CPO Review
Review of the Port's Contracting Policies and Procedures P-00317940 Prepared by Mobius Industries USA, Inc. Review of the Port's Contracting Policies and Procedures Table of Contents Executive Summary 3 Mission and Scope 3 Environment 4 Summary of Conclusions 4 Recommendations 5 Review Objective, Scope and Approach 6 Background 6 Review Objective 6 Review Scope 8 Environment 9 Review Approach 10 Assessments and Recommendations 12 Assessments of Objectives 12 Assessments of Focus Points 12 Recommendations 47 Management Response 48 Appendix A - Review Sample Contracts 51 Appendix B Review Survey/Interview Respondents 53 Appendix C Acronyms and Definitions 56 Appendix D Review Criteria 60 July 17, 2014 Prepared by Mobius Industries USA, Inc. 2 Review of the Port's Contracting Policies and Procedures Executive Summary Mission and Scope Procurements and contracting practices of the Port of Seattle (Port) Central Procurement Office (CPO) have a direct impact on all Port departments and on the outside contracting community that does business with the Port. It is therefore critical that the CPO processes, procedures, management controls, and established practices be efficient, economical, and effective. The purpose of this Review was to: Assess whether the established processes, procedures, management controls, and established practices are efficient, economical, and result in an effective way to provide procurements and contracting services. Acknowledge risk and evaluate risk management practices to ensure the Port enters into sound contracts with qualified firms at fair and reasonable contract rates. Identify and evaluate best practices in government procurement for delivering procurements and contracting services. Benchmark Port procurement practices with other government agencies best practices, including applicable private sector practices and the Federal Acquisition Regulation (FAR). The core of the Review focused on the following key areas: Strategy o Are procurements and contracting practices managed and driven by clear and effective strategies? o Are procurements and contracting practices aligned with the overall Port strategy and department strategies? o Are procurement and contracting practices effective to attain sound contracts with qualified firms at fair and reasonable contract rates? Operations o Are the CPO staffing levels and organizational structure appropriate for the size and complexity of Port operations and business requirements? o Does the Port follow best practices in delivery of procurements and contracting services? o Are the procurements and contracting practices meeting Port department needs and the contracting community at large, that do business with the Port? o Are the procurements and contracting practices consistent with best practices of other governmental agencies (e.g., ports, transits, counties, and federal agencies)? o Is technology leveraged effectively to deliver contracting services? o Are the Port's contracting practices designed and applied consistently without wasteful inefficiency? July 17, 2014 Prepared by Mobius Industries USA, Inc. 3 Review of the Port's Contracting Policies and Procedures o Is the Port capital projects delivery method aligned with the contracting practices? Environment The Port's procurement process is heavily influenced by a wide array of stakeholders. The Port's divisions, management, RDRs, and CPO all play a vital role throughout the entire process. At every phase of the Port's procurement process, each of the stakeholders has a direct impact on the results and efficiency of the phase. The Port's procurement process is dependent on a highly engaged group of stakeholders and must work in a collaborative and aligned manner in order to meet operational expectations, compliance requirements, and key milestones. The Review's analysis, comments, and recommendations made in this report are meant for all of the Port's procurement stakeholders. Summary of Conclusions Based upon the totality of the Review's results, we believe that the Port's procurement process is well managed, is meeting internally managed expectations, can be flexible but is very slow. The Port does not have a clear procurement strategy that is aligned from the Commission throughout the organization. The Review shows the Port's total procurement cycle time takes longer than other Port Authorities and Public Agencies however it should be noted that the Port does plan procurements out in a way that meets contract execution milestones while achieving compliance and minimizing business risk. Mobius believes that the Port can achieve compliance, maintain low business risk, gain total procurement speed, and gain efficiencies. Setting a clear and aligned total procurement vision for the entire Port to include the departments, CPO, RDRs, and other stakeholders with set objectives and actions driven by key performance indicators can accomplish this. Table 1 Total Procurement Cycle Time (in days) 2010 - 2014 POS Sampled Contracts (10%) Public Agencies Port Authorities Small Public Works Procurements 82.6 40.0 49.4 Major Public Works Procurements 131.7 117.3 127.0 Service/Consultant Related Procurements 240.9 125.4 85.5 Purchasing Procurements 145.5 58.1 52.1 July 17, 2014 Prepared by Mobius Industries USA, Inc. 4 Review of the Port's Contracting Policies and Procedures Recommendations Short-term recommendation (within one year): o Through the Review's internal interview phase, many of the non-CPO interviewees did not understand the meaning of the Port's Delegation of Authority (EX-2). We recommend that the Port develop a practice to reinforce consistent application of authorizations, approvals, and segregation of duties in all procurement and contracting processes. o Clearly define the Port's contracting and procurement strategy. Review and adjust practices in order to achieve strategic goals. o Provide mandatory RDR training as a prerequisite to initiating a procurement activity. o Review all required online procurement documents in order to ensure relevance. o Blueprint the departmental needs of the PeopleSoft users in order to align system capabilities with business needs. o Set realistic and stretch KPI goals based upon best practices and review with the departments and commission on a quarterly basis. o Conduct rate negotiation training and require a CPO certification of training for all assigned Port negotiators. Mid-term recommendation (two five years): o In order to have consistency of procurement processes and greater efficiencies, assign CPO contract administrators and buyers for CAT I and CAT II procurements and designate CPO contract administrators to departments that infrequently use the Port's procurement process. o Develop a flowchart for both the internal and external POS stakeholders showing how the procurement process works and related procurement expectations. o Develop and implement a single contract's database in order to maintain data and reduce redundancy of data entry. Long term recommendation (beyond five years): o Create a Port Authority Contracts and Procurement Association whereas port authorities throughout the United States can share best practices, risk management controls, emerging technologies, procurement and contracting trends, and their metrics. Management Response The Port's Management Response can be found prior to "Appendix A - Review Sample Contracts" on page 47 of the Report. This report and Review were conducted for the Port's management and Audit Committee purposes. Use of this report for other purposes may not be appropriate and must be approved by Mobius Industries USA, Inc. July 17, 2014 Prepared by Mobius Industries USA, Inc. 5 Review of the Port's Contracting Policies and Procedures Review Objective, Scope and Approach Background Procurements and contracting practices of the Port of Seattle Central Procurement Office (CPO) have a direct impact on all Port departments and on the outside contracting community that does business with the Port. It is therefore critical that the CPO processes, procedures, management controls, and established practices be efficient, economical, and effective. The Port established a centralized procurement office in June 2008 to address issues identified in the SAO Performance Audit Report. Review Objective The purpose of this Review is to: Assess whether the established processes, procedures, management controls, and established practices are efficient, economical, and result in an effective way to provide procurements and contracting services. Acknowledge risk and evaluate risk management practices to ensure the Port enters into sound contracts with qualified firms at fair and reasonable contract rates. Identify and evaluate best practices in government procurement for delivering procurements and contracting services. Benchmark Port procurement practices with other government agencies best practices, including applicable private sector practices and the Federal Acquisition Regulation (FAR). The core of the Review focused on the following key areas: Strategy o Are procurements and contracting practices managed and driven by clear and effective strategies? o Are procurements and contracting practices aligned with the overall Port strategy and department strategies? o Are procurement and contracting practices effective to attain sound contracts with qualified firms at fair and reasonable contract rates? Operations o Are the CPO staffing levels and organizational structure appropriate for the size and complexity of Port operations and business requirements? o Does the Port follow best practices in delivery of procurements and contracting services? o Are the procurements and contracting practices meeting Port department needs and the contracting community at large, that do business with the Port? July 17, 2014 Prepared by Mobius Industries USA, Inc. 6 Review of the Port's Contracting Policies and Procedures o Are the procurements and contracting practices consistent with best practices of other governmental agencies (e.g., ports, transits, counties, and federal agencies)? o Is technology leveraged effectively to deliver contracting services? o Are the Port's contracting practices designed and applied consistently without wasteful inefficiency? o Is the Port capital projects delivery method aligned with the contracting practices? July 17, 2014 Prepared by Mobius Industries USA, Inc. 7 Review of the Port's Contracting Policies and Procedures Review Scope The scope of this Review included all Central Procurement Office direct procurement and contracting activities to include Major Works, Small Works, Architectural & Engineering Professional Services, Personal Services, and Purchases Material, Equip, Supplies, Services to include Purchase Cards, from January 1, 2010 to March 11, 2014. During the Review period, between January 1, 2010 and March 11, 2014, the Port of Seattle Central Procurement Office (CPO) directly managed approximately 723 contracts valued at approximately $665.1M. The total population of contracts that were within included Major Works (88 contracts valued at approximately $265.5M), Small Works (136 contracts valued at approximately $31.6M), Architectural & Engineering Professional Services and Personal Services (451 contracts valued at approximately $296.0M), and Purchases Material, Equip, Supplies, Services (48 contracts valued at approximately $72.0M). The Port provided the percentage of CPO's work attributable to the Port's operational divisions and the mix should be considered in the Review's results: Service Agreements allocations o 66.6% Aviation o 19.0% Seaport o 2.6% Real Estate o 11.8% Corporate Construction allocations o 73.5% Aviation o 17.5% Seaport o 9.0% Real Estate Purchasing allocations o 76.5% Aviation o 6.5% Seaport o 17.0% Real Estate This Review did not include procurements made through contracts attained by other public agencies or through P-Cards and no significant issues were identified during the Planning Phase of the Review. July 17, 2014 Prepared by Mobius Industries USA, Inc. 8 Review of the Port's Contracting Policies and Procedures Environment The Port's procurement process is heavily influenced by a wide array of stakeholders. The Port's divisions, management, RDRs, and CPO all play a vital role throughout the entire process. At every phase of the Port's procurement process, each of the stakeholders has a direct impact on the results and efficiency of the phase. The Port's procurement process is dependent on a highly engaged group of stakeholders that must work in a collaborative and aligned manner in order to meet operational expectations, compliance requirements, and key milestones. The Review's analysis, comments, and recommendations made in this report are meant for all of the Port's procurement stakeholders. July 17, 2014 Prepared by Mobius Industries USA, Inc. 9 Review of the Port's Contracting Policies and Procedures Review Approach The approach and methodology used for the Review was specifically designed to respond to the following objectives: Assess whether the established processes, procedures, and management controls are efficient, economical, and result in an effective way to provide procurements and contracting services. Acknowledge risk and evaluate risk management practices to ensure the Port enters into sound contracts with qualified firms at fair and reasonable contract rates. Identify and evaluate best practices in government procurement for delivering procurements and contracting services. Benchmark Port procurement practices with other government agencies best practices, including applicable private sector practices and the Federal Acquisition Regulation (FAR). In order to review the POS CPO process in a manner that responds to the Review objectives, Mobius reviewed executed contracts, interviewed Port of Seattle (POS) procurement related stakeholders, surveyed firms and consultants that both successfully and unsuccessfully were awarded contracts by the POS, and surveyed other port authorities, large publically held companies, and other public agencies to include cities, counties, states, and the federal government. We chose to sample contracts by year, type, and department, Mobius selected 10% of all POS CPO related contracts executed since January 2010 through March 11, 2014. Mobius chose 10% or 72 of the total contracts executed by the POS, which had a total contract value of $248M or 37.3% of all POS contracts since 2010. The sampling represents contracts by year (2010, 2011, 2012, 2013, Jan March 11, 2014) from each type of procurement (major, small, purchasing, and service agreements) and represents contracts supporting the Aviation, Capital Development, Corporate, Real Estate, and Seaport divisions. Each contract was reviewed in order to ensure each of the CPO's stated procurement processes were followed, the time it took in order to complete each step, and if any significant business risks were identified as a result of the process or when applicable the rate negotiations. Mobius also pulled from the contract sample set the names of the associated Requesting Department Representatives (RDRs) and every consultant or firm that responded to the selected solicitations. We then interviewed 30 CPO employees (managers and administrators) as well as 62 POS department managers, RDRs, and contract specialists. In the interviews, we focused on the efficiency of each CPO process step, risks, controls, average time required to conduct each of the CPO's process steps, the CPOs ability to meet the needs of the customers and operations, customer service, knowledge and training of the key CPO process stakeholders, the July 17, 2014 Prepared by Mobius Industries USA, Inc. 10 Review of the Port's Contracting Policies and Procedures Port's CPO strategy, interest levels from outside firms/consultants, perceived barriers to conduct business with the Port, costs associated to do business with the Port, and CPO resources. After the contract review and interviews, Mobius both interviewed and surveyed outside organizations regarding their contracts and procurement metrics, benchmarks, and best practices. Mobius interviewed and/or surveyed 27 port authorities throughout the United States, 21 public agencies to include a federal agency, a state government, 4 counties, 15 cities, and 4 publicly held large companies. Mobius also interviewed and/or surveyed 63 firms and consultants that responded to one of the sampled contracts in order to receive their perspective on the POS CPO process and applicable rate negotiations. These results were compiled and