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| Submitted By: |
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| Cognizant DOE Office: |
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| Date of Last Self-Assessment: | August 2004 |
| Status Of Purchasing System: | Approved |
| Effective Date Of Approval: | March 29, 2004 |
| Thresholds For DOE Approval: |
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| Assessment Team Members: |
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1. General
The SLAC Purchasing Department Self Assessment was conducted in accordance with the SLAC 2004 Balanced Score Card Self Assessment Plan, dated October 9, 2003 and submitted to the DOE Oakland Office on October 10, 2003.
2. Purchasing Organization
3. Status of Open Items from the 2003 Self-Assessment Review
(None)
4. Participation In General
On November 18-20, 2003, the SLAC Purchasing Officer attended the DOE Small Business Program Manager’s Training Meeting in Washington, D.C. The purpose of this meeting was to facilitate interactions and direct discussions between the DOE Headquarter’s Small Business Office of Economic Impact and Diversity and the DOE Prime Contractor’s Small Business Managers. In addition, on May 24-25, 2004, the SLAC Purchasing Officer participated in the Annual Energy Research Laboratory Purchasing Managers Conference hosted by Pacific Northwest National Laboratory (PNNL). The group meets bi-annually to discuss common issues and exchange information.
5. Training
Training of personnel in FY04 continued to be aided by Stanford University’s educational allowance of $800 per year. This assistance helps defray the costs of training, conferences, workshops or seminars for every employee in order to further their education. The areas of training are as follows:
5.a. Buyer Training
During this fiscal year two (2) on-site training classes were presented to SLAC Buyers and Contract Administrators by Federal Publications Seminars, LLC on the following topics:
The class entitled “Government Contract Law” provided our Buyers and Contract Administrators with a step-by-step approach on how to handle legal factors that must be considered at every stage of the contracting process. Course instruction consisted of an introduction to government contracting, discussions on fiscal law requirements, competition requirements, sealed bidding, contracting by negotiation, simplified acquisition procedures, commercial item acquisitions, socioeconomic policies and requirements., bid protests contact costs, contract changes, inspection, acceptance and warranties, government-furnished property, pricing contract adjustments, terminations for both convenience and default, and processing claims under the Contract Disputes Act.
The course on “Government Contract Finance & Accounting for Non-Financial Managers” assisted the Buyers/Contract Administrators on increasing their overall effectiveness as contract professionals. The training session covered topics such as direct and indirect costs, overhead rates, unallowable costs, pre-award cost issues, types of contracts, contract funding, contract financing, incurred costs, government audits, and contract close-out procedures.
In addition to providing on-site training classes to our Buyers and Contract Administrators this fiscal year, Purchasing also sent its’ Construction Contract Administrators (3 individuals) to a four day course in Washington, D. C. on Construction Contracting presented by ESI International. The course topics consisted of providing a practical and comprehensive introduction to the laws of construction contracting and set a solid fountain for discussions on forming a construction contract, award controversies, contract interpretation and risk allocations, changes and claims, differing sit conditions, delays, suspension of work and acceleration , cost recovery, inspection acceptance and warranties, terminations, payment and discharge, bonds, and insurance, contracting disputes and the Civil False Claims Act.
All of these courses provided excellent reference materials for the SLAC Buyers/Contract Administrators to use in their day-to-day activities as procurement professionals.
5.b. Purchase Card Training
In June of 2004, the Purchasing Department conducted its mandatory annual training and review of the policies and procedures for the use of SLAC’s Purchase Card to all Cardholders and Approving Officials. The elements discussed were the primary changes and additions to our Purchase Card Manual entitled, “PROCEDURES FOR USE OF THE PURCHASE CARD FOR CARDHOLDERS AND APPROVING OFFICIALS” that occurred within the last year.
5.c. Ethics Training
The annual Purchasing Ethics Training session was held on August 3, 2004. This was a mandatory training session for all department professionals involved in the purchasing function. In addition to reminding buyers of the various University procedures covering code of conduct, a videotape entitled “You’ve Got It” produced by the U. S. Office of Government Ethics was shown to the group.A total of fourteen (14) Buyers and Contract Administrators and other departmental staff attended the session.
5.d. Safeguards and Security Training
In order to emphasize SLAC’S commitment to performing work in a safe and effective manner, all laboratory personnel, including all of the Purchasing staff, attended mandatory training sessions on Safeguards and Security on September 22, 2004.
1. Source of Data used in the Self-Assessment
The principal data generation source for the Four Perspectives was from the Business Information System (BIS). System data was collected from the period October 1, 2003 through September 30, 2004. All other data was obtained through the use of checklists and questionnaires as discussed later on in this report.
2. The Four Perspectives
The four perspectives discussed below were measured as part of the self-assessment process. Each measurement was rated using the Balanced Score Card Summary Sheet format.
1. CUSTOMER PERSPECTIVE
1.1 Transaction Customer Survey
SLAC obtained its measurement of this perspective from its internal customers (Requestors). A Transactional Customer Satisfaction Survey was initiated via e-mail, telephone and in-person interviews during the month of August 2004 to fifty (50) customers. Out of the fifty(50) individuals selected, only thirty-seven (37) individuals elected to participate. Each participant was asked to respond to a series of statements (see Exhibit II) pertaining to specific purchase orders. The statements were based upon the suggested core and optional questions of the “DOE Balanced Score Card for the Business Systems Performance Measurement and Management Program” guidebook. Areas assessed were timeliness, quality, communications, schedule, best value, overall satisfaction, and performance. The population of participants for this survey were determined by randomly selecting Requesters from the BIS data report who were associated with purchase orders that had been awarded within the past fiscal year.
Measure: Transaction Customer Survey
Core Elements:
Timeliness - Extent of customer satisfaction with timeliness of procurement processing, planning activities, and on-going communications.
Quality - Extent of customer satisfaction with the quality of Procurement services.
Communications - Extent to which Purchasing communicates accurate information, which impacts the work of the organization.
Schedule - Extent to which Purchasing is supportive of schedule requirements.
Best Value - Extent to which Purchasing strives to obtain the best price.
Performance - Extent to which Purchasing is committed to certain standards.
Overall Satisfaction - Extent of overall customer satisfaction with Purchasing.
