Newsletter - June 2017 
VALUE Bids
The VALUE contract for gasoline and diesel fuel has been extended through 7/31/2018. Please login on the VALUE website to view the extension documents:
- Log into your account on the left hand side
- Click on the "VALUE Bids" tab at the top of the page
- Click on the picture for "Gasoline, Diesel Fuel"
- The extension document is the last attachment on the left hand side, under the column labeled "Gasoline Diesel Fuel Award Documents"
The 7 Habits of Highly Ordinary Negotiators
The 7 Habits of Highly Ordinary Negotiators
Part 1 of 7
by Omid Ghamami
https://www.purchasingadvantage.com/blog
Habit #1 – Tries to Find Cost Savings in Price
This 7 part series is based a quarter century of me going to hundreds of companies in 21 countries and 5 continents across all industries and sectors. I’ve witnessed great practices and mediocre practices. From this experience, and from the biggest gaps between where we are and where I envision we can be, I’ve derived the following blog series, focusing on the 7 Habits of Highly ORDINARY Negotiators.
Habit #1 is “Tries to Find Cost Savings in Price”.
We have a profession that tries desperately to find cost savings at the negotiating table, in the form of price. This has been going on since the first currency was ever developed. We’ve gotten more and more sophisticated at achieving this objective, but we’ve stayed in the stone ages in terms of what we’re trying to achieve.
In fact, I think this is perhaps the biggest indicator of being an ordinary negotiator. Allow me to explain. What do your suppliers hear when you ask for a lower price? What they hear is “make less profit so I can report more cost savings”. How sustainable of a strategy do you think this is? How eager do you think suppliers will be in helping you achieve this objective?
Year after year, how many times can you keep dipping into that same well, with management expecting greater cost savings results? And do you know that suppliers who feel like they’ve been squeezed too hard will find other ways to make their money from you?
What % profit margin do you think your suppliers have? 10%? 15%? Certainly not more than 25%. Let’s say 15% for the sake of discussion. When you ask for a lower price, you are therefore actually saying “forget about the 85% cost opportunity here, I want to focus in on the 15% profit piece”.
Think about that. When you focus on price, you are focusing on profit. You are focusing on a very, very small piece of the pie. The rest of the pie is where all the money is. I could write a book with all the negotiations I’ve helped companies on where I helped them find up to 90% cost savings by focusing on cost instead of price. Maybe I will.
By the time your end user has handed you the SOW or Spec, the money is gone. It’s game over, the ship has already left the dock, and the bus has already left the station. The biggest cost savings opportunities have gone straight down the pipes.
Your end user is trained in developing Specs and SOW that are designed for FORM and FUNCTIONALITY, but not COST or TCO. Nobody trained them on that.
We keep trying to get upstream with our end users, but for all the wrong reasons: purchasing policy, finding other suppliers, etc. I shouldn’t say those are bad reasons, but that’s not where the money is at. The real money is in driving upstream Spec/SOW DESIGN FOR TCO.
Key strategies for doing this include standardization – changing from custom parts and processes to standard, simplification – doing bells and whistles analysis, reuse – technologies, suppliers, processes, parts, machinery, SOW/Specs, and harnessing supplier innovation – best practices they know of because hundreds of their other customers have solved the same problem as you in much better ways (and also much worse ways, and so they know what pitfalls to tell you to avoid).
If you set a requirement that your end user establishes success metrics for the purchase (we will talk about this more in the next blog), then you have a criteria against which to drive the strategies above. Without success metrics, you cannot do any of those things, because you won’t know (for instance) if shifting from a custom component to a standard component is a smart thing to do, even though it will save you money. The success metrics will tell you if it impacts the final result or not. Without that, you may make changes that save you money now, but cost you dearly later.
It’s just like if I asked you “what type of exercise should I do?” You can’t answer the question until I tell you what it is I am trying to accomplish. Upstream design for TCO is no different. Without objectives, you don’t know what changes you can or can’t make to take cost out of the equation, because if you take out the wrong elements, you might increase TCO or fail to meet your end user’s objectives.
We don’t have time or space here to get into examples, but let me say this: In my experience, only 20% of the cost savings are found in negotiations, and 80% of the cost savings are found in Upstream Design of the Spec/SOW for TCO. Does that get your attention? It should. This is the easiest profession to become a rock star in.
Look for the remaining parts of this series shortly to help get you on that path.
Be your best!
