Index

Procurement

Introduction/Background

Submitted By:

Stanford University

Stanford Linear Accelerator

2575 Sand Hill Road

Menlo Park, CA 94025

Cognizant DOE Office:     Oakland Operations Office

                                      Laboratory Contracts Management Division

Date of Last Self Assessment:                             August 1999

Status Of Purchasing System:                              Approved        

Effective Date Of Approval:                                   December 20, 1999

Tentative Date Of Next DOE Assessment:             October 2000

Thresholds For DOE Approval:                                  FFP Competitive >$5M

                                                                        FFP Noncompetitive >$1M

                                                                        All Cost Type >$100K

Assessment Team Members:

Legal Advisor:                          Ms. Rachel Claus, SLAC Staff Counsel

Participants:                            A. Saltzberg, SLAC Purchasing Officer

                                             T. Murphy, Associate Purchasing Officer

                                             R. Todaro, Associate Purchasing Officer

                                             Senior Buyer, Ron Antrim                                

                                             Senior Buyer, Larry Fisher

B.        BALANCED SCORECARD SELF ASSESSMENT PROGRAM

1. General

The SLAC Purchasing Department Self Assessment was conducted in accordance with the SLAC 2000 Balanced ScoreCard Self Assessment Plan, dated August 16, 1999, submitted to the DOE Oakland Operations Office.

2. Purchasing Organization

SLAC Purchasing is organized as depicted in the Organization Chart (see Exhibit I).

3. Status of Open Items From The 1999 Self-Assessment Review

                                                (None)

4. Participation In General

SLAC Purchasing participated with the other DOE Office of Science laboratories to discuss common issues and exchange information. Meetings were attended in October, 1999 and May, 2000.  Concurrent with attendance at the above stated meetings, we also attended the October, 1999 DOE Contractors Purchasing Managers Symposia and Workshops and participated in the CAPS meeting at LBL in May, 2000.

At the CAPS meeting, SLAC was in agreement with the other labs to continue to participate in the data collection process for the FY 2000 Study.  SLAC’s share for participation in the study will be $715.

The SLAC Purchasing Officer participated in the Procurement PEER Review at LBL in June, 2000. This was a three-day review of LBL’s Purchasing Office operations.

C.        BALANCED SCORECARD REVIEW AND ANALYSIS

1. Source of Data Used In The Self-Assessment

The principal data generation source for the Four Perspectives was from the Business Information System. System data was collected from the period October 1, 1999 through September 30, 2000.  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 ScoreCard Summary (Exhibit II).

1. CUSTOMER:         This perspective captures the ability of the organization to provide quality goods and services, effective delivery, and overall customer satisfaction.

2. INTERNAL:          This perspective provides data regarding the internal business results against measures that lead to financial success and satisfied customers.

3. FINANCIAL:        How effectively and efficiently SLAC meets the needs of its constituencies. This perspective captures cost efficiency, delivering maximum value to the customer for each dollar spent.

4. LEARNING AND GROWTH:        This perspective captures the ability of employees, information systems, and organizational alignment to manage the business and adapt to change.

2.1    CUSTOMER PERSPECTIVE

SLAC obtained its measurement of this perspective from its internal customers (Requestors). 

A Transactional Customer Satisfaction Survey was employed via telephone and in-person interviews in September, 2000.  Requestors were asked to respond to a series of statements (see Exhibit III) pertaining to specific purchase orders. The statements were based upon the suggested core and optional questions of the “DOE Balanced ScoreCards for the Business Systems Performance Measurement and Management Program” guidebook. Areas assessed were timeliness, quality, communications, schedule, best value, overall satisfaction, and performance. Recently awarded purchase orders, randomly selected from the BIS data report, were used for the survey.

Objective:       Customer Satisfaction

Measure:        Transactional 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.

Optional Elements:       

Schedule - Extent to which Purchasing is supportive of schedule requirements.

Best Value - Extent to which Purchasing strives to obtain the best price.

Overall Satisfaction - Extent of overall customer satisfaction with Purchasing.

