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Goal 6.0 DELIVER EFFICIENT, EFFECTIVE, AND
RESPONSIVE BUSINESS SYSTEMS AND RESOURCES THAT ENABLE
THE SUCCESSFUL ACHIEVEMENT OF THE LABORATORY MISSION(S)
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Stanford Linear Accelerator Center
Performance-Based Management Functional Area: Procurement |
|
Contractor
Contract No.: DE-AC02-76SF00515 |
DOE Office U.S.
Department of Energy |
| Submitted By: |
Stanford University Stanford Linear Accelerator Center 2575 Sand Hill Road Menlo Park, California 94025 |
| Cognizant DOE Office: |
Office of Science Stanford Site Office |
| Date of Last Self-Assessment: | August 2006 |
| Status Of Purchasing System: | Approved |
| Effective Date Of Approval: | March 29, 2004 |
| Thresholds For DOE Approval: |
FFP Competitive >$7M FFP Noncompetitive >$3M All Cost Type >$100K |
| Assessment Team Members: | |
| Legal Advisor: | Ms. Rachel Claus, SLAC Staff Counsel |
| Participants: |
R.
Todaro, SLAC Purchasing Officer D. Pindroh, Deputy Purchasing Officer T. Murphy, Associate Purchasing Officer G. Scrimger, Contract Administrator, Group Lead |
The SLAC Purchasing Department Self-Assessment was conducted in accordance with the SLAC 2006 Balanced Scorecard Self-Assessment Plan, dated September 29, 2005.
SLAC Purchasing is organized as depicted in the Organization Chart (see Exhibit I). Changes that occurred within the Purchasing Department during FY06 are as follows:
a) In November 2005, the Deputy Purchasing Officer and a Senior Contract Administrator/Group Lead resigned their positions.
b) In February 2006, Purchasing filled the Deputy Purchasing Officer position and Senior Contract Administrator/Group Lead positions. Both individuals had extensive electronic systems expertise which was a factor in their hiring preference.
c) In March 2006, Purchasing eliminated its three (3) Expeditor positions, converting these positions into two (2) Buyer II/Construction Administrator positions and one (1) Administrative Assistant position. The two (2) Buyer II/Construction Administrator positions were designed to meet fluctuations in workload demands. The administrative assistant position was created in order to implement a new central filing system.
d) The Purchasing Department hired three (3) summer students to perform various tasks as warranted throughout the department. Two of the summer students were assigned to support specific projects such as a Purchase Card audit and Recycle Report validation. One summer student was assigned to the Stores and Accounts Payable group for various assignments.
e) A Temporary employee was hired in June to assist with the Balanced Scorecard Self Assessment. The assignments ranged from conducting all surveys and assessing the results, coordinating the various reports necessary for the file review, and collecting and assessing the data necessary for the Balanced Scorecard Report to be submitted to the DOE in October.
f) A Senior Contract Administrator resigned her position in August 2006. A replacement was hired effective October 8, 2006.
Purchasing Procedures were determined to be in need of updating as a result of the FY05 Balanced Scorecard Self-Assessment Review. Updates were not completed due to the departure of the Deputy Purchasing Officer in November 2005. Lack of resources, time constraints, and other pressing matters up until August 2006 has delayed the completion of the procedures revision. We now anticipate updating all procedures by December 31, 2006.
From November 30-December 2, 2005 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 Headquarters’ Small Business Office of Economic Impact and Diversity and the DOE Prime Contractor’s Small Business Managers. In addition, on November 16-18, 2005, the Purchasing Officer participated in the Annual Energy Research Laboratory Purchasing Managers Conference hosted by National Renewable Energy Lab (NREL). The group meets bi-annually to discuss common issues and exchange information.
Training of personnel in FY06 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 three (3) on-site training classes were presented to SLAC Buyers and Contract Administrators by Federal Publications Seminars, on the following topics:
The class entitled “Effective Competitive Practices in Government Procurement” provided our Buyers and Contract Administrators with a two-day workshop focusing on the following:
-The rules for awarding contracts and placing orders, as mandated by the Federal Acquisition Regulations (FAR) and the Government Accountability Office.
