Commonwealth of Pennsylvania Edward G. Rendell, Governor Donald T. Cunningham, Secretary, DGS Savings for PA Taxpayers, Opportunities for PA Small Businesses David P. Yarkin, Deputy Secretary for Procurement, DGS Philadelphia, Pennsylvania July 22, 2004

PU8968 Page 2 Savings for PA Taxpayers, Opportunities for PA Small Businesses Strategic Sourcing Supplier Diversity Initiative Cooperative Purchasing Program (COSTARS)

PU8968 Page 3 Strategic Sourcing Maximizes the Commonwealth’s Leverage with Suppliers Major Changes through Strategic Sourcing Aggregation From 38 agencies buying on their own to one Commonwealth buying together. RFP vs. Competitive Sealed Bid Emphasis on quality and MWBE participation, not just low- cost. Reverse Auction Fact-Based Negotiations with Suppliers

PU8968 Page 4 Strategic Sourcing has Saved PA Taxpayers $74.2M to Date Some Highlights: $9.65M on Office Supplies Box of binder clips, was $0.84, now $0.11 Pack of adhesive notes, was $2.28, now $0.48 $19.1M on Personal Computers $11M on Copiers Midrange copier, was $525.12/mo., now $235.40/mo. $7M on Furniture $4.2M on Computer Maintenance Laptop maintenance, was $13.40/mo., now $6.83/mo.

PU8968 Page 5

PU8968 Page 6 Governor Rendell and Secretary Cunningham’s Commitment to Minority and Women Owned Businesses Women and minority owned businesses are among the fastest growing in Pennsylvania and the U.S. Yet, little had been done by the Commonwealth to encourage MWBE contracting. MWBE participation rate under previous administration was 2%. CHANGES: Executive Order , signed April 15, Expressed commitment to MWBE program from executive leadership. Streamline certification process, increase pool of certified vendors. Greater utilization of RFP allows consideration of MWBE in evaluation of proposals. “Match-making” at pre-proposal conferences. Goal of 10% participation – a 400% increase – by end of first term.

PU8968 Page 7 MWBE Initiative – Real Results, not Empty Promises Office Supplies – 45% MBE ($5.8M) Computer Maintenance – 10% MWBE Computer Peripherals – 19.6% MWBE ($4.6M) Computer Servers & Storage – 27.5% MWBE ($7.3M) Cleaning Supplies – 32% MWBE ($2.4M) and Furniture – PA-based vendor is Prime Contractor Furniture contract worth $11M.

PU8968 Page 8 Enhanced Procurement Opportunities for Small Businesses Small businesses are well-equipped to meet needs of political subdivisions, governmental authorities and school districts. Many use state contracts as a procurement vehicle with local procurement units. With General Assembly and small business groups, the Rendell Administration crafted HB1996 (2004) which enhances small businesses’ ability to serve local procurement units. DGS now authorized to set up contracts for sole use of local procurement units. When DGS strategically sources a commodity, it is required to establish these contracts, must by multi-award. Allows local procurement units the flexibility to buy from PA small businesses from the state contract. More details to follow. See for updates.