Target: 92% customer satisfaction (10 Total Points Possible)
Results: A rating of 92% (10 points - BSC Measured Rating) was assigned based upon an analysis of the internal customer questionnaire responses. There were thirty-seven (37) respondents to the survey whose satisfaction level was calculated as follows:
- The transactional survey had seventeen (17) statements the customer was asked to respond to with each response assigned a mathematical identity as follows:
5 points Strongly Agree
4 points Mostly Agree
3 points Agree (deemed as the Satisfactory level for the survey)
2 points Somewhat Disagree
1 point Strongly Disagree
0 points for No Opinion; and
The number of points for each statement for every respondent was added up; and
- The average rating was calculated by dividing the total points by the number of questions responded to by that respondent; and
- The number of satisfied respondents (average rating of 3 or above) were tallied and divided by the total number of respondents to arrive at the percentage gradient
(34) Number. Of Satisfied Customers = (92%)Satisfaction Rating
(37) Number Of Customers Surveyed
1.2 BIS Operator Climate Survey
This measure was established to determine the level of customer satisfaction concerning the Purchasing Department’s level of service to the Operators who are responsible for on-line entry of the purchase requisition. This review is to be performed bi-annually by the completion of a satisfaction survey by our customers. This survey as shown in Exhibit III was sent out to the sixty-five (65) Purchase Requisition Operators in July 2004. Out of the sixty-five (65) surveys sent out, only twenty-seven (27) recipients responded. In the survey, the Operator was asked to rate their level of satisfaction, on a scale from 1 to 5, with 1 representing a response of “strongly disagree” to 5 representing a response of “strongly agree”. A simple set of questions was devised and the Operators were asked to rate their level of satisfaction on the six (6) different elements of their job identified below. An average rating of 3 or above was regarded as a satisfactory response.
Measure: BIS Operator Climate Survey
Target: 87% Operator satisfaction (0 Total Points Possible)
(25) Number Of Satisfied Operators = (93%) Satisfaction Rating
(27) Number Of Operators Responded
Results: A rating of 93% (0 points - BSC Measured Rating) was assigned based upon an analysis of the Operator questionnaire responses. The average rating received by the Operators on each question are:
1. 4.3
2. 4.1
3. 4.2
4. 3.8
5. 4.2
6. 4.1
As demonstrated above, all questions identified in the survey received a rating of 3 or greater indicating satisfaction from the Operators in regards to the customer service that the Purchasing Department provides.
1.3 Purchase Cardholder Customer Survey
In addition to the surveys identified above, SLAC’s Purchasing Department also conducted a new survey this fiscal year to determine the level of customer satisfaction concerning the Purchasing Department’s level of service provided to our Purchase Card Holders. A target measurement was not established in the Balanced ScoreCard Plan for FY04 for this survey as SLAC wanted to introduce this assessment tool to the user community this fiscal year and then include it as a permanent part of the customer satisfaction series of the surveys next fiscal year. The results of this survey are shown in Exhibit IV. The survey was sent out to a total of two hundred twenty-one (221) Purchase Card Holders in July 2004. Out of the two hundred twenty-one (221) surveys sent out, only eighty-three (83) recipients responded. In the survey, Purchase Card Holders were asked to rate their level of satisfaction, on a scale from 1 to 5, with 1 representing a response of “strongly disagree” to 5 representing a response of “strongly agree.” A set of questions was devised and the Purchase Card Holders were asked to rate their level of satisfaction on the six (6) different elements of their duties as identified below. An average rating of 3 or above was regarded as a satisfactory response.
Measure: Purchase Card Holder Customer Survey
(83) Number of Satisfied PCard Holders = (100%) Satisfaction Rating
(83) Number of PCard Holders Surveyed
Target: 87% Purchase Card Holder Satisfaction (Points were not assigned as this measure was not included in the Balanced ScoreCard Plan for FY04)
Results: A rating of 100% (0 points - BSC Measured Rating) was assigned based upon an analysis of the Purchase Card Holder questionnaire responses. The average rating received by the Purchase Card Holders on each question are as follows:
As demonstrated above, all questions identified in the survey received a rating of 4 or greater thereby stating that the Purchase Card Holders “agree” or are satisfied that the Purchasing Department is providing good customer service in these specific areas.
2. INTERNAL BUSINESS PROCESS PERSPECTIVE
This perspective assures that customer requirements and expectations are understood and that appropriate procurement processes are in place to support customer needs. The self-assessment is the principal data generation or gathering source for this perspective. The core objectives and measures listed below were used by Purchasing to monitor its business processes and for the establishment of a baseline against which future performance will be compared.
2.1 Overall Compliance Review
To ensure compliance with applicable laws, regulations, prime contract terms and conditions, and SLAC policies and procedures, Purchasing conducted its annual review of procurement transactions during the period of August 1, 2004 through August 31, 2004. The PeopleSoft system randomly generated 450 files to be reviewed in the self-assessment; however, only 429 files were successfully located and due to time and personnel constraints, the self-assessment review was limited to those particular files. The 429 files were selected for review for the period of June 1, 2003 through August 30, 2004. The team reviewed the following files using the Self-Assessment Checklists (See Exhibit V and Exhibit VI):
Two Hundred (200) files from $0 -10,000; and
One Hundred Thirty-five (135) from $10,000 - $25,000; and
Ninety-four (94) files from $25,000 and over.
These 429 purchase orders represented $7,226,486, or 24.3% of the total value of $29,702,023 for all purchase orders awarded during this period. The calculation is as follows:
$0 - $10,000 $10,000 - $25,000 $25,000 and over
Total number of 200 135 94
actions including
modifications
Total Value $7,226,486
B. UNIVERSE
Total Number of actions in the review sample period was 7,472.
Total Value of actions in the review sample period was $29,702,023.
C. PERCENTAGE (sample/universe)
Total Number 429/7,472 = 5.7%
Total Value $7,226,486/$29,702,023 = 24.3%
The following areas were designated as a focus for the FY2004 self-assessment review process:
Measure: % of systems in full compliance with stakeholder requirements (e.g. applicable laws, regulations, procedures, terms and conditions of contracts, ethics, etc.) based on self-assessment.
Target: 90% compliance (30 Total Points Possible)
Results: Of the Purchasing System actions reviewed for compliance with applicable laws, procurement regulations, SLAC Purchasing procedures, prime contract terms and conditions, and Government/University ethical provisions, an average of 90.1% (30 points - BSC Measured Rating) were found to be compliant.