-Avoiding procedures that result in ineffective competition.
-Best practice for obtaining competition fairly, efficiently, and expeditiously.
This class emphasized the importance and necessity of competition in government contracting in order to obtain best value and provided Buyers/Contract Administrators with templates for designing effective competitive practices.
The course on “Time Management and Organizational Skills” was presented to the Buyers/Contract Administrators to increase their overall effectiveness as contract professionals. The training session provided the Buyers/Contract Administrators with effective time management tools and organizational skills to create a custom time management plan, which promotes organization, productivity, and flexibility in the everyday workplace.
The Construction Contract Administrators attended a two-day training seminar entitled “Controlling Construction Costs” presented specifically for SLAC construction project staff. This training provided Construction Contract Administrators with useful tools for effectively administrating construction contracts by building control considerations into bid documents and contract language.
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 May of 2006, the Purchasing Department conducted its mandatory annual training and review of the policies and procedures for the use of SLAC’s Purchase Card involving all Cardholders and Approving Officials. Topics addressed in the training session were: 1) How to document packages when receipts, etc., are incomplete; 2) Proof of delivery on will-calls and pick-ups; 3) Third party billing and internet auction sites; 4) Pre-approvals; 5) Cardholder and approver availability for review; 6) Error reports by email; 7) Books & miscellaneous publications; and 8) Use of the Telephone Order Log. Upon completion of the training, Cardholders were required to sign a document verifying their attendance.
5.c Ethics Training
The annual Purchasing Ethics Training session was held on August 16, 2006. 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 “E.I.: Ethics Inquiry” produced by the U. S. Office of Government Ethics was shown to the group because there have been several new buyers hired into the Department from the commercial sector. For those Purchasing Personnel who could not attend the first Ethics Training class, a make-up session was conducted on August 22, 2006. A total of twenty-five (25) Buyers and Contract Administrators and other departmental staff attended the training.
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 7, 2006.
The principal data generation source for the Four Perspectives was from the PeopleSoft and Business Information Systems. System data was collected from the period October 1, 2005 through September 30, 2006. All other data was obtained through the use of checklists, questionnaires, and vendor-supplied reports as discussed later on in this report.
The four perspectives discussed below were measured as part of the self-assessment process. Each measurement was rated using the Balanced Scorecard Summary Sheet format.
This perspective captures the ability of the organization to provide quality goods and services, effective delivery, and overall customer satisfaction. The level of satisfaction will be rated by the percentage of customer satisfaction with the timeliness, quality, and level of communication provided by the Purchasing Department.
SLAC obtained the measurement of this perspective from its’ internal customers (Requestors). The Transactional Customer Satisfaction Survey was initiated via e-mail during the month of August 2006 to one hundred (100) customers. Requestors were able to respond via email, which facilitated a quicker, more convenient, method of response. Out of the hundred (100) individuals selected, fifty-one (51) individuals (51%) elected to participate. Each participant was asked to respond to a series of statements (see Exhibit II) pertaining to a specific purchase order. 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, overall satisfaction, and performance. The population of participants for this survey was obtained by randomly selecting Requestors from the BIS data report that were associated with purchase orders that had been awarded within the past fiscal year.
