item #13 Replicated Contracts

• Any existing R3 contracts which have been replicated to SRM (expiration date of 6/30/09 or earlier) are on daily batch jobs– Any changes made to the R3 contract will be replicated and reflected

in SRM the next day– It is the Commodity Specialists responsibility to check and validate

changes in the SRM contract

• The list consists of of active contracts which were previously replicated

• Contracts will automatically be removed from the Replication batch list when their expiration date is reached

• In order to renew a replicated contract, the Commodity Specialist must create the new contract in SRM

• After 6/30/09, no replicated contracts should exist

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Agenda Item #13 R3 Contracts

• Any PO needed on a non replicated contract should be created in R3 and utilize the NNB document type until the contract is created in SRM

• All contracts existing in R3 which are genuinely being used by agencies running MRP, should remain in R3 and not replicated– This process is to be vetted via R3 and/or BW reports– MRP will be discussed further on our next slide

• Any contract existing solely for use by a warehouse to replenish stock which is then distributed to agencies via requisition, should remain in R3

• All “market price” contracts will remain in R3• All SRM GOA document types requiring the use of scaling

should be created in R3 and re-evaluated at such time scaling is tested

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Agenda Item #13 MRP Clarification

• MRP has a specific list of transactions found in SAP• MRP does not mean simply “inventory”, MRP is a process• The MRP Process plans, creates planned orders, converts

planned orders into requisitions and creates purchase orders• MRP needs to have a reorder point, prior and future

consumption, replenishment, lot size, lead time and use• In order for an agency to claim MRP, they must establish an

MRP Controller, Inventory Planner and material masters for their requirements

• Material masters should be listed as contract line items when the contract is created

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Agenda Item #13 Contracts in SRM

• With a few exceptions, all new contracts will be created in SRM– exceptions will be reviewed on a case by case basis

• Any contract containing services and expiring after 6/30/09, will be built in SRM

• Any contract expiring before 6/30/09 and meeting the criteria, will be replicated and it’s replacement built in SRM

• Any contract containing products which are inventoried, but not via MRP, will be built in SRM

• Global Outline Agreements (GOAs) – Scaling is being tested by IES

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Appendix

APPENDICES

A. Supplier Enablement

B. Sole Source Procurement Process

C. Finance Transformation

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Appendix A: Supplier Enablement

Email to Cheryl Kleemanckleeman@state.pa.us

Deadline for submission: Tuesday, February 17, 2009

SRM Punch-outs:

MeadWestvaco– In development process– 1 or 2 agencies to pilot (L&I & ?)– Information needed from agencies:

• MRP: Agencies currently running MRP must provide a list showing the material master for each item

• Agency Logo Artwork – Refer to: Commonwealth Style Guide

– MeadWestvaco graphic requirements (provided)

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Appendix A: Supplier Enablement

MeadWestvaco graphic requirements

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Appendix A: Supplier Enablement

MeadWestvaco graphic requirements continued

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Appendix B: Sole/Single Source Procurements

• Objective – Secretary & Governor’s initiative to make Sole/Single Source procurements more readily available for public scrutiny.

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• Benefits– Public Notice– Electronic internal agency approvals via e-mail– Electronic DGS internal approvals via e-mail– Archiving of Source Justification form and other

attachments for 3 years.– Internal DGS reporting features– Elimination of shopping carts for Sole/Single

Source requests for services– Automatic notification to Dept of State

Appendix B: Sole/Single Source Procurements

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Agency completes online SJF(including approvals)

Agency submits electronic SJF form to DGS

DGS Materials reviewer receives e-mail to review SJF

Agency will receive e-mail that DGSAccepted the form and can finish

Processing Shopping cart

BOP Internal Process

DGS Material reviewer assigns to CS for review

CS completes Determination Summary, attaches to SJF & approval form

CS routes to CPO for approval

CPO approves & sends back to CS

CS processes SPR & makes up PO for Board release & approval

Upon final release by Board,Material reviewer will update eMarketplace with award info

Agency will receive e-mailstating fully approved

Dept of State will receive e-mailPO/Supplier information

Agency prepares shopping cart & places on hold

DGS Materials reviewer accepts or

rejects SJF

Accepted

Re

ject

ed

, S

ho

pp

ing

Ca

rt is

re

turn

ed

Appendix B: Sole/Single Source Procurements

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Agency completes online SJF(including approvals)

Agency submits electronic SJF form to DGS

DGS Services reviewer receives e-mail to review SJF

Agency will receive e-mail that DGSAccepted the form

Agency will receive e-mailstating fully approved

Dept of State will receive e-mailPO/Supplier information

Agency may process PO

DGS Services reviewer accepts or

rejects SJF

BOP Internal Process

DGS Services reviewer assigns to CS for review

SJF routes for DGS approvals

Update posted on eMarketplace with proposed award into.