Narrative
The findings are as follows:
| Review Topic | Total Found Compliant | Per Cent Compliant |
| Purchasing Requisition processed timely | 360 out of 429 | 84% |
| Discount taken | 26 out of 34 | 76% |
| PWHA obtained | 51 out of 64 | 80% |
| Sole Source Justification | 52 out of 58 | 90% |
| Price Analysis | 402 out of 427 | 94% |
| Proposal accepted as proposed | 221 out of 229 |
100%* |
| EEO Certification properly completed | 94 out of 118 | 80% |
| Representations & Certifications complete | 90 out of 101 | 89% |
| Use of DOE ICPT Agreements | 35 out of 39 | 90% |
| Accuracy of COI citation | 406 out of 429 | 95% |
| Debarred Listing citation | 421 out of 429 | 98% |
| Financial/Technical Responsibility | 208 out of 229 | 91% |
| Buy American Waiver | 5 out of 5 | 100% |
| Non-excessive verbiage | 195 out of 200 | 98% |
| Correct Optional Clauses (s) used | 215 out of 238 | 90% |
| Overall Adequacy of File Documentation | 369 out of 429 | 86% |
| Total | 1441% |
* Review Topic No. 6 is intended to indicate the percentage of orders not negotiated by the buyer (i.e., they were accepted as proposed). Of the 229 files reviewed, 8 (3%) were negotiated. This data is presented for informational purposes only.
Total Average of Actions Reviewed Found Compliant (1441/16) = 90.1%
Issues and Corrective Action
(For those actions found to be less than 95% compliant).
It is important to note that the low performance characteristics on the individual elements can be attributed to the portion of the files reviewed for FY 2004. Out of the 450 files selected for the self-assessment this year, only 429 could be located at the time of the self assessment. Out of the 21 files that were missing, two (2) files were found approximately two (2) months after the self assessment audit concluded and were not reviewed.
The self assessment for FY04 revealed that five (5) of SLAC’s Buyers contributed to a violation of the section of the Business Services Division Procedure Number 42-2 entitled “Procurement by Negotiation’ that identifies the elements to be included in a procurement file. Out of these five (5) Buyers, two (2) retired this year, two (2) Buyers had one (1) and three (3) incidences, respectively, where a procurement file could not be found, and one (1) Buyer was found to have nine (9) procurement actions where a procurement file could not be located by Purchasing Management. In addition, the same Buyer had thirteen (13) files where there was no memorandum to file documenting the transaction. This is a violation of Business Services Division Procedure 42-16.
The corrective action for the two (2) Buyers who could not locate the one (1) and three (3) procurement files will receive an oral reprimand directly from the Purchasing Officer and Deputy Purchasing Officer when the results of the self-assessment audit are shared with each Buyer. During this session Purchasing Management will review BSD policy 42-2 with each of these Buyers to make sure they understand the necessity of preparing a procurement file. The Buyer who had the most violations for missing files and not preparing memorandums to file, will have BSD Procedures 42-4 and 42-16 reviewed with the Purchasing Officer and Deputy Purchasing Officer and will be reprimanded for these actions. This reprimand will be presented to the Buyer in writing and will be the basis for suspending her signature authority for a period of six (6) months. During this time Purchasing Management will closely review all of her files and will re-evaluate this Buyer’s performance and, depending upon her level of improvement, will entertain the idea of re-installing her signature authority at the end of this six (6) month period.
Other factors to consider when reviewing the results of our FY04 self-assessment review are the impact of two (2) senior buyers retiring during this review cycle which meant that their work had to be redistributed to other Buyers. This redirection of effort significantly impacted and greatly affected our Buyers ability to manage their individual workloads. In addition, during this fiscal year the SLAC Purchasing Department processed approximately 676 of time critical purchase requisitions for the GLAST program. This increase would normally be easily absorbed into our daily workload throughout the entire fiscal year. However, due to a lack of programmatic pre-procurement planning, schedule changes, and unexpected emergencies, the GLAST program generated approximately 42% of all the purchase requisitions during the months of June, July and August, of this fiscal year. This influx of approximately 284 purchase requisitions issued by GLAST were identified as “rush” orders thereby requiring Purchasing Management to assign nine (9) Buyers to the GLAST project so that these time critical requisitions could be placed.
As a result, all of the Buyers were asked to take on additional responsibilities of maintaining a more demanding workload by processing these project related procurements above and beyond their current workloads. This additional effort stretched the abilities of our Buyer’s in awarding purchase orders. All of these factors contributed to the results identified below concerning SLAC’s performance for fiscal year 2004.
1. Purchase Requisition Processed Timely
Results: (84% compliant) Last fiscal year SLAC scored 92% in this category. Some of the root causes that contributed to SLAC’s lower performance this year was attributed to the increased workload of all buyers due to the GLAST project and the retirement of a senior buyer who maintained a heavy workload. Upon his departure, this individuals’ work was disseminated among the remaining Buyers. As a result of this action, all of the Buyers experienced a significant increase in their daily workload which slowed down the department’s average cycle time.
Corrective Action: Purchasing Management shall increase its’ attention to this measurement by monitoring all buyer progress on the placement of awards.
Target Completion Date: On-going
2. Discount Taken
Results: (76% compliant) Buyers failed to take advantage of the discount offered by the vendor for prompt payment in many cases. SLAC improved significantly on this measurement as compared to the 63% result experienced last fiscal year.
Corrective Action: Purchasing Management will continue to reinforce with the Buyers the need to cite a discount offered by suppliers.
Target Completion Date: On-going
3. Pre-Work Hazard Analysis Obtained
Results: (80% compliant) In June 2002, the Buyers were required to obtain a Pre-Work Hazard Analysis for all types of work to be performed on SLAC premises. Purchasing concluded fiscal year 2004 at 70% thereby improving its overall performance by 10 percentage points.
Corrective Action: Purchasing Management will continue to enforce with the Buyers the need to obtain a completed PWHA form for any on-site effort.
Target Completion Date: On-going
4. Sole Source Justification Adequate
Results: (90% compliant) In FY03 SLAC ended the fiscal year with a rating of 78% as sole source justifications were either missing in the file or deficient in support of a sole source procurement. In other instances, the correct web format was not used. Reinforcement training of Buyers and the Purchasing and Deputy Officers on proper documentation requirements for sole source procurements was conducted through this year and, as a result, SLAC improved significantly on this measurement in FY04.