Performance - Extent to which Purchasing is committed to certain standards.                            

Target:      95%(national target) customer satisfaction rating in 2000.

Results:     A rating of  100% (BSC Measured Rating) was assigned based upon an analysis of the internal customer questionnaire responses. There were twenty (20) respondents to the survey whose satisfaction level was calculated as follows:

1. The transactional survey had 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

2. The number of points for each statement for every respondent was added up; and  

3. We calculated the average rating by dividing the total points by the number of questions responded to by that respondent; and  

4. We counted the number of satisfied respondents (average rating of 3 or above) and divided by the total number of respondents to arrive at the percentage gradient

(20) No. of Satisfied Customers =  (100%) Satisfaction Rating  

(20) No. of Customers Surveyed

2.2       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.

2.2.1    Contracting Officer Approval of Procedures and Formats

At the request of the Contracting Officer, SLAC submitted a complete set of its Purchasing Procedures for review. SLAC is pleased to report that the Procedures were approved as of March 16, 2000.  In addition, a set of the various SLAC Terms and Conditions formats were also submitted for review. Approval for the various terms and conditions formats was obtained as of March 10, 2000.

2.2.2    Effective Internal Controls

To ensure compliance with applicable laws, regulations, prime contract terms and conditions, SLAC policies and procedures, Purchasing conducted its annual review of procurement transactions the week of August 7, 2000.  The files to be reviewed consisted of 100 purchase orders randomly selected via the PeopleSoft system from the period October 1, 1999 through July 31, 2000. The team reviewed the following files using the Self-Assessment Checklists (See Exhibits IV and IVa):

Fifty (50) files for the Buyer I and Buyer II categories from $0-10,000; and

Twenty-five (25) files for the Buyer III category from $0-25,000; and 

Twenty-five (25) files for the Buyer III category from $10-25,000.

These 100 purchase orders represented $561,423 or 2% of the total value of $40,940,889, for all purchase orders awarded during this period. The calculation is as follows:

A.        SELECTED SAMPLE  

B.         UNIVERSE

Total Number of actions in the review sample period is 5510.   

Total Value of actions in the review sample period is $40,940,889.

C.        PERCENTAGE           (sample/universe)

               Total Number               100/5510 = 2%

      Total Value                   $561,423/$40,940,889 = 2%

The following areas were designated as a focus for the FY 2000 self-assessment review process:

•   Purchase Requisition processed timely.  

• Lead Time (from receipt of the Purchase Requisition to award of purchase order) under BIS.  

• Determination of financial and technical responsibility.

• Price Analysis adequacy.           

• Adequacy of sole source justification documentation.  

• EEO  Certification properly completed.  

• Buy American Waiver completed.  

• Appropriate use of DOE ICPT Agreements and other BOA’s.  

• Appropriate use of Optional Clauses.  

• Correct Debarred Listing Citation.  

• Accuracy of Conflict of Interest listing citation.  

• Overall adequacy of file documentation.

Objective:  Effective Internal Controls

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:     Meets or exceeds expectations.

Results:     Of the Purchasing System actions reviewed for compliance with applicable laws, procurement regulations, SLAC Purchasing procedures, prime contract terms and conditions and Government and University ethical provisions, a total average of 91.50% (5 points - BSC Measured Rating) were found to be compliant. 

Narrative       

The findings are as follows:  

Total Average of Actions Reviewed Found Compliant (1098/12) = 91.50%

Issues and Corrective Action

(For those actions found to be less than 95% compliant)

1. Purchase Requisition Processed Timely  

Corrective Action:   None Required (97% compliant).

2. Lead Time For Processing Procurement Requests (PRs)

Corrective Action:  Compared to FY 99 results (52%), we believe the 80% rating of compliance shows a significant improvement. We intend to continue reinforcement with the Requestor community to be cognizant of Purchasing lead times for placement of procurements. We intend on doing this by focusing on the major departments (such as SLAC Computation Services (SCS) and Site Engineering and Maintenance (SEM) responsible for not providing adequate lead-time when submitting their Purchase Requisitions. Target Completion Date:   September, 2000.