Meeting Minutes
Minutes of the VALUE Meeting
May 17, 2017
| Present | ||
| Name | Organization | |
| x | Barwick, Robert | City of West Allis |
| x | Fleming, Matt | Kenosha County |
| Hartmann, Roy | Washington County | |
| Jacobson, JoAnne | Port Washington/Saukville School District | |
| Jeffries, Karen | City of Milwaukee | |
| Kurer, Bill | Washington County | |
| Martin, Catherine | Waukesha County | |
| x | McKinney, Duane | Racine County |
| x | Matz, Cindy | Walworth County |
| x | Nash, Vicky | Waukesha County Technical College |
| Ruhnke, Jen | Milwaukee Metropolitan Sewerage District | |
| x | Schaack, Beth | City of Waukesha |
| Schleimer, Laurel | City of Wauwatosa | |
Common Solutions / Open Forum Discussion
Cindy asked what legal case management software people are using. Matt will check, but believes they are using a homegrown system. Duane will also check what they are using.
Vicky asked if anyone attended the Amazon webinar NIGP hosted. Robert mentioned that someone from West Allis may have attended. Vicky mentioned that it was very helpful and informative. They showed a lot of on-line reporting. 95% of the attendees were purchasing professionals. They touched on the pros and cons: Cons included that you lose some rebate and customer contact for follow-up or issues. Pros included that it is easy to use for the end user. Vicky indicated she will propose an “approval queue” to her management to allow her to spotcheck that the user is looking for competitive quotes – for example, don’t pay a cheap price and then a huge price for shipping. The queue will also help her ensure relationships with big contractors (office suppliers, MRO suppliers) are not tarnished.
Beth asked how people are handling sales tax on p-card receipts. Cindy mentioned that she had the user provide documentation of what steps they took to recoup the sales tax, and as the “pcard police” she provided guidance and/or approved the follow-up that was done and she included that documentation with the receipts.
Beth asked about the p-card contract VALUE has. It was recommended that she contact Cindy Greco to let her know of her interest, and ask about the training session coming up.
Duane mentioned they are bidding their banking services where the bank handles all the transactions (so that the public can pay bills with credit card) and asked who people are using.
Robert mentioned that West Allis has a survey going around about employee recognition, and was wondering what others did for employee recognition. Vicky mentioned that West Milwaukee gives people a cash incentive, and they can choose a “prize” from a list of items that has the West Milwaukee logo on it. WCTC does a pin on certain anniversary dates.
Business Meeting
- Treasurer’s Report as of 4/30/2017:
Checking: $15,270.02
Savings: $10,010.72
- New Members: None
- Hiring a Financial Advisor – We would like to have a financial advisor look at our bylaws, whether we should become a 401c-3, etc. Matt asked their financial group (Schenk) to look at our bylaws and provide feedback. From his reading of the bylaws, we are part of WAPP. However, we also have our own EIN for some reason.
- Audit Procedures – We would like to do an audit and better understand what JoAnne does for auditing.
- ByLaws – We plan to update our bylaws, but the task depends on the advice we receive from the Financial Advisor. We will need to present any changes to the bylaws to the VALUE membership at the March meeting for a vote.
- Strategic Business Plan – We discussed what our focus should be moving forward. In the past, one option we pursued was to invited the membership to a special meeting to update the plan.
Piggyback Updates
Below are changes or additions to the various piggyback opportunities available to VALUE member agencies. Visit the piggyback page on the VALUE website, and click on the Pig to see the full list.
Do you have a contract to add to the list? Contact cmatz.value@gmail.com to add your contracts to the piggyback list!
| New Contracts |
|
Back to School Health Fair Supplies |
| Contract Extensions |
|
Roadway Materials |
| Contract Expirations |
|
(None) |
State of Wisconsin Contract Updates
Updates to State of Wisconsin contracts are issued weekly by the State of Wisconsin. VALUE is reprinting the weekly information received as a courtesy to our members.
The following contracts have been updated for the week of 5/8/2017 - 5/12/2017:
505ENT-M15-PROPANESVC-00 Propane / LP Gas – Statewide - Updated price list with contact information.
505ENT-O16-NASPOCOMPUT-00 NASPO Computer Equipment, Peripherals, and Related Services - Lenovo Global Technology (United States) Inc. resellers were added to the Excel file with Bands, Contractors, Auth Resellers and STAR info.
505ENT-O15-FLOORING-00 Statewide Flooring Including Commercial Carpet, Resilient Coverings (Virgin and Recycled) and Related Services - Added Carpet Tile Products for Creative Solutions
The following contracts have been updated for the week of 5/15/2017 - 5/19/2017:
505ENT-M15-OFFURNITUR-00 STATEWIDE OFFICE FURNITURE - Posted updated Authorized Dealers.
