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Procurement Services Fall Newsletter: November 2016

Director's Message

This past year has been a very rewarding time for Procurement Services. Our buying team worked diligently to acquire the goods and services needed for our new Silicon Valley Campus in Santa Clara. It was an honor to attend the recent grand opening and see such a first class facility.

Speaking of moving into new facilities, Procurement Services will be relocating to Scotts Valley in January 2017. Along with our other administrative departments, we will be occupying the former Borland Software site on the north end of town. Despite being a bit farther away from campus (9 miles), we are very much committed to delivering a high level of service to our customers.

Wishing you the best during this academic year.

Darin Matthews, CPPO, CPSM
Director, UCSC Procurement Services

Buying Locally in Santa Cruz

Did you know that over a quarter of our annual spend goes to area businesses? During this past fiscal year, Procurement Services issued over $21 million in purchase orders and contracts to Santa Cruz County businesses. This was in increase over the amounts spent in the two prior years and represents about 20% of our annual spend. The chart below shows our local spend as compared to total spend during the past three years.

Like others at UCSC, we care a great deal about our community and our local businesses. Purchases made in Santa Cruz help support local jobs and strengthen our economy. Our suppliers pay local taxes, buy things like printing and fuel from other local suppliers, and serve as valuable members of our community. Buying local is absolutely a win-win situation.

Now, do we have a local preference? Absolutely not. Our buyers are always looking for the best value and often find that our Santa Cruz suppliers offer us the best deal. When we consider things like competitive pricing, product availability, and quality of service, our local suppliers frequently come out on top.

Purchase from Santa Cruz County Suppliers, FY 2015-16

Certification News

Procurement Services continues to promote professional development among our staff members, as well as professional certification. Earlier this year several of our employees attended a “boot camp” to help themselves prepare for the CPSM exams. The Certified Professional in Supply Management designation is offered through the Institute for Supply Management (ISM) and is considered the premier certification for professionals working in procurement and supply chain management. Additionally, the CPSM program is supported throughout the UC system.

Two of our senior buyers have recently achieved the status of CPSM, Lisa Dodd and Lauren May. Along with their documented experience in supply chain management, each of them had to pass three rigorous exams at computer testing sites in the Bay Area. You will now see the letters “CPSM” listed proudly after their names on emails, written correspondence, and business cards.

Congratulations to Lisa and Lauren!

 

Change Order Processing

When a purchase order (the contract between UCSC and the supplier) needs to be modified, a change order may be required. The change order form, located in the CruzBuy showcase, must be filled out with clear instructions about what needs to be changed on the purchase order and submitted. Once approved by the unit, the requisition will route to Procurement Services, where a buyer will update the purchase order in Banner to reflect the requested changes.

A change order can be processed for the following reasons:
  • Increase unit price on an existing line item (see Important Note On Tolerances below);
  • Increase quantity on an existing line item (see Important Note On Tolerances below);
  • Add a new line item to the purchase order, when associated with original items ordered;
  • Change the description of an existing line item (for a different item, cancel and process new order);
  • Change terms, including adding special notes to Banner text
Important Note on Tolerances
  • A change order is not necessary if the total PO increase is $100 or less;
  • A change order is not necessary if the total PO increase is between $100 and $500. However, FAST/AP requires authorization for increase from the Budget Approver;
  • A change order must be processed if the PO total increases by $500 or more.
Special note on changing FOAPALs for an existing purchase order: FOAPALs, or accounting strings, are used to determine which bucket of money the purchase should be applied to. It is the unit’s responsibility to make sure the funding sources are correct before approving a purchase requisition. If a correction needs to be made to the FOAPAL, the unit should make every effort to correct locally before submitting a change order request. The primary exception is when multiple invoices have been applied to a purchase, or if the purchase is for inventorial equipment. Under these exceptions, Procurement Services should be involved and a change order request submitted in CruzBuy.

Procurement Services Metrics

The pie chart below highlights all requisitions processed for FY 16 with turn time breakdowns for Procurement Services staff. Turn times are based on time between final department approval and final Procurement approval.



The bar graph shows the total number of requisitions processed by month for FY16, including those processed by Procurement Services.



The bar graph below shows the total number of requisitions processed by buyers and Business Contracts during each month for FY 16.


Benefits Achieved

As part of the system-wide P200 initiative, UCSC Procurement Services buyers were tasked with setting annual benefit goals for fiscal years 2015 and 2016. UCSC Procurement Services buyers exceeded these goals by a total of $900,000, resulting in over $4 million savings for UCSC over this two year period.

