A Day in the Life of a DTMB Procurement Buyer
Office of Performance and Transformation's Communication Representative Monica Drake will be following different State of Michigan employees throughout the year.
Think about your work laptop, your department’s database, the lighting above your desk, the toilet paper and paper towels you use in your office’s bathroom, and the service that delivers your packages. It would be difficult to do your job without these things, right?
Most of the products and services provided to state employees and our customers that are valued at more than $25,000 are processed for purchase through one agency – Department of Technology, Management and Budget (DTMB) Procurement. The Procurement office handles contracts in three different areas: commodities, professional and non-professional services and information technology (IT).
Buyer Steve Rigg handles bids for commodities, such as food, janitorial, electrical, fuel, license plates, security cameras, and snow removal.
“Janitorial services alone has 50 contracts. That’s for janitorial staff, cleaning supplies, trash bags, and toilet paper,” said Rigg. “At the Department of Corrections, they go through 50,000 cases of toilet paper per year. … When you buy in volume, you get a better discount.”
Procurement staff are the ones who coordinate evaluation of the bid proposals and ultimately select which proposal offers the best value for the state. They negotiate price, sometimes saving the state millions of dollars with just a phone call.
Buyer Jillian Yeates said, “A great deal of work goes into getting a contract. It can take time to make sure we get the best value.”
Yeates, who graduated with her law degree from Cooley Law School in 2013, is currently processing bids for four different services for four agencies, and she has 57 current contracts with vendors that she manages.
In total, Central Procurement’s 19 buyers and 2 student buyers manage almost 900 contracts combined. They also publish around 130 different solicitations a year through Buy4Michigan.
“We’re project managers, event planners, contract administrators, coordinators; we wear many hats,” she said. “There’s never a dull moment.”
Here is a simplified explanation of the steps that a procurement buyer goes through before awarding a contract to a bidder:
- Receive request from agency and assign to buyer to manage
- Buyer reviews the request for proposal (RFP), or solicitation proposal
An RFP is similar to a job posting online. It explains the service or product a department or agency wants to buy – whether it’s a new IT system or water bottles – and lists the requirements of the bidder. IT Buyer Simon Baldwin said, “One of the biggest challenges we have right off the bat is to figure out how we want to present the information for the RFP.”
- Buyer posts RFP on www.buy4michigan.com
Interested companies generally have two to four weeks to bid on the listed commodity or service by responding to the RFP and submitting their proposal back to Procurement.
- Bidders’ proposals are due
Services Buyer Specialist Mary Ostrowski said, “There are many things that are out of your control. You can’t always forecast whether you are going to have two or 10 bids and although competition is good, many bidders can add time to the evaluation process.”
- Finalize members of Joint Evaluation Committee (JEC), a group of subject matter experts from within and/or outside of state government who assist in evaluating the proposals
- Send JEC members a Code of Conduct and all of the proposal documents
“There have been instances when the documents are so large that we’ve had to mail them on a CD to the JEC members,” said Ostrowski. “We get proposals that are hundreds of pages.”
- Buyer creates Excel document and sends to JEC members to individually score the bidders’ proposals
- Meet with the JEC to review proposals and evaluate the bidders’ answers
“We evaluate (the vendors) on various technical factors such as staffing, experience and how they propose to manage the project. If they pass the technical scoring section, they move on to pricing. We’ll determine, out of the ones who can do this job, who brings the best overall value to the state,” said Yeates.
- Clarification of proposals sent back to bidders
Sometimes bidders will need additional clarification or they will “red line” items in the proposal that they want to change, such as the requirements or the pricing. “When it’s high profile, it can take a lot of time to negotiate the bids,” said Rigg.
- Bidders give oral presentations or demonstrations to JEC (if applicable)
- Buyer negotiates price with bidder
In Baldwin’s most recent finalized contract for DHHS, Deloitte Financial Consulting was re-hired for their IT system that determines citizens’ eligibility for benefit programs, like Bridge cards, food assistance, cash assistance, and medical. Baldwin talked Deloitte down $23 million from their proposed rate. “They were asking for a pretty huge raise. … So I used data via spreadsheets to show how much they’ve been paid in the past and how much their rates have typically increased,” he said. To get vendors to lower their rates, Baldwin said, “You have to ask for it and have the data to support your request from market research.”
IT Buyer Malu Natarajan is currently negotiating with a bidder for an IT system that determines timber production. “We would require about 1,750 hours of maintenance and support. Assuming its $100 per hour, which is the industry standard, it should only cost $175,000 versus the $700,000 they are asking for,” said Natarajan. She said, as buyers, it’s their job to determine when a vendor says, “We’re offering you a great deal,” if that’s actually true.
12. All committee members come to consensus on a bidder
13. Bidder award recommendation posted on Buy4Michigan website
14. Buyer drafts winning vendor’s contract; contract submitted, approved and sent to vendor for signature
15. Contract start date
In addition to all of these steps, events can happen that can delay a timeline. Rigg said, “Sometimes priority items come across your desk, and you have to drop everything you’re doing.”
Another circumstance that affects these steps – if a bidder protests the award recommendation.
One of the more interesting contracts for Yeates, through DHHS, was for a mail-order incontinence supplies and services contract. After thoroughly reviewing the proposals and evaluating products from the companies, the JEC made an award recommendation. The decision was protested by one of the other bidders.
To address the protest, the Procurement staff re-evaluated the proposals to ensure proper procedures had been followed. The review confirmed that the vendor to whom the contract had been initially awarded provided the best value.
“The company that won the bid that year was qualified and priced lower than the other bidders,” she said.
When asked, “What’s your favorite part of the job,” a common theme was, “Saving the state money.”
For instance, Yeates handles the statewide delivery services contract, which is currently held with UPS. After coordinating a category team and benchmarking pricing for other states, she discovered that other states were charged lower rates.
“I asked UPS for those rates, and they worked with us and honored the benchmarked costs. That ended up being approximately $300,000 in savings for the state,” she said.
“It feels good when you are able to save the state money. The best part of the job, I would say, is being able to make an impact.”