Corrective Action: Purchasing Management will continue to emphasize the need for a proper formatted justification to be completed for procurements in excess of $25,000.
Target Completion Date: On-going
5. Price Analysis Adequacy
Results: (94% compliant) In FY 03, SLAC experienced a rating of 82% as Buyers were not adequately addressing the requirement of price reasonableness by comparison in their memorandums to file. In most sole source procurements, Buyers failed to compare pricing to other vendors selling similar items and, instead, relied solely on previous purchase orders (some of which were outdated) with the same vendor to make that comparison. Due to Purchasing Management oversight, the Buyers significantly improved their approach to preparing more comprehensive price analyses this fiscal year.
Corrective Action: Purchasing Management will continue to reinforce the need for adequate price analysis.
Target Completion Date: On-going
6. Proposal Accepted As Proposed
Results: (100% compliant) for the second fiscal year in a row.
Corrective Action: No corrective action is required.
7. EEO Certification Not Properly Filled Out
Results: (80% compliant) The rating on this measurement for SLAC remainded virtually unchanged for this fiscal year when compared to last year (82%). Buyers continued to not verify that the vendor completed all sections of the EEO certification.
Corrective Action: SLAC Purchasing Management will instruct the Buyers to completely review the EEO Certifications received by suppliers at the time of receipt..
Target Completion Date: November 30, 2004
8. Representations And Certifications Complete
Results: (89% compliant) Last fiscal year’s rating in this category was 79%. The reinforcement training of Buyers was necessary to emphasize the importance of assuring that representations and certifications were completed for every section of the document. With the 10% increase in compliance with this measure for FY04 all corrective actions implemented had a positive outcome.
Corrective Action: Purchasing Management will continue with its’ efforts of educating the Buyers on the necessity to validate vendors representations and certifications are complete in all areas.
Target Completion Date: On-going
9. Use of DOE ICPT Agreements
Results: (90% compliant) Last fiscal year (FY03) SLAC Buyers failed to insert the correct language on the face of the purchase order incorporating the ICPT/BOA number which lead to a rating of 87% for this measurement. Additional training and emphasis by the Purchasing Officer and the Deputy Purchasing Officer significantly increased the rating for FY04 to 90%.
Corrective Action: Purchasing Management will continue to provide oversight on the use of ICPT’s and stress to the Buyers the need to cite the ICPT/BOA number in their procurements.
Target Completion Date: On-going
10. Accuracy of Conflict Of Interest Citation
Results: (95% compliant) SLAC’s rating dropped slightly in this category when compared to last fiscal year (97%).
Corrective Action: Purchasing Management will enforce with the Buyers the need to check and document the most up to date listing of the Conflict of Interest citation when constructing their procurement files
Target Completion Date: November 30, 2004
11. Debarred Listing Citation
Results: (98% compliant) During FY04 SLAC increased its rating on this measurement when compared to FY 03 (97%).
Corrective Action: No corrective action required.
12. Financial/Technical Responsibility
Results: (91% compliant) During FY03, SLAC experienced a rating of 86% for this measurement. The reason for last year’s performance was due to some buyers neglecting to make the required statement in their memo to file regarding the determination of financial and technical responsibility they had performed on the vendor prior to award. Attention to this problem by Purchasing Management during this fiscal year has lead to the successful increase in this year’s measurement.
Corrective Action: Purchasing Management will continue to stress to the Buyers the need to document their determination of financial and technical responsibility of the selected vendor.
Target Completion Date: On-going
13. Buy American Waiver
Results: (100% compliant) This is significant improvement of last fiscal year’s rating of 89% for this measurement.
Corrective Action: No corrective action is required.
14. Non-Excessive Verbiage
Results: (98% compliant) Last fiscal year SLAC received at 100% rating for this measurement.
Corrective Action: Since the decrease is slight no further action is required.
15. Correct Optional Clauses (s) Used
Results: (90% compliant) Last fiscal year, SLAC received a 95% compliance rating.
Corrective Action: Purchasing Management shall instruct the buyers on the importance of including of the correct optional clauses in purchase orders/subcontracts.
Target Completion Date: November 30, 2004
16. Overall Adequacy Of File Documentation
Results: (86% compliant) SLAC dropped from 93% (7 percentage points) in this area from last year’s review. Some possible explanations include situations where the Buyer checklist was not properly completed and documents such as the Pre-Work Hazard Analysis were missing from the official file.
Corrective Action: Purchasing management will reinforce the requirements to all Buyers that files must provide a complete and accurate audit trail of the purchase transaction.
Target Completion Date: November 30, 2004
2.2 Measuring Effectiveness
This objective measures the efficiency of the average cycle time (exclusive of Purchasing Authorization Card) acquisitions process by measuring the time between receipt of an approved purchase requisition and award of the purchase order.
2.2.a Average Cycle Time (Days) Transactions >$100,000
(15 Total Points Possible)
The average cycle time will be determined by dividing the total of time between receipt of requisitions and award by the number of awards. Measurements will be calculated for all transactions.
Measure: Average cycle time for all procurements (exception Purchasing Authorization Card
Average Cycle Time = Total of Time Between Receipt of Requisitions and Award
Total Number of Awards
Target: 30-35 days average cycle time for actions equal to or greater than $100,000
Results: 20.0 days (15 points BSC Measured Rating)
2.2.b Average Cycle Time (Days), Transactions <$100,000
(BSC Reporting Only)
The average cycle time will be determined by dividing the total of time between receipt of requisitions and award by the number of awards. Measurements will be calculated for all transactions.
Measure: Average cycle time for all procurements (exception Purchasing Authorization Card)
Average Cycle Time = Total of Time Between Receipt of Requisitions and Award
Total Number of Awards
Target: 8-10 days average cycle time for actions less than $100,000
Results: 2.8 days (0 Total Points Possible)
2.2.c Average Cycle Time (Days), Overall (BSC Reporting Only)
The average cycle time will be determined by dividing the total of time between receipt of requisitions and award by the number of awards. Measurements will be calculated for all transactions.