| Measure: | Transactional 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. Performance - Extent to which Purchasing is committed to certain standards. Overall Satisfaction - Extent of overall customer satisfaction with Purchasing. |
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| Target: | 92% customer satisfaction | ||||||||||||||||||||||||
| Results: | A
rating of
92% (10 points - BSC Measured Rating) was assigned based upon an
analysis of the internal customer questionnaire
responses. There were fifty-one (51) respondents to
the survey whose satisfaction level was calculated
as follows:
The transactional survey included six (6) statements that the customer was asked to respond to with a “yes” or “no”, as follows:
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| Summary |
Total Average of Affirmative Responses (576/6) = 96% Additionally, the transactional survey included one (1) question in which the customer was asked to rate his or her overall satisfaction with the level of service to Requestors. Each response was assigned a mathematical identity as follows: 5
points – Outstanding A total of forty-seven (47) satisfied respondents (i.e., a rating of 3 or above) were tallied and divided by the total number of respondents to arrive at the percentage gradient. (47)
Number of Satisfied Customers =
92% Satisfaction Rating |
This measure was established to determine the level of customer satisfaction concerning the Purchasing Department’s level of service to Operators, or those who are responsible for on-line entry of purchase requisitions. This review is performed annually by the completion of a satisfaction survey by the Operators. This survey, as shown in Exhibit III, was sent out to the fifty-four (54) Purchase Requisition Operators in July 2006. Out of the fifty-four (54) surveys sent out, twenty-three (23) recipients (43%) elected to respond. 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 seven (7) different elements as identified below. An average rating of 3 or above was regarded as a satisfactory response. The survey statements are as follows:
The average rating received by the Operators on each question is as follows:
As demonstrated above, all questions identified in the survey received an average rating of 4 or greater indicating satisfaction from the Operators in regards to the customer service that the Purchasing Department provides. Furthermore, of the twenty-three (23) Operators that responded to the survey, twenty-two (22) were satisfied (i.e., an average rating of 3 or above) with the level of service to Operators.
| Measure: | BIS Operator Climate Survey |
| Target: | 92% Operator satisfaction
(22)
Number of Satisfied Operators =
96% Satisfaction Rating |
| Results: | A rating of 96% (2 points – BSC Measured Rating) was assigned based upon an analysis of the Operator questionnaire responses. |
In addition to the surveys identified above, SLAC’s Purchasing Department also conducted a survey this fiscal year to determine the level of customer satisfaction concerning the Purchasing Department’s level of service provided to our Purchase Cardholders. The survey is shown in Exhibit IV. Out of two hundred fifty-seven (257) total Purchase Cardholders, sixty-five (65) of those cardholders have an inactive status. Therefore, in July 2006, the survey was sent to the one hundred ninety-two (192) active Purchase Cardholders. Out of the one hundred ninety-two (192) surveys sent out, one hundred five (105) recipients (55%) responded. In the survey, Purchase Cardholders 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 Cardholders were asked to rate their level of satisfaction on the seven (7) different elements as identified below. An average rating of 3 or above was regarded as a satisfactory response. The survey statements are as follows:
The average rating received by the Purchase Cardholders on each question is as follows:
As demonstrated above, all questions identified in the survey received an average rating of 4 or greater thereby stating that the Purchase Cardholders “agree” or are satisfied that the Purchasing Department is providing good customer service in these specific areas.
| Measure: | Purchase Cardholder Customer Survey |
| Target: | 92% Purchase Cardholder Satisfaction
(105)
Number of Satisfied PCard Holders =
100% Satisfaction Rating |
| Results: | A rating of 100% (3 points - BSC Measured Rating) was assigned based upon an analysis of the Purchase Cardholder questionnaire responses. |
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.
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, 2006 through August 11, 2006. The PeopleSoft system randomly generated 450 files to be reviewed in the self-assessment. The 450 files were selected for review for the period of July 1, 2005 through June 30, 2006. The team reviewed the following files using the Self-Assessment Checklists (See Exhibit V and VI):
Two Hundred (200) files from $0 -10,000; and
One Hundred Fifty (150) from $10,000 - $25,000; and One Hundred (100) files from $25,000 - $100,000.
*Note: Files greater than or equal to $100K were not included in this review because these files are subject to review by the SLAC Internal Review Board. See Section 2.8.
These 450 purchase orders represented $7,848,556, or 24.0% of the total value of $32,662,202 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 actions including modifications | 200 | 150 | 100 |
| Total Value | $7,848,556 |
Total Number of actions in the review sample period was 6211.
