2013 Spokane Vendor Training Vendor View of State Procurement Changes Presented by Servando Patlan June 19,

Contract Management Fee Collection and Vendor Sales Reporting All state contract vendors report contract sales quarterly via the states secure online system (with a few exceptions). In addition for some state contracts, contract vendors have been collecting contract management fees calculated as a percent of sales and remitting a check to the state quarterly for the contract management fee amount. This contract management fee helped fund the development and management of master state contracts. In the past the percentage varied from contract to contract. 2

Contract Management Fee Collection and Vendor Sales Reporting In an effort to streamline the contracting process, Enterprise Services will begin using one standard management fee rate and calculation for state master contracts. Beginning July 1, 2013 state contract vendors will pay a quarterly management fee of at least.74 percent to the department on all contract sales. This model will replace all current fee schedules charged by DES for Purchasing and Contracting services. For example 74 cents will be collected on every 100 dollars of sales 3

Contract Management Fee Collection and Vendor Sales Reporting For contracts that already have a management fee, DES may adjust the management fee to reflect the.74 percent via an amendment. Some vendors may use their marketing budgets to fund the 74 cents on 100 dollars of sales contract management fee. Other vendors may need to negotiate some or all of the 74 cents on 100 dollars of sales contract management fee into the contract pricing. DES will be working with those contract vendors where the current management fee is higher than.74 percent to negotiate lower contract pricing. 4

Contract Management Fee Collection and Vendor Sales Reporting Quarterly management fee language will be added via amendment to any existing contracts, as necessary, and included in all new contracts. The department will contact current contract vendors via separate communication if a contract amendment will be required on their contract. Phased implementation: Phase 1 – Contracts with no management fee Phase 2 – Contracts with a management fee of less than.74 percent Phase 3 – Contracts with a management fee of greater than.74 percent 5

Contract Management Fee Collection and Vendor Sales Reporting In practice at the end of a calendar quarter, contract vendors have 30 calendar days to report their contract sales via the states secure online system. About 40 days after the calendar quarter, the state will invoice the contractor for the contract management fee amount calculated on the total of the contract sales data submitted. Contract vendors will have 30 calendar days from the invoice date to remit their collected Contract Management Fee to the state. 6

V ENDOR S ALES R EPORTING State Secure Online Usage/Sales System Reporting: 7

V ENDOR S ALES R EPORTING Contract Usage Worksheet Worksheet lists most customer numbers for agency and political subdivisions and is downloadable to Excel so that vendor can use as a worksheet

Contract Management Fee Collection and Vendor Sales Reporting When setting up your customer accounts it is important to identify your customers in such a way that you can total their sales by agency. Many agencies use similar program names, e.g. Crime Lab may be used by Washington State Patrol, King County, and the City of Seattle. Reporting all Crime Lab sales together would be incorrect. 9

Servando Patlan Department of Enterprise Services Phone Christine Warnock Department of Enterprise Services Phone Questions 10