Re

ject

ed

, e

ma

il n

otif

ica

tion

Accepted

Appendix B: Sole/Single Source Procurements

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• Key Dates

– Demo was provided to the eMarketplace Agency Focus Group on on 01/07/09

– Testing was conducted with agency personnel on 01/12/09

– Anticipated go live date will be sometime in February.

Other No Substitutes - explain the request in the

comment section of the Shopping Cart

End User Procedures are in the process of being created

Have received already received some feedback for future enhancements.

Appendix B: Sole/Single Source Procurements

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Appendix C: Procure to Pay – Signature Authority for Invoice Payment

Current State Future State Per Management Directive 205.4

agency identifies an individual who should be granted the authority to approve invoices for payment.

A Signature Authorization form is completed and the form is kept on file with OB, DGS and Treasury for audit purposes.

Agency identifies an individual who should be granted the authority to approve invoices for payment.

Individual is role mapped to either the Invoice Receiver role or the Invoice Verifier role. No additional forms are required since role mapping will serve as proof of approval authority for Treasury.

Role mapping is not based on dollar value so agencies should evaluate the individuals and roles accordingly.

The role mapping change applies only to payment of invoices, all other processes remain as-is.

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Appendix C: Procure to Pay – Goods Receipt Entry

Future Process

Going forward, entry of a Goods Receipt (GR) will be required prior to processing of a market-based PO invoice or an invoice with multiple account assignments.

For these two invoice types, the OB invoice processor will reject an invoice that does not have a GR.

The invoice will then route to the Agency PO Line Item Reconciler, who will work with the Goods Receiver to make sure a GR is entered.

Upon entry, the Agency PO Line Item Reconciler will accept the invoice and it will then route back to the OB Invoice Processing Unit for review.

Rationale

Market Priced – Invoices cannot be entered for market priced POs therefore the only method to indicate to the agency that the invoice has arrived is via workflow to the agency.

Account Assignments – When a GR is not completed, the invoice processor must calculate the split which is a labor-intensive, time-consuming process only required due to a lack of proper receiving.

Future Process

Going forward, entry of a Goods Receipt (GR) will be required prior to processing of a market-based PO invoice or an invoice with multiple account assignments.

For these two invoice types, the OB invoice processor will reject an invoice that does not have a GR.

The invoice will then route to the Agency PO Line Item Reconciler, who will work with the Goods Receiver to make sure a GR is entered.

Upon entry, the Agency PO Line Item Reconciler will accept the invoice and it will then route back to the OB Invoice Processing Unit for review.

Rationale

Market Priced – Invoices cannot be entered for market priced POs therefore the only method to indicate to the agency that the invoice has arrived is via workflow to the agency.

Account Assignments – When a GR is not completed, the invoice processor must calculate the split which is a labor-intensive, time-consuming process only required due to a lack of proper receiving.

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Appendix C: Procure to Pay –Supporting Documentation

Where should supporting documentation be mailed in the future?

If documentation is currently required to be attached when submitting your invoice to the Comptroller office for processing, in the future it should be mailed along with the invoice to the appropriate new post office box for pick-up and processing by DOR.

If documentation is currently NOT required to be attached when submitting your invoice to the Comptroller office for processing, in the future it should continue to be mailed to the agency for retention and the invoice should be mailed to the appropriate new post office box for pick-up and processing by DOR.

Due to the varying requirements for supporting documentation within an agency and/or program area, it would be best for each agency program area to tailor the Non-PO vendor letter to indicate where supporting documentation should be sent.

Where should supporting documentation be mailed in the future?

If documentation is currently required to be attached when submitting your invoice to the Comptroller office for processing, in the future it should be mailed along with the invoice to the appropriate new post office box for pick-up and processing by DOR.

If documentation is currently NOT required to be attached when submitting your invoice to the Comptroller office for processing, in the future it should continue to be mailed to the agency for retention and the invoice should be mailed to the appropriate new post office box for pick-up and processing by DOR.

Due to the varying requirements for supporting documentation within an agency and/or program area, it would be best for each agency program area to tailor the Non-PO vendor letter to indicate where supporting documentation should be sent.

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Appendix C: Workflow for AgencyFiscal Review of Shopping Carts

Required Actions:

The recommendation for fiscal review in shopping carts were received and will be live in production 2/6/09.

We will be notifying agency project managers this week that cart changes and role mapping will be ready with an effective date of 2/6/09.

These changes will impact all agencies with the exception of Penn Dot with whom we are working for a later date to allow time for training.

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Closing

Survey

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Thank you