Total Value of actions in the review sample period was $32,662,202.
| Total Number | 450/6,211 = 7.2% |
| Total Value | $7,848,556/$32,662,202 = 24.0% |
The following areas were designated as a focus for the FY 2006 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 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 83.3% (3 points - BSC Measured Rating) were found to be compliant. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Narrative | The findings are as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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:
| Measure: | Number of On-Time Deliveries by Key Suppliers
(2,538)
Total Number of Deliveries of Key Suppliers (3,423) |
|
| 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:
Marginal: Good: Excellent: Outstanding: |
< 54.0%
54.1% - 64.0% 64.1% - 74.0% 74.1% - 84.0% > 84% |
| Results: | Per the Narrative below, 74.1% (4 points - BSC Measured Rating) of deliveries were on time for Key Suppliers | |
Key Suppliers are 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 has a PeopleSoft query to capture the performance of our key suppliers by line item. On-time delivery is calculated 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.
In FY05, SLAC had sixty (60) key suppliers that had a total of 4,111 purchase order line items. Out of these line items, 2,783 were delivered on-time resulting in a 67.6% rating. In FY06, the number of key suppliers decreased to twenty-three (23). For these suppliers, a total of 3,423 purchase order line items were issued throughout the year. Of this amount, 2,538 were delivered on-time resulting in a 74.1 % on-time delivery score for the fiscal year. This is a 6.5 % increase in performance from SLAC’s FY05 achievement of 67.6% and is 9.9 % under the 84% target for FY 2006.
For Fiscal Year 2007, we will continue to designate this area as a need for special attention by the Buyers. In March 2006, three (3) Expeditor positions were eliminated. Responsibility of expediting was transferred to the buyers in order to promote attention to supplier performance and on-time delivery. Purchasing has developed a new on-time delivery report sent to all Buyers each morning to notify them of overdue line items. It is believed that buyer ownership will lead to more efficient expediting.
Target Completion Date: September 19, 2006
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
(20 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
($42,477,668) Total dollars for all procurements over $100,000 awarded in FY06 ($48,463,263) |
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| Target: | Unsatisfactory: Marginal Good Excellent Outstanding |
< 54.9% 55.0% – 59.9% 60.0 %– 64.9% 65.0% – 69.9% > 70.0% |
| Results: | 87.6% of SLAC’s procurements over $100,000 were competed (20 Points - BSC Measured Rating) | |
In FY05, only 66.1% of the $29,362,875 obligated on procurements exceeding $100,000 was competed. In FY06, SLAC competed $42,477,668 of the $48,463,263 obligated on procurements over $100K, equivalent to a rating of 87.6% for effective use of competition on procurements in excess of $100,000. This represents a 21.5% increase in performance from FY05.
This objective is measured in 3 areas: transactions placed by users outside of the Purchasing Department; transactions placed through Alternative/Rapid Purchasing Techniques (RPT), involving both Buyers and the user community; and lastly, transactions placed using e-commerce, including online ordering systems or paperless ordering techniques. The percentage of volume in these areas is determined by the total number of transactions placed by users, RPT, or e-commerce divided by the total number of actions awarded in FY06 (including Purchasing awards).
The total number of actions awarded in FY06 was calculated as follows:
| PeopleSoft Transactions | = | 6,411 |
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| Office Supply Releases – online | = | 3,187 |
| Haas Chemical Management – online | = | 2,626 |
| Grainger – online | = | 1,896 |
| (a) U.S. GPO Releases | = | 70 |
| Blanket Order Releases | = | 1,009 |
| (b) Book Order Releases | = | 72 |
| Fabrication Releases | = | 3 |
| Purchasing Card Transactions | = | 15,123 |
| Petty Cash Transactions | = | 1,230 |
| Total Number of Transactions | = | 31,627 |
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 (including Just In Time (JIT), Purchasing Authorization Card, Releases against Basic Ordering Agreements, etc.) placed directly by the user divided by the total number of actions awarded.
Measure: Percentage of transactions placed by users, including JIT, purchase cards, blanket order releases, etc.