3. Financial And Technical Responsibility Determination

Corrective Action:   None Required (100% compliant).

4. Price Analysis Adequacy

Corrective Action: Approximately 16% of the price analyses were less than sufficient. Some buyers did not provide sufficient support of their analysis. Purchasing management needs to assure that price analysis is performed and documented for all purchase actions  with emphasis on how reasonableness was established. Reinforcement training of buyers will be required.

Target Completion Date:    September, 2000.

5. Adequate Sole Source Justification Documentation

Corrective Action:  Sole source justifications did not provide a valid reason for not competing the effort involved.  Reinforcement training of Buyers on proper documentation requirements of a sole source procurement is necessary.

Target Completion Date:   September, 2000.

6. EEO Certification Not Properly Filled Out

Corrective Action: Reinforcement training of Buyers on a properly completed certification is necessary.

Target Completion Date:  September, 2000.

7. Buy American Waiver  

Corrective Action:   None Required (100% compliant).

8. Use of DOE ICPT Agreements

Corrective Action:    None Required (100% compliant).  

9. Debarred Listing Cite

Corrective Action:    None Required (97% compliant).                     

10. Correct Clause Sets (BIS)  

Corrective Action:        There were six instances where Buyers failed to incorporate either the correct clause or clause set in the purchase order. Reinforcement training on including the proper clause and clause set in the purchase order is necessary.  

Target Completion Date:  September, 2000.

11. Incorrect Conflict Of Interest List Date Cited.

Corrective Action:    None Required (97% compliant).

12. Overall Adequacy Of File Documentation  

Corrective Action:  There were some instances where Buyer checklist and file requirements were not followed. Purchasing management will need to reinforce the requirement to all Buyers that files must provide a complete and accurate audit trail of the purchase transaction.  

Target Completion Date:   September,  2000.

2.2.3    DOE Audits During FY 2000

Inspector General (IG) Audit of Purchasing Function

The IG contracted with KPMG to perform an audit of SLAC’s procurement process and internal controls. The audit was performed from July 5 -14, 2000. A number of disbursement transactions were selected for detailed review. KPMG requested associated supporting documentation starting with the purchase requisition process and ending with payments from the bank. SLAC is proud to report there were no findings on the transactions reviewed.

KPMG also collected information on SLAC’s indirect costs and allocation methodology. As a result of the audit, KPMG was able to complete the necessary fieldwork and will not have to return, as originally planned, in August, 2000. They do plan, however, to return in November, 2000, to focus on transactions in September and October 2000.

2.2.4    Stanford University Audit Group Reviews

a.         Allowable Costs Review

In April, 2000, the Stanford University Internal Audit Group conducted an Allowable Cost Review for FY 1999.  The objective of the audit was to determine whether costs incurred during the period October 1, 1998, through September 30, 1999, were allowable under the terms of the prime contract. The audit covered expense transactions processed through the Accounts Payable, Special Payments, Payroll, and Petty Cash systems. There were some findings and recommendations made in the various areas and corrective actions were subsequently implemented. An audit report was issued on May 5, 2000, (Engagement Number: 00-204) and is available upon request.

b.         Purchase Requisition Authorization and Documentation

The Internal Audit Group performed a review of the SLAC Purchase Requisition system for proper authorization and documentation. Their review resulted in “no findings” and found the purchase requisitions reviewed to be “properly authorized and supported.”  The audit report was issued on June, 2000, (Engagement Number: 00-236) and is available upon request.

c.         Current Stanford University Audit Group Reviews

Procurement Card  (currently under review)

Inventory Function (currently under review)

2.2.5    Internal Review Board

The Internal Review Board (IRB) is comprised of the Purchasing Officer and two (2) Associate Purchasing Officers, with Staff 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:

• Overall completeness of the procurement.

• Compliance with mandatory requirements of regulations.  

• Quality of documentation in support of contract type, source selection, and price.  

• Proper application of SLAC Purchasing Procedures.