analyzed in order to conduct an efficient comparison analysis based upon actual POS milestone metrics, establish relevant benchmarks to include the FAR, identify best practices in procurement, review risk management practices, thus ensuring the POS is entering in contracts at sound and reasonable rates, and provide the POS with analysis and recommendations which focused on the following key areas: Strategy o Are procurements and contracting practices managed and driven by clear and effective strategies? o Are procurements and contracting practices aligned with the overall Port strategy and department strategies? o Are procurement and contracting practices effective to attain sound contracts with qualified firms at fair and reasonable contract rates? Operations o Are the CPO staffing levels and organizational structure appropriate for the size and complexity of Port operations and business requirements? o Does the Port follow best practices in delivery of procurements and contracting services? o Are the procurements and contracting practices meeting Port department needs and the contracting community at large, that do business with the Port? o Are the procurements and contracting practices consistent with best practices of other governmental agencies (e.g., ports, transits, counties, and federal agencies)? o Is technology leveraged effectively to deliver contracting services? o Are the Port's contracting practices designed and applied consistently without wasteful inefficiency? o Is the Port capital projects delivery method aligned with the contracting practices? July 17, 2014 Prepared by Mobius Industries USA, Inc. 11 Review of the Port's Contracting Policies and Procedures Review Objective Assessments and Recommendations Objective 1: Assess whether the established processes, procedures, and management controls are efficient, economical, and result in an effective way to provide procurements and contracting services. Key Review notes: The sample set of contracts was reviewed in order to determine whether all key POS procurement controls and milestones were achieved. Interviews and surveys were conducted with the CPO and Requesting Department Representatives (RDRs) in order to review controls, the efficiency by key milestones, and procurement performance. The Port's solicitation respondents were surveyed to determine if the Port effectively advertised business opportunities to outside firms and consultants. Assessment: No significant issues were observed in the control management within the procurement and contracting process. The Port's procurement process is controlled IAW the RCW, FAR, Port Resolutions/Regulations, and Policies/Procedures. Key public works contracting processes require Commission notification for key procurement milestones such as advertisement, execution, and change orders that exceed certain parameters. Based upon the Port's current procurement policies and procedures, the process is considered adequate but can become more efficient and economical. The Review looked at the controls, efficiencies, performance, quality, and significant procurement milestones and found minor issues with some possible areas of improvement. The interviews and surveys identified that the majority of CPO contract administrators and buyers along with the RDRs believe there is more than adequate control (see Figure 1) and based upon the direct interviews, strongly believe the Port has an opportunity to become more efficient while maintaining compliance and transparency. Figure 1 Management Controls (Procurement & Contracts) Group Too much Significant Adequate Port of Seattle - Total 22.9% 52.1% 25.0% CPO 5.9% 61.8% 32.4% All (less CPO) 28.2% 49.1% 22.7% Aviation 17.2% 51.7% 31.0% Capital Development (less CPO) 26.5% 58.8% 14.7% Corporate 30.8% 46.2% 23.1% Real Estate 43.8% 31.3% 25.0% Seaport 40.0% 40.0% 20.0% July 17, 2014 Prepared by Mobius Industries USA, Inc. 12 Review of the Port's Contracting Policies and Procedures Although the majority of the interviewed RDRs have identified the process as too complex and confusing, ~84% of the Port's non-CPO interviewees believes the CPO team is performing adequately or better (see Figure 2). Figure 2 CPO Performance Group Very High High Adequate Low Poor Port of Seattle - Total 10.4% 41.5% 35.6% 8.9% 3.7% CPO 24.2% 66.7% 6.1% 0.0% 3.0% All (less CPO) 5.9% 33.3% 45.1% 11.8% 3.9% Aviation 3.6% 35.7% 42.9% 14.3% 3.6% Capital Development (less CPO) 12.9% 38.7% 41.9% 3.2% 3.2% Corporate 4.3% 30.4% 43.5% 17.4% 4.3% Real Estate 0.0% 28.6% 57.1% 14.3% 0.0% Seaport 0.0% 20.0% 60.0% 0.0% 20.0% Over half (67%) of the POS stakeholders interviewed and surveyed believe the procurement process is efficient (average or better see figure 3). Half or more than half of the Aviation, Seaport, and Real Estate divisional respondents rate the procurement efficiency as less than average; however, 84% of the departmental respondents, as well as the CPO see the quality (on time and with few change orders see figure 4) of the contracts as average or better. The departmental interviews suggest that certain projects receive a higher priority and others may be delayed. There is frustration with the majority of the Port's RDRs that the process for the Cat II and III procurements are exactly the same and are not tailored to the needs of the individual departments. Figure 3 Procurement Efficiency Group Very High High Average Low Poor Port of Seattle - Total 3.1% 17.6% 46.6% 26.7% 6.1% CPO 3.2% 38.7% 54.8% 3.2% 0.0% All (less CPO) 3.0% 11.0% 44.0% 34.0% 8.0% Aviation 3.8% 0.0% 38.5% 50.0% 7.7% Capital Development (less CPO) 3.0% 12.1% 57.6% 24.2% 3.0% Corporate 4.8% 23.8% 33.3% 33.3% 4.8% Real Estate 0.0% 14.3% 35.7% 35.7% 14.3% Seaport 0.0% 0.0% 50.0% 16.7% 33.3% Based upon the contract reviews, there were no significant issues noted with change orders or significant delays beyond the stated expectation of contract kick-off. The Port's survey participants also indicate that the contracts are typically delivered on time with few change orders. July 17, 2014 Prepared by Mobius Industries USA, Inc. 13 Review of the Port's Contracting Policies and Procedures Figure 4 Contract Quality Below average Poor (0% on (below 50% on time time procurement Very high (100% High (mostly on Average (above procurement and/or on time time 50% on time and/or always procurement and procurement and procurement and/or numerous change no change few change some change change orders orders Group orders required) orders required) orders required) required) required) Port of Seattle - Total 4.4% 42.9% 36.3% 15.4% 1.1% CPO 4.3% 60.9% 21.7% 8.7% 4.3% All (less CPO) 4.4% 36.8% 41.2% 17.6% 0.0% Aviation 0.0% 55.6% 33.3% 11.1% 0.0% Capital Development (less CPO) 4.3% 26.1% 43.5% 26.1% 0.0% Corporate 7.7% 38.5% 46.2% 7.7% 0.0% Real Estate 10.0% 30.0% 40.0% 20.0% 0.0% Seaport 0.0% 25.0% 50.0% 25.0% 0.0% The interviews and surveys that were conducted within the Port suggest that there is opportunity to improve efficiencies, reduce costs, and reduce the amount of time required to adequately plan, procure, and begin operations. In this Review, the procurement actions for Category I, II, and III procurements were analyzed using the following general procurement milestones: 1. Acquisition Planning Phase (see Figure 5). 2. Request/Requisition Review Phase (see Figure 6). 3. Solicitation/Advertisement Phase (see Figure 7). 4. Interview/Demonstration Phase (if applicable- see Figure 8). 5. Bid Opening and Evaluation Phase (see Figure 9). 6. Rate Negotiation Phase (if applicable- see Figure 10). 7. Contract execution After the Notice of Intent to Award (see Figure 11). Figure 5 Acquisition Planning Phase Group Too Long Adequate Efficient Port of Seattle - Total 51.6% 45.2% 3.2% July 17, 2014 Prepared by Mobius Industries USA, Inc. 14 Review of the Port's Contracting Policies and Procedures CPO 34.5% 58.6% 6.9% All (less CPO) 56.7% 41.2% 2.1% Aviation 56.0% 44.0% 0.0% Capital Development (less CPO) 47.1% 50.0% 2.9% Corporate 50.0% 45.0% 5.0% Real Estate 84.6% 15.4% 0.0% Seaport 80.0% 20.0% 0.0% The acquisition-planning phase includes all RDR activities up to and including the actual acquisition planning meeting(s). The Port's CPO senior management typically assists the Requesting Department's management and RDRs with planning the procurement strategy. CPO contract administrators/buyers do not actively get involved until after this phase is complete. The majority of the CPO contract administrators and buyers, as well as the RDRs, expressed frustration with the lack of inter-office communication in regards to the strategy and specific requirements. Overwhelmingly, the respondents believe the contract administrator assigned to a particular procurement should participate in the acquisition-planning meeting. As figure 5 indicates below, with the exception of the Port's Capital Development division, all of the Port's divisional respondents state that the acquisition-planning phase takes too long. The CPO respondents (contract administrators and buyers) typically do not participate in this phase so should be excluded from the results. Top reason for the delays is tied to scheduling meetings with all the required participants from the Requesting Department. Figure 6 Request/Requisition Review Phase Group Too Long Adequate Efficient Port of Seattle - Total 32.8% 51.5% 15.7% CPO 20.0% 53.3% 26.7% All (less CPO) 36.5% 51.0% 12.5% Aviation 30.8% 42.3% 26.9% Capital Development (less CPO) 25.7% 68.6% 5.7% Corporate 34.8% 52.2% 13.0% Real Estate 66.7% 26.7% 6.7% Seaport 60.0% 40.0% 0.0% The request/requisition review phase is conducted prior to advertisement and is the stage where the CPO works with the RDR in order to ensure all required analysis, documentation, solicitation requirements, terms and conditions, and approvals are accurate, compliant with the Port's policies and procedures, and complete. 63.5% of the RDRs and 80% of the CPO contract administrators/buyers see this stage as adequate or efficient (see figure 6). During the interviews, a number of issues were frequently raised by both the RDRs and the members of the CPO to include: Infrequent users (RDRs) of the CPO process are not properly trained RDRs have a difficult time staying updated with the changing CPO policies and procedures. July 17, 2014 Prepared by Mobius Industries USA, Inc. 15 Review of the Port's Contracting Policies and Procedures Online forms are not up-to-date. There are inconsistencies from CPO contract administrators/buyers in their performance and requirements. Priorities can shift from one procurement to another with poor communication flow between the stakeholders. Only senior members of management can exercise procurement decisions or authority thus contract administrators/buyers are delayed waiting for interpretation of direction or approval to proceed. Figure 7 Solicitation/Advertisement Phase Group Too Long Adequate Efficient Port of Seattle - Total 19.5% 52.0% 28.5% CPO 9.7% 41.9% 48.4% All (less CPO) 22.8% 55.4% 21.7% Aviation 8.7% 60.9% 30.4% Capital Development (less CPO) 27.6% 58.6% 13.8% Corporate 30.4% 52.2% 17.4% Real Estate 30.8% 38.5% 30.8% Seaport 0.0% 75.0% 25.0% The majority (80.5%) of the RDRs and members of the CPO (see figure 7) believe that the solicitation and advertisement phase is adequate to efficient. The top issue identified in this phase indicates that the scope and specification requirements within solicitation may not be well defined. Many RDRs stated that they are not properly trained or experienced enough to write the technical specifications. Figure 8 Interview/Demonstration Phase Group Too Long Adequate Efficient Port of Seattle - Total 18.0% 52.0% 30.0% CPO 17.6% 52.9% 29.4% All (less CPO) 18.1% 51.8% 30.1% Aviation 13.6% 59.1% 27.3% Capital Development (less CPO) 8.0% 64.0% 28.0% Corporate 27.3% 45.5% 27.3% Real Estate 40.0% 20.0% 40.0% Seaport 0.0% 50.0% 50.0% The interview/demonstration phase is only applicable to purchasing and service agreement/consultant types of procurements. As noted in figure 8, 82% of the CPO and RDRs see this phase as adequate to efficient. Many of the respondents have applauded the CPO for improving the evaluation portion of this phase and with only the hope to be able to ask ad-hoc questions, do not see a lot of room for further efficiencies without losing the quality of the interview or demonstration. Figure 9 Bid Opening and Evaluation Phase Group Too Long Adequate Efficient Port of Seattle - Total 15.7% 53.5% 30.7% July 17, 2014 Prepared by Mobius Industries USA, Inc. 16 Review of the Port's Contracting Policies and Procedures CPO 0.0% 53.3% 46.7% All (less CPO) 20.6% 53.6% 25.8% Aviation 20.8% 58.3% 20.8% Capital Development (less CPO) 11.8% 64.7% 23.5% Corporate 36.4% 36.4% 27.3% Real Estate 25.0% 50.0% 25.0% Seaport 0.0% 40.0% 60.0% The bid opening and evaluation phase is seen by approximately 84% of the Port's survey and interview respondents as adequate or efficient (see figure 9). Again, many of the respondents indicated that the evaluation process has dramatically improved over the past few years. Minor issues, most notably, were trying to schedule time with the required evaluators from the Requesting Department. Figure 10 Rate Negotiation Phase Group Too Long Adequate Efficient Port of Seattle - Total 41.2% 46.4% 12.4% CPO 25.0% 50.0% 25.0% All (less CPO) 44.4% 45.7% 9.9% Aviation 38.9% 50.0% 11.1% Capital Development (less CPO) 50.0% 39.3% 10.7% Corporate 38.1% 52.4% 9.5% Real Estate 33.3% 55.6% 11.1% Seaport 80.0% 20.0% 0.0% 75% of the CPO and 56% of the RDRs believe that the rate negotiation phase is adequate to efficient (see figure 10). Half of the Capital Development divisional respondents see this phase as taking too long. There were a number of issues seen in the contract samples and cited during the interviews: Unclear if the RDR or the CPO is supposed to conduct the negotiation. Negotiators do not feel they are adequately trained. The rate negotiation tool (MINT) is built only to analyze the local region and may not include all the specialty occupations. Since January 1, 2010 there have been inconsistent methods of determining whether a rate is fair and reasonable some use the MINT, others use previous contracts. Recently, the Port's CPO has rolled out a consistent methodology of negotiating rates through the use of the MINT, current GSA schedules, and historical contract data. Figure 11 Contract execution After the Notice of Intent to Award Group Too Long Adequate Efficient Port of Seattle - Total 28.7% 51.9% 19.4% CPO 6.3% 59.4% 34.4% All (less CPO) 36.1% 49.5% 14.4% Aviation 36.0% 40.0% 24.0% Capital Development (less CPO) 34.4% 56.3% 9.4% Corporate 31.8% 59.1% 9.1% Real Estate 38.5% 46.2% 15.4% July 17, 2014 Prepared by Mobius Industries USA, Inc. 17 Review of the Port's Contracting Policies and Procedures Seaport 60.0% 20.0% 20.0% Figure 12 Port's Perceived Barriers for Firms/Consultants to do Business with the Port Safety and Terms and Insurance Bonding Security Group Conditions Requirements Requirements Requirements Other Port of Seattle - Total 46.2% 40.6% 22.4% 8.4% 23.8% CPO 47.1% 41.2% 32.4% 5.9% 17.6% All (less CPO) 45.9% 40.4% 19.3% 9.2% 25.7% Aviation 37.9% 34.5% 13.8% 6.9% 13.8% Capital Development (less CPO) 44.1% 38.2% 20.6% 8.8% 29.4% Corporate 40.0% 40.0% 4.0% 4.0% 24.0% Real Estate 68.8% 56.3% 50.0% 25.0% 37.5% Seaport 60.0% 40.0% 20.0% 0.0% 40.0% Figure 12A POS Solicitation Respondents Barriers for Firms/Consultants to do Business with the Port as compared to other Public Entities Terms and Conditions Bonding Requirements Insurance requirements No Difference 38.1% 7.9% 9.5% 42.9% Figure 12B POS Solicitation Respondents Barriers for Firms/Consultants to do Business with the Port as compared to other Publically Held Commercial Companies Terms and Conditions Bonding Requirements Insurance requirements No Difference 42.9% 15.9% 15.9% 25.4% There is a large disparity between the ratings that the CPO and the divisional RDRs give the period of time between contract execution (the period of time after the negotiations are completed and/or notice of intent to award is given to the time when a contract is fully accepted and authorized) and the notice of intent to award. 94% of the CPO believes the amount of time is adequate to efficient, whereas 64% of the divisional RDRs see it as such (see figure 11). As figure 12 depicts, both members of the CPO and the RDRs believe firms/consultants have issues with the Port's Terms and Conditions (T&Cs), insurance, bonding requirements (this is not a discretionary practice as it is a mandate), equal benefit compliance, security, and safety plans. 