The Construction and Properties CAP and Central Purchasing

The Construction and Properties (CAP) and Central Purchasing (CP) divisions have been working as research partners with Arizona State University’s Performance Based Studies Research Group (PBSRG) since 2009 to utilize an enhanced version of Best Value Purchasing. Dr. Dean Kashiwagi is the founder of PGSRG and has created a procurement process over the last 18 years that has gained international acceptance and praise with an astounding 98% overall customer satisfaction rating. The process utilized is known as the Performance Information Procurement System, or PIPS, and the State of Oklahoma has seen impressive results in both CAP and CP through our utilization of this revolutionary procurement process. Overall metrics from the PBSRG program are captured below. Overall Performance Line In the 18 years that we have been developing and implementing our business model, our results have shown that the fundamental concepts and methods have applied to the projects and organizations in every industry that we’ve been invited to work with thus far. In fact, overall we maintain a 98% customer satisfaction rating of our processes. Here are some of our numbers 975+ Projects Procured $4. 7 Billion in Projects Procured 9. 5 / 10 Client Rating of Contractor/Vendor 57% of the time the Best Value Vendor is the Lowest Cost 41 Industries Where Our Model Has been Tested 1000+ Vendors in our Past Performance Database

PIPS shares an aspect of the traditional best value process in that the focus of the requirement is “what” is needed while allowing the “expert” to determine “how” your requirement will be accomplished. Where PIPS differs from traditional best value are the methods in which an “expert” supplier is indentified. PIPS draws heavily on Dr. Dean’s supporting text, “Information Management Theory” and utilizes logic and dominant information to nearly eliminate decision making within the selection process. Oklahoma has been acknowledged by PBSRG as a leading state in the implementation of the PIPS process and has now completed 8 projects through the Central Purchasing division. Oklahoma Best Value Project Information # of Best-Value Procurements 10 Estimated Value of Best-Value Procurements $ 42, 323, 726 Protest Success Rate (# of protest won / # of protests) 3/3 # of Different Services 12 % Where Identified Best-Value was Lowest Cost 92% Project Performance # of Completed Projects 9 Average Customer Satisfaction 9. 4 Cost Savings $ 29, 377, 049 % On-time 100% % On-budget 100%

PIPS offers the following benefits: • The identification of the initial Best Value or ‘‘expert” supplier is completed with a minimum amount of “dominant” information allowing both submission and evaluation to be completed in a fraction of time as compared a traditional solicitation process • Decision making causes risk, reliance on dominant information greatly reduces the need for decision making in the evaluation/award process • 75% of the initial evaluation is completed utilizing submissions that do not contain supplier names making awards easily defendable • Expert suppliers are able identify risks that may be encountered in delivery and are required to provide a “risk mitigation plan” prior to award • The awarded supplier is responsible for contract management and is required to submit “weekly risk reports” which contain agreed upon performance metrics

Are there been costs associated with PIPS utilization? Both CAP and CP, as research partners with PBSRG, have for the last 3 years taken responsible for all licensing fees associated with the PIPS process. Our license provides for on-site support from PBSRG representatives, access and utilization of a multitude of documents necessary to facilitate the process, and for seats at the annual certification conference. Relative to results received by the State thus far, the fees are very reasonable. Relative to Oklahoma related savings, fees have been just over 1%. Most of the resulting savings have be for the benefit on State agencies and have not been utilized to off-set licensing fees. How does my agency take advantage of and utilize the PIPS process? Both Central Purchasing and Construction and Properties now have certified facilitators to assist your agency with the PIPS process. Our facilitators, after receiving PIPS certification, have this year passed the “Train the Trainer” certification and are now ready to assist and facilitate a PIPS project for your agency.

Is there a fee to my agency to utilize PIPS? Yes, to enable the program to grow with continued support from PBSRG, State Agencies will need to begin supporting the license fee associated with our partnership through an assessment of fees relative to the size and complexity of your specific project. A fee schedule is posted below. What support can my agency expect to receive in exchange for the fee? Your agency will receive a dedicated facilitator who will handle all pre-education training for your agency and suppliers as well as the critical facilitation of the preaward phase, license to all PIPS related documentation required to administer the process, and unlimited support from PBSRG professionals. What will be required from my agency to support the process? The agency will need to assign a procurement professional that is familiar with general state requirements as well as requirements specific to your organization

Best Value - PIPS fee schedule Alloctated Budget for project One Time Acquisition Multi-year acquisition (the larger of either) $10, 000 to $100, 000 $1000 min. or 5% $1, 000 min. or 7% (1000 to 5000) (1, 000 to 7, 000) $100, 001 to $500, 000 $5, 000 min. or 3% $5, 000 min. or 5% (5, 000 to 15, 000) (5, 000 to 25, 000) $500, 001 to $5, 000 $7, 000 min. or 1/2% $10, 000 or 1/2% (7, 000 to 25, 000) (10, 000 to 25, 000) Above $5, 000 $10, 000 to 1/2% (10, 000 to 25, 000+) $12, 000 or 1/2% (10, 000 to 25, 000+)