Measure: Average cycle time for all procurements (exclusive of Purchasing Authorization Card)
Average Cycle Time = Total of Time Between Receipt of Requisitions and Award
Total Number of Awards
Target: 10 –13 days average cycle time overall
Results: 2.9 days (0 Total Points Possible)
Narrative
For Fiscal Year 2004, the average cycle time for BIS procurements under $100,000 was 2.8 calendar days (7,619 transactions), for procurements equal to or over $100,000 it was 20.0 calendar days (80 transactions), and for All procurements it was 2.9 calendar days (7,699 transactions). Transactions are defined as both Purchase Orders and Subcontracts. Processing time is not tracked for the remaining dollars, which are attributable to credit card purchases, blanket order releases, and modifications to existing purchase orders and subcontracts. Measured cycle time begins with the approval by Purchasing Management of the purchase requisition (subsequently assigned to the buyer) and ends with the award of the purchase order or subcontract. Important to note here is that efforts normally defined as pre-procurement planning are not represented in the information system calculations. Purchasing staff is oriented to the customer service process of initiating the request for proposal/bid package as early as possible, which often precedes receipt and approval of the purchase requisition from the requesting organization. This process is deemed to be more responsive to the customer’s needs and supportive of SLAC’s mission.
A comparison of fiscal year 2003 and fiscal year 2004 data is as follows:
| Transaction $ | FY 03 | Transactions | FY 04 | Transactions |
| Under $100K | 2.9 Days | 6441 | 2.8 Days | 7,619 |
| Over $100K | 19.8 Days | 95 | 20.0 Days | 80 |
| Overall Actions | 3.1 Days | 6536 | 2.9 Days | 7,699 |
As can be seen in the chart above, when comparing the FY04 data with FY03, the purchase requisition processing time decreased slightly for transactions under $100K. while remaining relatively the same for transactions over $100K. This mild adjustment contributed to a slight reduction in the requisition processing time for all requisitions. Some of the factors that affected our cycle times include experiencing a significant increase in the number of purchase requisitions in both the over and under $100K categories that were processed by Purchasing just for the GLAST project alone. At the height of the project’s procurement acquisitions Purchasing had 8 Buyers assigned to the project who met weekly with program people in order to give statues reports and set priorities. Even with the major demands of GLAST experienced by the Purchasing Department throughout the entire fiscal year, Purchasing was still able to exceed its’ requisition processing time for all procurements.
2.2.d. Percentage of Transactions Placed Through Alternative/Rapid Purchasing Techniques (5 Total Points Possible)
This objective measures the transfer of traditional purchasing activities such as supplier selection, best value determination, and ordering and receiving from the purchasing organization directly to the user organization. The percentage of this volume is determined by the total number of transactions (Just In Time, Purchasing Authorization Card, Releases against Basic Ordering Agreements) placed directly by the user divided by the total number of actions awarded (includes Purchasing awards). The period covered is October 2003 through September 2004.
Measure: Percentage of transactions placed through alternative and Rapid Purchasing Techniques (RPT) (JIT, Purchase Card, Blanket Order Releases, E-Commerce, ICPT, Oral Purchase Orders, Strategic Agreements and Supplies Programs.)
The following formula shall be applied to measure the effective use of alternate procurement methods:
Percentage of transactions placed by RPT = Total number of RPT transactions placed
Total Number of Transactions
Target: 80% or greater of transactions placed through Rapid Purchasing Techniques.
Results: A 79% (3 Points - BSC Measured Rating) measurement was obtained as follows:
| BIS Transactions | 6,482 |
| Office Supply Releases - on line | 3,998 |
| Office Supply Releases - faxed | 42 |
| Office Supply Releases – phone | 194 |
| U.S. GPO Releases | 21 |
| Blanket Order Releases | 828 |
| Book Order Releases | 1,000 |
| ICPT Transactions | 1,300 |
| Purchasing Card Transactions | 15,706 |
| Petty Cash Transactions (est.) | 1,314 |
| Total Number of Transactions | 30,885 |
| Customer Issued Transactions | 24,403 |
| Percentage of Volume (24,403/30,885) | 79% |
2.2.e Percentage of Transactions Placed through E-Commerce(5 Total Points Possible)
Measure: The percentage of transactions placed through electronic Commerce. For this measurement e-commerce is defined as all acquisitions made by the user community through the on-line ordering systems for Grainger, Dell, and Corporate Express
The following formula shall be applied to measure the effective use of e-commerce:
Percentage of transactions placed by e-commerce shall equal:
Total Number of e-commerce transactions placed (5,273)
Total Number of Rapid Purchasing Transactions (30,885)
Target: Unsatisfactory: <1.0%
Marginal 2.0%
Good 3.0 %
Excellent 4.0%
Outstanding > 5.0%
Results: Using the formula above, 17%. measurement was obtained (5 Points - BSC Measured Rating)
2.2.f Implementation of Chemical Management System
Another example of an Alternative Rapid Purchasing Technique is the site-wide implementation of a chemical management system. Throughout Fiscal Year 2004, SLAC Purchasing Department was active in the development and implementation of a new Chemical Management System designed to increase the efficiency of chemical product procurement by contracting with a single consolidated supplier which will manage the purchase, storage, application, and disposal of chemical products. This Chemical Management System enables web-based procurement and approval processes, reduces on-site chemical inventory and handling, in addition to provision of guaranteed cost savings. This Chemical Management System also serves to meet new environmental regulations mandating that facilities of SLAC’s size and emissions report annually on facility-wide chemical usage. This contract was awarded to the HAAS Corporation on August 11, 2004. This is the first of its’ kind where SLAC Purchasing successfully issued one (1) purchase agreement that is responsible for integrating all of the existing hazardous waste purchase orders into one agreement that will manage the use of chemicals site wide.
2.3 Effective Supplier Management (5 Total Points Possible)
This measurement will be obtained by dividing the number of line items delivered on time by the total line items due ( or total like items received) for SLAC Key Suppliers. The percentage of on-time deliveries of purchased goods from SLAC’s key suppliers will be tracked and performance will be measured on a cumulative basis. The following formula will be used:
Measures: Number of On-Time Deliveries by Key Suppliers
Total Number of Deliveries of Key Suppliers
Key suppliers are identified as commodity vendors within the last three (3) years who have been awarded a minimum of ten (10) orders equaling or exceeding $50,000 per year.