38% sampled respondents (figure 12A) to the Port's solicitations that were interviewed/surveyed did indicate that the Port's T&Cs were more of a barrier than other publics agencies, and 8% stated that the bonding were more stringent than other public agencies. 43% of the POS solicitation respondents did not see a difference working with the Port versus another public agency and 25% (figure 12B) versus publically held commercial companies. Objective 2: Acknowledge risk and evaluate risk management practices to ensure the Port enters into sound contracts with qualified firms at fair and reasonable contract rates. July 17, 2014 Prepared by Mobius Industries USA, Inc. 18 Review of the Port's Contracting Policies and Procedures Key Review notes: The sample set of contracts was reviewed in order to determine whether the Port's Terms and Conditions (including bonding, insurance, security, and safety requirements) were deemed strong enough to protect the Port's interests. Contracts were also reviewed in order to determine whether enough proposals or quotes were received in order to have a competitive basis of evaluation. Interviews and surveys were conducted with the CPO and Requesting Department Representatives (RDRs) in order to review if there were any significant risks associated with the sampled contracts and how often risks were monitored. Firms and consultants were surveyed in order to determine if their billing rates were set any higher than with their other public agency and large commercial customers. Assessment: No significant issues were observed. 100% of the sampled contracts reviewed showed consistency in the T&Cs and were deemed adequate. The majority of the RDRs and all of the CPO contract administrators/buyers indicate that they review business risks for each procurement. Although no issues were noted with the number of fully responsive bidders/proposals, 50% of the purchasing department related procurements only received one or two responsive bidders (see figure 13). All of the CPO groups have an opportunity to advertise to a larger group of potential bidders. Many of the Port's interviewees suggested that firms and consultants are resistant to doing work with the Port, as it costs more and as such they are resistant to competing. However, 97% of the POS solicitation respondents (those who have successfully completed and those that have not) state that they will continue to compete for opportunities at the Port and 89% stated that they check the Seattle Daily Journal of Commerce either daily or weekly. Figure 13 POS Solicitation Responses - # Bidders Average No. of % of less than three Type Bidders/Proposals bidders/Proposals Rx Rx MC 6.4 7.1% SW 3.9 12.5% PUR 3.8 50.0% SA 8.1 18.6% Nearly half of the surveyed/interviewed commercial companies believe that it does cost more to work with the Port (see figure 14) although 90% state that their billing rates are not inflated in order to work with the Port. Figure 14 POS Solicitation Responses Costs & Billing Rates Are your billing rates Are your billing rates Does it cost more to Does it cost more to (overhead and profit) higher (overhead and profit) higher work with the POS than work with the POS than on a POS contract than on on a POS contract than on with other public with publically held contracts with other public contracts with publically held entities? companies? entities? companies? July 17, 2014 Prepared by Mobius Industries USA, Inc. 19 Review of the Port's Contracting Policies and Procedures Yes Yes Yes Yes 46% 62% 13% 8% No No No No 54% 38% 88% 92% Objective 3: Identify and evaluate best practices in government procurement for delivering procurements and contracting services. Key Review notes: There were 35 Port Authorities surveyed and 20 fully completed the survey, 29 Public agencies (federal, state, county/parish, and cities) and four large publically held commercial companies also participated in the survey and 19 fully completed the survey. From that surveyed/interviewed sample set and using the standards of whether the Port Authority or Public Agency achieved either "well controlled" or "satisfactory" procurement audit results on their last procurement and contracts audit, best practices were identified and evaluated. Best Practices: Compliance is the top priority of Port Authorities (63%), however our Port Authorities indicated that depending on the type of contracting activity (public works, service agreements, etc.) there are elevated issues of compliance (i.e., Public Contract Code, Labor Code, etc.). In all cases, procurement with the top quartile respondents focused on transparency and customer service. Top quartile performers use Key Performance Indicators (KPIs) and set goals in the delivery of contracts and procurements. The top quartile of performers stated that they use both the Contract Compliance and the Delivery KPIs most often. Listed below are the KPIs most often used in order of frequency: 1. Procurement Cycle Time (Top KPI for Public Agencies) - This procurement KPI measures the average amount of time it takes to process an order. It typically starts at the time the purchase requisition (PR) is placed with the purchasing department, and ends when the contract is signed and all T&C requirements are met. This includes the amount of time spent on the request for quotation (RFQ) from several vendors, and the process taken to award the job to the winning vendor. The Port uses the "Transparent Pipeline" in order to measure the amount of time taken to process an order but does not set any goals in order to improve efficiencies, performance, or reduce cost. 2. Contract compliance (Top KPI for Port Authorities) - this KPI measures compliance to contract service level agreements (SLA's), contract terms and conditions (T&Cs), and pricing agreements. This metric is used to benchmark suppliers' compliance to the standards they have negotiated. The Port does manage SLAs, T&Cs, and pricing but does not track this KPI nor set any targets. July 17, 2014 Prepared by Mobius Industries USA, Inc. 20 Review of the Port's Contracting Policies and Procedures 3. Delivery (Least used by Public Agencies) - This procurement KPI measures the accuracy of the deliveries of a product. This is done by comparing the actual delivery date to the promised (or quoted) date for a product or service, and seeing how frequently it is late, and by how many days/weeks/months it is late. Recommend the Port does not use as a KPI target as it is not used often and the Procurement Cycle Time KPI meets the same efficiency objective. 4. Quality (Least used by Port Authorities) - Supply base has demonstrated continuous improvement in defect rates. This can be achieved by identifying metrics such as defects per million (DPM) that effectively measure the progress being made towards "betterment of quality". Recommend the Port does not use as a KPI target as the Port generally does not produce a specific end-item in large quantities. Best practices were identified and evaluated for the respondent/interviewee total procurement process and each of the procurement process milestones: 1. Total Procurement Process Well-defined and detailed written policies, processes, and procedures compliant with federal, state, and local law - well defined time lines for differing types of requirements. Service level agreements with defined expectations and goals. Standardized contract templates, terms and conditions, and other forms. Leverage procurement by consolidating requirements for volume purchasing. Develop and implement cooperative procurement strategies. Utilization of reverse auctions. Procurement agents certified by National Institute of Government Purchasing. Benchmarking using internal standards by type of procurement and/or standards detailed by the National Institute of Government Purchasing targets. P-Cards used under $10K. Utilization of State contracts database for purchases. Electronic solicitation and bidding with on-line vendor management. Use of on call agreements and making procurement document templates consistent. 2. Acquisition Planning Phase Communication with end users, suppliers, reviews of cooperative contracts available to compile market research reports. Establish requirements with user departments, determine budgets, ensure funding, prepare non-restrictive scope of work, and specifications. July 17, 2014 Prepared by Mobius Industries USA, Inc. 21 Review of the Port's Contracting Policies and Procedures Early and pro-active interface with the requesting department/individual in order to establish clarity of purpose, develop proper specifications and/or scope of work. Conduct pre-advertisement meetings when appropriate. 3. Request/Requisition Review Phase Needs are clearly identified with clear and realistic timelines. Thorough review of the scope of work and specifications to ensure non-restrictive and promote competition. Reviewed for compliance, value, and transparency. All supporting documents must be linked to electronic requisition prior to assignment to procurement staff. All procurements have a formal procurement checklist. Maintain currency with relevant Terms and Conditions. Large procurement projects are reviewed by the Director of Procurement 4. Solicitation/Advertisement Phase Provide limits in page quantity for RFP/RFQ responses that reduces consultant preparation for response and evaluation team review. Advertise in the local newspaper, minority websites, specialized publications, and journals. Advertise on the internal website. i. Bid documents posted on internal website for all registered suppliers to download. ii. Send automatic email notifications of a bid in any NAICS category the vendor has registered for. For Washington State agency utilize the Washington's Electronic Business Solution (WEBS) website. Send bid notifications to known potential bidders. Directly contact firms that have registered through the internal Social Responsibility Department. Establish relationships with the local chamber of commerce. 5. Interview/Demonstration Phase Standardized methods of interviews, evaluations, and demonstrations. Central procurement provides guidance to the selection advisory committee. Short listed firms are given scripts prior to demonstrations/interviews. Pre-established questions, requirements and score sheets provided to firms and internal evaluation committee. Advertise the interview date in the solicitation so the proposers are aware of when they will be held. Require all evaluators to sign and disclose any potential conflict of interests. July 17, 2014 Prepared by Mobius Industries USA, Inc. 22 Review of the Port's Contracting Policies and Procedures The procurement function provides the evaluation committee with rule of conduct during interviews. Interviews are conducted by a panel of subject matter experts. Provide debriefings that also allow for reciprocal feedback to the process. 6. Bid Opening and Evaluation Phase Standardized formal and informal bid opening procedures. Evaluation for responsiveness by procurement officials first, then for acceptability using a facilitated review of the bid or proposal. Standardized Minimum Requirements Review is conducted for all submitted bids. Provide an abstract at the conclusion of bid opening. Bids scanned and emailed to evaluators within hours. 7. Rate Negotiation Phase Clear negotiation guidelines are issued. Internal training is required prior to allowing an employee to conduct rate negotiations. Requirements to submit best rates based on level of expertise needed to perform the project are advertised in the solicitation. During negotiations, service providers are asked to justify positional assignments versus at a lower level of expertise. Detailed scopes and hours to perform that work are requested. Utilization of work breakdown structures to establish fair comparisons. A cost-price analysis and rate negotiations are conducted concurrently with the negotiation hours and scope of work. 8. Contract execution After the Notice of Intent to Award Standardized review practice by user department, internal procurement office, internal attorney, and risk management. Department and contractor's signatures are collected at the beginning of the award process, then signed, complete contract packages routed for final approval electronically. Objective 4: Benchmark Port procurement practices with other government agencies best practices, including applicable private sector practices and the Federal Acquisition Regulation (FAR). Key Review notes: In order to benchmark the Port's procurement practices with relevant organizations, the benchmark analysis was based upon other government agencies excluding Port authorities (to include those that follow the Federal Acquisition Regulation (FAR)) and other port authorities. The Review focused on the significant procurement milestones and the associated timelines as a metric. July 17, 2014 Prepared by Mobius Industries USA, Inc. 23 Review of the Port's Contracting Policies and Procedures Through the surveys and interviews, comparisons versus the Port were made from the top performing port authorities and other public agencies. The report excludes any organization that did not achieve either a well controlled or satisfactory procurement audit result and commercial companies due to significantly different regulatory requirements. The results of benchmarking the Port's procurement process against other Port Authorities and public entities show valid results however, should be viewed with management discretion as there are significant standard deviations (see Appendix C Acronyms and Definitions) due to selfreporting of metrics, variances in procurement process definition, variance in efficiency tied to prioritizing efforts and assigning more focused resources), resources applied to a procurement effort, individual entity risk management controls, unique local and state procurement laws, and sample populations. Figure 15 Benchmarks Total Contracts and Procurement Time (Procurement Function Involvement through Contract Execution) Small Public Works Major Public Works Service/Consultant Purchasing Procurements Procurements Related Procurements Procurements Public Agencies Average Average Average Average 40.0 117.3 125.4 58.1 Median Median Median Median 30.0 90.0 60.0 20.5 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 26.7 45.3 40.5 24.3 July 17, 2014 Prepared by Mobius Industries USA, Inc. 24 Review of the Port's Contracting Policies and Procedures Port Authorities Average Average Average Average 49.4 127.0 85.5 52.1 Median Median Median Median 36.5 107.5 59.0 25.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 34.8 93.2 73.1 43.6 Port of Seattle (sampled contracts) Average Average Average Average 82.6 131.7 240.9 145.5 Median Median Median Median 84.0 123.0 234.0 107.5 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 30.3 48.7 130.5 145.5 Average Average Average Average Port v. Public Agencies % Difference 106.4% 12.3% 92.0% 150.3% Port v. Port Authorities % Difference 67.3% 3.7% 181.6% 179.3% Port v. Public Agencies # Days Difference 42.6 14.5 115.4 87.4 Port v. Port Authorities # Days Difference 33.2 4.7 155.3 93.4 Assessment: The Port is within 5% or 5 days of the total procurement period required for major public works procurement as compared with other Port Authorities (see figure 15). The Port is significantly higher than all respondents as compared to small works procurements (+106% or 43 days v. public agencies and +67% or 33 days v. other port authorities), service/consultant related procurements (+92% or 115 days v. public agencies and +182% or 155 days v. other port authorities), and purchasing related procurements (+150% or 87 days v. public agencies and +179% or 93 days v. other port authorities). Further benchmarks were identified and evaluated for each of the significant milestones in the procurement process (see figures 16 22). Benchmark highlights by milestone: Figure 16 Benchmarks Total Acquisition Planning Phase Time Small Public Major Public Service/Consultant Purchasing Works Works Related Procurements Procurements Procurements Procurements Public Agencies Average Average Average Average 14.6 34.4 9.4 18.6 Median Median Median Median 5.0 30.0 10.0 20.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 20.8 26.4 5.6 12.3 July 17, 2014 Prepared by Mobius Industries USA, Inc. 25 Review of the Port's Contracting Policies and Procedures Port Authorities Average Average Average Average 16.4 63.5 29.7 13.5 Median Median Median Median 14.0 45.0 25.0 12.