• Compliance with prime contract provisions.

• Legal adequacy as a contractual document.

A total of 60 actions were reviewed by the IRB for FY 2000.  The reviews disclosed weaknesses in price analysis, incomplete representations and certifications, inconsistency or lack of file documentation, inconsistent delivery terms and other minor errors and omissions.

2.2.6    Effective Supplier Management

This measurement will be obtained by dividing the number of line items delivered on time by the total line items due (or total line items received).

Objective:  Effective Supplier Management

Measure:  % delivery on time (no later than 2 days after the Purchase Order due date).

Target:     75% on time delivery.

Results:     Per the Narrative below, 70.2% (4 points - BSC Measured Rating) of the purchase orders were delivered on time.

Narrative

SLAC has designed a PeopleSoft query to capture vendor performance by line item.

After discussions with Procurement Manager’s at 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.  SLAC has elected to use a definition of on time delivery of up to 2 days after the Purchase Order due date.

The data indicates that of the 12,887 Purchase Order line items measured during FY 2000, 70.2% were delivered on time.  This equates to a Balanced ScoreCard Measured Rating of 4 points.  Overall, this is only a 2% improvement over FY 1999 and falls short of the Target for FY 2000 of 75%.

As such, SLAC Purchasing Management has designated this area as in need of special attention by the Buyers during the FY 2001.  This includes management analyzing late deliveries to identify those vendors that need to improve their on-time deliveries.  This analysis will also identify the SLAC buyer so they are able to work with their delinquent vendors.

2.2.7    Effective Utilization of Alternate Procurement Approaches

This objective measures the transfer of traditional purchasing activities such as supplier selection, best value determination, 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 1999 through September 2000.

Objective:    Effective utilization of alternate procurement approaches.

Measure:     Optimum % of transactions placed by users (JIT, Purchase Card, Blanket Order Releases) divided by the sum of total transactions.

Target:        75% (CAPS target is 72.5%)

Results:         A 73.1% (3 Points - BSC Measured Rating) measurement was obtained as follows:

2.2.8    Streamlined Processes

This objective measures improvements to the acquisition processes, which serve to enhance procurement efficiency, reduce cycle time, reduce operating cost and increase overall customer satisfaction with the procurement process.  This measurement will be obtained by totaling the number of re-engineered, re-designed, or re-validated processes.

Objective:    Streamlined Processes

Measure:     Number of critical processes re-engineered, re-designed or re-validated.

Target:        Two annually.

Results:       Five critical processes were re-engineered, one critical process was re-validated, and one critical process was re-designed in 2000 (see Narrative below).       (4 points - BSC Measured Rating)

Narrative

1. Purchasing Procedures Revision (re-engineering effort)

A major achievement this year was the complete revision of the Purchasing Procedures to make them consistent with the DOE prime contract (FAR, DEAR clauses). The revision was considered a critical process due to the information presented for the buyer as guidelines on how to conduct procurements. The revised procedures were reviewed and found sufficient by the DOE Contracting Officer by letter dated March 10, 2000.

2. Shipping/Receiving/Stores Procedures Revision (re-engineering effort)

Another significant achievement this year (March, 2000) was the complete re-write of the Shipping/Receiving and Stores procedures. This was also considered a critical process for issuance of current guidance of the employees involved in these functions.

3. SLAC Terms and Conditions Formats (re-engineering effort

1. Architect Engineer Agreement Terms and Conditions Clause Set

A new clause set was developed as a necessary compliment to the construction group activities and functions. The creation of this new clause set was deemed a critical process due to the complexity of the numerous clauses contained therein and the need to have them be consistent with the new DOE/SLAC prime contract provisions. (Reviewed and approved by the DOE Contracting Officer as of March 10, 2000.)

2. Personal Services Agreement Terms and Conditions Clause Set (re-engineering effort) 

A major revision/updating of this clause set was necessary in order to align it with the new DOE/SLAC prime contract provisions. This effort was considered a critical process and was completed in October, 1999.  (Reviewed and approved by the DOE Contracting Officer as of March 10, 2000.)