Target: Unsatisfactory: <53.0%
Marginal: 53.1% - 63.0%
Good: 63.1% - 73.0%
Excellent: 73.1.% - 83.0%
Outstanding: >83%
Results: Per the Narrative below, 73% (3 points - BSC Measured Rating) of deliveries were on time for Key Suppliers
Narrative
This fiscal year, SLAC changed this objective to measure the on-time delivery of our key suppliers only. In our FY04 Balanced ScoreCard Plan key suppliers were defined as a commodity vendor that within the last three (3) years has been awarded a minimum of ten (10) orders that equal or exceed $50,000 per year. SLAC identified that we issued purchase orders to twenty-three (23) key suppliers in FY2004.
SLAC designed a PeopleSoft query to capture the performance of our key suppliers by line item. After discussions with Procurement Managers at various DOE Office of Science Laboratories, it was determined that on time delivery was calculated by others to include those items delivered up to 3 days after the Purchase Order due date so as to accommodate internal processing of the delivered items. This methodology was applied to our calculation as well.
The data indicates that a total of 3,716 key supplier Purchase Order line items were measured during FY 2004, of which, 73% were delivered on time. This falls short of the target for FY 2004 of 83%.
Corrective action for fiscal year 2005 will be to continue to designate this area as a need for special attention by the Buyers and Expeditors. Increased monitoring of a supplier’s performance in this area will be conducted. This includes managing and analyzing late deliveries to identify those key suppliers that need to improve their on-time deliveries.
2.4 Socioeconomic Subcontracting
This objective measures the success in achieving business practice goals. This will be measured by dividing the number of socio-economic goals achieved by the total number of goals.
Objective: Socioeconomic Subcontracting
Measure: % of economic and social diversity and local participation program goals achieved including: SB and SDB Goals, Regional/Local Outreach/Support Good Neighbor Program. (5 Total Points Possible)
Target: Far exceeds expectations = >106% of goals.
Exceeds expectations = 101% to 105% of goals.
Meets expectations = 92% to 100% of goals.
Needs improvement = <92% of goals.
Results: As of September 30, 2004, SLAC attained 233.63% of the goals set with the DOE. (5 Point - BSC Measured Rating)
Narrative
With the level of SLAC’s participation in both “in-reach” and “out-reach” activities, SLAC was able to attain the target of Far Exceeds Expectations.
Goal Performance
During this fiscal year SLAC’s actual reportable dollars for socioeconomic goal performance totaled $66,461,098. This is a $16,461,098 increase from our originally
projected socioeconomic base of $50,000,000. Based upon this achievement, SLAC exceeded all of its socioeconomic goals except for the Small Disadvantaged Business (SDB) category. SLAC’s SDB goal 6% for the year and our achievement fell short of this goal by only .3%. If our analysis was performed on dollars alone, SLAC exceeded the projected dollars by $789,932 for the Small Disadvantaged Business category, however, fell short of meeting the actual percentage goal. SLAC's efforts in fiscal year 2004 are summarized as follows:
| FY 2004 | GOALS | ACTUAL REPORTABLE | ||
| TOTAL | $50.0M | $66,461,098 | ||
| Sm. Bus. | $28 M | 56.0% | $39,419,478 | 59.3% |
| Sm. Disadv. Bus. | $3M | 6.0% | $3,789,932 | 5.7% |
| Sm. W/O | $3M | 6.0% | $6,138,976 | 9.2% |
| 8(a) Pilot | $1.25M | 2.5% | $2,261,110 | 3.4% |
| Veteran Owned | $50K | 0.1% | $372,708 | 0.6% |
| HubZone | $250K | 0.5% | $1,321,491 | 2.0% |
SLAC purchase card program continued to have a major impact on our socioeconomic results. In FY04, our purchase card usage was 5.5% compared to FY 03 ($5.6M). Albeit the level of usage remained relatively unchanged during these two (2) fiscal years, the use of the purchase card continues to eliminate a large portion of the procurement dollars from the reportable base that might have been otherwise been made available for award to small businesses.
The DOE Headquarters Integrated Contractor Purchasing Team (ICPT) initiative also contributed to a decrease in available dollars for the socio-economic goals. Although using ICPT agreements is a cost effective means of procuring goods and services and is an efficient way to achieve product standardization, the program has a substantial impact on the socio-economic program. For example, SLAC has historically purchased desktop and laptop computers from small disadvantaged and small woman-owned businesses. However, since FY 1998, by utilizing an ICPT BOA, SLAC has standardized on Dell computers.
Outreach Efforts
SLAC participated in the following outreach activities during Fiscal Year 2004:
Industry Council for Small Business Development (ICSBB)
General Services Administration’s (GSA) monthly Market Fair
The U. S. Small Business Administration’s 8(a) Showcase (as scheduled)
In addition to the activities identified above, SLAC also interacts with the following organizations:
“Inreach” Efforts
The Purchasing Officer, in his role as Subcontracting Plan Administrator, routinely reports socio-economic program progress to the Associate Director, Business Services Division, for his information. He, in turn, disseminates such information to other
members of the Directorate so as to keep them informed of SLAC's progress in meeting the Department of Energy's socio-economic goals. The Subcontracting Plan Administrator, in his capacity as Purchasing Officer, reviews goals, and reports progress on salient ideas and innovative methods during scheduled buyer meetings. On a monthly basis, each buyer is informed of individual accomplishments and overall cumulative progress in meeting the total goals of the Laboratory. All personnel are encouraged to develop new small, small disadvantaged, and small woman-owned sources and assist such firms in becoming viable sources of services and supplies to the Laboratory.
In order to increase subcontracting opportunities for all small businesses, the Purchasing Department continued to support a Senior Buyer with 23 years of experience in the role of Assistant Small Business Liaison. The duties of this individual were to locate qualified small, small disadvantaged, small woman-owned, and 8(a) businesses and introduce these companies among the SLAC buying and programmatic communities so that they can be added to bid lists and compete for work. This Buyer retired in August of this year so we are currently looking for a suitable replacement for this individual.
During our yearly employee performance appraisals, we stress to each Buyer the importance of the program and encourage them to solicit small, small disadvantaged, and small woman-owned business concerns at every opportunity. We have in place means for monitoring each buyer's performance and utilizing the results as one tool in our salary setting process. This process has proven itself to be very satisfactory for SLAC as evidenced by our year-to-year achievements, which we consider to be outstanding. Individual buyer achievements are acknowledged and discussed at buyers meetings along with progress toward meeting SLAC's goals.