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 12.8 61.8 23.4 7.8 Port of Seattle Average Average Average Average (sampled contracts) 10.0 62.0 72.6 sample too small Median Median Median Median 10.0 32.0 48.0 sample too small Std. Deviation Std. Deviation Std. Deviation Std. Deviation sample too small 61.4 80.4 sample too small Average Average Average Average Port v. Public -31.6% 80.4% 672.0% sample too small Agencies % Difference Port v. Port -39% -2.4% 144.1% sample too small Authorities % Difference Port v. Public (4.6) 27.6 63.2 sample too small Agencies # Days Difference Port v. Port (6.4) ( 1.5 ) 42.8 sample too small Authorities # Days Difference 1. Acquisition Planning Phase (see Figure 16 and Appendix C Acronyms and Definitions) Note: This phase may be defined differently from one entity to another as some do not conduct acquisition planning in the same manner as the Port. a. Small works (-32% or -5 days v. public agencies and -39% or -6 days v. other port authorities). b. Major works (+80% or +28 days v. public agencies and -2% or -2 days v. other port authorities). c. Service/Consultant related procurements (+672% or +63 days v. public agencies and +144% or +43 days v. other port authorities). d. Purchasing related procurements (sample set was too small). Figure 17 Benchmarks Total Solicitation/Review Phase Time Small Public Major Public Service/Consultant Purchasing Works Works Related Procurements Procurements Procurements Procurements Public Agencies Average Average Average Average 2.9 6.7 3.4 6.9 Median Median Median Median 2.5 5.0 3.0 5.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 2.2 5.3 1.5 7.1 July 17, 2014 Prepared by Mobius Industries USA, Inc. 26 Review of the Port's Contracting Policies and Procedures Port Authorities Average Average Average Average 4.3 10.3 9.3 5.2 Median Median Median Median 2.5 10.0 7.0 2.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 4.1 7.8 9.2 7.0 Port of Seattle Average Average Average Average (sampled contracts) 26.3 63.5 70.7 104.0 Median Median Median Median 15.0 70.0 57.0 82.5 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 22.1 51.7 54.9 98.6 Average Average Average Average Port v. Public 814.3% 845.1% 1995.2% 1409.7% Agencies % Difference Port v. Port 518.5% 519.1% 664.5% 1888.2% Authorities % Difference Port v. Public 23.4 56.7 67.3 97.1 Agencies # Days Difference Port v. Port 22.0 53.2 61.5 98.8 Authorities # Days Difference 2. Request/Requisition Review Phase (see Figure 17 and Appendix C Acronyms and Definitions) a. Small works (+814% or +23 days v. public agencies and +519% or +22 days v. other port authorities). b. Major works (+845% or +57 days v. public agencies and +519% or +53 days v. other port authorities). c. Service/Consultant related procurements (+1,995% or +67 days v. public agencies and +665% or +62 days v. other port authorities) d. Purchasing related procurements (+1,410% or +97 days v. public agencies and +1,888% or +99 days v. other port authorities) Figure 18 Benchmarks Total Advertising Phase Time Small Public Major Public Service/Consultant Purchasing Works Works Related Procurements Procurements Procurements Procurements Public Agencies Average Average Average Average 4.8 13.8 6.6 16.7 Median Median Median Median 5.0 14.0 5.0 20.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 3.9 11.0 5.2 13.3 July 17, 2014 Prepared by Mobius Industries USA, Inc. 27 Review of the Port's Contracting Policies and Procedures Port Authorities Average Average Average Average 11.1 29.4 19.7 10.3 Median Median Median Median 8.5 25.5 14.0 8.5 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 8.9 22.7 16.1 9.8 Port of Seattle Average Average Average Average (sampled contracts) 20.3 50.5 38.6 44.3 Median Median Median Median 20.0 40.0 27.0 28.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 6.8 29.5 36.1 42.0 Average Average Average Average Port v. Public 327.1% 266.8% 483.2% 165.6% Agencies % Difference Port v. Port 83.2% 71.7% 95.8% 329.8% Authorities % Difference Port v. Public 15.5 36.8 32.0 27.6 Agencies # Days Difference Port v. Port 9.2 21.1 18.9 34.0 Authorities # Days Difference 3. Solicitation/Advertisement Phase (see Figure 18 and Appendix C Acronyms and Definitions) a. Small works (+327% or +16 days v. public agencies and +83% or +9 days v. other port authorities) b. Major works (+267% or +37 days v. public agencies and +72% or +21 days v. other port authorities) c. Service/Consultant related procurements (+483% or +32 days v. public agencies and +96% or +19 days v. other port authorities) d. Purchasing related procurements (+166% or +28 days v. public agencies and +330% or +34 days v. other port authorities) Figure 19 Benchmarks Total Interview/Demonstration Phase Time Small Public Major Public Service/Consultant Purchasing Works Works Related Procurements Procurements Procurements Procurements Public Agencies Average Average Average Average 2.8 19.3 6.0 16.7 Median Median Median Median 2.0 17.5 2.0 5.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 2.0 18.0 6.2 17.8 July 17, 2014 Prepared by Mobius Industries USA, Inc. 28 Review of the Port's Contracting Policies and Procedures Port Authorities Average Average Average Average 8.3 25.6 9.5 9.8 Median Median Median Median 6.0 6.0 10.0 7.5 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 8.8 47.1 7.5 11.5 Port of Seattle Average Average Average Average (sampled contracts) NA NA 35.8 NA Median Median Median Median NA NA 35.0 NA Std. Deviation Std. Deviation Std. Deviation Std. Deviation NA NA 16.7 NA Average Average Average Average Port v. Public NA NA 496.6% NA Agencies % Difference Port v. Port NA NA 278.1% NA Authorities % Difference Port v. Public NA NA 29.8 NA Agencies # Days Difference Port v. Port NA NA 26.3 NA Authorities # Days Difference 4. Interview/Demonstration Phase (if applicable- see Figure 19 and Appendix C Acronyms and Definitions) a. Small works (Not Applicable) b. Major works (Not Applicable) c. Service/Consultant related procurements (+497% or +30 days v. public agencies and +278% or +26 days v. other port authorities) d. Purchasing related procurements (Not Applicable) Figure 20 Benchmarks Total Bid Opening/Evaluation Phase Small Public Major Public Service/Consultant Purchasing Works Works Related Procurements Procurements Procurements Procurements Public Agencies Average Average Average Average 1.9 8.1 3.6 13.4 Median Median Median Median 1.0 5.0 1.5 10.0 Std. Deviation Stud Deviation Std. Deviation Std. Deviation 1.5 9.5 4.0 11.1 July 17, 2014 Prepared by Mobius Industries USA, Inc. 29 Review of the Port's Contracting Policies and Procedures Port Authorities Average Average Average Average 6.5 16.6 14.9 7.2 Median Median Median Median 2.0 5.0 5.0 3.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 13.4 23.9 26.2 9.2 Port of Seattle (sampled contracts) Average Average Average Average 12.7 20.0 19.8 25.7 Median Median Median Median 11.0 15.0 21.0 13.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 6.3 12.2 15.0 32.1 Average Average Average Average Port v. Public Agencies % Difference 575.6% 146.6% 447.2% 91.4% Port v. Port Authorities % Difference 94.1% 20.3% 33.1% 257.3% Port v. Public Agencies # Days Difference 10.8 11.9 16.2 12.3 Port v. Port Authorities # Days Difference 6.1 3.4 4.9 18.5 5. Bid Opening and Evaluation Phase (see Figure 20 and Appendix C Acronyms and Definitions) a. Small works (+576% or +11 days v. public agencies and +94% or +6 days v. other port authorities) b. Major works (+147% or +12 days v. public agencies and +20% or +3 days v. other port authorities) c. Service/Consultant related procurements (+447% or +16 days v. public agencies and +33% or +5 days v. other port authorities) d. Purchasing related procurements (+91% or +12 days v. public agencies and +257% or +19 days v. other port authorities) Figure 21 Benchmarks Total Rate Negotiation Phase Time Small Public Major Public Service/Consultant Purchasing Works Works Related Procurements Procurements Procurements Procurements Public Agencies Average Average Average Average 2.8 13.6 2.8 26.7 Median Median Median Median 2.5 10.0 2.5 20.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 1.7 11.5 1.7 28.2 July 17, 2014 Prepared by Mobius Industries USA, Inc. 30 Review of the Port's Contracting Policies and Procedures Port Authorities Average Average Average Average 8.5 23.0 18.3 9.6 Median Median Median Median 5.0 14.0 12.0 7.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 9.2 27.1 22.4 8.9 Port of Seattle (sampled contracts) Average Average Average Average NA NA 67.3 NA Median Median Median Median NA NA 50.5 NA Std. Deviation Std. Deviation Std. Deviation Std. Deviation NA NA 46.1 NA Average Average Average Average Port v. Public Agencies % Difference N/A N/A 2348.2% N/A Port v. Port Authorities % Difference N/A N/A 268.2% N/A Port v. Public Agencies # Days Difference N/A N/A 64.6 N/A Port v. Port Authorities # Days Difference N/A N/A 49.0 N/A 6. Rate Negotiation Phase (if applicable- see Figure 21 and Appendix C Acronyms and Definitions) a. Small works (Not Applicable) b. Major works (Not Applicable) c. Service/Consultant related procurements (+2,348% or +65 days v. public agencies and +267% or +49 days v. other port authorities) d. Purchasing related procurements (Not Applicable) Figure 22 Benchmarks Total Notice of Intent to Award to Contract Execution Time Small Public Major Public Service/Consultant Purchasing Works Works Related Procurements Procurements Procurements Procurements Public Agencies Average Average Average Average 10.4 21.4 9.5 26.4 Median Median Median Median 5.0 15.0 5.0 10.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 17.2 17.1 12.6 38.6 Port Authorities Average Average Average Average July 17, 2014 Prepared by Mobius Industries USA, Inc. 31 Review of the Port's Contracting Policies and Procedures 10.8 22.1 13.9 9.9 Median Median Median Median 10.0 15.0 10.0 7.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 10.6 15.7 11.9 11.2 Port of Seattle (sampled contracts) Average Average Average Average 32.4 14.7 36.3 29.3 Median Median Median Median 24.5 13.0 18.5 8.0 Std. Deviation Std. Deviation Std. Deviation Std. Deviation 27.2 10.2 38.5 55.3 Average Average Average Average Port v. Public Agencies % Difference 212.4% -31.3% 283.9% 11.0% Port v. Port Authorities % Difference 201.2% -33.7% 161.3% 195.3% Port v. Public Agencies # Days Difference 22.0 ( 6.7 ) 26.8 2.9 Port v. Port Authorities # Days Difference 21.6 ( 7.4 ) 22.4 19.4 7. Contract execution after negotiations and/or the notice of intent to award (see Figure 22 and Appendix C Acronyms and Definitions) a. Small works (+212% or +22 days v. public agencies and +201% or +22 days v. other port authorities) b. Major works (-31% or -7 days v. public agencies and -34% or -7 days v. other port authorities) c. Service/Consultant related procurements (+284% or +27 days v. public agencies and +161% or +22 days v. other port authorities) d. Purchasing related procurements (+11% or +3 days v. public agencies and +195% or +19 days v. other port authorities) Point of Focus 1: Are procurements and contracting practices managed and driven by clear and effective strategies? Key Review notes: There is no formally stated procurement and contracting practices strategy. There is a published resolution and complete CPO policies and procedures. During the interviews with the members of the Port's CPO and RDRs, as well as senior management, the question posed was: What are the Port's procurement and contracting strategy? Assessment: The Port does follow their stated policies and procedures; however, there is no formally published procurement and contracting practices strategy. Not July 17, 2014 Prepared by Mobius Industries USA, Inc. 32 Review of the Port's Contracting Policies and Procedures a single interviewee knew what the Port's formal procurements and contracting strategy is; however, 63% stated the Port follows one. 89% stated they thought the strategy is tied to compliance, control and/or risk management. Although 70% of the Port's departmental respondents indicated that the CPO's customer service performance is average or better (see Figure 23), only 1% stated that the Port's procurement strategy is focused on customer service/operational support. Point of Focus 2: Are procurements and contracting practices aligned with the overall Port strategy and department strategies? Key Review notes: As the Port does not have a published or well-known procurement and contracting strategy, the Review focused on whether the procurement practices are aligned with the departmental strategies. During the interviews with the members of the Port's CPO and RDRs, as well as senior management, the question was posed to them asking if the Port's procurement and contracting strategy/policies and procedures are aligned with the department's strategies. Assessment: 68% of those interviewed stated that the CPO process is aligned with departmental strategies and nearly 70% of the Port's departmental respondents indicated that the CPO's focus on customer service is adequate or better. Figure 23 CPO's Customer Service Performance Group Very High High Average Low Poor Port of Seattle - Total 8.9% 25.2% 41.5% 21.5% 3.0% CPO 25.0% 43.8% 28.1% 3.1% 0.0% All (less CPO) 3.9% 19.4% 45.6% 27.2% 3.9% Aviation 3.6% 17.9% 50.0% 21.4% 7.1% Capital Development (less CPO) 3.0% 15.2% 54.5% 24.2% 3.0% Corporate 8.7% 26.1% 26.1% 39.1% 0.0% Real Estate 0.0% 21.4% 50.0% 21.4% 7.1% Seaport 0.0% 20.0% 40.0% 40.0% 0.0% Point of Focus 3: Are procurement and contracting practices effective to attain sound contracts with qualified firms at fair and reasonable contract rates? Key Review notes: Objective Point #2 addresses risk management and controls. Firms and consultants were surveyed in order to determine if their billing rates were set any higher than with their other public agency and large commercial customers. Assessment: No significant issues were observed. 100% of the sampled contracts reviewed showed consistency in the T&Cs and were deemed adequate. The July 17, 2014 Prepared by Mobius Industries USA, Inc. 33 Review of the Port's Contracting Policies and Procedures majority of the RDRs and all of the CPO contract administrators/buyers indicate that they review business risks for every procurement. Although no issues were noted with the number of fully responsive bidders/proposals (see figure 13), all of the CPO groups have an opportunity to advertise to a larger group of potential bidders through other procurement advertisement websites and broader direct advertising using the Port's vendor rosters. Many of the Port's interviews suggested that firms and consultants are resistant to doing work with the Port as it costs more and thus are resistant to competing. However, 97% of the POS solicitation respondents (those who have successfully completed and those that have not) state that they will continue to compete for opportunities at the Port and 89% stated that they check the Seattle Daily Journal of Commerce either daily or weekly. Figure 13 POS Solicitation Responses - # Bidders Average No. of % of less than three Type Bidders/Proposals bidders/Proposals Rx Rx MC 6.4 7.1% SW 3.9 12.5% PUR 3.8 50.0% SA 8.1 18.6% Nearly half of the surveyed/interviewed commercial companies believe that it does cost more to work with the Port (see figure 14) although 90% state that their billing rates are not inflated in order to work with the Port. Figure 14 POS Solicitation Responses Costs & Billing Rates Are your billing rates Are your billing rates Does it cost more to Does it cost more to (overhead and profit) higher (overhead and profit) higher work with the POS than work with the POS than on a POS contract than on on a POS contract than on with other public with publically held contracts with other public contracts with publically held entities? companies? entities? companies? Yes Yes Yes Yes 46% 62% 13% 8% No No No No 54% 38% 88% 92% Point of Focus 4: Are the CPO staffing levels and organizational structure appropriate for the size and complexity of Port operations and business requirements? Key Review notes: During both the interview and survey phases of the Review, both the divisions and the CPO were asked whether they believe they have the proper organizational structure and size in order to meet their current demand and maintain the desired control, compliance, and customer service requirements. July 17, 2014 Prepared by Mobius Industries USA, Inc. 34 Review of the Port's Contracting Policies and Procedures Assessment: 73% of the CPO respondents/interviewees stated that the CPO's organizational structure and staffing levels are adequate (see figure 24). The Small Works and Major Works CPO teams believe that they may need to be staffed up if they become busier. Every team within the CPO department believes that they would be more efficient if they had a dedicated data entry administrator. The divisions show disparity with this question. Most see the long delays in the procurement process tied to not enough resources with the CPO. The majority of the divisional respondents interviewed indicate that they would like to have a dedicated contracts administrator or buyer matrixes into their division while maintaining a direct line of control to the CPO. Figure 24 CPO's Organizational Structure & Levels Adequate Inadequate Organizational Organizational Structure and Staffing Structure and Staffing Group Levels Levels Port of Seattle - Total 58.8% 41.2% CPO 73.3% 26.7% All (less CPO) 52.2% 47.8% Aviation 42.1% 57.9% Capital Development (less CPO) 64.0% 36.0% Corporate 41.7% 58.3% Real Estate 57.1% 42.9% Seaport 50.0% 50.0% Point of Focus 5: Does the Port follow best practices in delivery of procurements and contracting services? Key Review notes: The Review determined what the top performing port authorities, public agencies, and large publically held companies best practices were being followed (see objective point 3) and then compared the Port's procurement practices and interview notes to them. Assessment: The Port does follow the majority of the best practices identified by the top performing port authorities, public agencies, and large publically held companies. The Port follows the following best practices: Key Performance Indicators The Port does not use Key Performance Indicators (KPIs) in order to manage targets as used by the top quartile performers (port authorities, public agencies, and commercial companies). The CPO utilizes their Transparent Pipeline in order to track the Procurement Cycle Time, which is the top KPI for Public Agencies. July 17, 2014 Prepared by Mobius Industries USA, Inc. 35 Review of the Port's Contracting Policies and Procedures Total Procurement Process Well-defined and detailed written policies, processes, and procedures compliant with federal, state, and local law - well defined time lines for differing types of requirements. Service level agreements with defined expectations and goals. Standardized contract templates, terms and conditions, and other forms. Develop and implement cooperative procurement strategies. P-Cards use. Utilization of State contracts database for purchases. Electronic solicitation and bidding with on-line vendor management. Use of on call agreements and making procurement document templates consistent. Acquisition Planning Phase Establish requirements with user departments, determine budgets, ensure funding, prepare non-restrictive scope of work, and specifications. Conduct pre-advertisement meetings when appropriate. Request/Requisition Review Phase Needs are clearly identified with clear and realistic timelines. Thorough review of the scope of work and specifications to ensure non-restrictive and promote competition. Reviewed for compliance, value, and transparency. All procurements have a formal procurement checklist. Maintain knowledge with relevant Terms and Conditions. The Director of Procurement reviews large procurement projects. Solicitation/Advertisement Phase Provide limits in page quantity for RFP/RFQ responses that reduces consultant preparation for response and evaluation team review. Advertise in the local newspaper, minority websites, specialized publications, and journals. Advertise on the internal website. i. Bid documents posted on internal website for all registered suppliers to download. ii. Send automatic email notifications of a bid in any NAICS category the vendor has registered for. Send bid notifications to known potential bidders. Directly contact firms that have registered through the internal Social Responsibility Department. Interview/Demonstration Phase Standardized methods of interviews, evaluations, and demonstrations. Central procurement provides guidance to the selection advisory committee. July 17, 2014 Prepared by Mobius Industries USA, Inc. 36 Review of the Port's Contracting Policies and Procedures Short listed firms are given scripts prior to demonstrations/interviews. Pre-established questions, requirements and score sheets provided to firms and internal evaluation committee. Advertise the interview date in the solicitation so the proposers are aware of when they will be held. Require all evaluators to sign and disclose any potential conflict of interests. The procurement function provides the evaluation committee with rule of conduct during interviews. Bid Opening and Evaluation Phase Standardized formal and informal bid opening procedures. Evaluation for responsiveness by procurement officials first, then for acceptability using a facilitated review of the bid or proposal. Standardized Minimum Requirements Review is conducted for all submitted bids. Provide an abstract at the conclusion of bid opening. Rate Negotiation Phase Clear negotiation guidelines are issued. Detailed scopes and hours to perform that work are requested. Utilization of work breakdown structures to establish fair comparisons. A cost-price analysis and rate negotiations are conducted concurrently with the negotiation hours and scope of work. Contract execution After the Notice of Intent to Award Standardized review practice by user department, internal procurement office, internal attorney, and risk management. Point of Focus 6: Are the procurements and contracting practices meeting Port department needs and the contracting community at large that do business with the Port? Key Review notes: Interviews and surveys were conducted with the CPO and Requesting Department Representatives (RDRs) in order to determine if the CPO is meeting the needs of the Port's departments. Firms and consultants were surveyed in order to determine if their billing rates were set any higher than with their other public agency and large commercial customers and to see if they would continue to compete for business. Assessment: Overall, the surveys, interviews, and contract reviews indicate that the procurement and contracting practices are meeting the needs of the Port's departments and contracting community. July 17, 2014 Prepared by Mobius Industries USA, Inc. 37 Review of the Port's Contracting Policies and Procedures 68% of those interviewed stated that the CPO process is aligned with departmental strategies and nearly 70% of the Port's departmental respondents indicated that the CPO's focus on customer service is adequate or better. Figure 23 CPO's Customer Service Performance Group Very High High Average Low Poor Port of Seattle - Total 8.9% 25.2% 41.5% 21.5% 3.0% CPO 25.0% 43.8% 28.1% 3.1% 0.0% All (less CPO) 3.9% 19.4% 45.6% 27.2% 3.9% Aviation 3.6% 17.9% 50.0% 21.4% 7.1% Capital Development (less CPO) 3.0% 15.2% 54.5% 24.2% 3.0% Corporate 8.7% 26.1% 26.1% 39.1% 0.0% Real Estate 0.0% 21.4% 50.0% 21.4% 7.1% Seaport 0.0% 20.0% 40.0% 40.0% 0.0% Although the majority of the interviewed RDRs have identified the process as too complex and confusing, 84% of the Port's non-CPO interviewees believes the CPO team is performing adequately or better (see Figure 2). Figure 2 CPO Performance Group Very High High Adequate Low Poor Port of Seattle - Total 10.4% 41.5% 35.6% 8.9% 3.7% CPO 24.2% 66.7% 6.1% 0.0% 3.0% All (less CPO) 5.9% 33.3% 45.1% 11.8% 3.9% Aviation 3.6% 35.7% 42.9% 14.3% 3.6% Capital Development (less CPO) 12.9% 38.7% 41.9% 3.2% 3.2% Corporate 4.3% 30.4% 43.5% 17.4% 4.3% Real Estate 0.0% 28.6% 57.1% 14.3% 0.0% Seaport 0.0% 20.0% 60.0% 0.0% 20.0% Over half, (67%), of the POS stakeholders interviewed and surveyed believe the procurement process is efficient (average or better see figure 3). Half or more than half of the Aviation, Seaport, and Real Estate divisional respondents rate the procurement efficiency as less than average. However, 84% of the departmental respondents, as well as the CPO, see the quality (on time and with few change orders see figure 4) of the contracts as average or better. The departmental interviews suggest that certain projects receive a higher priority and others may be delayed. There is frustration with the majority of the Port's RDRs that the process for the Cat II and III procurements are exactly the same and are not tailored to the needs of the individual departments. Figure 3 Procurement Efficiency Group Very High High Average Low Poor July 17, 2014 Prepared by Mobius Industries USA, Inc. 38 Review of the Port's Contracting Policies and Procedures Port of Seattle - Total 3.1% 17.6% 46.6% 26.7% 6.1% CPO 3.2% 38.7% 54.8% 3.2% 0.0% All (less CPO) 3.0% 11.0% 44.0% 34.0% 8.0% Aviation 3.8% 0.0% 38.5% 50.0% 7.7% Capital Development (less CPO) 3.0% 12.1% 57.6% 24.2% 3.0% Corporate 4.8% 23.8% 33.3% 33.3% 4.8% Real Estate 0.0% 14.3% 35.7% 35.7% 14.3% Seaport 0.0% 0.0% 50.0% 16.7% 33.3% Based upon the contracts reviewed , there were no significant issues noted with change orders or significant delays beyond the stated expectation of contract kick - off. The Port's survey participants also indicate that the contracts are typically delivered on time with few change orders. Figure 4 Contract Quality Below average Poor (0% (below 50% on on time time procuremen Very high (100% High (mostly on Average (above procurement t and/or on time time 50% on time and/or always procurement and procurement and procurement and/or numerous change no change few change some change change orders orders Group orders required) orders required) orders required) required) required) Port of Seattle - Total 4.4% 42.9% 36.3% 15.4% 1.1% CPO 4.3% 60.9% 21.7% 8.7% 4.3% All (less CPO) 4.4% 36.8% 41.2% 17.6% 0.0% Aviation 0.0% 55.6% 33.3% 11.1% 0.0% Capital Development (less CPO) 4.3% 26.1% 43.5% 26.1% 0.0% Corporate 7.7% 38.5% 46.2% 7.7% 0.0% Real Estate 10.0% 30.0% 40.0% 20.0% 0.0% Seaport 0.0% 25.0% 50.0% 25.0% 0.0% Nearly half of the surveyed/interviewed commercial companies believe that it does cost more to work with the Port (see figure 14) although 90% state that their billing rates are not inflated in order to work with the Port. Figure 14 POS Solicitation Responses Costs & Billing Rates Are your billing rates Are your billing rates Does it cost more to Does it cost more to (overhead and profit) higher (overhead and profit) higher work with the POS than work with the POS than on a POS contract than on on a POS contract than on with other public with publically held contracts with other public contracts with publically held entities? companies? entities? companies? Yes Yes Yes Yes 46% 62% 13% 8% No No No No 54% 38% 88% 92% 97% of the POS solicitation respondents (those who have successfully completed and those that have not) state that they will continue to compete for opportunities at the Port. July 17, 2014 Prepared by Mobius Industries USA, Inc. 39 Review of the Port's Contracting Policies and Procedures Point of Focus 7: Are the procurements and contracting practices consistent with best practices of other governmental agencies (e.g., ports, transits, counties, and federal agencies)? Key Review notes: The Review determined what the best practices were being used by the top performing port authorities, public agencies, and large publically held companies (see objective point 3) and then compared the Port's procurement practices and interview notes to them. Assessment: The Port's procurements and contracting practices are consistent with best practices of other governmental agencies as stated in focus point 5. The Port follows the following best practices: Key Performance Indicators The Port does not use Key Performance Indicators (KPIs) in order to manage targets as used by the top quartile performers, port authorities, public agencies, and commercial companies. The CPO utilizes their Transparent Pipeline in order to track the Procurement Cycle Time, which is the top KPI for Public Agencies. Total Procurement Process Well-defined and detailed written policies, processes, and procedures compliant with federal, state, and local law - well defined time lines for differing types of requirements. Service level agreements with defined expectations and goals. Standardized contract templates, terms and conditions, and other forms. P-Cards use. Utilization of State contracts database for purchases On-line vendor management. Use of on call agreements and making procurement document templates consistent. Acquisition Planning Phase Establish requirements with user departments, determine budgets, ensure funding, prepare non-restrictive scope of work, and specifications. Conduct pre-advertisement meetings when appropriate. Request/Requisition Review Phase Needs are clearly identified with clear and realistic timelines. Thorough review of the scope of work and specifications to ensure non-restrictive and promote competition. Reviewed for compliance, value, and transparency. All procurements have a formal procurement checklist. Maintain knowledge with relevant Terms and Conditions. July 17, 2014 Prepared by Mobius Industries USA, Inc. 40 Review of the Port's Contracting Policies and Procedures Large procurement projects are reviewed by the Director of Procurement Solicitation/Advertisement Phase Provide limits in page quantity for RFP/RFQ responses that reduces consultant preparation for response and evaluation team review. Advertise in the local newspaper, minority websites, specialized publications, and journals. Advertise on the internal website. i. Bid documents posted on internal website for all registered suppliers to download. ii. Send automatic email notifications of a bid in any NAICS category the vendor has registered for. Send bid notifications to known potential bidders. Directly contact firms that have registered through the internal Social Responsibility Department. Interview/Demonstration Phase Standardized methods of interviews, evaluations, and demonstrations. Central procurement provides guidance to the selection advisory committee. Short listed firms are given scripts prior to demonstrations/interviews. Pre-established questions, requirements and score sheets provided to firms and internal evaluation committee. Advertise the interview date in the solicitation so the proposers are aware of when they will be held. Require all evaluators to sign and disclose any potential conflict of interests. The procurement function provides the evaluation committee with rule of conduct during interviews. Bid Opening and Evaluation Phase Standardized formal and informal bid opening procedures. Evaluation for responsiveness by procurement officials first, then for acceptability using a facilitated review of the bid or proposal. Standardized Minimum Requirements Review is conducted for all submitted bids. Provide an abstract at the conclusion of bid opening. Rate Negotiation Phase Clear negotiation guidelines are issued. Detailed scopes and hours to perform that work are requested. Utilization of work breakdown structures to establish fair comparisons. A cost-price analysis and rate negotiations are conducted concurrently with the negotiation hours and scope of work. July 17, 2014 Prepared by Mobius Industries USA, Inc. 41 Review of the Port's Contracting Policies and Procedures Contract execution After the Notice of Intent to Award Standardized review practice by user department, internal procurement office, internal attorney, and risk management. Point of Focus 8: Is technology leveraged effectively to deliver contracting services? Key Review notes: During the Review of the Port's contracting and procurement practices, the Port's Procurement and Roster Management System (PRMS) was evaluated through interviews and surveys with the surveyed POS solicitation respondents. The Review also questioned the CPO and divisions if they believed the Port was effectively leveraging technology in order to deliver contracting services. Assessment: The Port's Procurement and Roster Management System (PRMS) was determined to be valuable (see figure 25) and effective (see figure 26) as it pertains to the POS solicitation respondents. Figure 25 How Firms Search for POS Opportunities Port of Seattle website (Procurement and Roster Direct advertisement Management System Seattle Daily Journal from the Port of (PRMS)) of Commerce Seattle Search engines 76.2% 52.4% 27.0% 6.3% Figure 26 PRMS User Interface PRMS - User Interface - Easy to PRMS - User Interface - Use Somewhat Difficult PRMS - User Interface - Difficult 76.2% 52.4% 27.0% 69% of the CPO's contract administrators and buyers indicated that they believe