The following formula shall be applied to measure the percentage of transactions places by users:
Number
of transactions placed by users
(25,172) = 79.6%
Total
Number of Transactions
(31,627)
Target: 85% or greater of transactions placed through users
Results: Using the formula above, a rating of 79.6% was obtained (0 Points – BSC Measured Rating)
Measure: Percentage of transactions placed through alternative and Rapid Purchasing Techniques (RPT), including purchase cards, long-term purchasing agreements, e-commerce, JIT, 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 Rapid Purchasing Techniques shall equal:
Total number of RPT transactions placed
(27,642) =
87.4%
Total Number of Transactions
(31,627)
Target: 85% or greater of transactions placed through Rapid Purchasing Techniques.
Results: Using the formula above, a rating of 87.4% was obtained (10 Points - BSC Measured Rating)
Measure: Percentage of transactions placed through electronic commerce. For this measurement e-commerce is defined as transactions for which all communication with the vendor(s) throughout the pre-award and award process is done by electronic means (i.e., paperless). E-commerce tools include the internet, use of CDs, e-catalogs, email, etc. (Use of fax machines is not included unless it is a paperless fax).
The following formula shall be applied to measure the effective use of e-commerce:
Total Number of e-commerce transactions placed
(11,055) = 35.0%
Total Number of Transactions
(31,627)
| Target: | Unsatisfactory: | < 55.0% - 59.9% |
| Marginal | 60.0% - 64.9% | |
| Good | 65.0% - 69.9% | |
| Excellent | 70.0% - 74.9% | |
| Outstanding | > 75.0% |
Results: Using the formula above, a rating of 35.0% was obtained (0 Points - BSC Measured Rating)
For FY06, only 35% of 31,627 total transactions were placed using e-commerce, which is significantly under the national target of 75%. This is attributed to the delay in implementation of the PeopleSoft upgrade to web-based version 8.8.
Following the implementation of PeopleSoft version 8.8, Direct Connect (Business-to-Business) is now the next phase for e-commerce, which will allow SLAC to link up directly to its current online vendors.
Target Completion Date: August 30, 2007
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.
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 (excluding Purchasing Authorization Card) |
| Average Cycle Time = |
Total Time between Receipt of Requisitions & Award
|
| Target: | 27-32 days average cycle time for actions greater than $100,000 |
| Results: | 23.4 days for actions greater than $100,000 (15 points – BSC Measured Rating) |
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 (excluding Purchasing Authorization Card) |
| Average Cycle Time = | Total Time Between Receipt of Requisitions &Award
Total Number of Awards |
| Target: | 6-9 days average cycle time for actions less than or equal to $100,000 |
| Results: | 4.6 days for actions less than or equal to $100, 000 (0 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 (excluding Purchasing Authorization Card) |
| Average Cycle Time = | Total Time Between Receipt of Requisitions & Award
Total Number of Awards |
| Target: | 9-12 days average cycle time for all actions |
| Results: | 5.0 days for all actions (0 Total Points Possible) |
For Fiscal Year 2006, the average cycle time for BIS procurements less than or equal to $100,000 was 4.6 calendar days (6,568 transactions). For procurements over $100,000, the average cycle time was 23.4 calendar days (126 transactions). For all procurements, average cycle time was 5.0 calendar days (6,694 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, and subsequent assignment to the buyer, and ends with the award of the purchase order or subcontract. It is important to note 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 2005 and fiscal year 2006 data is as follows:
| Transaction $ | FY 05 | Transactions | FY 06 | Transactions |
|---|---|---|---|---|
| Under $100K | 2.5 Days | 5,468 | 4.6 Days | 6,568 |
| Over $100K | 11.4 Days | 84 | 23.4 Days | 126 |
| All Actions | 2.6 Days | 5,552 | 5.0 Days | 6,694 |
As displayed in the chart above, when comparing the FY06 data with FY05, the purchase requisition processing time increased significantly for those transactions under and over $100K; however, SLAC’s cycle time in all three categories remained under the national targets set forth by the DOE. It should be noted that several factors may have affected Purchasing’s ability to process purchase requisitions in FY06. First of all, Purchasing faced the loss of several experienced buyers, who were relocated to LCLS to handle specific project demands. Therefore, Purchasing was required to hire and train several new buyers. Additionally, Purchasing upgraded to PeopleSoft version 8.8; this implementation required the training of all buyers and personnel involved with the purchasing function. These circumstances likely contributed to the exhibited increase in SLAC’s cycle time for all transaction categories for FY06.