Additional Small Business Activities
During FY2004, SLAC received correspondence from 35 small, small disadvantaged, and small woman-owned businesses seeking inclusion on our bidder’s list. Each letter of inquiry was reviewed and personally responded to by the Purchasing Officer, giving the vendor the name and phone number of the assigned buyer. A copy of the letter and any vendor literature is forwarded to the appropriate buyer for reference and inclusion on their bidder's lists. With implementation of the Business Information System, we have also been sending questionnaires to these new vendors. Both the SLAC Buyers and requisitioners load the information provided by the vendors into our PeopleSoft vendor database so that it can be utilized on future procurements.
In summary, the Stanford Linear Accelerator Center continues to provide a very aggressive, positive, and outstanding small, small disadvantaged, and small woman-owned business program.
2.5 Effective Use of Competition
This measure applies to any dollars obligated during the fiscal year on a subcontract or purchase order that was awarded using effective competition and whose current dollar value exceeds $100,000. Effective competition means, given the size and complexity of the requirement, a sufficient number of potential sources are solicited with the expectation of receiving competitive proposals to support the reasonableness of price or cost. The placement of delivery orders, task orders, or releases against indefinite delivery, indefinite quantity, requirements-type or other similar contracts are considered competitive if the underlying contract was awarded using effective competition.
Measure: The percentage of total dollars obligated on actions over $100,000 using effective competition (5 Total Points Possible)
The following formula shall be applied to measure the effective use of competition:
Total dollars obligated on competitive procurements over $100,000 ($11,876,318)
Total dollars awarded in FY04 ($66,461,098)
Target: Unsatisfactory: <15.0%
Marginal 15.0% – 19.9%
Good 20.0 %– 24.9%
Excellent 25.0% – 29.9. %
Outstanding > 30.0%
Results: 17.8% of SLAC’s procurements over $100,000 were Competed (2 Points - BSC Measured Rating)
2.6 Reviews
During FY2004, the following audits were conducted that included the Purchasing Department’s participation:
A. Purchase Card Audit
Although, there were not any direct external audits of the Purchase Card system during FY 2004, Purchasing participated in a Cost Audit of the SLAC Accounting Department, which was conducted in July 2004 by the Department of Energy Inspector General. This audit included a review of records and documentation in regards to the Purchase Card system to ensure appropriate use and accounting procedures on behalf of the cardholders and approving officials. The official report by the DOE Inspector General is yet to be received by SLAC; however, the Inspector General indicated at the time of the Cost Audit that records and documentation for the Purchase Card system were above adequate.
B. Stanford University Internal Audit Review of SLAC Purchasing Controls
In August, 2004 an audit was conducted by the Stanford University Internal Audit Department. The primary objective of the audit was to evaluate the existing controls in the following areas:
Purchasing Office’s policies and procedures, compliance and training;
Management of the Purchasing Office;
Flow down clauses on purchase orders and subcontracts;
Selecting sources; and
Pricing and negotiation
The recommendation of this audit was that the Purchasing Officer should continue to implement the corrective actions that were developed during the FY 2003 self assessment, and to measure the achievement of all actions taken.
B.1 Flow down clauses on purchase orders and subcontracts
Recommendation
Based upon the review of the audit team, SLAC terms and conditions for fixed price construction subcontracts/purchase orders issued for commercial supplies and services as well as on-site work, all contain flow down clauses, including those terms and conditions required by the prime contract.
Corrective Action:
SLAC Purchasing Management concurs with this recommendation.
Target Completion Date: January 31, 2005
B.2. Selecting sources
Recommendation
The review of documentation revealed that the Purchasing Office promotes competitive sourcing to the maximum extent possible. The Buyers have a vendor performance rating system that evaluates price, quality, and delivery performance. For sole/single source purchases, written justifications were appropriately obtained.
Corrective Action:
No corrective action is necessary.
B.3. Pricing and negotiation
Recommendation
The Purchasing Office performs cost/price analysis and technical evaluation of its vendors’ proposals/quotations. A system of ensuring SLAC is taking advantage of purchase discounts is also in place.
Corrective Action:
No corrective action is necessary
Based upon the review performed, which included observations, interviews, discussions, reviews of reports, and tests of records, the report concluded that the existing SLAC Purchasing controls are adequate and effective to ensure that the integrity and accuracy of the purchasing system are upheld. A copy of the audit report dated August 31, 2004, entitled “Review of SLAC Purchasing Controls” is available upon request.
C. Review of SLAC Controls Over Blanket Order Releases
In May 2004, the Stanford University’s Internal Audit Department performed a review of the controls on blanket order releases at SLAC. The primary objective of this audit was to assess the adequacy and effectiveness of the existing controls over blanket purchase orders. A copy of the audit report is available upon request. In summary, three (3) recommendations resulted from the review. They are as follows:
C.1 Recommendation
The Purchasing Officer should ensure that all invoices from Corporate Express are properly reviewed and approved by account or department approvers before payment is made
Corrective Action: SLAC Purchasing Management concurs with this recommendation.
Target Completion Date: Completed September 30, 2004
C.2 Recommendation
The Purchasing Officer should ensure that proper review and approval of all on-line BPO purchases (releases) are in place.
Corrective Action: SLAC Purchasing Management concurs with this recommendation.
Target Completion Date: October 31, 2004
C.3 Recommendation
The Purchasing Officer should notify the Accounts Payable Department that in the future, all invoices for BPOs must be matched with blanket order release forms before payments are processed
Corrective Action: SLAC Purchasing Management concurs with this recommendation.
Target Completion Date: September 30, 2004
2.7 Internal Review Board
The Internal Review Board (IRB) is comprised of the Purchasing Officer, the Deputy Purchasing Officer , with SLAC Legal Counsel serving as an advisor as necessary. All procurement actions to be submitted to the DOE for approval are required to be reviewed by the Board prior to submittal. In addition, all procurement actions exceeding $100K are to be reviewed by the IRB whether or not they are to be submitted to the DOE. The review focuses on the following areas:
A total of 163 actions were reviewed by the IRB for FY 2004. The reviews disclosed
weaknesses in price analysis, representations and certifications not completed properly, purchase orders lacked appropriate language/conditions, period of performance conflicting dates, specification document not clear, and inconsistency or lack of file documentation, and other minor errors and omissions.