3. DOE Review of SLAC Terms and Conditions Formats (re-validation effort)

At the request of DOE, a complete set of the various SLAC Purchase Order Terms and Conditions formats were submitted for review and approval. These formats included commercial, non-commercial, construction, and various representations and certifications formats.  All of the formats submitted were approved, without comment, by DOE as of March 10, 2000.

4. Purchasing Department Web Homepage (re-engineering effort)

The following improvements were made to the Purchasing Department Homepage for FY 2000:

• We added Stores, Shipping and Receiving Procedures in along with their respective organizational charts. We also added the Accounts Payable Group organizational chart.

• Existing Purchasing Procedures were updated to reflect their revisions as approved by the DOE as of March, 2000.

• We added the SLAC Conflict of Interest listing (for employees) for more efficient use by the buyers.

• We added the Purchasing Card manual so it could be accessible on-line.  

• We revised the on-line format for Justification for Non-competitive Procurements.

5. DELL Products On-line Ordering (re-design effort)

DELL Computer Corporation worked with SLAC Purchasing during the past year to set up a customized on-line computer store to develop quotations on standard configurations. This process allows the user community and buyers to access system-specific technical information and link to useful information throughout DELL’s extensive website. In July, 2000, Purchasing implemented the next phase in the process by commencing on-line ordering with DELL. This e-commerce achievement eliminates the purchase order mail out to DELL thereby creating a more efficient and economic critical process.

2.2.9    Acquisition Process

This objective measures the efficiency of the acquisition 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. Per a request from the DOE Headquarters Office of Procurement & Assistance Management, starting in FY 1999, the core measure was changed to under $100K, over $100K, and All actions. Targets are based on average processing time for FY 1999 as reported by DOE M&O Contractors.

Objective:       Acquisition Process

Measure:        Average cycle time (exception Purchasing Authorization Card)

Revised Targets:       Actions <$100K    -      8.3 days

                                Actions >$100K    -    30.9 days

                                All Actions            -   11.9 days

Results:                     Actions < $100K   -     1.33 days

                                 Actions > $100K   -     9.48 days

                                 All Actions              -    1.41 days

                                      (9 points - BSC Measured Rating)

Narrative

For Fiscal Year 2000, the average cycle time for BIS procurements under $100,000 was 1.33 calendar days (7169 transactions), for procurements over $100,000 it was 9.48 calendar days (77 transactions), and for All procurements it was 1.41 calendar days (7246 transactions). See Exhibits V and Va depicting Requisition Processing Time. Transactions are defined as both Purchase Orders and Subcontracts.  It should be noted that the data reflected in the table was collected and tracked on the automated system (BIS) and accounts for approximately 83.5% of the procurement dollars in FY 2000.  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 are 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.

2.2.10   Good Corporate Citizenship through Purchasing

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:  Good corporate citizenship through purchasing.

Measure:  % of economic and social diversity and local participation program goals achieved including: SB and SDB Goals, Regional/Local Outreach/Support Good Neighbor Program.

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, 2000, SLAC attained 130.1% of the goals set with the DOE.  (7 points - BSC Measured Rating)

Narrative

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 goal.  The Subcontracting Plan Administrator, in his capacity as Purchasing Officer, reviews goals, reports progress, and salient ideas and innovative methods during scheduled buyer meetings.  On a monthly basis each buyer is provided a printout 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.

During Fiscal Year 2000, the SLAC Purchasing Department’s performance against its socio-economic goals fell short in awards to Small Business and Small Woman Owned Business (see Exhibit VI and VIa).  However, awards to Small Disadvantaged Business and 8(a) Pilot Program awards far exceeded the SLAC FY 2000 goals. SLAC’s achievement is quite commendable in view of several factors.  A notable roadblock continues to be the impact of the SLAC Purchase Card Program, which eliminated $3.9 million from the reportable base.  The SLAC Buyers have traditionally been able to place an extremely high percentage of these low dollar value procurements with small, small disadvantaged, and woman-owned businesses.  In addition, there was a reduction in the dollars available for Purchases in the SLAC budget during FY 2000.