Both GLAST and LCLS continued to have an affect on the number of purchase requisitions processed by Purchasing. Even though GLAST procurements were not as significant as they had been in previous years, due to the fact that the procurement phase of the project was winding down, Purchasing experienced several short periods of an influx of purchase requisitions. Even with the unanticipated demands of GLAST and LCLS experienced by the Purchasing Department this fiscal year, Purchasing was still able to exceed its’ requisition processing time for all procurements.
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: | Socio-Economic Subcontracting | ||||||||||||||||||
| Measure: | % of subcontract dollars awarded in the
following categories: Small Business Small Disadvantaged Business Small Woman-Owned Business 8 (a) Pilot Program Veteran-Owned HubZone |
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| Target: |
|
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| Results: | As of
September 30, 2006, the following percentages of
subcontract dollars were awarded in the following
categories
(3
Points - BSC Measured Rating):
(3 Points Total Assigned) |
During this fiscal year SLAC’s actual reportable dollars for socioeconomic goal performance totaled $85,135,420. This is a $35,135,420 increase from our originally projected socioeconomic base of $60,000,000. Based upon this performance total, SLAC met and exceeded its socioeconomic goals in the categories for Small Business and the 8(a) Pilot Program. However, SLAC did not meet its socioeconomic goals in the other categories. SLAC’s achievement in the Small Woman-Owned category fell merely 0.34% short of its goal of 5.76%, although SLAC exceeded the projected dollar goal for this category by $1,161,266. Additionally, SLAC achievement exceeded the projected dollars for the HubZone category by $863,044, falling only 0.33% short of the HubZone goal of 2.22%. SLAC's efforts in Fiscal Year 2006 are summarized as follows:
| FY 2006 | GOALS | ACTUAL REPORTABLE | ||
|---|---|---|---|---|
| TOTAL | $ 60,000,000 | $ 85,135,420* | ||
| Sm. Bus. | $ 24,780,000 | 41.3% | $ 37,231,874 | 43.7% |
| Sm. Disadv. Bus. | $ 3,798,000 | 6.33% | $ 3,138,330 | 3.69% |
| Sm. W/O | $ 3,456,000 | 5.76% | $ 4,617,266 | 5.42% |
| 8(a) Pilot | $ 1,800,000 | 3.00% | $ 3,029,374 | 3.56% |
| Veteran Owned | $ 1,213,200 | 1.25% | $ 499,916 | 0.59% |
| HubZone | $ 750,000 | 2.22% | $ 1 ,613,044 | 1.89% |
*Includes approximately $28.8M for LCLS Awards.
SLAC Purchase Card program continued to have a major impact on our socioeconomic results. In FY06, our purchase card usage was $5,072,883 which is $866,102 greater than our level of usage in FY 05 (approximately $4.2M). This increased level of purchase card usage in FY06 continues to eliminate a large portion of the procurement dollars from the reportable base that may have otherwise been made available for award to small businesses.
Another source of impact was the fact that many procurements for FY06 were awarded to large businesses for major projects such as the Linac Coherent Light Source (LCLS) due to the specific nature of such efforts.
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 2006:
Internal 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 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 bi-monthly basis, the buying staff is informed of buyer achievements 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.
Employee performance evaluations incorporate language that emphasizes the importance of the Socioeconomic Subcontracting program and encourages Buyers to solicit small, small disadvantaged, and small woman-owned business concerns at every opportunity. Individual buyer achievements are acknowledged and discussed at buyer meetings along with progress toward meeting SLAC's goals.
Additional Small Business Activities
During FY 2006, SLAC received correspondence from a large number of small, small disadvantaged, and small woman-owned businesses seeking inclusion on our bidder’s list. A copy of the letter and any vendor literature is forwarded to the appropriate buyer for reference and inclusion on their bidder's lists.