When planning a large dollar/volume purchase, please reach out to Procurement Services at the earliest opportunity. Engaging Buyers early in the process allows them to develop the most ideal cost-saving strategy.



Help Protect Sensitive University Data

When sensitive University data that is considered confidential or restricted is being provided to a supplier, Procurement Services’ Business Contracts team needs to know in order to better contractually protect the University and its constituents’ interests. Campus Clients may notify Business Contracts by simply adding a comment within our CruzBuy purchase requisition system stating confidential or restricted data is involved or by completing the form here. The definition of confidential and restricted data can be found here. Note that there are some types of data including credit cards and electronic health information that have additional privacy/security contract requirements.

If you are unsure whether the data (i.e., content) that the University is sharing with the supplier qualifies as restricted or confidential, please contact the Campus Privacy Official and/or Chief Information Security Officer for assistance. Further information on UC’s privacy policies can be found here. UC, UCSC and other IT policies on securing sensitive electronic University data can be found here.

Prevailing Wage Requirements

The University requires all private construction contractors to follow public works law and pay their workers prevailing wages when working on a project funded by the University. The University must report prevailing wage projects with the State of California, Department of Industrial Relations (DIR) and obtain a DIR project number to associate with the purchase order before commencing work.

Prevailing wages are due, in most instances, if the project costs are more than $1,000, and involves new construction, alteration, demolition, installation, repair and maintenance. In addition, this incorporates the installation of equipment that requires specialized trade skills, such as electrician, plumber, carpenter, etc. Other classifications include but are not limited to, moving services, furniture assembly/installation, and wall attachment services.

The Department of Industrial Relations determines the prevailing wage that must be paid based on the type of work and location the services are performed at. If UCSC does not require its suppliers to pay prevailing wages when applicable there could be consequences:
  • Contract could be subject to cancellation
  • UCSC’s reputation could be at risk
  • Supplier could be fined or debarred from future public works projects
  • Supplier could sue UC for any increased labor costs and penalties and associated costs such as attorney’s fees
Additional Prevailing Wage and Public Works contracting information may be obtained at Prevailing Wage Requirements.

P200 Celebration

The final benefit numbers for FY15-16 are in. UC Procurement Services as a system has surpassed the P200 goal of achieving $200 million in benefit one year ahead of schedule, with the grand total equaling $268.7 million! Additionally, over the past four years delivering on nearly all major components of the P200 roadmap designed to transform UC Procurement’s organizational and operational capabilities in support of the long-term strategic objectives.

We invite you to watch a message from UC Chief Procurement Officer, Bill Cooper on the accomplishments of the P200 program and the milestones that were achieved across the system: UC P200 Celebration.

To celebrate this milestone, all ten campuses on Wednesday, August 31st celebrated in unison with an afternoon of food and festivities. UC Santa Cruz Procurement Services celebrated our success of P200 by enjoying an afternoon of Hawaiian food, a leisurely stroll to Natural Bridges State Beach, and then a return to the office for Chocolate Macadamia Nut Brownies, with Vanilla Ice Cream. We invited everyone to wear their favorite beach, or Hawaiian attire for this celebration event. Congratulations Team!!

Procurement Services on the Move to SVC

As you may have heard, UC Santa Cruz will establish a center in Scotts Valley, leasing office space in the Enterprise Technology Centre (ETC) that will accommodate more than 500 staff members. Procurement Services is part of this move and will be relocating our office operations in late January 2017. Just like we are now, we will continue to be available by phone, e-mail, teleconference calls, and by scheduling face-to-face meetings either at the ETC or on campus. We are excited for this opportunity and look forward to this move a little ways up highway 17.

Employee Corner: Employee Updates

Andrea Miner Andrea Miner, Buyer, Procurement Services

Procurements Services is pleased to welcome Andrea Miner as a new Buyer, effective July 18, 2016.

Andrea comes to us from Santa Cruz Biotechnology Inc where she was employed as a Purchasing Specialist for the last four years. Andrea is a proud banana slug alumni, graduating from the University of California, Santa Cruz in 2011 with a BS in Biological Sciences. Her biology & biotechnology background offers helpful insight on lab purchases for campus science departments. Andrea also enjoys spending time outdoors, attending local events, & exploring everything Santa Cruz. Please join us in welcoming Andrea back to UCSC, and as a new Buyer to Procurement Services.



Jennifer Roszell-Shohat Jennifer Roszell-Shohat, Buyer, Procurement Services

Procurement Services is pleased to announce the hiring of Jennifer Roszell-Shohat as a new Buyer, effective August 22, 2016. Jennifer is joining our team after many years of service in Staff Human Resources.