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.  Since FY 1998, by utilizing an ICPT BOA, SLAC standardized on Dell computers.

We feel that our program efforts have been outstanding considering the removal of a large portion of the procurement dollars from the base available for award to small, small disadvantaged, and small woman owned businesses. The motivation and individual efforts of each of our procurement personnel is to be commended in view of the substantial obstacles that have been placed in their way.

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 utilize 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.

SLAC participated in the High Tech 2000 Small Business Procurement Fair and Conference in the City of Industry sponsored by JPL and NASA.  The two-day event included 275 Prime Contractor booths and was attended by representatives of over 1200 small businesses.  The conference included numerous workshops on doing business with federal agencies, prime contractors, and technology commercialization.  SLAC successfully established several new SDB and woman owned sources at this conference.  SLAC also participated in the DOE Small Business Conference and Procurement Fair attended by DOE Program Offices, other M&O Contractors, and over 175 small businesses.

In addition, SLAC receives over 130 letters a year from small, small disadvantaged, and small woman-owned businesses seeking inclusion on our bidders list.  Each letter of inquiry is 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.  The information they provide is loaded into our PeopleSoft vendor database that can be utilized by both the SLAC Buyers and requisitioners.

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.

2.3.   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’s organizational costs divided 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.

Objective: Optimum cost efficiency of purchasing operations.

Measure:  Cost to spend ratio:      Purchasing Operation’s operating costs divided by purchasing obligations.

Target:     $.029 per $1 of Goods and Services Procured (CAPS & FY 1998 Benchmark)

Results:    The Purchasing Administration cost to acquire $1 of goods and services at SLAC during Fiscal Year 2000 was $.0253 (10 points - BSC Measured Rating).  This is calculated as follows:

                 Total Salaries and Fringe Benefits       = $1,560,600

                          Total Procurement Dollars in FY 00      = $61,750,618

               Cost to Procure $1 of Goods and Services:

                  $1,560,600/$61,750,618                    = $.0253

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.  Excluded are such items as salaries associated with temporary duty assignments for Purchasing personnel outside of the Purchasing Department, MIS Support and facility maintenance items. Metrics were revised last year to reflect staffing requirements generated by the on-going support for the Business Information System (BIS). After our experience with the new system, it became evident that BIS support would be a permanent requirement. The CAPS benchmark for DOE M&O Contractors has been adjusted for salary increases and the high cost of living in the Bay Area. 

The metrics included in the FY 2000 Balanced ScoreCard Self Assessment Plan are as follows:

                        <$.030 = far exceeds expectations = 10

                           $.035  to $.0310 = exceeds expectations = 8

                           $.039  to $.0351 = meets expectations = 4

                        >$.040 = needs improvement = 0

2.4    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.

2.4.1    Employee Satisfaction

This objective measures the level of satisfaction Purchasing staff experience with their working environment. As part of this measurement, data was reviewed regarding employee voluntary termination from the Purchasing Department. In the review Year 2000, the Department continued its stable work force environment with no retirements or voluntary termination. The Department is fortunate in the fact that it does not exhibit a high transitory workforce.  There is virtually no turnover rate among the  Buyers where the length of SLAC service runs from two (2) to twenty-one (21) years. Absenteeism is considered “as leave without pay” and there were no instances of absenteeism during the review period.

Training of personnel in FY 2000 continued to be constrained by budget priorities. This situation may improve in the future as Stanford University has, effective September 1, 2000,  implemented an $800 per year allowance (no more $200 per quarter restriction) to defray costs of training, conferences, workshops or seminars that every employee may enroll in to further their education.