During FY 2006, the following audits were conducted that included the Purchasing Department’s participation:
On April 24-27, 2006, a peer review was conducted by the Business Peer Review Team, consisting of representatives from Jefferson Lab, Fermi National Accelerator Laboratory, and Lawrence Berkeley Laboratory. The primary objective of the review was to identify areas of strength and areas where there was opportunity for improvement based on known best business practice, or other industry standards.
The Business Peer Review Team noted the following as areas of strength for the SLAC Purchasing Department:
-Proactive organizational changes, including realignment of positions to improve buyer accountability and vendor performance;
-Appropriate documentation of purchasing files;
-Implementation of PeopleSoft version 8.8, which will enable E-Commerce Business-to-Business linkup.
The Business Peer Review Team issued three recommendations as a result of this review. They are as follows:
Purchasing Management should strengthen the processing of Buy American Act waivers through buyer refresher training on Buy American Act requirements, and establish a means in the solicitation documents for vendors to certify applicability of the Buy American Act requirements for items supplied to the lab.
Corrective Action
SLAC Purchasing Management concurs with this recommendation. Item is currently under review.
Target Completion Date: December 31, 2006
Purchasing Management should aim to strengthen buyer training on the proper use of non-commercial vs. commercial terms and conditions.
Corrective Action
SLAC Purchasing Management concurs with this recommendation. Item is currently under review.
Target Completion Date: December 31, 2006
Purchasing Management should establish controls for distribution of revisions to the Policies and Procedures to ensure that each buyer is working with the most current revision.
Corrective Action
SLAC Purchasing Management concurs with this recommendation. Item is currently under review.
Target Completion Date: December 31, 2006
In July-August 2006, an internal audit of all Purchase Card Usage for the month of August 2005 was conducted by the Purchasing Department. An audit evaluating payment of sales tax covering the period of October 2005 through July 2006 was performed in conjunction with the annual audit.
The Purchase Card Audit found that there were no instances of policy violations in the following areas during the month of August 2005 for all Purchase Cardholders:
-Missing Signature of Approving Official
-Exceeding single Purchase Limit
-Purchase of unauthorized items
-Card Sharing
However, the Purchase Card Audit revealed that approximately fifty-nine (59) percent of the Statements of Account for August 2005 were noted as having at least one transaction irregularity when measured against SLAC Policy and Procedure. The Purchasing Department issued the following recommendations as a result of this audit:
The Purchasing Department’s current approach to Cardholder education needs revision and meaningful consequences to policy and procedure violations need to be employed.
Corrective Action
SLAC Purchasing will review the policies and procedures of other DOE laboratories using the Purchase Card Program for audit, training, and enforcement. This information will be incorporated into existing SLAC procedure and changes will be broadcast to all Cardholders and Approving Officials.
Target Completion Date: December 1, 2006
Purchase Cardholders and Approving Officials must be properly educated regarding SLAC’s tax exempt status and resolving mistakenly charged sales tax. The current statement included in the Policy and Procedure should be revised to definitively state SLAC’s tax exempt status and the consequences for not recognizing and resolving the payment of sales tax on purchase card transactions.
Corrective Action
The Purchasing Department will revise the current statement regarding SLAC’s tax exempt status in the Policy and Procedure as recommended. To resolve the immediate issue of taxes that have been paid, the SLAC accounting office will compute legitimate sales tax owed, and apply to that amount, the sales tax already paid.
Target Completion Date: December 1, 2006
The Internal Review Board (IRB) is comprised of the Purchasing Officer, the Deputy Purchasing Officer, and a Senior Contract Specialist/Group Lead with SLAC Legal Counsel serving as an advisor if 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 154 actions were reviewed by the IRB for FY 2006. The reviews disclosed weaknesses in price analysis, incomplete representations and certifications, purchase orders lacking appropriate language or terms and conditions, conflicting period of performance dates, unclear specification documents, and inconsistency or lack of file documentation, and other minor errors and omissions.
As noted earlier, Purchasing Procedures are currently in the process of being updated. The anticipated date of completion is December 31, 2006.
