Ask SET Anything: Procurement Edition recap

Last Monday, the SET team hosted another edition of our Ask SET Anything event series. This edition focused on procurement and staff were invited to learn more about projects in this space, ask questions, raise concerns, and share feedback. We had another great turnout with approximately 94 staff joining us for the live Zoom meeting and another 80 watching the livestream. Thank you to everyone who joined the event.

Procurement workstream sponsor, Martin Coutts (AVP Finance, Procurement and Planning) and I were joined by a panel consisting of members of the Procurement team and the SET team.

• Phil Webb — Director, Procurement and Contract Management
• Sherry Hickman — Manager, Product & Equipment, Procurement and Contract Management 
• Tamice Froehler  — Manager, Contract Services
• Kris Urbanczyk  — Project Lead, Logistics
• Chad Alexander — Project Lead, Travel and Expense
• Stefan Sicking — Manager, SupplyNet
• Craig Gawryluik — Director, Financial Services, Shared Services
• Annette MacPherson — Senior HR Service Partner
• Rob Munro — Executive Lead, Service Excellence Transformation
• Brian Stewart — Program Director, Service Excellence Transformation

For those who were unable to attend the event, a recording is available for viewing:

University-wide procurement spend review

Much of the discussion focused on projects currently underway or planned as part of the procurement stream's task in reviewing and redesigning the expenditure strategy for goods and services across the university. Originally tasked with finding $17.6 million in savings, the Procurement Team have thus far identified potential savings of approximately $12 million.

Wave 1 and Wave 2 Activities

Twenty-seven opportunities were presented to senior leadership and approval was granted to proceed with project reviews in two waves. Phil Webb shared a brief presentation that provided background on the procurement spend review, details on Wave 1 and Wave 2 procurement projects, and the framework being used to move these activities forward.

A new way to do procurement

The Procurement Team reviewed a number of practices and processes that were identified by a third party report from KPMG in November of 2020. These recommendations included: increasing compliance with procurement policies and procedures, negotiating and receiving competitive pricing, reducing duplicated procurement activities, and reducing purchasing demand.

These changes are vital not only because of the efficiencies infused and cost reduction, but because the savings we are able to make in Procurement are translating into job savings, avoiding layoffs and staff reductions. In order to minimize the impact on our workforce, it is essential for us, as a community, to commit to following the processes outlined in the UAPPOL policies and procedures and ensuring compliance with all processes is achieved.

Procurement web page

To keep you informed about ongoing changes and updates within the procurement stream, a dedicated web page has been created. This web page tracks progress and provides updates on procurement projects progress under the U of A for Tomorrow initiative. Here you will find an overview of the stream's approach, working group members, upcoming consultation events, FAQs, and more.

As we continue with the UAT initiative, we want to ensure that staff have their questions and concerns addressed and learn more about the opportunities in the new operating model. We will continue to host engagement events including more Ask SET Anything events, so be sure to check the UAT consultation page for upcoming dates and further details. The next event will be the All Staff Edition on November 5. More details will be shared soon.

Below, you will find answers to some of the questions asked during the Ask SET Anything: Procurement Edition. Stay tuned for these, and more that were submitted, to be answered on the SET FAQ web page and procurement web page.

Todd Gilchrist
Vice-President (University Services and Finance)
Chair, Service Excellence Steering Committee (SESC)

Questions asked and answered

Can you outline the expected changes related to foundational procurement and what it could mean for the campus community as a whole?
The university and Procurement & Contract Management (PCM) have over a number of years implemented purchasing standards that assist the community in purchasing goods and services. These standards take into account the trade agreement thresholds of $75K for goods and services and $200,000 for construction related projects. For the university to reduce spending in procurement we must adhere to the practices we currently have in place and implement some additional ones that ensure the best value is gained. Our Preferred Supplier Agreements (PSA's) are the result of an RFP process and must be used to maximize savings. They include free shipping, free returns and a higher level of customer service from the vendors.