In addition, the primary measurement used to determine employee satisfaction was by the Climate Survey Questionnaire (see Exhibit VII) conducted in August, 2000.  The survey asked for the employee’s view of his/her working environment in the following categories:

• Training Adequacy

• Working Environment

• Management Support and Leadership  

• Employee Empowerment

• Information Availability

Survey Results: The survey was distributed to eighteen (18) individuals within the Purchasing Department. A total of sixteen (16) responses were returned. Any survey response above the 3.00 level was considered a positive outlook on the working; environment. Any average response below 3.00 was considered as a; negative outlook.  The majority of responses (10) registered an average of 4.00 or higher, while five (5) responses registered 3.00 or above. Only one response registered a 2.34 level. Concluding therefore that fifteen (15) responses were considered as fifteen (15) employees satisfied and one (1) employee dissatisfied with the managerial and working environment.

The percent of satisfied employees was measured by dividing the number of satisfied employees (15) by the number of employees responding to the survey (16). (15 divided by 16 = 93.8%).

Results:   A 93.8% weighting for this perspective was assigned per the above.

2.4.2    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 2000/2001 Purchasing staff’s Performance Evaluations to determine if the goals established as of April, 2000, are consistent with and supportive of the organizational goals. Employee alignment was measured by dividing the number of aligned employees by the total number of employees with buying functions.

Survey Results:    The following organizational goals were validated against individual goals for alignment:

• Continue to be compliant with all Environment, Safety and Health (ES&H) training requirements. (Site-wide goal)

• Continue to support and foster Communication Quality Initiatives (CQI) techniques in day-to-day functions and responsibilities. (Business Services Division goal) 

• Continue to establish new small vendors and small disadvantaged vendors ensuring SLAC meets its goals established with DOE. (Purchasing Department goal)

All of the performance evaluations reviewed were found to contain the above goals and deemed to be in alignment with SLAC organizational goals. As a result, employee alignment was obtained at a rate of 100% of the total of twelve (12) employees involved with buying functions.

2.4.3   Information Availability

This objective measures the availability to Purchasing employees of current information on strategic goals and objectives, on customers, on vendors, on internal processes, and on financial consequences of their decisions. A survey (see Exhibit VIII) was conducted on September 29, 1999, to determine what information tools are necessary for the employees to do their jobs better and faster. This was measured by dividing the number of information items available by the number of information items needed.

Survey Results:  Verification was made of the following information resources available to each  Buyer:

Purchasing Buyers Handbook (BIS)

Purchasing Procedures

Conflict of Interest Listing

Debarred Listing

Business Information System Web Site

Thomas Register

DOE Integrated Contractor Purchasing Team (ICPT) Homepage

FAR and DEAR web sites

SBA 8(a) and SDB Certification Homepage

Purchasing Department Homepage

Of the ten (10) information tools available, all were considered necessary for the employee to perform his/her responsibilities more efficiently. This translates into a measurement of 100%.

(For Items 2.4.1 through 2.4.3 above)

Objective:  Employee Satisfaction; Organizational and Employee Alignment; Strategic Information Availability.        

Measure:   Employee satisfaction index (includes data from employee survey, focus groups, absenteeism, and voluntary termination’s.

Employee alignment % of employees whose actual performance is aligned with Key Success Factors.

There is a measure of useful information (policies, procedures, operational reports) available to employees.

Target:      Employee Satisfaction - 85% satisfied employees.

                 Employee Alignment - 90% aligned. (national)

Information Availability - 90% of work groups have the data they need to do their jobs. (national)

Results:     Employee Satisfaction  - 93.8% (10 points - BSC Measured Rating)

                 Employment Alignment- 100% (5 points - BSC Measured Rating)

                 Information Availability- 100% (5 points - BSC Measured Rating)

D.     SUMMARY

The analysis of the Four Perspectives (Customer, Internal, Financial, Learning and Growth) of the FY 2000 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 Balanced ScoreCard Summary (Exhibit II) depicts the total points available and total points achieved for each of the Four Perspectives.  As a result, a total point evaluation of 97 was attained which translates into an adjective rating of Outstanding. 

It is the opinion of the Review Team that the SLAC Purchasing System is consistent with and supports the DOE core values and critical success factor strategies of providing services that are responsive to customer needs, in accordance with established compliance requirements, and employment of best business practices to the maximum extent possible.