The following terms and conditions formats were updated consistent with the Stanford University/DOE prime contract in the last quarter of FY 2006:
All formats were submitted to the DOE SLAC Site Office in July 2006 for review and approval.
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.
This objective measures the level of satisfaction of the Purchasing staff in regards to their experience within the working environment. The measurement used to determine employee satisfaction was the Employee Satisfaction Climate Survey Questionnaire (see Exhibit VII). The survey was distributed to twenty-five (25) individuals total, nineteen (19) within the central Purchasing Department and four (4) in the LCLS Purchasing Department. A total of eighteen (18) individuals, fifteen (15) from central Purchasing and three (3) from LCLS Purchasing were responsive to the survey. Each participant was asked to respond to a series of statements pertaining to the working environment. Employees were asked to rate their level of satisfaction on a scale from 1 (strongly disagree) to 5 (strongly agree). An average rating of 3 or above was regarded as a satisfactory response.
| Measure: | Employee satisfaction survey |
| Core Elements: | Training Adequacy Working Environment Management Support and Leadership Employee Empowerment Information Availability |
| Target: | 90% Employee Satisfaction |
| Number of Satisfied Staff (17)
=
94.4% Satisfaction Rating Number of Staff Responded (18) |
|
| Results: | A
rating of
94.4% (5 points - BSC Measured Rating) was assigned based on an
analysis of the internal Employee Satisfaction
Climate Survey.
Out of the eighteen (18) individuals who responded, seventeen (17) employees gave the Department a rating of 3.0 or greater providing satisfactory ratings for their surveys. The results of this survey found the majority of responses, twelve (12), registered an average of 4.00 or higher. |
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 May through April. A review was conducted of the 2005/2006 Purchasing Staff’s Performance Evaluations to determine if the goals established as of April 2005, are consistent with and 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. |
| Total number of aligned employees Total Number of employees with buying functions |
|
| Target: | Unsatisfactory:
< 78.0% - 82.9% Marginal 83.0% – 87.9% Good 88.0% – 92.9% Excellent 93.0% – 97.9% Outstanding > 98.0% |
| Results: | The following organizational goals were
validated against individual goals for the
alignment:
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%. (10 points - BSC Measured Rating) |
This objective measures the availability to Purchasing employees of current information on strategic goals and objectives, customers, vendors, internal processes, and financial consequences of their decisions. A survey (see Exhibit VIII) was conducted in August 2006 to determine the availability of information tools considered necessary for the Buyers/Subcontract Administrators to complete their tasks effectively and efficiently. This was measured by dividing the number of information items readily available by the number of information items necessary.
| Target: | 90% availability |
| Survey Results: | Verification was made of the
following informational resources available to each
Buyer/Contract Administrator:
Purchasing Buyers Handbook (BIS) |
Of the ten (10) information tools considered necessary for the Buyer/Subcontract Administrator to perform his/her responsibilities efficiently, all ten (10) were found to be readily available to each Buyer/Subcontract Administrator. Of interest is to note that some of the new buyers had difficulty navigating through the Department Homepage to access some of the resource websites. This is likely attributable more to a lack of training than a lack of resource availability. This translates into a measurement of 100% (0 points – BSC Measured Rating) for this 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.
| 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 = > $.034 |
| Results: | The
Purchasing Administration cost to acquire $1 of
goods and services at SLAC during Fiscal Year 2006
was
$.018 (10 points -BSC Measured Rating). This is calculated as follows:
Total Salaries and Fringe Benefits = $2,167,000 Total Procurement Dollars in FY 06 = $121,661,728 Cost to Procure $1 of Goods and Services: $2,167,000/121,661,728 = $ .018 |
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.
The analysis of the Four Perspectives (Customer, Internal, Learning and Growth, Financial) of the FY 2006 SLAC Balanced Scorecard 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 Score Card Report for FY 2006. The Total Activity Score for FY 2006 is 95, which translates into an adjective rating of “OUTSTANDING”.
The following exhibits are presented in PDF format.
SLAC National
Accelerator Laboratory, Menlo Park, CA