2.8 BSD Purchasing Procedures
As of this writing, SLAC’s Business Services Purchasing Procedures are currently being updated. The procedures were determined to be in need of updating to make them consistent with the new Prime Contract. The anticipated date of completion is December 31, 2004 with an implementation date of January 31, 2005.
2.8.a Terms and Conditions
The various terms and condition formats were determined to be in need of updating to make the consistent with the new DOE/Stanford Prime Contract DE-AC02-76SF00515. The anticipated date of completion is December 31, 2004.
3. FINANCIAL PERSPECTIVE
This perspective measures the functional cost efficiency of the purchasing organization. This will be measured by establishing a cost to spend ratio, which will be calculated by dividing Purchasing organizational costs by the business volume. Organizational costs are the total costs for acquisition, i.e., labor, direct, indirect, fringe benefits, overhead, travel, training, etc. Business volume is defined as the total of all dollars obligated.
3.1 Cost to Spend Ratio: Optimum Cost Efficiency of Purchasing Operations (10 Total Points Possible)
Measure: Cost to Spend Ratio: Purchasing Operation’s Operating Costs Divided by Purchasing Obligations
Target: Outstanding = <$.025
Excellent = $.025 to $.0279
Good = $.028 to $.0309
Marginal = >$.031 to $.0339
Unsatisfactory = >$.0344
Results: The Purchasing Administration cost to acquire $1 of goods and services at SLAC during Fiscal Year 2004 was $.025 (8 points - BSC Measured Rating). This is calculated as follows:
Total Salaries and Fringe Benefits = $ 1,802,000
Total Procurement Dollars in FY 04 = $71,500,000
Cost to Procure $1 of Goods and Services:
$1,802,000/$71,500,000 = $.025
Narrative
Purchasing administration includes salaries and fringe benefits and related M&S costs for those Purchasing staff directly involved in the procurement of goods and services.
4. LEARNING AND GROWTH PERSPECTIVE
The learning and growth perspective measures Purchasing’s ability and potential to develop and grow. This perspective looks to the future and sets objectives that strive for benefit at a later date. On September 1, 2004, Management presented the PowerPoint presentation entitled “Update to The Purchasing Journey” (Exhibit VII) to all departmental personnel. This presentation detailed the Purchasing Department’s progress on various project and program goals and provided an updated outline of future projects and departmental objectives.
4.1 Employee Satisfaction
This objective measures the level of satisfaction of the Purchasing staff in regards to their experience within the working environment. As part of this measurement, data was reviewed regarding employee turnover within the Purchasing Department. In the review Year 2004, Purchasing’s work force was reduced by the retirement of two (2) Senior Buyers. Three (3) Senior Buyers and three (3) Temporary Buyers were hired in FY 2004 to support new program requirements, increased workloads, and to fill the positions of the retired Senior Buyers. In the past, the department has not exhibited a high transitory workforce. However, due to retirements and the demands of upcoming projects scheduled, there have been multiple new additions to the Purchasing workforce.
The primary measurement used to determine employee satisfaction was the Climate Survey Questionnaire (see Exhibit VIII). The survey was distributed to twenty-three (23) individuals within the Purchasing Department. A total of thirteen (13) individuals were responsive to the survey and ten (10) individuals were non-responsive. The survey asked for the employee’s view of his/her working environment in the following categories:
Survey Results
In regards to the Employee Satisfaction survey, an average response above the 3.00 level was considered to be a satisfied rating of the individual’s experiences with the work environment. Any average response below 3.00 was determined to be an unsatisfied rating. The results of this survey found the majority of responses, nine (9), registered an average of 4.00 or higher, the remaining four (4) responses registered 3.00 or above. Out of the thirteen (13) individuals who responded, all thirteen (13) employees gave the Department a rating of 3.0 or greater providing satisfactory ratings for their surveys.
Measure: Employee satisfaction index (includes data from employee survey, focus groups, absenteeism, and voluntary terminations) Satisfaction levels of the survey respondents were calculated as follows:
5 points Strongly Agree
4 points Mostly Agree
3 points Agree (deemed as the Satisfactory level for the survey)
2 points Disagree
1 point Strongly Disagree
0 points for No Opinion; and
(13) No. Of Satisfied Staff = (100%) Satisfaction Rating
(13) No. Of Staff Surveyed
The percent of satisfied employees was measured by dividing the number of satisfied employees (13) by the number of employees responding to the survey (13). (13 divided by 13 = 100%)
Target: 85% satisfaction (5 Total Points Possible)
Results: A 100% weighting (5 points - BSC Measured Rating) for this perspective was assigned per the above.
4.2 Employee Alignment
This objective measures the alignment of individual goals with the organizational goals. Goals are normally established with the employee at the time of performance evaluation. The SLAC one-year evaluation period runs April through March. A review was conducted of the 2003/2004 Purchasing Staff’s Performance Evaluations to determine if the goals established as of April 2004, are consistent with an supportive of the organizational goals.
Measure: Employee alignment was measured by dividing the number of aligned employees by the total number of employees with buying functions as shown in the formula below. (5 points - BSC Measured Rating)
Total number of aligned employees
Total Number of employees with buying functions
Target: Unsatisfactory: <70.0% - 74.9%
Marginal 75.0% – 74.9%
Good 80.0 %– 84.9%
Excellent 85.0% – 89.9. %
Outstanding > 90.0%
Results: The following organizational goals were validated against individual goals for the alignment:
(15) No. of aligned employees = (100%) Satisfaction Rating
(15) No. of employees with buying functions
All of the performance evaluations reviewed were found to contain the above goals and deemed to be in alignment with the SLAC organizational goals. As a result, employee alignment was obtained at a rate of 100%. (5 points - BSC Measured Rating)
D. SUMMARY
The analysis of the Four Perspectives (Customer, Internal, Financial, Learning and Growth) of the FY 2004 SLAC Balanced Score Card Review concluded that the processes and procedures of its Purchasing System are adequate and compliant with applicable laws, regulations, and prime contract terms and conditions to support the continued approval by the DOE.
The Procurement Performance Assessment Model (PROAM) “Gauge Model” (Exhibit IX) summary depicts the total activity value and total activity score for each of the Four Perspectives as identified in this Balanced ScoreCard Report for FY 2003. The Total Activity Score for FY 2004 is 91, which translates into an adjective rating of “OUTSTANDING”.
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