technology is effectively leveraged in order to deliver procurement and contracting services whereas 53% of the divisions do (see figure 27). Figure 27 POS Leveraging Technology to Deliver Procurement and Contrac ting Services Group Yes No Port of Seattle - Total 57.8% 42.2% CPO 68.8% 31.3% All (less CPO) 52.9% 47.1% Aviation 26.3% 73.7% Capital Development (less CPO) 68.0% 32.0% Corporate 64.3% 35.7% Real Estate 50.0% 50.0% Seaport 50.0% 50.0% July 17, 2014 Prepared by Mobius Industries USA, Inc. 42 Review of the Port's Contracting Policies and Procedures The interviews/surveys indicated some issues and frustrations with the current procurement and contracting platforms and processes: Multiple contract databases requiring multiple entries of the same information. Improving SharePoint usage and integration. i. Each department has their own SharePoint directory and tends to store the same data in multiple locations. ii. Some key decision emails and documents are not stored on SharePoint. iii. Share RFP documents versus sending them through email. Outdated version of Internet explorer requires use of multiple browsers and causes issues when trying to access/download to Livelink. There is a requirement for wet signatures versus electronic authorizations. This requirement tends to slow down the procurement process. The PeopleSoft system was identified numerous times as being too rigid, not customized to the individual departments, terms incorrectly defined, poor naming conventions, and prone to poor data input. Navigating the Port's web page can be difficult. Examples: i. URL: http://www.portseattle.org/Pages/default.aspx 1. Most construction contracts reference the Port's standards for compliance. Starting at the referenced URL and then selecting "Construction Projects" can find a safety document. The safety document is at the lower right side of the page. ii. URL: http://www.portseattle.org/Business/Construction- Projects/Pages/default.aspx 1. To locate other standards including to capital and expense projects, the operator must click on the "Airport Tenants" box at the bottom of the URL: http://www.portseattle.org/Business/Construction- Projects/Airport-Tenants/Pages/default.aspx; then find "Looking for Design Standards & Permit Info?" Point of Focus 9: Are the Port's contracting practices designed and applied consistently without wasteful inefficiency? Key Review notes: In order to determine whether the contracting practices are designed and applied consistently without wasteful inefficiency, the Review evaluated the process versus other high performing port authorities, public agencies, and large commercial companies. The surveys and interviews directly queried the respondents on this question. July 17, 2014 Prepared by Mobius Industries USA, Inc. 43 Review of the Port's Contracting Policies and Procedures Assessment: Each of the contracts that were sampled, followed a very clear and consistent process. 93% of the surveyed POS solicitation respondents also indicated that the Port's contracts and procurement process is consistent. Over half (67%) of the POS stakeholders interviewed and surveyed believe the procurement process is efficient (average or better see figure 3). Half or more than half of the Aviation, Seaport, and Real Estate divisional respondents rate the procurement efficiency as less than average. However, 84% of the departmental respondents, as well as the CPO, see the quality (on time and with few change orders see figure 4) of the contracts as average or better. Figure 3 Procurement Efficiency Group Very High High Average Low Poor Port of Seattle - Total 3.1% 17.6% 46.6% 26.7% 6.1% CPO 3.2% 38.7% 54.8% 3.2% 0.0% All (less CPO) 3.0% 11.0% 44.0% 34.0% 8.0% Aviation 3.8% 0.0% 38.5% 50.0% 7.7% Capital Development (less CPO) 3.0% 12.1% 57.6% 24.2% 3.0% Corporate 4.8% 23.8% 33.3% 33.3% 4.8% Real Estate 0.0% 14.3% 35.7% 35.7% 14.3% Seaport 0.0% 0.0% 50.0% 16.7% 33.3% Based upon the contract reviews, there were no significant issues noted with change orders or significant delays beyond the stated expectation of contract kick-off. The Port's survey participants also indicate that the contracts are typically delivered on time with few change orders. Figure 4 Contract Quality Below average Poor (0% (below 50% on on time time procuremen Very high (100% High (mostly on Average (above procurement t and/or on time time 50% on time and/or always procurement and procurement and procurement and/or numerous change no change few change some change change orders orders Group orders required) orders required) orders required) required) required) Port of Seattle - Total 4.4% 42.9% 36.3% 15.4% 1.1% CPO 4.3% 60.9% 21.7% 8.7% 4.3% All (less CPO) 4.4% 36.8% 41.2% 17.6% 0.0% Aviation 0.0% 55.6% 33.3% 11.1% 0.0% Capital Development (less CPO) 4.3% 26.1% 43.5% 26.1% 0.0% Corporate 7.7% 38.5% 46.2% 7.7% 0.0% Real Estate 10.0% 30.0% 40.0% 20.0% 0.0% Seaport 0.0% 25.0% 50.0% 25.0% 0.0% July 17, 2014 Prepared by Mobius Industries USA, Inc. 44 Review of the Port's Contracting Policies and Procedures Nearly half of the surveyed/interviewed commercial companies believe that it does cost more to work with the Port (see figure 14) although 90% state that their billing rates are not inflated in order to work with the Port. Possible areas of improvement were noted in the surveys and interviews: Multiple database management results in inefficiency and errors. Redundancy in procurement related required forms. CPO acting only in a manner of compliance during the late stages of the acquisition planning phase often times requires the RDRs to change the process and redo work in order to meet the CPO's requirements. Greater, more direct hands on involvement by the CPO would help clarify requirements and provide subject matter expertise where needed. Scheduling meetings with the required participants from the Requesting Departments during the various phases of procurement adds time and impacts the procurement timeline. Both the majority of the CPO and the RDRs view rosters as not valuable and inefficient. Procedures and forms should be customized to the needs of the individual departments. Point of Focus 10: Is the Port capital projects delivery method aligned with the contracting practices? Key Review notes: The Review sampled 10% of the Port's contracts valued at over 37% of the Port's total procured contract value since 2010. Assessment: The Port's capital project deliver methods were consistently aligned with the Port's procurement and contracting practices. July 17, 2014 Prepared by Mobius Industries USA, Inc. 45 Review of the Port's Contracting Policies and Procedures Recommendations Short-term recommendation (within one year): o Through the Review's internal interview phase, many of the non-CPO interviewees did not understand the meaning of the Port's Delegation of Authority (EX-2). We recommend that the Port develop a practice to reinforce consistent application of authorizations, approvals, and segregation of duties in all procurement and contracting processes. o Clearly define the Port's contracting and procurement strategy. Review and adjust practices in order to achieve strategic goals. o Provide mandatory RDR training as a prerequisite to initiating a procurement activity. o Review all required online procurement documents in order to ensure relevance. o Blueprint the departmental needs of the PeopleSoft users in order to align system capabilities with business needs. o Set realistic and stretch KPI goals based upon best practices and review with the departments and commission on a quarterly basis. o Conduct rate negotiation training and require a CPO certification of training for all assigned Port negotiators. Mid-term recommendation (two five years): o In order to have consistency of procurement processes and greater efficiencies, assign CPO contract administrators and buyers for CAT I and CAT II procurements and designate CPO contract administrators to departments that infrequently use the Port's procurement process. o Develop a flowchart for both the internal and external POS stakeholders showing how the procurement process works and related procurement expectations. o Develop and implement a single contract's database in order to maintain data and reduce redundancy of data entry. Long term recommendation (beyond five years): o Create a Port Authority Contracts and Procurement Association whereas port authorities throughout the United States can share best practices, risk management controls, emerging technologies, procurement and contracting trends, and their metrics. July 17, 2014 Prepared by Mobius Industries USA, Inc. 46 Review of the Port's Contracting Policies and Procedures Management Response CPO appreciates the work accomplished by Mobius in performing this efficiency review. The information gained during this review will be vital as we shape our future. We will be implementing a number of the recommendations within the next year or two. CPO recognizes our role as business partner and that we are a customer service organization. We were established in 2008 to bring the Port into compliance with legal requirements and best practices. Many see our compliance role as a primary function. We have been on a journey in the last year or so to move our customers from thinking about us as a compliance organization to a business partner. We have more work to do. CPO policies and procedures indicate that the procurement purpose is to meet the Port's needs in attaining quality products and services in a timely manner at reasonable prices while ensuring (a) consistent, fair competitive processes; (b) compliance with legal requirements and Port policies and procedures; and (c) efficiency and effectiveness of procurement process. See CPO-1, section 1.1 & CPO-5 Section 1.1. In 2013, as part of strategic alignment CPO formalized its mission and visions statements. Our mission is to "partner with our customers to meet port business needs through excellence in procurement and contract services." Our vision is to "attain cost effective results through efficient and effective processes within our legal parameters." Our team members' annual performance goals emphasize customer service, being a strong business partner, and improving procurement efficiency. As part of Strategic Alignment we developed strategies and objectives and included them in our 2014 budget plan. A copy of the strategies and objectives are included at conclusion of this response. Based on interviews conducted by Mobius we have more work to do educating and reinforcing our strategic alignment within the Port. Successful procurement is dependent on a strong collaborative working relationship among CPO, our customers, and other important stakeholders. Together we impact the timeliness and quality of our procurement and contracts. We look forward to establishing Port-wide KPI goals and implementing process improvements. Although CPO has flowcharts and process guidelines, we can do better. We will reach out to the Process Improvement Project Manager and use Lean methodologies to develop more effective process diagrams and guidance documents. We are looking to develop an internal intake process for identifying process changes and determining which one we want to carry out. We will engage our customers and stakeholders in this process. July 17, 2014 Prepared by Mobius Industries USA, Inc. 47 Review of the Port's Contracting Policies and Procedures Procurement timeliness is a focus area for the Port and CPO has made changes over the last few years to try to make our process more expedient. Attached is a chart the shows the total procurement cycle time for the contracts sampled by Mobius, data gathered form public agencies and port authorities along with CDD Procurement Metrics. Our procurement time is improving over the POS sample set. We will use the information gained in this report and work with our customers and procurement stakeholders to make additional changes that will result in improved procurement cycle time. Total Procurement Cycle Time (in days) 2010 - 2014 2013 POS Q1 2014 POS POS CDD Metrics CDD Metrics Sampled (100% - (100% - Contracts Public Port Transparent Transparent (10%) Agencies Authorities Pipeline) Pipeline) Small Public Works Procurements 82.6 40.0 49.4 56* 37* Std Dev. No Std Dev No Std Dev 30.3 26.7 34.8 Provided Provided Major Public Works Procurements 131.7 117.3 127.0 78* 67* Std Dev. No Std Dev No Std Dev 48.7 45.3 93.2 Provided Provided Service/Consultant Related Procurements 240.9 125.4 85.5 198.0 269 Std Dev. No Std Dev No Std Dev 130.5 40.5 73.1 Provided Provided Purchasing Procurements 145.5 58.1 52.1 82.0 49 Std Dev. No Std Dev No Std Dev 145.5 24.3 43.6 Provided Provided IMPLEMENT CENTURY AGENDA STRATEGIES 1. Balance Port interests to optimize and influence organizational outcomes. (a) Align leadership, partners, team, and resources with strategic organizational needs. (b) Structure our contractual relationships to optimize our results. CONSISTENTLY LIVE BY OUR VALUES THROUGH OUR ACTIONS AND PRIORITIES 2. Explore new and innovative methodologies for achieving efficiency in process. (a) Leverage experiences and knowledge to improve process and outcomes. (b) Partner with public and private business to promote the Port and improve process and outcomes. July 17, 2014 Prepared by Mobius Industries USA, Inc. 48 Review of the Port's Contracting Policies and Procedures SUPPORT PPORT MISSION WITH IMPLEMENTATION OF PORT DIVISIONS' BUSINESS PLANS 3. Position the Central procurement office as a high performing and valuable Port resource. (a) Foster team members' development. (b) Increase organizational and individual ownership and accountability. July 17, 2014 Prepared by Mobius Industries USA, Inc. 49 Review of the Port's Contracting Policies and Procedures Appendix A - Review Sample Contracts A-0000269024 Airport Terminal Passenger Ramp A-0000269248 Standoff Barges A-0000270071 RMU/Kiosks for SeaTac Intl Airport A-0000270184 Risk Management Information System A-0000270195 Siemens Building Technologies, Duplex Sump Control Panels A-0000271327 Automated Passport Control Kiosks A-0000272093 A-0000272094 High Mast Area, Flood Lighting, and Lower Level LED Lighting C-00317658 Genetec Omnicast Software Support C-00317927 Airport Janitorial Services MC-0316561 NER Phase 1 - Final Paving, Landscaping, & Reclamation MC-0316677 Central Pre-Conditioned Air MC-0316730 Bus Maintenance Facility MC-0316771 T-18 North Harbor Islands Mooring Dolphins MC-0316815 Noise Remedy Job Order Contract MC-0316860 Comprehensive Storm water Management P/D (Adaptive Management) MC-0316974 Pier 91 Fender System Upgrade MC-0316998 8th Floor Weatherproofing Project MC-0317091 Gate Improvements - Electrical Upgrade MC-0317218 Terminal 117 Clean Up MC-0317304 Delta Lobby/ATO United TKT/ATO RMM Abatement On-Call 2012 MC-0317359 Garage Emergency Lights Retrofit MC-0317415 FT C15 HVAC Replacement Project MC-0317433 T5 Maintenance Dredging 2012 MC-0317586 T-91 Tank Farm Clean Up MC-0317798 C-60 C-61 BHS Modifications P-00316163 REAL ESTATE SERVICES IDIQ P-00316298 UNDERWATER DIVE SERVICES P-00316327 AVENV LONG TERM MONITOR DMCRDF P-00316400 CRANE INSPECTION SVCS P-00316411 SEA ENV COMPLIANCE & MGMT P-00316429 BENEFITS CONSULTANT SELF-INS P-00316436 TICKET COUNTER CASEWORK P-00316504 ICT-MSA- IT STAFFING P-00316624 FIMS II DESIGN CASEWORK P-00316638 PSGR LOADING BRIDGE DESIGN SVS P-00316668 SEDIMENT SUPPORT - L.DUWAMISH P-00316701 PROJ CONTROL SUPPORT SVCS IDIQ P-00316763 CONSTRUCTION MNGT SVS IDIQ K#3 P-00316806 BHS DESIGN SERVICES IDIQ P-00316827 WORKFORCE DVLPMT SVCS CONTRACT P-00316903 CONCESSIONS PLANNING & LEASING P-00316910 REGULATED MATERIALS MNGT IDIQ P-00316956 SAFETY IDIQ July 17, 2014 Prepared by Mobius Industries USA, Inc. 50 Review of the Port's Contracting Policies and Procedures P-00316958 Storm water IDIQ Solicitation P-00317007 WATER MONITORING/TESTING SVS P-00317035 REALESTATE DVLPMT SVCS P-00317144 4550 ELECT MECH IDIQ SVCS P-00317148 PEOPLESOFT FINAN SYS UPGRADE P-00317205 STIA Environ & Maz Mat Field Support P-00317315 CLAIMS ADMINISTRATION SERVICES P-00317353 ROOFING SYSTEM Des Svcs IDIQ P-00317408 Federal Govt Advocacy Services P-00317417 Cleanup Oversight Services - Terminal 117 P-00317424 CAT3 GRAPHIC DESIGN SVCS P-00317437 Buildings and Structures: Design & Engineering Support P-00317516 Air Balancing Other HVAC Task P-00317562 T46 Lease Improvements - Mach P-00317579 Construction Management Services P-00317636 Baggage Handling System Capitalization and Optimization P-00317673 IT Services P-00317740 IAF Program Management Svcs S-00317794 