Jennifer has previous experience conducting department purchasing operations, supplier negotiations, vendor selection and cost savings analysis from her previous roles both within the University, and her years of previous employment. She earned her Purchasing Management Certificate from California State University, Sacramento. She will now continue to provide her experience and expertise in managing a vast variety of goods and services procured by our campus. In her spare time she enjoys holistic nutrition and wellness, farmers' markets, cooking, bicycling, hiking, skiing, camping, charity food events, visiting with friends and family, concerts, beach going and all the fun activities that our beautiful area of Santa Cruz has to offer. Please join us in welcoming Jennifer to UCSC Procurement Services.

Cindy Rogers Cindy Rogers, Business Contracts Administrator, Procurement Services

Procurements Services is pleased to welcome Cindy Rogers as a new Business Contracts Administrator, effective September 8, 2016.

Cindy has worked in the Medical Industry, Automotive Finance & Sales Industry, Banking Operations and Commercial Loans Industry, and most recently prior to UCSC she worked as an Intellectual Property Paralegal & Systems Administrator for a leading Hard Disk Drive Manufacture. In her spare time she enjoys raising her three kids, watching movies, baseball, and parachuting out of perfectly good airplanes. Please join us in welcoming Cindy to UCSC Procurement Services.

Low-Value Purchase Order Processing Costs

Each purchase order costs the University resources and funds to process. Current studies show it often costs more than $100 in administrative expenses to generate a purchase order and in many cases, the cost of managing and generating a purchase order can exceed $200 per transaction based on the complexity of the purchase. In addition to the PO processing cost is the accompanying expense associated with each invoice payment entered by our FAST/AP staff. Finally, there are supplier costs to factor in, such as order fulfillment, delivery and invoicing. Reducing the effort required to obtain low-dollar purchases remains an ongoing challenge.

As the chart below shows, 20% of all POs under $100,000 issued for goods (services are not included in these numbers) are $50 or less. When total cost of procure-to-pay is taken into consideration, POs less than $50 don’t make economic sense for either the University or our suppliers.

Requesters have a few options available. One best practice is to consolidate purchases whenever possible to reduce administrative costs of processing many low dollar requisitions. Combine requirements from a single supplier into one requisition. Another option, if the low dollar item is needed immediately, a Pro-card is an excellent way to procure since Pro-card transaction processing is significantly less costly to the university and to the supplier than procuring and paying via a purchase order.

Together, we can reduce administrative costs to the University and to our suppliers by simply being aware of the total cost of our procure-to-pay cycle and using the best method possible to procure the items needed.

Supplier Selection

Whenever possible, use an established supplier in CruzBuy for ordering goods and services. New suppliers should only be added if the supplier is essential to university research, instruction, or if the new supplier will be used on an on-going basis. The onboarding process for adding a new supplier is administratively costly and time consuming to university resources. Our recommendation is to use suppliers who have established UC Strategically Sourced agreements, and UCSC local agreements whenever possible. Many of these pre-negotiated supplier agreements are available in CruzBuy, and have catalogs within the CruzBuy e-procurement tool for quick ordering convenience.

Search for an Active Supplier in CruzBuy
From the CruzBuy Home page select “Suppliers”.


Click on “+Click to expand Search for Supplier Filter


Enter the first few letters of the supplier you are searching for.


Adding a New Supplier
When a requester is unable to locate a required supplier in CruzBuy, a CruzBuy form is used to establish the new supplier. Start by locating the appropriate ordering form on the CruzBuy Home Page. After the form is selected, click on “enter manually” and fill in the supplier’s information. While not all fields are required, it is recommended that requesters provide the supplier’s contact name, phone number, and fax or email for purchase order distribution and further Buyer communications with the new supplier.

Once the requisition is submitted by the requester and approved by the Budget Approver (org), the requisition will automatically route to Procurement Services for review and further supplier on-boarding and requisition processing.

Procurement Services will reach out to the new supplier and obtain all the necessary information for the supplier onboarding process using a Payee Setup204. Department CruzBuy requesters should not request completed Payee Setup 204 forms from CruzBuy suppliers, or attach completed 204 forms to the CruzBuy requisition, or send completed 204 forms to Financial Affairs for on-boarding. Financial Affairs and Procurement Services have established procedures in place to match new suppliers with pending requisitions. Bypassing these procedures may cause requisition processing delays.

Note: The Financial Accounting and Reporting Office (FAR) will routinely have the new vendor setup completed within two working days after receipt of the completed and signed Payee Setup 204. If the Payee Setup 204 form is submitted by the supplier incomplete or illegible, it will delay vendor setup and requisition processing.
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