505ENT-M17-WICOMPUTER-00 Computer Equipment and Related Services - Updated the EMC contact information and address change
505ENT-M15-MFDCOPIER-00 Copiers and Related Devices - Canon provided notification of model updates (added and discontinued machines). The machines available are posted on the NASPO ValuePoint contract website.
505ENT-M15-LMPBLLSTR-01 Lamp, Ballast, Mercury Containing Equipment, and Battery Recycling, and PCB Disposal Services - Contract Renewal through June 30, 2018
505ENT-M10-VHICALRNTL-00 Nationwide Vehicle Rental Services - Updated Rental Vehicle Quick Reference Guide
The following contracts have been updated for the week of 5/22/2017 - 5/26/2017:
505ENT-M15-PROPANESVC-00 Propane / LP Gas – Statewide - Updated supplier contact list.
505ENT-M15-OFFURNITUR-00 STATEWIDE OFFICE FURNITURE - Posted updated DISCOUNT INFORMATION to include Connection Zone Benching, Screen, Storage and Privacy Booths from KI.
505ENT-M15-LMPBLLSTR-01 Lamp, Ballast, Mercury Containing Equipment, and Battery Recycling, and PCB Disposal Services - Added new contact list.
505ENT-M17-WICOMPUTER-00 Computer Equipment and Related Services - Updated the Contacts/Pricing document for CDW-G.
505ENT-M15-HZRDSWSTSV-01 Hazardous Wastes Services - Contract renewed for one year.
505ENT-O13-BADGERNET-00 Alternate Internet Access for BadgerNet Authorized Users - Contract has been extended through June 30, 2018 for all vendors except Infinity and Airstream
505ENT-O13-SERVICEPROF-00 Temporary Professional Services - Updated Contract Synopsis and User Guide.
505ENT-O15-FLOORING-00 Statewide Flooring Including Commercial Carpet, Resilient Coverings (Virgin and Recycled) and Related Services:
- Added Johnsonite Resilient Products for Creative Solutions
- Added Resilient Product for Sergenian's
- Added Carpet Tile for Nonn's
505ENT-M13-REMANTONER-01 STATEWIDE REMANUFACTURED TONER AND INK PRODUCTS - Renewed - third and final renewal option.
505ENT-M17-SKYPEACC-01 Skype for Business-Compatible Speakerphones, Headsets and Related Equipment - New Contract
The following contracts have been updated for the week of 5/29/2017 - 6/2/2017:
505ENT-M15-VEHICMAINT-01 Managed Fleet Vehicle Maintenance Services And Accident Management - Contract Amendment - New contract term will be 24 months, from July 1, 2017 through June 30, 2019.
505ENT-M16-WSCADBCRMON-01 Data Breach and Credit Monitoring Services - Uploaded new QUICK START GUIDE and USER GUIDE to include notation that in August of 2016, Experian acquired CSID. All terms, pricing and services as outlined in the NASPO VALUEPOINT contract remain unchanged. Revised contact information.
505ENT-M17-RATECERT-00 Class 5 Legal/Public Notices: Rate Certification Program - Certification Rates Bulletin updated for June 2017
505ENT-O15-FLOORING-00 Statewide Flooring Including Commercial Carpet, Resilient Coverings (Virgin and Recycled) and Related Services - Added Carpet Tile Products for Creative Solutions
The following contracts have been updated for the week of 6/5/2017 - 6/9/2017:
505ENT-M16-PRINTPAPER-00 Paper: Printing Grades, 50" Roll Stock (DET), and Copy Paper (White and Colors) - All LOT contracts have been renewed for 1 more year
505ENT-M15-PROPANESVC-00 Propane / LP Gas – Statewide - Contract Renewed until June 30, 2018
505ENT-M15-MFDCOPIER-00 Copiers and Related Devices - Updated the Sharp Authorized Dealer information and applicable ordering instructions.
505ENT-M17-SKYPEACC-01 Skype for Business-Compatible Speakerphones, Headsets and Related Equipment - Updated synopsis information
505ENT-M16-NATURALGASWI-00 Natural Gas Supply & Management Non-Firm - Uploaded 2018 CenterPoint TC for Areas 6, 11 & 12. Uploaded Milwaukee County TC's for non firm facilities
NIGP Webinars
NIGP Webinars
The Impact of Uniform Guidance on Procuring under Federal Awards for Municipalities and Counties
Date: June 21, 2017
Time: 1:00-2:30 CST
Note: This online training session is applicable for procurement professionals working for cities and counties, but not states. States follow their own procurement requirements under the Uniform Guidance.
The target audience is based on those who are making decisions about policies and procedures of the procurement department. Those at the beginner level are also welcome to attend to get a sense of the 2 CFR Part 200 requirements.
Date: July 25, 2017
Time: 1:00-2:30 CST