Entertainment Services, Concessions Entertainment Program S-00317859 Temporary Agency Services for Senior Level Accountant and Senior Financial Analyst Disciplines S-00317868 Security Guard Svc at P66 SW-0316362 Small Roof Replacement and Roof Repair SW09-011 SW-0316884 Concrete/Asphalt Cutting On-Call Port wide Non-ACM SW-0316901 Landscape Maintenance South Areas On-Call 2011 SW-0317207 General Construction On-Call Port wide 2012 SW-0317405 Chiller Repairs On-Call Airport 2012-2014 SW-0317467 Signage Maintenance On-Call STIA 2013 SW-0317733 Electrical On-Call Port wide 2013-4 SW-0317852 Electrical On-Call Port wide 2013-5 July 17, 2014 Prepared by Mobius Industries USA, Inc. 51 Review of the Port's Contracting Policies and Procedures Appendix B Review Survey/Interview Respondents Port of Seattle Surveyed/Interviewed Employees Aidane, Abdessamad Griffith, Susan McMartin, Robert Smith, Michael Akiyama, Patricia Grotheer, Wayne McWilliams, Joseph Soike, Natividad Albert, K. Guthrie, Marilyn Meagher, Tanaya Spangler, Patricia Alvarado, Jessica Hamel, Tamara Mellen, Josefina Styrck, L. Alvarez, Cynthia Harrell, A. Meyer, Paul Terwilliger, Garrett Anderson, K. Hemingway, Tina Mims, Jennifer Thomas, Dan Anderson, Sean Hennelly, Barry Moldver, Aaron Tomosada, Jamie Arciniega, Sherry Hill, Duane Morrison, Elizabeth Tong, Michael Bean, Douglas Hollingsworth, Jeff Moses, Manette Tonti, Selena Bestwick, Carol Hooper, Thomas Nessel, Joseph Trovesi, J. Biddinger, John Hovde, K. O'Brien, Lauren Tupper, Pamela Bornhorst, Heather Hoyman, Robert Oliphant, Barbara Tygesen, Allen Brantley, Michelle Huey, Nora Olson, Adam Vande Kamp, Mark Bristol, Victoria Hunter, Rebekah Osborne, Bethany Vouros, Gregory Britz, Beth Jarvi, Valarie Palanca, Victor Warren, Kenneth Brown, S. Jayne, Timothy Peterson, Angela Webb, Jeremy Browning, Deborah Jenkins, R. Phair, Lisa Weiss, Sherry Burdette, K. Joyce, Jessica Pierce, Amy Weitz, James Carbajal, Jesus Kay, Claudia Poor, Geraldine Whittaker, Delmas Chan-Etquibal, Betty King, Michele Porter, Anne Wickliff-Small, M Clemetson, Christopher Kipp, Jennifer Powell, Paul Willig, Elizabeth Contreras, Jasmin Kitano, Nancy Pulsifer, L. Wilson, C. Darch, Bonnie Kleiber, David Rabbo, Hala Witzman, James DeMuro, Andrea Knight, Brian Rehm, Todd Woodard, Tamela Doubt, Kathy Knowles, Erik Reis, M. Zachrisson, D. Duffner, Robert Kuhlman, M. Richer, Gary Ensley, Garry Kuiken, Tamra Ridge, R. Erwin, Thomas Kuroiwa, Roy Rives, Dwight Etzkorn, Patricia Lam, Yeuk Shan Robbins, Donald Evans, Stan Lane, Robert Robinson, Rees Federow, Harold Longridge, Mark Rosmond, James Feigin, Joshua Mach, Ticson Royal, William Formisano, Jamie Martin, Nicole Rybolt, Steven Fujino, Shari Maruska, Robert Sadler, Krista Fulton, L. Mathews, S. Sante, Teresa Goedken, Charles Maxwell, David Schmidt, Steven Gonzales, Frank Mayo, Sofia Schramm, Diane Sherwood, Graves, Ralph Mazzuca, Amanda Christopher Greymond, Alley McKendry, Tracy Skaggs, Melanie July 17, 2014 Prepared by Mobius Industries USA, Inc. 52 Review of the Port's Contracting Policies and Procedures Surveyed/Interviewed Commercial Companies AECOM Owen Richards Architects (ORA) Airport Concessions Consulting Services PCS Structural Solutions Apex Systems, Inc. PEC Appraisal Group of the Northwest, LLP PELLCO Construction, Inc BergerABAM Plantscapes, Inc. Burns & McDonnell Regency NW Construction, Inc Burton Construction Inc. Roth Consulting Compunnel Software Group, Inc. S.M. Stemper Architects Conestoga-Rovers and Associates ServerLogic Construction Group International Sierra Systems US, Inc. Del-Mar Concrete Cutting Sixkiller Consulting, LLC Design Air, Ltd. SMI DH Environmental, Inc. Swanson Rink Total Creative, Inc. dba TCi Design + Evergreen Fire and Security Branding Foy Group TripleNet Technologies, Inc. Glumac TWO NINE SIGNS Grette Associates URS Corporation Harbor Pacific Contractors Van Ness Feldman Harris Group Inc. Vancouver Airport Authority Harris Group Inc. WHH Nisqually Federal Services Hart Crowser, Inc. Witt O'Brien's HDR WSP Heartland, LLC Kennedy/Jenks Consultants Kiewit Infrastructure West Co. KolKay Electric Landau Associates Lawhead Architects PS LeighFisher Long Bay Enterprises Inc. Lydig Construction MacDonald-Miller Facility Solutions MacDonald-Miller Facility Solutions MACRO.CCS, Inc. Magnus Pacific Corporation McBee Strategic MidMountain Contractors, Inc. National Sign Corporation Neumeric Technologies Corporation July 17, 2014 Prepared by Mobius Industries USA, Inc. 53 Review of the Port's Contracting Policies and Procedures Port Authority Public Agency Alabama State Port Authority - Authority Self-Reported Revenue USDA National Finance Center - Authority Self- $150M (100% Complete) Reported Revenue $138M (100% Complete) Diamond State Port Corporation - Authority Self-Reported Revenue $32M (100% Complete) City of Bellingham (100% Complete) Greater Baton Rouge Port Commission - Authority Self-Reported City of Boise - Authority Self-Reported Revenue Revenue $7M (100% Complete) $400M (100% Complete) Humboldt Bay Harbor, Recreation & Conservation District - Authority Self-Reported Revenue $2.1M City of Chandler City of Cincinnati - Authority Self-Reported Jacksonville Port Authority (100% Complete) Revenue $1.2B Maine Port Authority - Authority Self-Reported Revenue $1.4M City of Kennewick (100% Complete) MS State Port Authority at Gulfport - Authority Self-Reported City of Lincoln, NE - Authority Self-Reported Revenue $84M (100% Complete) Revenue $300M (100% Complete) North Carolina State Ports Authority - Authority Self-Reported City of Los Angeles - Authority Self-Reported Revenue $40M (100% Complete) Revenue $8B Panama City Port Authority - Authority Self-Reported Revenue $13M (100% Complete) City of Montgomery, Alabama Philadelphia Regional Port - Authority Self-Reported Revenue City of Richland - Authority Self-Reported Revenue $9.3M (100% Complete) $196M (100% Complete) Port Everglades, Broward County, Florida - Authority Self-Reported City of Riverside - Authority Self-Reported Revenue $143M (100% Complete) Revenue $1B Port of Anacortes - Authority Self-Reported Revenue $14M (100% Complete) City of Sacramento (100% Complete) Port of Coos Bay City of San Antonio (Texas) (100% Complete) City of Santa Rosa - Authority Self-Reported Port of Everett (100% Complete) Revenue $150M (100% Complete) Port of Hueneme - Authority Self-Reported Revenue $13M (100% Complete) City of Tacoma (100% Complete) Port of Longview - Authority Self-Reported Revenue $32M (100% County of San Diego - Authority Self-Reported Complete) Revenue $5B Port of Los Angeles County of Ventura Port of Oakland - Authority Self-Reported Revenue $402M (100% King County - Authority Self-Reported Revenue Complete) $676.6M (100% Complete) Port of Olympia - Authority Self-Reported Revenue $12.5M (100% Municipality of Anchorage - Authority Self-Reported Complete) Revenue $471.3M Port of Palm Beach District - Authority Self-Reported Revenue Oregon Department of Transportation - Authority $16M Self-Reported Revenue $200M (100% Complete) Travis County- Authority Self-Reported Port of San Francisco Self-Reported Revenue $84M Expenditures $600M Port of South Louisiana - Authority Self-Reported Revenue $11.5M (100% Complete) Port of Tacoma - Authority Self-Reported Revenue $125.3M Port of Vancouver USA - Authority Self-Reported Revenue $32M (100% Complete) San Diego Unified Port District - Authority Self-Reported Revenue $144.6M (100% Complete) St. Bernard Port Harbor and Terminal District - Authority Self- Reported Revenue $9.4M (100% Complete) Toledo Port Authority - Authority Self-Reported Revenue $12.6M (100% Complete) Note: (100% Complete) indicates that the respondent answered all questions from the survey and/or interview. July 17, 2014 Prepared by Mobius Industries USA, Inc. 54 Review of the Port's Contracting Policies and Procedures Appendix C Acronyms and Definitions Acronyms CPO Port of Seattle Central Procurement Office DPM Defects per Million FAR Federal Acquisition Regulation IAW In Accordance With ICT Information and Communication Technology KPI Key Performance Indicator MC Major Construction Major Public Works Procurements MINT Port's Rate Negotiation Tool NAICS North American Industry Classification System NIGP National Institute of Government Purchasing OSR Office of Social Responsibility P-Card Purchasing Card Port Port of Seattle POS Port of Seattle PRMS Port's Procurement and Roster Management System PUR Purchasing RCW Revised Code of Washington (state law) RDR Requesting Department Representative RFI Request for Information RFP Request for Proposal RFQ Request for Quotation SA Service Agreement Service/Consultant Related Procurements SAO State Auditors Office SLA Service Level Agreement SME Subject Matter Expert SOS Scope of Services SOW Scope of Work SOX Sarbanes Oxley ACT Std Deviation Standard Deviation SW Small Works Small Public Works Procurements T&C Terms and Conditions URL Uniform Resource Locator WEBS Washington's Electronic Business Solution July 17, 2014 Prepared by Mobius Industries USA, Inc. 55 Review of the Port's Contracting Policies and Procedures Procurement Process Phase Definitions Acquisition Planning Phase The period of time prior to the Request/Requisition Review Phase by which the efforts of all Port personnel responsible for an acquisition are coordinated and integrated through a comprehensive planning, analysis, and/or design in order to develop a strategic plan to accomplish a project and/or meet contracting needs in a timely manner and at a reasonable cost. Request/Requisition Review Phase The period of time taken to adequately review the requisition support documentation (pre-advertisement/pre-solicitation release). Solicitation/Advertisement Phase The period of time taken to adequately attract interest from qualified firms/consultants and respond to a solicitation. Interview/Demonstration Phase If applicable, the period of time taken to conduct interviews and/or participate in product and/or service demonstrations from interested firms/consultants that are responding to a solicitation. Bid Opening and Evaluation Phase The period of time taken to open bids and/or evaluate proposals/responses to a solicitation and issue a Notice of Intent to Award. Rate Negotiation Phase If applicable, the period of time taken to conduct rate negotiations on proposed services from a firm or consultant. Contract Execution After the Notice of Intent to Award The period of time after negotiations have been completed and/or the notice of intent to award is given to the time when a contract is fully accepted and authorized. July 17, 2014 Prepared by Mobius Industries USA, Inc. 56 Review of the Port's Contracting Policies and Procedures Other Definitions Adequate Good enough, although not necessarily the most or the best; sufficient. Meets performance metric within agreed upon levels of expectation between 40% - 60% of the time. Aviation A division within the Port of Seattle. Average (performance measure not numerical) Meets performance metric within agreed upon levels of expectation between 40% - 60% of the time. Benchmark Standard, or a set of standards, used as a point of reference for evaluating performance or level of quality. Benchmarks may be drawn from a firm's own experience, from the experience of other firms in the industry, or from legal requirements such as environmental regulations. Best Practice A method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark. Capital Development A division within the Port of Seattle. Corporate A division within the Port of Seattle. CPO Central Procurement Office works within the Port's Capital Development Division. Efficient (performance measure) Works well and quickly. Exceeds performance metric within agreed upon levels of expectation more than 60% of the time. High Exceeds performance metric within agreed upon levels of expectation more than 60% of the time. Low Does not achieve performance metric within agreed upon levels of expectation more than 40% of the time. Non-CPO Interviewees Survey and interview respondents that do not work with the CPO. Norm Generally accepted practice or performance metric. Poor Not accomplishing a task well. Does not achieve performance metric within agreed upon levels of expectation more than 90% of the time. Real Estate A division within the Port of Seattle. Seaport A division within the Port of Seattle. July 17, 2014 Prepared by Mobius Industries USA, Inc. 57 Review of the Port's Contracting Policies and Procedures Significant Exceeds performance metric within agreed upon levels of expectation more than 60% of the time. Standard Deviation is a number used to tell how measurements for a group are spread out from the average (mean), or expected value. Standard deviation measures the spread of individual results around a mean of all the results. A low/small standard deviation means that most of the numbers are very close to the average. A high/large standard deviation means that the numbers are spread out. At its most basic level, a standard deviation is a number that tells you how similar a set of numbers is. Too much Exceeds performance metric within agreed upon levels of expectation more than 90% of the time and is thought to impede performance. Top Performing These organizations' procurement structure and process are typically well controlled, efficient, and typically use procurement benchmarking data, best practice models, and practical tools specifically designed to support the organization's strategy, objectives, and actions. Very High Exceeds performance metric within agreed upon levels of expectation more than 90% of the time. Well Managed Denotes strong controls in all key areas (at least one of the first two criteria needs to be met and the third criterion needs to be met):Well managed, no material weaknesses noted; Well managed, but minor improvements are needed; Effective and sustainable. Does not include the speed or efficiency of the procurement cycle time. July 17, 2014 Prepared by Mobius Industries USA, Inc. 58 Review of the Port's Contracting Policies and Procedures Appendix D Review Criteria Review Criteria Data Source Metric (target) Assess whether the established processes, procedures, and management controls are efficient, economical, and result in an effective way to provide procurements and contracting services. Internal POS Acquisition planning phase Surveys/Interviews Adequate Internal POS Bid opening and evaluation phase Surveys/Interviews Adequate Contract execution after the notice of intent to Internal POS award Surveys/Interviews Adequate Internal POS Interview/demonstration Surveys/Interviews Adequate Internal POS Rate negotiation phase (consultants) Surveys/Interviews Adequate Internal POS Request/requisition review phase Surveys/Interviews Adequate Internal POS Solicitation/advertisement Surveys/Interviews Adequate Contract Review - Control over the contracts and procurement Internal POS process Surveys/Interviews No findings -Adequate Contract Review - Current level of performance by the contracts Internal POS and procurement team Surveys/Interviews Adequate Quality of the Port's contracts? - Average (above Contract Review - 50% on time procurement and/or some change Internal POS orders required) Surveys/Interviews Average Internal POS POS purchasing efficiency Surveys/Interviews Average POS solicitations adequately marketed to firms POS Solicitation and consultants Respondents 75%+ through PRMS of SDJ Acknowledge risk and evaluate risk management practices to ensure the Port enters into sound contracts with qualified firms at fair and reasonable contract rates. Business risks are reviewed for each POS procurement interviews/surveys No findings & 90%+ yes Contract Review - Internal POS No findings -Normal to Surveys/Interviews - additional firm costs - Interview/surveys Billing rates within 75% of Bonding requirements set to manage risk to the with POS solicitation standard billing rates to POS at reasonable rates respondents others Contract Review - Internal POS No findings -Normal to Surveys/Interviews - additional firm costs - Interview/surveys Billing rates within 75% of Insurance requirements set to manage risk to with POS solicitation standard billing rates to the POS at reasonable rates respondents others July 17, 2014 Prepared by Mobius Industries USA, Inc. 59 Review of the Port's Contracting Policies and Procedures Contract Review - Internal POS Surveys/Interviews - Interview/surveys Port's business risk based upon the contracts with POS solicitation and procurement process respondents No findings -Average/Low Contract Review - Internal POS No findings -Normal to Surveys/Interviews - additional firm costs - Interview/surveys Billing rates within 75% of Safety and security requirements set to manage with POS solicitation standard billing rates to risk to the POS at reasonable rates respondents others Contract Review - Internal POS No findings -Normal to Surveys/Interviews - additional firm costs - Interview/surveys Billing rates within 75% of Terms and Conditions set to manage risk to the with POS solicitation standard billing rates to POS at reasonable rates respondents others Contract Review - 3+ competitors / POS Solicitations and advertisement phase is POS departments rating "yes" adequately attracting enough attention interviews/surveys 75%+ Firms and consultants are billing at their POS Solicitation 75%+ billing at standard standard rates Respondents rates Identify and evaluate best practices in government procurement for delivering procurements and contracting services. Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and Port's business risk based upon the contracts public agencies / POS Within top quartile of and procurement process interviews/surveys results Contract Review - Interviews/Surveys with Port Authorities, large publically held Quality of the Port's contracts? - Average (above companies, and 50% on time procurement and/or some change public agencies / POS Within top quartile of orders required) interviews/surveys results Interviews/Surveys with Port Authorities POS is focused on compliance, transparency, and public agencies / operational support, and customer service in a POS Within top quartile of balanced manner. interviews/surveys results Interviews/Surveys with Port Authorities, large publically held companies, and Within top quartile of Acquisition planning phase public agencies results July 17, 2014 Prepared by Mobius Industries USA, Inc. 60 Review of the Port's Contracting Policies and Procedures Interviews/Surveys with Port Authorities, large publically held companies, and Within top quartile of Bid opening and evaluation phase public agencies results Interviews/Surveys with Port Authorities, large publically held Contract execution after the notice of intent to companies, and Within top quartile of award public agencies results Interviews/Surveys with Port Authorities, large publically held companies, and Within top quartile of Interview/demonstration public agencies results Interviews/Surveys with Port Authorities, large publically held companies, and Within top quartile of Rate negotiation phase (consultants) public agencies results Interviews/Surveys with Port Authorities, large publically held companies, and Within top quartile of Request/requisition phase public agencies results Interviews/Surveys with Port Authorities, large publically held companies, and Within top quartile of Solicitation/advertisement public agencies results Interviews/Surveys Best practices used by Port Authorities, Public with Port Authorities, Agencies, and large publically held companies large publically held that have a satisfactory or better audit and are companies, and in the top quartile of performance (milestone public agencies / POS Within top quartile of achievement) interviews/surveys results Interviews/Surveys with Port Authorities, large publically held companies, and Contract Administrators focus on customer public agencies / POS Within top quartile of service interviews/surveys results Interviews/Surveys with Port Authorities, large publically held companies, and Contract Administrators knowledge of supply public agencies / POS Within top quartile of and service market? interviews/surveys results July 17, 2014 Prepared by Mobius Industries USA, Inc. 61 Review of the Port's Contracting Policies and Procedures Interviews/Surveys with Port Authorities, large publically held companies, and Current level of performance by the contracts public agencies / POS Within top quartile of and procurement team interviews/surveys results Interviews/Surveys with Port Authorities, large publically held companies, and Flexibility with the contracts and procurement public agencies / POS Within top quartile of process interviews/surveys results Interviews/Surveys KPIs used by Port Authorities, Public Agencies, with Port Authorities, and large publically held companies that have a large publically held satisfactory or better audit and are in the top companies, and quartile of performance (milestone public agencies / POS Within top quartile of achievement) interviews/surveys results Interviews/Surveys with Port Authorities, large publically held Performance of key stakeholders in the companies, and contracts and procurement function (excluding public agencies / POS Within top quartile of contract administrators) interviews/surveys results Interviews/Surveys with Port Authorities, large publically held Value of the contracts and procurement companies, and organization from the contractor/consultant public agencies / POS Within top quartile of community? interviews/surveys results Benchmark Port procurement practices with other government agencies best practices, including applicable private sector practices and the Federal Acquisition Regulation (FAR). Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Acquisition planning phase (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and Bid opening and evaluation phase (MC, SW, SA, public agencies / POS contracts audit & top Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, Satisfactory + large publically held procurement and Contract execution after the notice of intent to companies, and contracts audit & top award (MC, SW, SA, Pur) public agencies / POS quartile results July 17, 2014 Prepared by Mobius Industries USA, Inc. 62 Review of the Port's Contracting Policies and Procedures interviews/surveys Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Interview/demonstration (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Rate negotiation phase (SA) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Request/requisition phase (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Solicitation/advertisement (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Total acquisition time (MC, SW, SA, Pur) interviews/surveys quartile results Are procurements and contracting practices managed and driven by clear and effective strategies? CPO - 90%+ consistent Procurements and contracting practices Internal POS understanding of the managed by clear and effective strategies Surveys/Interviews strategy POS RDRs - 75%+ Procurements and contracting practices Internal POS consistent understanding managed by clear and effective strategies Surveys/Interviews of the strategy Are procurements and contracting practices aligned with the overall Port strategy and department strategies? The POS key stakeholders have a clear Internal POS understanding of the procurement process interviews 75%+ Internal POS departments find the CPO processes valuable to the Port and their Internal POS individual departments Surveys/Interviews 90%+ Valuable rating July 17, 2014 Prepared by Mobius Industries USA, Inc. 63 Review of the Port's Contracting Policies and Procedures Are procurement and contracting practices effective to attain sound contracts with qualified firms at fair and reasonable contract rates? Contract Review - 3+ competitors / POS Solicitations and advertisement phase is POS departments rating "yes" adequately attracting enough attention interviews/surveys 75%+ Firms and consultants are billing at their POS Solicitation 90%+ billing at standard standard rates Respondents rates Are the CPO staffing levels and organizational structure appropriate for the size and complexity of Port operations and business requirements? Internal POS Adequate CPO staffing level - CPO perspective Surveys/Interviews 75%+ Adequate CPO staffing level - POS by divisional Internal POS perspective Surveys/Interviews 75%+ Internal POS departments find the CPO processes valuable to the Port and their Internal POS individual departments Surveys/Interviews 90%+ Valuable rating Does the Port follow best practices in delivery of procurements and contracting services? Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Acquisition planning phase (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and Bid opening and evaluation phase (MC, SW, SA, public agencies / POS contracts audit & top Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and Contract execution after the notice of intent to public agencies / POS contracts audit & top award (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Interview/demonstration (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and Port's business risk based upon the contracts public agencies / POS Within top quartile of and procurement process interviews/surveys results July 17, 2014 Prepared by Mobius Industries USA, Inc. 64 Review of the Port's Contracting Policies and Procedures Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Rate negotiation phase (SA) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Request/requisition phase (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Solicitation/advertisement (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - Interviews/Surveys with Port Authorities, large publically held Satisfactory + companies, and procurement and public agencies / POS contracts audit & top Total acquisition time (MC, SW, SA, Pur) interviews/surveys quartile results Contract Review - 3+ competitors / POS Solicitations and advertisement phase is POS departments rating "yes" adequately attracting enough attention interviews/surveys 75%+ Internal POS departments find the CPO processes valuable to the Port and their Internal POS individual departments Surveys/Interviews 90%+ Valuable rating Port's procurement KPIs are consistent with Interviews/Surveys those used by Port Authorities, Public Agencies, with Port Authorities, and large publically held companies that have a large publically held satisfactory or better audit and are in the top companies, and quartile of performance (milestone public agencies / POS achievement) interviews/surveys Compare and contrast Interviews/Surveys with Port Authorities, large publically held Quality of the Port's contracts? - Average (above companies, and 50% on time procurement and/or some change public agencies / POS Within top quartile of orders required) interviews/surveys results July 17, 2014 Prepared by Mobius Industries USA, Inc. 65 Review of the Port's Contracting Policies and Procedures Are the procurements and contracting practices meeting Port department needs and the contracting community at large, that do business with the Port? Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and Port's business risk based upon the contracts public agencies / POS and procurement process interviews/surveys Average/Low Contract Review - Interviews/Surveys with Port Authorities, large publically held Quality of the Port's contracts? - Average (above companies, and 50% on time procurement and/or some change public agencies / POS orders required) interviews/surveys Average Contract Review - 3+ competitors / POS Solicitations and advertisement phase is POS departments rating "yes" adequately attracting enough attention interviews/surveys 75%+ The Port's contracts and procurement process are flexible enough to meet the needs of the departments and contracting community (processes are the same but resources in place Internal POS to handle change) Surveys/Interviews 75% + rating Interview/surveys Less than 50% seen as Bonding requirements are not seen as a with POS solicitation barrier v. other public significant obstacle to do business with the Port respondents agencies Interview/surveys Less than 50% indicate with POS solicitation that it costs more v. other Cost incurred to do business with the Port respondents public agencies Interview/surveys Less than 50% seen as Insurance requirements are not seen as a with POS solicitation barrier v. other public significant obstacle to do business with the Port respondents agencies Port notifies the competing firms and Interview/surveys consultants of evaluation results in a reasonable with POS solicitation timeframe respondents 75%+ Interview/surveys POS interview/demonstration phase valued by with POS solicitation firms and consultants respondents Valuable 75%+ Interview/surveys Previous POS solicitation respondents will with POS solicitation continue to compete for the Port's business respondents 90%+ Interview/surveys Less than 50% seen as Terms and Conditions are not seen as a with POS solicitation barrier v. other public significant obstacle to do business with the Port respondents agencies CPO is responsive to departmental needs POS interviews 75%+ 90%+ finding POS Firm's ability to find business opportunities with POS solicitation opportunities using POS the POS respondent survey advertisement methods July 17, 2014 Prepared by Mobius Industries USA, Inc. 66 Review of the Port's Contracting Policies and Procedures Firm's ability to meet the POS' Terms and POS solicitation About the same with other Conditions respondent survey public agencies or better POS procurement process adequately focused POS on operational support and customer service surveys/Interviews 50% + Are the procurements and contracting practices consistent with best practices of other governmental agencies (e.g., ports, transits, counties, and federal agencies)? Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and public agencies / POS Port achieving 50%+ of Acquisition planning phase (MC, SW, SA, Pur) interviews/surveys best practices Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and Bid opening and evaluation phase (MC, SW, SA, public agencies / POS Port achieving 50%+ of Pur) interviews/surveys best practices Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and Contract execution after the notice of intent to public agencies / POS Port achieving 50%+ of award (MC, SW, SA, Pur) interviews/surveys best practices Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and public agencies / POS Port achieving 50%+ of Interview/demonstration (MC, SW, SA, Pur) interviews/surveys best practices Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and public agencies / POS Port achieving 50%+ of Rate negotiation phase (SA) interviews/surveys best practices Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and public agencies / POS Port achieving 50%+ of Request/requisition phase (MC, SW, SA, Pur) interviews/surveys best practices July 17, 2014 Prepared by Mobius Industries USA, Inc. 67 Review of the Port's Contracting Policies and Procedures Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and public agencies / POS Port achieving 50%+ of Solicitation/advertisement (MC, SW, SA, Pur) interviews/surveys best practices Contract Review - Interviews/Surveys with Port Authorities, large publically held companies, and public agencies / POS Port achieving 50%+ of Total acquisition time (MC, SW, SA, Pur) interviews/surveys best practices Interviews/Surveys Best practices used by Port Authorities, Public with Port Authorities, Agencies, and large publically held companies large publically held that have a satisfactory or better audit and are companies, and in the top quartile of performance (milestone public agencies / POS Port achieving 50%+ of achievement) interviews/surveys best practices Is technology leveraged effectively to deliver contracting services? IT leveraged effectively in order to deliver Internal POS contracting services Interviews Internal POS Yes 75%+ Technology leveraged effectively to deliver Internal POS procurement and contracting services Surveys/Interviews Internal POS Yes 75%+ Firm's use of POS Procurement and Roster POS solicitation Respondents using PRMS Management System (PRMS) respondent survey 75%+ POS Procurement and Management System POS solicitation (PRMS) ease of use respondent survey "Easy to use" 75%+ Are the Port's contracting practices designed and applied consistently without wasteful inefficiency? Consistent approach to the CPO process Contract review yes 80%+ Interview/surveys Port has a consistent approach to procurement with POS solicitation and contract administration respondents yes 75%+ CPO process applied without significant wasteful inefficiency Interviews yes 75%+ Is the Port capital projects delivery method aligned with the contracting practices? POS capital project delivery method aligned with POS contracting practices Contract review No findings July 17, 2014 Prepared by Mobius Industries USA, Inc. 68
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