University purchasing methods are straightforward, however they are often used incorrectly. Small dollar purchases can be purchased on the university Purchasing Card program (<$5K). We encourage employees to get one if they don't have one and use it if they do. SupplyNet (Coupa) is an electronic purchasing platform that includes 34 PSA's and 16 punchout catalogs that punch out directly to the vendor and pull the information into SupplyNet; the PO is then issued. It is easy to use, training is available and access should be provided to anyone purchasing on behalf of the university. Expense reimbursement is not a purchasing method and should only be used to reimburse expenses below $500. Purchasing goods and services should be completed by using the two primary purchasing methods identified. We discourage the use of expense reimbursement. Expense reimbursement is a highly expensive process that requires the use of personal resources to complete the transaction. The university incurs additional cost to process these claims and does not receive the benefits that relate to their procurement process (rebates, competitive pricing, enhanced customer service and free delivery).

Services contracts should always be set up prior to the work beginning. This ensures terms and conditions are in place to protect the university from inadequate or incomplete work and assists in the dispute resolution process if a dispute arises. A service contract ensures pricing is identified and the scope of work has been outlined by the university and the vendor.

Procurement & Contact Management will implement these changes by April 1. Many are in progress now and a rollout strategy is currently being worked on. Savings in procurement can be gained if processes are followed, workarounds and exceptions are reduced and purchasing practices are followed as outlined. Through the task force it is clear we need to continue to train the community on these practices (twice a year) and improve the availability of this information. We are currently reviewing our training and communication strategy to ensure the messaging is clear, precise and available.

As part of foundational procurement, I am aware there will be a two quote requirement which will be implemented in the new fiscal year when purchasing goods and services at the university. How will this look and when is it actually going to be required?
Two quotes will be required between $20,000 and $75,000 unless a single source justification applies. This accounts for approximately 1200 transactions annually and targets approximately $40 million dollars in spend.  It will provide better transparency to our vendors as well as more accountability and review to the spend under the competitive bid threshold. This will also allow our university to align with other universities across the country that currently require this practice. PCM is targeting to implement this process April 1, 2022, once training has been rolled out to the university community.

Could you provide more detail on the centralized event management software project?
We have been conducting a taskforce review of event management at the university and we found that over two years ago (pre-COVID) we spent just about $200,000 on event management between CVent and Eventbrite at the university. With that information we knew there had to be a more cost effective option out there. One thing we wanted to do is make sure we did a full taskforce review so we had representation from all the faculties and through this task force work we were able to identify several other software packages that are being used across the institution and need to remain in place as they are more specific than was general products, such as Eventbrite, offer to the institution. We have been working with a company called Groupize to investigate their event management software to see if we could help fund economies of scale at the U of A for event management, and we were able to do that. We are currently compiling information we've gained over the last three months through working with the task force into a report that will be taken forward to the SET steering committee. We are also working with Groupize to share needs, wants and wishes of the platform of everyone involved in the task force and they will provide a structured demo of what they can and can not do to ensure we understand what the software can provide.

Oftentimes I am able to secure better pricing on my own, in this case why should I use the preferred suppliers?
Preferred supplier agreements (PSAs) provide the university great value, they are competitively bid, and in most cases include free shipping. Customer service with these agreements is enhanced, this includes no cost returns and expedited support team from the vendor.

PSAs, overall provide strong savings to the U of A and reduce/eliminate additional costs of procuring the goods on your own. They eliminate the need for U of A employees to go shopping on their own, incur additional costs such as gas, mileage and parking, provide door-to-door delivery, and eliminate the need to complete an expense reimbursement.

What options are available if the preferred supplier does not sell what I'm looking for?
If the item you are looking to purchase is less than $5,000 you can use a PCard to make that purchase, you can also contact us and we can look for a supplier of that product. If we receive the same request for something our preferred supplier does not currently offer, we'll try to add that item to a preferred supplier listing.